Senate to review co-op, DU franchises

THE Senate is going to initiate a review of franchises held by both electric cooperatives ( ECs) and distribution utilities ( DUs), a legislator said.

“We will now review the franchises of each ailing [electric] cooperative,” Sen. Sherwin Gatchalian, who heads the Senate energy committee, said at the sidelines of the Energy Outlook: Supplying Rising Demand at Lower Cost held recently at Joy-Nostalg Hotel & Suites in Pasig City.

Gatchalian said ailing power cooperatives were those that incurred significant debt losses.

The National Electrification Administration (NEA) has identified the troubled ECs as Albay Electric Cooperative,

Inc. (Aleco); Camarines Sur III Electric Cooperative, Inc. (Casureco III); Masbate Electric Cooperative, Inc. ( Maselco); Ticao Island Electric Cooperative, Inc. ( Tiselco); Tawi- tawi Electric Cooperative, Inc. ( Tawelco); Basilan Electric Cooperative, Inc. ( Baselco); Sulu Electric Cooperative, Inc. (Suleco); Lanao del Sur Electric Cooperative, Inc. (Lasureco); and Abra Electric Cooperative, Inc. (Abreco).

The Senate panel will also evaluate the franchises of all DUs to determine if the electricity they procure is the least expensive in terms of generation.

“We will now review the franchises of all utilities to make sure that they are buying the least cost generation and delivering the best service to consumers,” Gatchalian told reporters.

Republic Act 9136 or the Electric Power Industry Reform Act of 2001 states that a DU should supply electricity at the least cost to its customers.

“If warranted, we will cancel that franchise and give it to another operator who can operate better,” Gatchalian said.

This franchise assessment, he said, can be swiftly escalated to the Joint Congressional Power Commission ( JCPC) so that legislators can act promptly.

Congress has the sole authority to grant franchises to entities engaged in the transmission and the distribution of electricity, the Epira law states.

The Senate energy committee was prompted to look into the franchises of both ECs and DUs following its hearing on the Bicol Light and Power Corp.’s application to hold a franchise to operate, manage, and maintain a power distribution system for end users residing in the towns of Baao, Balatan, Bato, Buhi, Bula, Nabula, and the city of Iriga in the Camarines Sur province.

Incorporated in 1972, Camarines Sur I Electric Cooperative Inc. (Casureco) holds an existing franchise to provide electricity service to 10 towns and 287 barangays in Camarines Sur.

“The last discussion was to come up with another hearing because you cannot have two franchises in one and the same area because the impact would be higher electricity rates to consumers. That’s already a proven fact,” Gatchalian said.

“We will now have another hearing to determine whether to give another franchise is warranted or not,” he added.