Sep 26, 2020

PALECO to oppose franchise bid of MORE Reedbank Corp

The board of directors of the Palawan Electric Cooperative (PALECO) will submit a position paper to the Lower House opposing the granting of a franchise to MORE Reedbank Corp. to establish and operate a power distribution system in the province.

The corporation is a subsidiary of Enrique Razon Jr.’s Prime Metroline Holdings, Inc. (PMHI).

PALECO board chair Jeffrey Y. Tan-Endriga said their position paper against House Bill No. 8829 authored by House Reps. Frederick F. Abueg and Gil A. Acosta will argue among others the fact that it was never consulted with them at the onset and it still has a 10-year franchise that cannot be legally terminated

“Ito ang pinanghahawakan natin para i-sustain ang ating kooperatiba. Na-cite namin doon ang mga reasons kung bakit [ayaw namin]. Actually, di pa siya tapos. But ‘yong concept or tema is. You know, instead na tulungan ng ating local officials ‘yong problema natin sa kuryente, mukhang parang lalo pang pinabayaan, lalo pang pinagkanulo… parang ganoon. Sad to say, ganoon ang interpretation natin,” he said.

(This is what we’re holding onto to sustain our cooperative. We cited there the reasons why we don’t want it. Actually, it’s not yet complete. But the concept or theme is like that. You know, instead of helping us in our electric problem, our local officials abandoned us, they betrayed us… like that. Sad to say, it’s how we interpret it.)

Endriga reiterated they were not consulted, and that as far as they are concerned, the PALECO franchise is still good for 10 years before expiration and “it is not an ailing cooperative to be abandoned” by the granting of another franchise to a private power producer.

He said there is no sense in MORE Reedbank Corp. coming to Palawan to take over the PALECO franchise.

Endriga stressed that the cooperative has been transparent in its management and operation, and acknowledges that it has technical problems that cause power interruptions, such as vegetation clearing because the local Department of Environment and Natural Resources (DENR) had been very strict in the past in granting them tree cutting permits.

He said part of the solution to their problems too was supposedly their proposed P1.161 billion from 2017 to 2021 for capital expenditure (CAPEX), but its approval for 29 proposed projects was delayed.

It was only approved by the Energy Regulatory Commission (ERC) in December last year, and lower at P1.082 billion from their original submission.

“Our situation is kailangan nating magkaisa, magtulungan dahil sigurado… kung saka-sakaling mangyari ang kagustuhan nila… ito ay malaking disadvantage sa part ng consumers considering na nasa Small Power Utilities Group (SPUG) area tayo,” he said.

(Our situation is when need to be one and help each other because… if what they like happens… it will be a big disadvantage on the part of the consumers considering we are in a SPUG area.)

He said PALECO cannot be compared to the private company Panay Electric Company, Inc. (PECO) whose franchise had expired and was not renewed reportedly due to bad service, high power rates, and inefficiency.

Endriga said what he wants to emphasize is that in the case of PECO, it does not follow that a private electric company would have good power services compared to a power cooperative.

“Mawawala ang subsidiya natin kung magiging private company na ang kooperatiba at tiyak na magiging profit-oriented ‘yan. May markup cost ‘iyan sila tiyak. What can you expect? High rate, pero the same line ang gagamitin nila. Linya ng PALECO so, nagbago lang ng management pero the same instrument, the same venue, tumaas pa ang kuryente,” he said.

(We will lose our subsidy if the cooperative becomes a private company, and it will be profit-oriented I’m sure. They will impose a markup cost. What can you expect? High rate, but the same instrument, the same venue, and power rate will increase.)

Endriga said other cooperatives in the country have also expressed support recently to rally behind them to prevent their privatization since it may become a precedent.

He said House Bill No. 8829 is “very unfair” to the PALECO, especially its use of the December deadline given by President Rodrigo Duterte.

Abueg and Acosta noted that the service of the electric cooperative has been ‘wanting’ due to serious problems of frequent and long power outages.

“Among the complaints against PALECO are serious problems of frequent and long power outages and power interruptions, inadequately-maintained lines, inadequate investment in distribution facilities, and inordinate delay in the restoration of power services, among others,” Abueg’s and Acosta’s “explanatory note” of the bill stated.

Both believe that if MORE Reedbank Corporation is granted a franchise “to establish, operate, and maintain electricity distribution in the province”, it will solve “continuing inefficient management of the distribution of electricity to the Palawan mainland” which is currently distributed by PALECO.”

Meanwhile, former PALECO officer-in-charge Napoleon Cortes, Jr. pointed out that under Presidential Decree 2699, if there are two applicants requesting for a franchise in one area — one private company and the other a cooperative — the preference will be given to the latter.

“Therefore, hindi pwede magkaroon ng dalawang franchise sa isang lugar maliban na lang kung i-repeal nila ang provisions ng PD 269. Wala pang lugar sa Pilipinas na may dalawang franchise ang isang electric utility,” Cortes said.

(Therefore, there can’t be two franchises in one area unless they repeal the provisions of PD 269. No place in the Philippines has two franchises for one electric utility.)

PALECO project supervisor and acting general manager Engr. Nelson A. Lalas, on the other hand, said that as a “Double A” cooperative which only has a technical problem, the power cooperative should not be privatized.

He said PALECO should also not shoulder all the blame for its technical problems because the National Power Corporation (Napocor) and the independent power producers have a hand in it.

“When I assumed office, we went to Brooke’s Point and we had an investigation and we saw that the power interruption was not only the responsibility of PALECO alone. Even the transmission lines of the Napocor and its power suppliers are to blame,” he said.

Lalas said the problem in vegetation is now being resolved by ongoing clearing operations that are performed by a task force they formed.

Lalas said the operations in progress are already 62 to 70 percent completed and targets to finish by the February.

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