EDITORIAL: The Paleco franchise and the Razon lobby


A string of surprising developments have occurred in the last two weeks concerning the Palawan Electric Cooperative (Paleco) franchise. First was a report emerging from the House of Representatives about two Palawan’s congressmen – Reps. Frederick Abueg and Gil Acosta Sr – sponsoring a franchise for a company called MORE Reedbank Corporation to operate an electric distribution facility in Palawan, one that would supplant that of the Paleco whose existing franchise issued by the National Electrification Administration (NEA) is still good for 10 years.

As Paleco officials scrambled a press conference to denounce the two congressmen’s move to undermine the cooperative, they would find out a few days later that energy secretary Alfonso Cusi had sent a letter to the House of Representatives calling for the revocation of 17 cooperative franchises from different parts of the country, Paleco included. The DoE described these coops as  “underperforming, financially and technically distressed” and called for their cancellation.

As media began to pick up the story however, another letter from Cusi was sent to the House asking for the cancellation of its earlier communication. The last letter, dated 30 January 2019, apologized for the preceding communication sent to the chamber and clarified that the coops in question will still undergo evaluation.

These developments have raised questions that relevant local officials including Reps. Abueg and Acosta should answer -what is going on?

These train of events began when President Rodrigo Duterte late last year issued a warning to takeover Paleco if the power interruptions in the province were not resolved. This was immediately followed by a de facto takeover of Paleco by the National Electrification Administration (NEA), the government body mandated to regulate all electric cooperatives. NEA appointed a new general manager for Paleco, replacing a local insider appointed by the existing board. NEA granted its own appointee absolute powers over the cooperative including its board of directors who were elected by all the cooperative’s member consumers.

Last week, Representatives Frederick Abueg and Gil Acosta of the 2nd and 3rd districts respectively filed a bill in the House sponsoring the awarding of a new franchise that will overlap that of Paleco to MORE Reedbank Corporation, reportedly a newly-formed power entity controlled by business tycoon Enrique Razon.

The filing of the bill was followed by dead silence from its sponsors, who have until recently declined media interviews seeking answers to burning questions everyone wanted to ask – why is there a sudden lobby to takeover Paleco?

The letter, ostensibly signed by DoE Secretary Alfonso Cusi, described the 17 coops as “underperforming, financially and technically distressed” citing an evaluation on them supposedly done by the National Electrification Administration (NEA).

In last week’s press conference held by Paleco, NEA appointed GM Engr. Nelson Lalas sought to appease speculations of a Paleco takeover, stating that his order from his superiors was solely to improve the capacity of the cooperative. He also categorically stated that NEA does not regard Paleco as an “ailing cooperative”, noting that it has a high rating of “double A” in their lexicon.

If true, the DoE’s move to cancel the franchise of Paleco along with other “ailing cooperatives” must have the imprimatur of the NEA, for it is this agency which has a direct hand on the status of franchises like Paleco.

Palawan’s congressional representatives have already disclosed their hand, and it was unfortunate that they have done so with nary a consultation with their supposed constituents. Whether they were acting in good faith to serve the common good or their Palawan constituents or performing at the behest of a private company seeking to undermine Paleco is only for each of them to explain to the public.

At this point, since it is fairly evident there is a strong lobby to take over the Paleco franchise, consumers in Palawan deserve to hear properly from the players involved. Relevant local government units, particularly the provincial government and the city government of Puerto Princesa, should step in to lay bare the agenda for everyone to see.

The lack of transparency on the part of our two congressmen who sponsored the Razon franchise and the acquiescing silence of local government officials do not help but fuel speculations of collusion and conflict of interest.

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