ERC grants Peco provisional permit to supply Iloilo power

ILOILO CITY, Philippines — With a new franchise holder still without power distribution assets, the Energy Regulatory Commission (ERC) has granted the Panay Electric Co. (Peco) a provisional permit to continue distributing power in Iloilo City to avert disruption of power supply.

In a 13-page order promulgated on May 24, the ERC issued a provisional certificate of public convenience and necessity (CPCN) to Peco but only within the two-year transition period when More Electric and Power Corp. (More Power), a new distribution firm controlled by billionaire Enrique Razon Jr., is mandated to take over the power distribution in the city.

“If a provisional CPCN is not issued upon expiration of Peco’s CPCN on (May 25), customers will be denied electricity for the reason that no distribution utility is authorized to operate and maintain the distribution system in Iloilo City,” according to the order signed by Agnes Devanadera, ERC chair and chief executive officer, and four commissioners.

Peco’s franchise expired on Jan. 18 while its CPCN was valid only until May 25.

Republic Act No. 11212, signed by President Rodrigo Duterte on Feb. 14, grants a 25-year distribution franchise to More Power. The firm has a pending application for a CPCN in the ERC.

Peco and More Power are locked in a legal dispute over the latter’s bid to expropriate Peco’s distribution assets.

Conditions

The ERC said the granting of provisional CPCN was not an extension of Peco’s franchise.

“I would like to underscore the provision of the law that the provisional CPCN granted to Peco during the transition period shall not be construed as extending the franchise of Peco, which has expired on Jan. 18, 2019. More, on the other hand, can exercise its right of eminent domain whereby it may acquire such private property that is actually necessary to enable it to perform its obligation to provide uninterrupted supply of electricity in Iloilo City,” Devanadera said in a statement.

Peco welcomed the issuance of the provisional CPCN.

“The grant of provisional authority to operate is a great turn of events for Ilonggo consumers and gives the courts time to thoroughly review and deliberate the confiscatory provisions of the More [franchise law]. This [law] will set precedents and affect the entire power industry of the Philippines and should be reviewed with caution,” Marcelo Cacho, Peco administrative officer, said in a statement sent to the Inquirer.