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MANILA - A power struggle looms between two of the country's business tycoons as the Metrobank group dug in its heels, saying its energy generating unit in Panay owns no transmission facilities, contrary to claims made by the National Grid Corp. of the Philippines.
George S. K. Ty controls the Metrobank group, while Henry Sy Jr. of the SM group heads NGCP, which wants to take over what it deems as transmission facilities in the hands of Panay Energy Development Corp., a unit of Ty-owned Global Business Power Corp.
Arthur N. Aguilar, president of GBPC, said the facilities that NGCP wants to take over are being used by PEDC in delivering electricity to Panay Electric Co. Inc., the Lopez-owned utility that distributes electricity in Iloilo City.
"Our current operations in Iloilo City enable us to do so with the power plant strategically located within the franchise area of PECO, the city's sole power distributor," Aguilar said.
As such, these facilities are "generation assets and not transmission assets," he said.
Under present regulations, power plants within a distribution utility's service area may operate connection facilities, bypassing those run by NGCP, which holds the 25-year concession over the country's transmission lines.
NGCP wants to acquire PEDC's assets, particularly the switchyard that connects the latter's coal plant to PECO, claiming that these function as transmission facilities.
Cynthia Perez-Alabanza, NGCP spokesperson, earlier said PEDC is using the switchyard to connect to other distribution utilities as well as to sell capacity to the grid.
"PEDC is acting like a mini-grid within the grid," she said.
PEDC's control over the facility also has isolated PECO from other power plants, which could help the utility temper its generation rate of roughly P8 per kilowatt-hour, the highest in the Visayas area where the rate averages P6 per kilowatt-hour.
Should NGCP take over PEDC's switchyard, consumers in Iloilo City would have to shell out P1 per kilowatt-hour in transmission charges.
Aguilar said PEDC's direct connection to the PECO franchise allows the distributor to enjoy lower rates.
"We maintain that Iloilo City, where our plant is located, should be allowed to connect directly to the plant allowing it to enjoy lower cost of power," he said.
PEDC inaugurated its 164-megawatt coal plant last year in a bid to bring down Iloilo City's electricity rates, which went up as high as P12.95 per kilowatt-hour in 2010 because of the area's reliance on diesel-fed generating facilities.
Despite their conflicting claims, Aguilar said PEDC will abide by the decision of the Energy Regulatory Commission, which has stepped in to resolve the two parties' dispute.
"We take this as an opportunity to properly discuss our side in detail. We have full trust on ERC's judgment and shall abide by whatever decision it would take. PEDC shall support any measure that will benefit the greater majority and will propel economic progress in the city of Iloilo," Aguilar said.
The dispute has drawn political support for one of the parties in the person of Senator Franklin Drilon, a Liberal Party stalwart who hails from the region.
He said NGCP's plan to acquire the assets will increase the price of electricity by P1.00 per kilowatt-hour in the 180 barangays PECO covers, "which is obviously against the policies of the government."
“As I see it, I could not find any reason – other than vested interest and the desire to rake up money – for the NGCP to decide to intervene in the distribution of electricity in Iloilo, since the present setup seems to be running smoothly, and is more advantageous to household consumers,” the senator said.
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