DOE softpedals on PALECO franchise cancellation


After backtracking from an earlier push for Congress to cancel the franchise of some 17 electric cooperatives in the country, including the Palawan Electric Cooperative (PALECO), energy secretary Alfonso G. Cusi recently assured all cooperatives they will observe due process in conducting an investigation on their status and capabilities.

In a statement released Wednesday, Cusi said that the priority in doing the performance review is to uncover the reasons behind the troubles of the power cooperatives and help in their rehabilitation.

“There will be due process for all ECs. Our priority is to address the root causes of their problems and help in their rehabilitation so they may provide the quality of services that the consumers in their franchise areas truly deserve,” Cusi said in the statement.

But he warned, however, that ECs that have “extremely dire cases” will not be ignored by the government because of their “negative impact on citizens.”

He pointed out that “other reasonable and legal options”, as provided in Republic Act 10531 or the National Electrification Administration (NEA) Law, must be considered.

The statement named the 17 ECs that the DOE said have been “chronically failing to provide satisfactory services required by their electric distribution franchise.”

These are are DANECO (Davao del Norte), ALECO (Albay), BASELCO (Basilan), CASURECO III (Camarines Sur), FICELCO (Catanduanes), LASURECO (Lanao), MASELCO (Masbate), OMECO (Occidental Mindoro), ORMECO (Oriental Mindoro), PALECO (Palawan), PELCO (Pampanga), SULECO (Sulu), and ZAMCELCO (Zamboanga).

For many years, residents of these areas have been complaining of persistent and unresolved brownouts caused by some ECs’ heavy debts and failure to pay for their power supply, he further said in the statement.

Cusi cited that even President [Rodrigo] Duterte himself publicly expressed disappointment over the “poor performance of electric services in Palawan and Masbate.”

“We trust that ECs in these problem areas will cooperate with the DOE’s constructive efforts to get to the heart of their long-running problems. We will work with the ECs in creating and implementing viable solutions for the benefit of their consumers,” he said.

Meanwhile, NEA also released a statement Thursday supporting the move of the DOE to revoke its recommendation to the House of Representatives to disenfranchise the 17 ECs.

“Consistent with its mandate under Republic Act 10531, the NEA will, moving forward, conduct a thorough performance review of the ECs involved and submit the results of the same to the DOE and the House of Representatives for their appreciation and evaluation,” the statement said.

On January 11, Cusi wrote to House Speaker Gloria Macapagal-Arroyo recommending the cancellation of the franchises of PALECO and 16 other ECs because of their underperforming operations.

The recommendation was pursuant to Section 46 of Republic Act 9136 and reports of the National Electrification Administration (NEA) regarding “underperforming, financially and technically distressed” power cooperatives.

First Palawan District House Rep. Franz “Chicoy” Alvarez confirmed on February 1 that a copy of the letter was forwarded to the legislative franchises committee which he chairs.

“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),” Rep. Alvarez said.

On January 30, Cusi wrote again to Arroyo “to recall and revoke” the January 11 dated letter, stating that the department deemed it “imperative to conduct further evaluation and assessment on the status and performance of the ECs.”

“Recently, the DOE received reports and information from these electric cooperatives that they have already addressed the issues against them. If indeed there have rectifications of the identified issues, there may no longer be any basis for our recommendation. Hence, while awaiting submission of proof/compliance by these electric cooperatives, we deem it prudent to hold, in the meantime, our recommendation,” Cusi said in his letter.

Asked if he knew about Cusi’s second letter revoking the recommendation for cancellation of the 17 ECs’ franchises, Alvarez said on February 2 that he is not aware if a copy has been sent to the legislative franchises committee.

“If official talaga ‘yon, dapat may letter din. Pero sa ngayon wala pa kaming nakikita o natatanggap. We will wait muna if meron talaga siyang letter na pinadala. Pero so far wala pa (If it’s official, there should be a letter. But right now, we have not received any),” he said.

On February 2, the Philippine Rural Electric Cooperative Association, Inc. (Philreca) in a press statement decried the DOE’s proposal to the House of Representatives, calling it an “unjust and biased recommendation” that was never consulted with the concerned ECs.

It said the endorsement “was done in haste and in the absence of due diligence on the part of the DOE,” particularly because it was “recalled and revoked by Secretary Cusi himself.”

Philreca said they firmly believe that the recommendation will only serve one purpose and that is “to manipulate the mindset of the public for them to think that the ECs are not performing well. And with this comes the justification on the entry of private, for-profit, and zero-experience corporations.”

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