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DoE says gov’t takeover will be last resort in Iloilo City’s power distribution issue

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ENERGY Undersecretary Felix B. Fuentebella, speaking to the media on May 18, assured Iloilo City residents that the government will not allow a breakdown in power supply delivery. — BW/ERSSANTIAGUDO

ILOILO CITY — Department of Energy (DoE) Undersecretary Felix B. Fuentebella has assured residents here that they are monitoring the power distribution tug-of-war between two companies and that the government will be ready to step in should the situation lead to a breakdown in supply delivery.

“Government takeover is always the last resort. Makikialam ang gobyerno (The government will step in) under the Constitution in public utilities, but this is only subject to the condition of there is really no power supply,” Mr. Fuentebella said last May 18, when he was in town as guest speaker of the 43rd Regional Alumni Institute of the University of the Philippines.

For now, he said, the transitory provision of Republic Act (RA) 11212 must be followed.

RA 11212 grants MORE Electric and Power Co. (MORE Power) the franchise to distribute supply in Iloilo City, but the company has yet to secure a Certificate of Public Convenience and Necessity from the Energy Regulatory Commission (ERC) amid a protracted legal battle with longtime distributor Panay Electric Co. (PECO).

PECO’s CPCN, meanwhile, will expire by May 25, and its congressional franchise already expired last Jan 19.

A CPCN serves as the permit to start operations for a utility.




“Once this issue will heighten, there’s a transitory provision in the franchise law… Under the law, we (DoE) only have the supervisory (power) so we cannot meddle unless we see a violation on the player,” Mr. Fuentebella said.

Based on the transitory provision, PECO may be authorized to operate for two more years until MORE Power has established its own power distribution system.

Mr. Fuentebella also emphasized that they cannot intervene since there are pending court cases, but he stressed that the primary thrust of DOE is to safeguard consumers.

“There’s a court case going on so we’re just waiting for all this because we cannot really intervene as far as this hearing is concerned. At the end of the day, the DoE is always on the consumer side because we want a smooth transition and we want uninterrupted services,” he said.

In an earlier interview, PECO Vice President for Operations and General Manager Randy S. Pastolero said they will heed the DoE until the franchise issue is resolved.

He also assured that the company will continue operating even after the expiration of its CPCN, unless there is a specific instruction from authority.

“Definitely, we will not stop our operation just because our CPCN already expired because we already agreed with the DoE and even our power suppliers that the delivery of power services to our consumers would be paramount,” he said.

Last March 11, MORE Power filed an expropriation case before the Iloilo Regional Trial Court in a bid to acquire PECO’s assets.

PECO struck back by seeking an injunction and temporary restraining order (TRO) against MORE Power, which was granted for 20 days by the Mandaluyong City Regional Trial Court Branch 209 on March 13.

MORE Power, however, secured on March 28 a 60-day TRO from the Court of Appeals preventing the Mandaluyong City RTC from enforcing its TRO.

Meanwhile, MORE Power continues to prepare for a possible takeover of the power distribution services in the city.

Last May 15, MORE Power signed a one-year interim power supply agreement with KEPCO SPC Power Corporation (KSPC) for 5 megawatts (MW) and an option for another 5 MW. — Emme Rose S. Santiagudo