Duterte to Palawan power firm: Shape up or face takeover

/ 05:16 AM November 12, 2018
ENERGY SOURCE The Malampaya gas field, just off Palawan province, is one of the country’s sources of energy. —INQUIRER PHOTO

ENERGY SOURCE The Malampaya gas field, just off Palawan province, is one of the country’s sources of energy. —INQUIRER PHOTO

PUERTO PRINCESA CITY — President Rodrigo Duterte warned that the national government would take over facilities of Palawan’s lone power distributor and bring in a foreign company if recurring outages did not end.

The President said he was giving Palawan Electric Cooperative (Paleco) until the end of the year to shape up or ship out.


Speaking at an event celebrating the Underground River late on Saturday, the President said unless Palawan’s power problems were solved within the year, he would order the expropriation of the cooperative and turn over its franchise to more capable entities.

He cited Chinese companies, which he said were interested in power distribution in the province.


The President was the main guest at the launch of the city’s “Subaraw Festival” dedicated to the Underground River.

1-hour speech

“On the extreme, maybe I will give you about toward the end of the year [to have] a new set-up that would provide enough energy so that it can operate and it can move,” the President said in a rambling hour-long speech at People’s Amphitheater in Mendoza Park.

“You have to upgrade your source of energy. If not, I will find one with funding — China has been itching to get hold of developments here,” Duterte said.

The Palawan mainland grid, which is operated by Paleco and supplied by two independent power producers, has been experiencing regular power service interruptions caused by multiple problems.

These included generator malfunctions and problems in distribution lines.

The outages sometimes last up to six hours in some areas, including this city.


Eminent domain

“That is not acceptable to me,” the President said, adding that the national government can exercise its “power of eminent domain” to take over Paleco and bring in another distributor.

“I will expropriate your franchise,” the President said. “I’ll buy that at a valuation that is fair — just compensation.”

Reacting to the President’s pronouncement, Paleco board chair Jeffrey Tan-Endriga said the problem of Palawan’s power sector was rooted in national agencies that Paleco had to deal with.

“Our problems are with national agencies,” he said.

Close supervision

He cited as example the Energy Regulatory Commission, which sat on Paleco’s capital expenditure plan for two years, delaying Paleco projects.

Being a nonstock, nonprofit entity, Paleco is being supervised by the Department of Energy through the National Electrification Administration, Tan-Endriga said.

“How could we invest in our situation where every move should be supervised?” he said.

“The electric cooperative has no autonomy even if we are the ones who understand better the situation,” he added.

The President also took the occasion to reiterate his administration’s stance on exploitation of Palawan’s energy resources.

He said, though, that the Philippine government was open to joint exploration not only with China, but with the United States and other countries, too.

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TAGS: Energy Regulatory Commission, ERC, Jeffrey Tan-Endriga, Palawan Electric Cooperative, Paleco, Rodrigo Duterte
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