Senate OKs 25-year franchise to new Iloilo power coop

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The Senate approved on third and final reading the 25-year legislative franchise to MORE Electric and Power Cooperation (MORE Power).

House Bill No. 8302 was approved with 15 affirmative votes, zero negative vote, and no abstentions.

MORE Power will take Panay Electric Company’s (PECO) place as the only power distributor in Iloilo City as PECO’s franchise ends in January 2019

“There were many complaints that PECO failed to give good service, their assets did not improve, and even the power distribution which triggered brownouts. They have also been charging high rates which were not appropriate,” said Senator Grace Poe, chairwoman of the Senate Committee on Public Services, in a Panay News article.

The franchise bill provides for a transition period of not more than two years from the grant of legislative franchise, allowing PECO to operate temporarily until MORE Power is in full operation.

During the transition period, PECO is required to settle all refunds in connection with the all cases filed against it.

Meanwhile, MORE Power is directed to conduct an information campaign for its operations to Iloilo end-users and to “accord preference” to hiring PECO employees.

Both companies are also required to ensure that laid-off employees receive all separation and retirements benefits prescribed by law.

The bill also includes provisions for MORE Power to undergo a competitive selection process in securing power supply agreements. It should also reduce the duration and frequency of power interruptions.

MORE Power is required to submit an annual report to Congress on its compliance with the terms and conditions of the franchise. Any sale or transfer of its shares are also subject to Congressional notification.

Meanwhile, the Energy Regulatory Commission (ERC) was directed to conduct a comprehensive assessment of the company’s operations one year after the grant of the franchise and five years thereafter.

Cheaper rates under MORE Power

Headed by billionaire Enrique Razon, MORE Power said they are prepared to provide cheaper electricity rates to the residents of Iloilo City.

In a Manila Standard report, MORE Chief Compliance Regulator Cyril del Callar was quoted as saying the company plans to reduce electricity rates in the area by securing electricity supply from cheapers sources like the Wholesale Electricity Spot Market (WESM) where power rates sold were lower by P4 per kWh.

He added that Ilonggos had been paying electricity rates as high as P13 per kWh for roughly a decade while residents in Metro Manila were paying only about P11 per kWh, prompting the residents to spearhead a campaign to replace PECO.

These consumer complaints, he noted in the report, formed the basis of the Iloilo City Council resolution in November 2017 that asked Congress not to renew PECO’s franchise and the national government to take over its operation.

Del Callar was also quoted as saying the complaints under the resolution prompted MORE to apply for a congressional franchise for power distribution in Iloilo City to improve electricity service, help lower the city’s power rates, and address other consumer complaints.

Meanne Rosales is a reporter and segment producer at Power Philippines. For content concerns, story pitches, or partnerships and collaborations, you may contact her through meanne@powerphilippines.com.

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