Iloilo executives, solons mulling review of lone power firm’s franchise

ILOILO CITY—Lawmakers and officials of Iloilo City are holding preliminary meetings to determine whether or not to conduct a full-blown review of the franchise granted to the city’s lone power distributor.

City Rep. Jerry Treñas said Iloilo officials including Sen. Franklin Drilon and Mayor Jed Patrick Mabilog would meet with officials of the Department of Energy to discuss the power situation especially in the city and the quality of service of Panay Electric Co. (Peco).

He said the preliminary meetings were aimed at gathering data before meeting with Peco officials.

“If it will be shown that the power situation in Iloilo City has turned from bad to worse because of Peco’s inaction, then we will have to review [its franchise],” Treñas told the Inquirer.

Drilon said he would also look into the request of Mabilog when the Senate returns to its legislative work after the impeachment trial of removed Chief Justice Renato Corona. The trial lasted for nearly six months and ended with Corona’s conviction on May 29.

Mabilog last month wrote separate letters to Drilon and Treñas, asking Congress to conduct a review of Peco’s franchise and consider opening a franchise to other power distributors in the city.

He cited losses to businesses due to brownouts and the need for a stable power supply amid increased investments and development projects in the city.

Peco, which has been operating since 1923, is the city’s lone power distributor and services 53,000 households, commercial establishments and offices.

The Cacho family has a 70-percent stake in the company while the remaining 30 percent is controlled by the Lopez-owned First Philippine Holdings Corp. (First Holdings).

The mayor called for the review after the May 2 citywide blackout that lasted from seven to 19 hours especially in the city’s business district.

Peco has apologized for the blackout and has explained that it was caused by a rare technical glitch.

It said the blackout was triggered by a “flashover” or mini-explosion in one of its five substations but was worsened by interconnection problems with its supplier, Panay Energy Development Corp. and Panay Power Corp.

The management of the electric distributor has assured that it is addressing the problems and is improving its services through a four-year development and upgrading program costing P240 million.

Mabilog earlier said that if franchises would be opened to other players, the city could invite investors like  Aboitiz Power Corp. or that of business tycoon Manuel Pangilinan through  Manila Electric Co.

Peco has an existing 25-year franchise granted by Congress in 1994, which will expire on 2019.

The power distributor insisted that under the Electric Power Industry Reform Act, power transmission and distribution are “natural monopolies” with only one franchise given in a particular area.