The House of Representatives conducted an important inquiry on the Palawan power issue on Monday, February 5. It was a probe initiated by Palawan congressmen to look at the controversies surrounding the steep rise of electricity rates in the province and the accusations of mismanagement by the Palawan Electric Cooperative (PALECO), the franchise holder for power distribution in the province’s main grid.
The hearing unfortunately quickly transformed into a bashing session on PALECO and its officers instead of a level-headed inquiry and solutions to bigger problems. No less than the committee chair, Marinduque Rep. Lord Velasco, set the tone of the session by taking the cudgels for PALECO’s aggrieved consumer owners, pointing out the cooperative’s alleged lack of management capacity and its supposed negative track record as an inefficient service provider.
What was missing as the committee meeting drew to a close was a discussion on the important answer to the question – what to do?
Some PALECO stakeholders simply want to get rid of the PALECO management, citing mismanagement and lack of capacity on the part of its officers. They had gone to Congress with a demand that the National Electrification Agency (NEA) take over the cooperative. Rep. Jose Alvarez of the 2nd district, for his part, had long expressed his view that PALECO should enter a joint venture with a new player from the private commercial sector if it is to efficiently perform. At the hearing, he lamented the fact that none of his pitches for such ventures has materialized.
PALECO, for its part, blames the national government policy removing the so-called missionary subsidy for island grids like Palawan as the reason for the steep power race increase now being experienced by Palawan consumers. For its own sake, it failed miserably to defend its reputation and track record during the inquiry, overwhelmed by the collective political weight arraigned against it.
The House Energy committee ought to continue with that public hearing, but this time invite NEA, the Department of Energy, and even the private sector players that have expressed interest at some point in taking over PALECO or entering into a joint venture with the cooperative to perform its role of power distribution. That should be a robust mix of resource persons who could illuminate possible policy directions.
The question of whether a government takeover of PALECO is possible and makes financial sense should be addressed by NEA or the Department of Energy.
On the option of privatizing PALECO or forcing the cooperative to accept a joint venture offer, has there been any financial due diligence done about this by any of the interested parties? What were their findings and how does this policy track impact the pricing of electricity in Palawan?
The issue is not solely about PALECO and its officers if only one would care to understand.