Power and arm-twisting in Iloilo

Living in Iloilo, the Cacho family, which is behind the operations of Panay Electric Co. or Peco, say they share the gains — and pains — of their customers in this booming city of Panay Island.

Indeed, says Marcelo Cacho, administrative manager of Peco who belongs to the fourth generation Cachos in Peco, there is an unwritten rule within the family that they cannot operate generators in their homes. “If there are brownouts, then we, too, suffer the brownouts along with our customers,” he says.

Founded in 1923 by a consortium made up of prominent residents of Iloilo City, Peco was sold four years later to Candelaria Ditching Cacho, an enterprising widow who, through years of savings and hard work, managed to raise the capital to gain control of the electric company. She assigned her son Mariano, a civil engineer, to manage the firm.

The outbreak of World War II spurred Mariano to escape from Iloilo with his family because he did not want to collaborate with the Japanese. At war’s end, the family found Iloilo in a shambles, with much of the lines and machinery destroyed. Mariano then sold his landholdings and even the mansion he had so lovingly built for his family to rebuild Peco from the ashes.

Upon Mariano’s passing, his son Jose Maria, nicknamed Kalawang, who was then a rising executive with the Shell company, was appointed to succeed him. It was under Jose Maria that Peco underwent a modernization program, importing machinery and facilities from abroad despite a sudden 60-percent devaluation of the peso against the dollar. Shell, which had agreed to provide fuel to Peco, continued to do so at lenient credit terms because of Jose Maria’s reputation. Stockholders agreed not to receive dividends for several years to allow the company to pursue its modernization drive.

Today, Peco faces a major challenge perhaps more fraught with danger than the war or an economic crisis.

With its franchise due for renewal next year, recalls Marcelo, a wealthy businessman approached his family offering to buy Peco from them. This tycoon has made his money mainly through port operations and leisure development but has little, if any, experience in power distribution.

Duly filing their application with the House of Representatives’ committee on legislative franchises in November 2017, Peco executives waited for the House to act on their petition, with no word on when — or whether — the committee headed by Palawan Rep. Franz Josef Alvarez would start the hearings.

Then, all of a sudden, around August or September, the committee held a hearing on the application for franchise from MORE, a former mining company. Just recently, the committee passed MORE’s application and, in a move so clandestine no news emerged about it except in self-serving press releases, the House plenary voted to cancel Peco’s franchise and give it to MORE.

Subsequent reports cite the “high” electricity rates that Peco had been charging as ground for revoking the company’s franchise.

Electric companies around the country have been ordered to refund customers for overcharging by power generators. Like other distributors, Peco has been giving these refunds to customers, with the Energy Regulatory Commission citing Peco for its record of compliance, making it one of only five power distribution companies nationwide to receive the citation.

Peco AVP Randy Pastolero points out that it will not be so easy for MORE to simply replace the 95-year-old Peco. “It will be very hard for them to put up facilities at a very short time,” points out Pastolero. “What will happen in the meantime to the people of Iloilo?”

With elections coming up, adds Pastolero, “are Ilonggos to be deprived of their right to vote just because there is no electricity in polling precincts?”

One tactic that MORE is reportedly resorting to is to use “eminent domain” to forcibly take over the facilities of Peco, including its plants and facilities down to electric posts and wires. But isn’t this outright thievery cloaked in legality? What do the folks of Iloilo City have to say about this?

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