PECO seeks ERC to reconsider revocation of authority to operate

By Victor V. Saulon
Sub-Editor

PANAY Electric Co., Inc. (PECO) has asked the Energy Regulatory Commission (ERC) to permit the distribution utility’s continued operation in Iloilo City while the area transitions to a new franchise holder, after the regulator revoked PECO’s authority to do so.

“This morning we filed with the ERC an urgent motion for reconsideration” relating to the revocation, PECO legal counsel Estrella C. Elamparo said in a briefing Monday in Manila.

She said the ERC had been misled into the impression that MORE Electric and Power Corp. now has control over the operations of the city’s power distribution.

The ERC filing is the latest development in the dispute between PECO, Iloilo City’s power distributor since 1923, and the new franchise holder of that service, businessman Enrique K. Razon, Jr.’s MORE.

In its motion, PECO said it was “unofficially” shown by MORE on March 6 the ERC resolution revoking its certificate of public convenience and necessity (CPCN). The resolution was issued on March 5 by ERC Chairperson and Chief Executive Officer Agnes VST Devanadera.

The ERC said it had revoked the CPCN after determining that MORE had established or acquired its own distribution system, and after verifying that Mr. Razon’s company has transitioned to full operations.

In its resolution, the ERC also issued a provisional authority to MORE to operate the city’s distribution network and to implement the last approved distribution charges of PECO.

However, PECO’s legal counsel said the ERC had relied on the supposed issuance of a writ of possession in favor of MORE and its “purported findings.” It said the evidence relied upon by the commission is “based on shameless misrepresentations” by MORE.

“If not reversed, the Resolution would cause serious confusion among the consumers of Iloilo and trigger violations of contractual obligations, not to mention eventual disruption of electricity in Iloilo,” PECO said.

Ms. Elamparo said she remains hopeful that the ERC would reverse its order and reinstate PECO’s provisional CPCN and revoke the provisional authority issued “by mistake” to MORE.

Aside from the filing with the ERC, she said PECO had filed an urgent motion before the Court of Appeals (CA) for a temporary restraining order (TRO) and put on hold the writ of possession issued by a regional trial court in Iloilo that prompted MORE to start taking over the power distribution assets.

“Although it’s just a temporary restraining order that restrains the doing of future acts, there is a principle called status quo ante, meaning a TRO can restore the parties to the status prior to the controversy, especially if the acts were performed after an application for TRO was already made,” Ms. Elamparo told reporters after the briefing.

She also said PECO has a pending application, filed earlier this year, for franchise renewal. She said the application “could still move.”

“We’re hopeful it will move,” she said.

Marcelo U. Cacho, PECO head of public engagement and government affairs, said the company has two years after the issuance of the CPCN in May 2019 to operate as Iloilo’s distribution utility.

“So that means up to May of 2021, so that’s a lot of time, that’s still over a year,” he said.

Ms. Elamparo said MORE has two years after the grant of its franchise on Feb. 14, 2019 to “legally and completely” take over or build up its own facilities, otherwise its franchise will be automatically revoked.

Asked whether PECO is willing to settle, Mr. Cacho said, “I think the best settling for them is, they build their own facilities and we can compete,” he said.

He said the last appraisal made by PECO on the value of its power distribution assets was made in 2018, although the company has since invested in more equipment, including enhancements in its substations.

“The valuation we got was P4 billion,” he said about the appraisal done about two years ago.

Ms. Elamparo said the deposit made by MORE for the distribution assets was “grossly insufficient” at just a little over P500 million.

She said a case remains pending at the Supreme Court after MORE questioned a judgment issued by a Mandaluyong regional trial court that declared the expropriation of PECO’s power assets as unconstitutional and illegal.

She said MORE should have waited first for the high court’s decision instead of asking the Iloilo court to issue the writ of possession.