Group opposes House bill to expand franchise for public electricity distribution service in Iloilo City

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ILOILO CITY — The country’s National Association of Rural Electricity Cooperatives opposes a bill that would extend coverage of the Iloilo City electricity distributor owned by business mogul Enrique Razon Jr.

Iloilo Rural Electricity Co-operatives have also warned that passage of the bill would lead to private companies taking control of the electric co-operatives.

In a four-page position paper dated September 28 and submitted to the House of Representatives, the Philippine Rural Electric Cooperatives Association Inc., which has 121 members, said that the extension of More Power Electric Corp’s franchise area . (More Power) would cause an increase in electricity. costs, unlike supporters of House Bill 10258.

The bill, sponsored by seven lawmakers, including Iloilo representatives Michael Gorriceta and Braeden John Biron and Iloilo City representative Julienne Baronda, provides for the extension of More Power’s franchise area of ​​Iloilo City to 15 other towns and a town in Iloilo.

These include the towns of Alimodian, Leganes, Leon, New Lucena, Pavia, San Miguel, Santa Barbara, Zarraga, Anilao, Banate, Barotac Nuevo, Dingle, Duenas, Dumangas, San Enrique and Passi City.

In their explanatory note, Biron and Gorriceta cited reduced electricity tariffs and the rehabilitation and improvement of the electricity distribution system in the town of Iloilo a year and a half after More Power took over the distribution assets. and the operation of Panay Electric Company (Peco).

“We believe that such a service, marked by the highest standards, and which has proven to be fast, reliable, responsive, modern and forward-looking, should also be made available to Ilonggos outside of Iloilo City, ”they said.

But Philreca pointed out that these areas are already covered by Iloilo Electric Cooperative (Ileco) 1, Ileco 2 and Ileco 3.

He said that granting More Power legislative franchise to operate in these areas violates Republic Law 9136 (Electric Power Industry Reform Act 2001 or Epira).

It also violates a provision of the National Electrification Administration Act which states that “… no franchise for the service shall be granted to another person in an area or part for which a cooperative holds a franchise … According to Philreca’s position paper.

Allowing more electricity to operate in areas where electric co-ops already serve consumers would also be redundant and incur additional costs, he said.

“More (Power), if allowed to expand its franchise as a public distribution utility, will then build a duplicate distribution system and redundant facilities to serve the same customers,” Philreca said.

He said More Power’s tariffs in Iloilo City are lower than those of rural cooperatives because its source is from a subsidized company owned and controlled by the government.

“In the long run, More (Power) cannot offer cheaper and more affordable electricity and power costs in the added areas. Instead, it will only charge consumers a higher rate, ”according to the position paper.

More Power announced earlier that starting in May, it was largely sourcing from Leyte’s unified geothermal power plants, through Power Sector Assets and Liabilities Management Corp. via the electricity network, allowing it to choose the cheapest tariff.

Residential consumers in the city of Iloilo were billed P6.4562 per kWh from P10.0149 in June or a decrease from P3.55.

The rate for commercial consumers also fell from 3.31 P per kWh to 6.18 P in July from 9.49 P in June.

More Power took over Peco’s distribution assets in February last year after the Iloilo Regional Magistrates’ Court issued a possession order.

Republic Law No. 11212 signed by President Duterte on February 14, 2019 granted More Power a 25-year franchise to establish, operate and maintain an electricity distribution system in the city of Iloilo.

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