Power co-op group hits ‘flip-flop’ on franchises

An umbrella group of 121 electric cooperatives across the country expressed frustration over the Department of Energy’s (DOE) flip-flop over a recommendation to revoke the franchises of 17 of the group’s members, saying this showed the haste and unjustness of DOE actions.

In a memorandum dated Jan. 11 and addressed to Speaker Gloria Macapagal-Arroyo, Energy Secretary Alfonso Cusi recommended the cancellation of franchises of 17 utilities as these were found to be “underperforming, financially and technically distressed.”

Withdrawn

Cusi said aside from recommending that the cooperatives’ franchises be revoked, the DOE was also drafting policy to adopt a process of competitive selection for the grant of franchises to replace the existing utilities.

But on Friday, when Philippine Rural Electric Cooperatives Association Inc. (Philreca) raised a howl of protest over the memo, Energy Undersecretary Felix William Fuentebella said Cusi had already withdrawn his recommendation on Jan. 29.

“The DOE sees the need to further evaluate and assess the present status and performance of the 17 electric cooperatives,” Fuentebella said.

Targets

Philreca said in a statement that such flip-flopping meant that the recommendation was done in haste and in the absence of due diligence on the part of the DOE.

The 17 utilities included the cooperatives of Abra (Abreco), Pampanga 3 (Pelco III), Occidental Mindoro (Omeco), Oriental Mindoro (Ormeco), Palawan (Paleco), Camarines Sur 3 (Casureco III), Albay (Aleco), Masbate (Maselco), First Catanduanes (Ficelco), Ticao Island (Tiselco), Zamboanga City (Zamcelco), Davao del Norte (Daneco), Basilan (Baselco), Sulu (Suleco), Tawi-Tawi (Tawelco), Maguindanao (Magelco) and Lanao del Sur (Lasureco).

“While we believe that recalling and revoking the original endorsement is the right thing to do, his (Cusi’s) actions have already caused significant damage and irreparable negative impression on the electric cooperatives,” Philreca said.

Review

On Friday, Cusi, in a statement, announced that the DOE would review all electric cooperatives’ compliance with service requirements of their franchises.

The energy chief said many cooperatives had failed to carry out their mandate for various reasons.

The controversial memo came in the wake of another controversy over the takeover bid targeting Iloilo City’s Panay Electric Co. (Peco), which had applied for renewal of franchise following endorsement by the DOE.

Peco’s franchise, however, lingered without action at the House of Representatives which instead approved the application for franchise of a new power industry player, More Electric and Power Corp.