DOE moves to cancel PALECO franchise


First Palawan District House Rep. Franz “Chicoy” Alvarez confirmed Friday that his committee already received a copy of the January 11 letter of Energy Sec. Alfonso Cusi recommending the cancellation of franchises of 17 ailing cooperatives, including the Palawan Electric Cooperative (PALECO).

Cusi’s letter which was addressed to House Speaker Gloria Macapagal-Arroyo recommended the scrapping of PALECO’s franchise and 16 others pursuant to Section 46 of Republic No. 9136 and based on reports of the National Electrification Administration (NEA) regarding “underperforming, financially and technically distressed” power cooperatives.

Rep. Alvarez said the legislative franchises committee of the House of Representatives already has a copy of the letter from the Department of Energy (DOE), which is also drafting a policy recommendation for them “to adopt a process of competitive selection for the grant of franchises to potential applicants.”

“Na-receive na po ‘yan ng ating committee na meron nga nang pinapa-cancel ang DOE na 17 prangkisa ng electric cooperative. Confirmed ‘yan at ang alam ko ay copy furnished din ang NEA (It was received by our committee recommending the cancellation of 17 franchises of electric cooperatives. That’s confirmed and NEA was copy furnished),” he said.

He said the letter which was referred to his committee this week will be forwarded to the legal department of the lower house because some of the franchises of the power cooperatives were issued by the NEA.

Alvarez said his committee wants to make sure if the House of Representatives has the mandate to cancel NEA issued franchises.

“Susulat pa lang tayo at i-re-refer ito sa legal department kasi ang mga franchises ng electric cooperatives ay ang nag-grant dati ay NEA pa, hindi ang legislative franchises committee sa Congress. Hindi ako sigurado sa proseso ng pag-cancel ng kanilang prangkisa ay dapat bang magmula sa Kongreso,” he pointed out.

(We’re about to write a letter to refer this to the legal department because the franchises of the electric cooperatives were granted by the NEA in the past, not the legislative franchises committee of the Congress. I am not sure about the process of the cancellation of their franchises if it should come from the Congress.)

But he said that at present, new power cooperative applicants or those that will renew their franchises will already have to go through their committee.

He said Cusi’s recommendation is “mabigat talaga” or has weight if their committee is to decide on the discontinuation of the franchises even if they are still far from their expiration dates.

Alvarez said he is familiar with some cooperatives because their franchises went through his committee, and one in Lanao owes billions in financial loan.

However, he said his committee might no longer be able to handle the matter because the lower house will already go on break next week.

“Hindi na namin kaagad-agad maaaksyonan ‘yan dahil next week ay magbre-break na kami at ang balik na namin ay May 20 hanggang June 6 na lang din ang sessions. Lalo na dahil may prosesong sinusunod ang committee, syempre aalamin din namin ang paliwanag ng mga power cooperatives gaya ni PALECO,” he said.

(We cannot act on that immediately because we’re already taking a break next week and will come back on May 20 to hold sessions until June 6. There’s also a process that needs to be followed, of course, we have to hear the explanations of the cooperatives like PALECO.)

Alvarez said it might be tackled when the next Congress comes in.

But if the DOE is in a hurry, it will most likely refer the matter to the NEA which has more time to study and make decisions.

“If ire-refer nila ‘yan sa NEA, mas maluwag ang NEA to make decisions. If NEA cancels the franchises, the areas will be opened to other applicants. DOE na talaga mismo… so talagang may weight,” he stated.

(If they will refer the letter to the NEA, the NEA has time to make decisions. If NEA cancels the franchises, the areas will be opened to other applicants. It’s the DOE that made the recommendation… so it has weight.

He said even if PALECO’s franchise is still worth 10 years, revocation is possible if it can be proven that it is an “underperforming electric cooperative”.

The issue on the revocation of the 17 power cooperative franchises was coincidental to the filing of 2nd and 3rd District Reps. Frederick Abueg and Gil Acosta of House Bill 8829 which seeks the granting of a franchise to MORE Reedbank Corp. by businessman Enrique Razon on January 14.

Their explanatory note carried President Rodrigo Duterte’s warning to expropriate PALECO’s franchise “if it does not shape up by the end of December last year.”

The bill seeks to grant Razon a franchise “to establish, operate, and maintain a distribution system in Palawan for the conveyance of electric power to end users in the province.”

Responding to Alvarez’s confirmation, PALECO board chair Jeffrey Tan-Edriga said the information about the DOE’s recommendation had already reached their knowledge.

But he said the DOE should be asked about the basis that it used to render PALECO as an underperforming cooperative with financial and technical troubles.

“We know Sec. Cusi submitted the letter for revocation of 17 cooperative franchises including our coop. His basis is that we are an ailing coop? Do you believe we are ailing? We should ask the DOE regarding this,” said Endriga also on Friday.

In their quarterly press conference last week, no less than NEA-designated project supervisor and acting general manager Engr. Nelson Lalas said PALECO is not an ailing cooperative.

What it has, he said, are technical problems that are already being resolved.

He said that as a “Double A” category cooperative with good financial standing, PALECO “should not be privatized.” (with reports from Rachel Ganancial)

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