Statement of the Iloilo Economic Development Foundation, Inc. (ILED) on House Bill No. 8302 entitled “An Act Granting MORE Electric and Power Corporation a Franchise to Establish, Operate and Maintain, for Commercial Purposes and in the Public Interest, a Distribution System for the Conveyance of Electric Power to the End Users in the City of Iloilo, Province of Iloilo.

Hon. Grace Poe and members of the Senate Committee on Public Services, good morning.

My name is Narzalina Lim and I am here to represent the Iloilo Economic Development Foundation, Inc. (ILED), a public-private sector partnership founded in 2007, with a long-term vision  to work on making Iloilo an attractive investment destination and to continuously bring new investments to the city and province. The Mayor and Governor of Iloilo sit on our Board along with private sector representatives from the Iloilo Multi-Sectoral Business Organization; the Chamber of Commerce and Industry of Iloilo; the Iloilo Business Club; the Federation of Filipino-Chinese Chambers of Commerce of Panay; the Filipino Chinese Chamber of Commerce and Industry; and the Iloilo Convention and Visitors Bureau.  I have been with ILED since its founding; served as its President for eight years; and am currently its Chairperson.

I wish to disclose that the Panay Electric Company is a member of ILED and we have had several discussions with them in the past to determine how their services can be improved.  Mr. Roel Castro, President of Monte Oro Corporation, parent company of MORE Electric and  Power  Corporation, sits on the Board of ILED representing Palm Concepcion Power Corporation.  When ILED started preparing its statement on power distribution in the city which was publicly released on September 25, 2018, Mr. Castro recused himself from the discussions to forestall accusations of conflict of interest.

In 2010, ILED commissioned a study by Parsons  and Brinckerhoff (since then renamed WSP), a Singapore-based consulting group, to determine what PECO had to do to upgrade and modernize its systems to improve network reliability and provide better customer service.. At that time, PECO’s reliability indices showed that its performance was below the Philippines’, overall, and inferior to other main regional utilities such as that in Malaysia, Thailand, and Indonesia. The frequency of interruption was especially high in PECO’s network at that time.  The study recommended that PECO consider various steps to improve its network performance.

In 2018, ILED commissioned WSP again to undertake a review of PECO’s performance over the eight-year period. The report, completed in September of this year, gives the following conclusions:

• PECO’s network performance has improved significantly since 2010.
• While improved, the services that PECO provides lags behind what distribution utilities (DUs) in key Philippine cities like Metro Manila, Cebu and Davao, provide. The gap widens even more when comparison is made with DUs in the ASEAN region.
• Recommendations made in 2010 have been implemented but not in full. It will take an investment of approximately PHP500 million to fully implement the recommendations which focus on the reconfiguration of the distribution network; installation of recloser circuit breakers in all the main distribution feeders; the establishment of in-house planning capabilities and the installation of SCADA in all five substations. SCADA stands for Supervisory Control and Data Acquisition System. When used to monitor and control the distribution feeder, it can provide a 10-15% reduction in the System Average Interruption Duration Index (SAIDI) when compared with a similar feeder that is not equipped with SCADA facilities. In addition to the SCADA system, WSP also recommends that PECO replaces the old control and relay panels of Jaro and Luna substations.

The 2018 WSP study did not include a review of PECO’s customer service as this was outside the Terms of Reference.  To address the issue that PECO has unsatisfactory customer service, ILED organized two focus group discussions on March 6, 2018, attended by consumers, among them a migrant worker’s organization; the Iloilo Metropolis Subdivision  Homeowners’ Association;  non-government organizations and business and professional organizations.  PECO attended these FGDs.    The complaints focused mostly on billing errors and the lack of empathy shown by PECO employees when people complain in person at the PECO head office. Calling the hot line was even worse. There was nobody picking up on the PECO end.

ILED respectfully submits to this Committee, the WSP study and the record of the focus group discussions for its review and consideration.  In the public interest, we further suggest that the 2018 WSP report be appended to the grant or renewal  of franchise, whatever the case may be. A written pledge – a covenant with the Ilonggos  –  by the distribution utility to implement the recommendations therein should be a pre-condition to the grant or renewal of franchise.

The economy of Iloilo is growing.  We are no longer the sleepy town of years ago but a vibrant city that aims to take its place amongst the most competitive cities, not just in the Philippines but in Asia. This is our vision. The Ilonggos therefore expect the following from the distribution utility:

• A willingness to share our vision and to be a true partner in Iloilo’s development;
• Demonstrated capability, track record, and financial capability to operate and maintain a distribution utility for a fast-growing metropolis;
• Significant investments in infrastructure; systems and technology; and human resources;
• A long-term commitment to Iloilo.

Lastly, we appeal to our decision-makers in Congress that any decision made on behalf of the Ilonggos ensures that there will be no power interruption during the transition. We need continuity to seal the gains that we have already accomplished this far in Iloilo’s development.

 

Respectfully submitted:

Iloilo Economic Development Foundation,Inc.