President Rodrigo Duterte’s decision to take over the Palawan Electric Cooperative (PALECO) has caught local cooperative officials by surprise but vowed to appeal the decision before Malacañang.
PALECO chair Jeffry Endriga-Tan told Palawan News they will try to explain their “actual situation” to the president, stating that the statements he made during his speech Thursday, November 4, at the Western Command (WESCOM) headquarters were based on “wrong information” fed to him by a city council official.
“Ang gagawin po natin ay iparating sa kanya (Duterte) ang actual and real facts of our status and accomplishments. Mahirap talaga ang situation ng mga electric coops not only PALECO but all 121 electric coops,” Endriga told Palawan News.
President Duterte, in an apparent surprise policy order during his visit to Puerto Princesa, said he will ask the Department of Energy (DOE) to effect a government takeover of the power distribution franchise for Palawan, citing its performance as the basis for the takeover. He vowed to issue an order to this effect “next week.”
He asserted that there is a basis for his action, pointing out that the cooperative’s function is imbued with the public interest.
“You cannot claim private interest because itong ilaw is impressed with public good,” he said.
The president did not elaborate on the mechanism of the government takeover but stated that PALECO will have to agree to a government-initiated buyout of the distribution facility.
“Either you come to agree with us or I will order an expropriation. I will do it next week, I will issue the order,” he said.
Endriga blames Damasco
“Very clear kanino ba galing ang info kay (Elgin) Damaso so meaning bias. But I know President Digong, he is a man of justice. Syempre, bilang ama natural ‘yan, maggalit ‘yan sa anak dahil nagsumbong ‘yong sinungaling na anak,” Endriga said.
He said they will submit “actual and real facts” on the status of the cooperative to the Office of the President.
Responding to Endriga’s accusation, Damasco stood by his criticism of PALECO.
“Bakit, hindi ba totoo ang nakasaad sa aking liham? Simula 2018 noong unang nagbanta ang Pangulo sa PALECO na dapat ayusin nila ang serbisyo, may nagbago ba? Simula noon hanggang ngayon ganoon pa rin, madapuan lang ng ibon, madaanan lang ng daga o ahas ang linya nila, brown – out na kaagad. Libo libong appliances na ang nasira dahil sa power surge. Sa Rio Tuba, low voltage ang kuryente doon, dami na nasira appliances. Ayon sa report ng NAPOCOR sa pagdinig noon sa Kongreso,more then 70 percent ng cause ng brown – out is nagmula problema sa distribution system ng Paleco. Sino ngayon ang nagsisinungaling?,” Damasco told Palawan News.
Takeover of cooperatives
Endriga also expressed concern over what he claims to be a policy initiative of the DOE and the National Electrification Administration (NEA) to put “cronies” in every cooperative.
“Ang DOE-NEA, they want to take over electric coops and put cronies in every coop. Nakuha na nila ang Malampaya, the source. Ang market naman ang kailangan nila para kumpleto na,” he said.
“But I believe in our president. Mas importante sa kanya ang kapakanan ng taong bayan and PALECO is owned by our MCOs,” he added.
Duterte’s warning in 2019
In 2018, Duterte came to Palawan for a visit and blasted PALECO during an impromptu speech at Mendoza Park. He warned that the cooperative must shape up by the end of that year or the government will have private entities take over.
He even dropped a hint of Chinese business interests but did not go into details.
DOE audit and intervention
In early 2019, DOE Sec. Alfonso Cusi had recommended the cancellation of the franchises of 17 ailing cooperatives that included PALECO.
Cusi’s letter which was addressed to then-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.
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.
The board of directors of PALECO submitted a position paper to the Lower House opposing the granting of a franchise to MORE Reedbank Corp. PALECO was firmed against the takeover of its franchise.
DOE following his recommendation of franchise cancellation has created a task force to conduct a comprehensive institutional, financial, and technical audit of PALECO.
It was dubbed as “Task Force Palawan Power”, composed of representatives from the DOE, National Power Corporation (NAPOCOR), NEA, Energy Regulatory Commission (ERC), and PALECO.
A “Task Force Kapatid” was also created where some of the electric cooperatives went to Palawan to help PALECO to conduct upgrading activities. NEA has instructed PALECO to create a sustainability plan for vegetation management.
Threat of takeover and expropriation
Endriga in a radio interview on Friday said what they are currently considering is the proposal for a joint venture with MORE Electric and Power Corporation (MORE Power).
“Pero hindi ko iniisip ang ganitong bagay, worst case scenario is nakikita natin na isang paraan na magkaroon tayo ng joint venture. Ang proposal po ng ating mahal na governor, kino-consider natin at tinitingnan natin kung ano ang magiging epekto nito, kung ano ang advantages at disadvantages,” he said.
In September 2021, MORE Electric and Power Corporation (MORE Power) had an idea of a joint venture with PALECO to participate in operating the latter’s distribution franchise in the province. Governor Jose Alvarez also vocal with his support to the MORE Power during the congressional probe citing its “low rate” implemented in Iloilo.
“Kailangan natin pag-aralan ito, sa ngayon ang MORE Power ay interesado makipag-joint venture sa ating kooperatiba. Hindi natin sinasarado ang ating pinto upang pag-aralan ‘yong kanilang intensyon,” Endriga added.
A related Supreme Court decision in 1998 had struck down a government order to take over an electric cooperative in Camarines Norte, stating that “pertinent laws on cooperatives, namely, R.A. No. 6938, R.A. No. 6939, and P.D. No. 269 as amended by P.D. No. 1645 does not provide for the President or any other administrative body to take over the internal management of a cooperative.”
The SC case refers to Camarines Norte Electric Cooperative, Inc., et al. vs. Ruben D. Torres. (with a report by Patricia Laririt)