Laguna mayors file petition to block FLECO’s franchise

June 8, 2023 People's Tonight 2361 views

A GROUP of mayors from ten of the 11 municipalities served by the First Laguna Electric Cooperative Inc. (FLECO) oppose the granting of a new franchise to FLECO due to its “unreasonably high” electricity rates and “poor services” to residents of the said towns.

The executives of the local government units (LGUs) from Cavinti, Famy, Kalayaan, Mabitac, Paete, Pagsanjan, Pakil, Pangil, Siniloan, and Sta. Maria have filed a petition requesting the Congress and Senate not to grant another franchise to FLECO.

FLECO applied for franchise renewal in December last year through House Bill (HB) No. 6484 to the House of Representatives’ 19th Congress. It currently holds an existing franchise granted by the National Electrification Commission in May 1978, which will expire on May 16, 2028.

The mayors urge the Senate and the House of Representatives to consider the “grievances” and “concerns” of the municipalities served by FLECO in “reviewing the renewal application” of the electric cooperative.

“We urge the lawmakers to reflect on the wider ramifications and prioritize the collective interests of the community over the electric cooperative’s own interests,” said Pakil Mayor Vincent Soriano.

According to the petition signed by the mayors, FLECO has allegedly “failed” to mitigate the increasing electricity prices for its captive market, violating its mandate under the Electric Power Industry Reform Act of 2001 (EPIRA, IRR Rule 7, Section 4h) to supply the electricity in the least cost manner.

‘High electricity rate’

FLECO’s residential rate in February this year was P14.9831/kWh, P3.3004 higher than its rate in February 2019 of P11.6827/kWh. Meralco’s rate was only P10.8895/kWh in February this year.

The seemingly high electricity rate of FLECO is putting a “serious economic strain” on the residents and businesses in the 11 towns since the electricity bills, according to the petition, already represent roughly 11% of Laguna’s per-capita gross domestic product (GDP) in 2021, or P271,470 per capita.

Despite imposing high electricity rates, there are frequent and prolonged brownouts in the towns, resulting in costly disruptions of residential and commercial activities and stoppage of production processes.

Soriano added, “We are very concerned that due to FLECO’s unreliable service, investment inflows in our towns have become anemic, retarding the growth of our local economy and the improvement of our constituents’ welfare and living conditions.”

This is despite the proximity of FLECO’s franchise to economically developed areas in the south.

Most of the 11 Laguna towns in FLECO’s franchise areas have the potential to become commercial and tourist hubs. However, FLECO’s “inability” to put up necessary power infrastructure in a timely manner has “dampened investors’ enthusiasm and limited commercial and industrial developments in the municipalities,” according to the local chief executives.

The mayors strongly object to the renewal of FLECO’s franchise and encourage the electric cooperative to “develop solutions” with the adjacent utility company to “improve” electricity services in the area.

Among the mayors who signed the petition were Arrantlee Arroyo of Cavinti, Lorenzo Rellosa of Famy, Sandy Laganapan of Kalayaan, Alberto Reyes of Mabitac, Ronald Cosico of Paete, Vincent Soriano of Pakil, Gerald Aritao of Pangil, Patrick Ellis Go of Siniloan, Rocelle Carolino of Sta. Maria, and Cezar Areza of Pagsanjan.