"The company should have bowed out of business a long time ago."
"The company should have bowed out of business a long time ago."
Apart from being without franchise, Iloilo City’s electricity distribution utility Panay Electric Co. is facing new legal cases following its failure to renew its license and settle some P90 million worth of real estate taxes with the city government.
According to Norman Tabud, head of the city government’s Business Permits and Licensing Office, PECO did not secure a business license to operate in 2019 in violation of the city’s Tax Revenue Code on the recommendation of the City Treasurer’s Office for failing to pay an assessed P90 million, and additional penalties since March this year, in real estate taxes.
In fact, Tabud adds that PECO has failed to secure a business permit to operate since last year because of an instruction from the City Treasurer’s Office to hold in abeyance the issuance of the permit pending the company’s payment of its realty tax obligations.
Such violations could affect PECO’s temporary Certificate of Public Convenience and Necessity from the Energy Regulatory Commission, which requires all distribution utilities to comply with all legal requirements for any business to operate in any area.
Recall that PECO is now operating under a two-year temporary CPCN issued by the ERC to allow the new distribution utility company issued a franchise by the Senate and the House of Representatives, More Electric and Power Corp. a transition to its full takeover of the electricity distribution operation in Iloilo City.
While PECO had paid its other business taxes arising from its operation. PECO has contested the City Treasurer’s ruling in a case filed with the Iloilo City Regional Trial Court, thus a standoff exists on whether the city government could stop PECO from operating until it secures its business permit.
The other day, newspaper reports said the Iloilo City government put up for auction today PECO’s assets to cover its unpaid real estate taxes for two years.
This was after the city government rejected the settlement offer of PECO.
Adding to its woes, PECO is facing investigation by the ERC because of a complaint filed by Iloilo City Mayor Jerry Trenas to address the continuing rising problem of its aged electricity poles posing danger to residents and houses in the vicinity after catching fire due to ageing transformers or overloaded old transmission lines.
Under ERC Resolution No. 5, Series of 2008, any distribution utility granted a CPCN to operate a distribution system in any area must comply with standards set under the Philippine Grid Code and the Philippine Distribution Code, especially those that concern public safety, the ERC stressed when it initiated an investigation on incidents of safety violation by PECO because of the electricity pole fires.
Trenas asked the ERC to conduct the investigation and perform its function to protect consumer interests after the Iloilo City Fire Marshall and the BFP reported that in three days alone from Oct. 19 to 21, nine PECO electricity poles all around the city caught fire either due to exploding transformers or severed transmission lines setting fire on the wood poles.
PECO had delivered electricity to the residents of Iloilo City for the longest time. As such, it would be safe to say it contributed a huge part in the development of the city. But when the time came, its services was said to have slowly deteriorated due maybe to its aging equipment and support infrastructure, it should have embarked on its own modernization program. Who knows, maybe the incidents of alleged overbilling of up to 1,000 percent maybe due to its antiquated system.
But having failed to do so, or maybe deciding against modernization of its equipment and support infrastructure, PECO should have then decided on its own, to bow out of business a long time ago. In such a way, it could have avoided all the predicament it is facing right now.