AS the Panay Electric Co. counts down its last few days as Iloilo City’s lone electricity provider—a distinction it has held for the past 95 years—the cause of its imminent demise is still a raw wound, most especially to its owner. Expectedly, the Cacho family will fight it out as long as it can. The company is the family’s “baby,” and the decision of both chambers of Congress to end Peco’s franchise has apparently wounded the Cachos deeply and painfully.
Just weeks ago, a letter-memorandum, purportedly signed by House Speaker Gloria Macapagal-Arroyo “commanding” the chairman of the House Committee on Legislative Franchise to meet with its Senate counterpart, scorched the Internet. In the alleged letter, Arroyo wrote that she was acting in accord with President Rodrigo Duterte who urgently wanted a consolidated bill so he could sign it into law. GMA and the lower house have denied that such a letter exists.
However, whether GMA sent a letter or not is immaterial. As I have written in my previous column, based on what my friends from Iloilo and the voluminous documents that I have gathered have revealed, the true story behind the Peco debacle is a different story from what the Cachos want the public to believe. The company has been remiss in fulfilling its mandate to efficiently provide its customers with cheap and reliable power.
The debate that led to the impending end of this 95-year-old franchise may have begun from the company’s own declaration of the amount it pays for the electricity that it sells to its more than 54,000 customers. Talk about a fish getting caught by its mouth!
According to its homepage, https://panayelectric.com/index.php/home/peco-suppliers, Peco has been paying an average generation cost of P7.7307 per kilowatt hour for 97.6 percent of the electricity it buys from exclusive power-purchase agreements for distribution to Iloilo City residents. This average generation cost has been translated to a distribution rate or monthly bill that ranged from a high of P12.1576 per kWh in September 2018 to its lowest rate of P11.1426 per kWh in January 2018 (https://panayelectric.com/index.php/home/monthly-rate)
In the same web site, Peco reveals that it paid only an average of P1.9812 per kilowatt hour of electricity that it bought through the Wholesale Electricity Spot Market (WESM), an open market where utilities distributing electricity in their franchise areas bid for and acquire contracts for electricity supply from power-generating companies offering their excess generating capacity for sale.
Ironically, Peco claims its power rates have been going down since being cited in 2010 by the Freedom from Debt Coalition-Iloilo as the power utility with the highest electricity rate not only in the entire Philippines but in the world. Aside from the higher rates they were charged, Peco consumers also complained about frequent billing errors—whether deliberate or accidental.
Peco’s rival MORE Electric Power Corp., which secured the legislative franchise to take over electricity distribution in Iloilo City once Peco’s franchise expires on January 18, 2019, has committed to buy more electricity from WESM, especially if the power rates in the electricity supply bidding system is low. MORE President Roel Castro said that on average WESM rates for the Panay Island cost P3.13 per kWh in 2018.
Because of its exclusive power- supply agreement with two coal-fired power companies in Panay Island, Peco has had to charge higher rates to its 54,000 customers. Castro says MORE Power will implement a more fluid electricity supply-management system that will take advantage of the lowest price to benefit Iloilo City consumers when it takes over the distribution franchise in January.
Business group Iloilo Economic Development Foundation (ILED) conducted two focus group discussions (FGDs) on March 6, attended by Peco and its consumers, including a migrant worker’s organization, the Iloilo Metropolis Subdivision Homeowners’ Association, nongovernment organizations, and business and professional organizations.
When she appeared before the Senate hearing on the Iloilo City utility franchise, ILED Chairman Narzalina Lim said that the FGDs sought to address the issue that Peco has unsatisfactory customer service. “The complaints focused mostly on billing errors and the lack of empathy shown by Peco employees when people complain in person at the Peco head office. Calling the hot line was even worse. There was nobody picking up on the Peco end,” Lim told the Senate (https://investiniloilo.com/news/).
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