After controversial takeover of PECO.
BUSSINESSMAN Enrique K. Razon Jr., with the backing of Palawan local officials and his allies in Congress, is now targeting the Palawan Electric Cooperative (PALECO) after a controversial but successful effort to wrest the franchise of the Panay Electric Company (PECO) early this year.
The records from the just concluded 17th Congress disclosed that last January 14, House Bill (HB) 8829 was filed by Palawan second district representative Frederick Abueg and Palawan third district representative Gil Acosta pushing for the grant of a 25-year congressional franchise to ‘MORE Reedbank Corporation.’
The company is part of the Prime Metroline Holdings Corporation, where Razon sits both as board chairman and chief executive officer.
Palawan governor Jose ‘Pepito’ Alvarez, in talks with the local media last February, took credit for the filing of HB 8829 by Abueg and Acosta in favor of Razon.
Alvarez belittled PALECO’s status as a “cooperative,” which, he claimed, is an “inefficient” way of running a power distribution company.
The filing of HB 8829 came on the same month that Energy Secretary Alfonso Cusi wrote a letter to Congress calling for the revocation of the franchises of 17 existing electric cooperatives in the country to include PALECO.
Cusi branded these cooperatives as “underperforming” and “financially and technically distressed,” an accusation vehemently protested both by PALECO and by the Philippine Rural Electric Cooperatives Association (Philreca).
Although Cusi subsequently recalled the letter, he approved the creation of a “special task force,” ‘Task Force Palawan Power,’ to conduct a “comprehensive audit” of PALECO, a move that Palawenos feared, is intended to find justifications to cancel the cooperative’s franchise so it can be given to Razon.
Based on its business profile, PALECO is a non-stock, non-profit electric cooperative established in 1974 with the approval of the National Electrification Administration (NEA), through the mandates given to it under Presidential Decree (PD 269).
On the other hand, its last registration with the Cooperative Development Authority (CDA) in 2010, gave it a term of another 50 years. Its franchise as a power distributor is set to expire by 2029 or 10 years from now, according to its board chairman, Jeffrey Tan-Endriga.
Although HB 8829 only refers to the granting of a franchise to Razon’s company and is silent on the existing franchise of PALECO, the established rule is that there can only be one franchise holder in a given area thereby threatening PALECO with the premature cancellation of its franchise.
Similar to the case of PECO, Razon stands to acquire PALECO and its entire assets through the “eminent domain” provision of HB 8829.
This provision gives MORE Reedbank the right to possess everything that PALECO has worked for since it was established more than 45 years ago after payment of “just compensation.”
PALECO’s service areas covered Puerto Princesa City and the towns of Aborlan, Narra, Espanola, Brookes Point, Bataraza, Quezon, Rizal, Balabac Island, Roxas, San Vicente, Taytay, El Nido, and the islands of Dumaran, Araceli, Cuyo, Magsaysay and, Cagayancillo.