Utility group warns of ‘power crisis’ in Iloilo City

Utility group warns of ‘power crisis’ in Iloilo City

- in News, Philippines
Electrical workers atop electrical posts.Image via Panay News.

The Private Electric Power Operators Association (PEPOA) has issued a warning about a possible power crisis facing the highly urbanized city of Iloilo. The risk comes from whether the franchise of the existing utility operator is renewed, or the contract rewarded to a new applicant which ‘has no distribution system and would have to build one from scratch’, as said by PEPOA to the Lower House’s committee on legislative franchises.

The current distributor for electricity in Iloilo City is Panay Electric Co. (PECO), while the new applicant is More Minerals Corp. (MMC).

“We are shocked to learn of the hasty approval of the franchise application of More Minerals Corp. to the detriment of the incumbent distribution utility Panay Electric Company,” said PEPOA is a letter dated Sept. 19 and addressed to Rep. Franz Alvarez, chairman of the House legislative franchises committee. This was in reference to House Bill 8132, MMC’s application to take over distribution. The letter also included PEPOA’s recommendation that it would be a wiser choice to maintain the existing power distributor and allow for PECO to extend its franchise (House Bill 6023).

“This development is deeply concerning to us as it puts a highly urbanized city like Iloilo at risk,” the letter continued, emphasizing the risks PEPOA foresees for the switch to the unvetted new applicant.

PEPOA president Atty. Ranulfo Ocampo outlined a primary concern of his organization regarding More Minerals Corp. taking over utility distribution, namely that MMC is primarily a mining company. PEPOA doubts that MMC would have the technical capability to operate and maintain utility distribution facilities.

“Even if MMC were to change its primary purpose into power distribution, no company can get the required experience and qualifications in just a few days. This alone shows that MMC is not technically capable to serve as the power distribution utility in Iloilo City and do not deserve to be granted a legislative franchise to operate as such,” Ocampo added. Ocampo also pointed out that MMC does not have the track record or history of experience in electric distribution utility.

PECO has operated in the business of utility distribution for 95 years and belonged to the top performers in the country. Ocampo also referred to public records which show that PECO’s system average interruption frequency index was among the top in the country. By this data, PECO ranked no. 8 out of 146 industry players.

“They [PECO] are among the top 15 percent in terms of positive reliability performance compared to the other 146 electric distribution utilities in the country,” the PEPOA leader said.

Ocampo briefly addressed the issue of erroneous billing complaints brought against PECO by consumers, brushing aside the concern saying that the complainants registers with the Energy Regulation Commission (ERC) do not even make up .01 percent of PECO’s more than 60,000 customer base.

“To make this as basis for approving the franchise application MMC is unjustifiable. Almost all electric distribution utilities, even the best-performing ones, have erroneous billing complaints which can be resolved on their own initiatives, or with ERC intervention if needed. This is not something new to the industry and is certainly not sufficient basis for withholding the franchise renewal of PECO,” Ocampo stressed.

According to Ocampo’s recommendation, the renewal of PECO’s franchise would guarantee a stable supply of power to Iloilo City, while approving MMC would be a risk. He further highlighted the role PECO has played in the development of Iloilo over the last 5 years, citing the partnership between the utility provider and the city has yielded “immense economic growth”.

“Its ability to support big investors in terms of their power requirements is seen in the massive growth of the city in recent years. Because of this, the city of Iloilo brings in high economic returns to the Philippines and continues to do so. It does not make sense at all to change that economic growth negatively by approving the electric distribution franchise of MMC,” Ocampo said.

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