Prov'l gov't offers to buy back power, water utilities

By: JUNE S. BLANCO

THE provincial government has formally offered to buy back its 70 percent share in the power and water utilities formerly operated by the Provincial Public Utilities Department (PPUD). In separate but similar letters already received by the Bohol Light Company, Inc. (BLCI) and the Bohol Water Utilities, Inc. (BWUI), Gov. Erico Aumentado offered to return the P155 million to the Salcon Group of Companies that bought the shares in 2001.

Aumentado said while the provincial government continues to own 30 percent of both utilities, it has not received a single centavo in dividends since the sale. When still operated by the province, income from the power utility chalked P35.4 million a year while that of the water utility managed a little over P5 million annually. The income raked in by both utilities through the years had paved the way for the classification of Bohol as a Class A province.

Under Salcon, however, the provincial government's representative in the utilities board reported losses from the operation of both utilities at around P1 million to P2 million yearly. While Aumentado had already floated the buy back option years before, this report prompted him to formalize the offer. Aumentado admits Salcon has implemented changes and improvements in both utilities for which it incurred loans. The buy back offer includes the assumption of the bank obligations, he said. This even as he filed Thursday with the Energy Regulatory Commission (ERC) a motion to dismiss or suspend the proceedings on the petition the BLCI filed seeking the approval of a proposed rate reformatting to comply with Republic Act (RA) 7832.

BLCI, he pointed out, has been operating without a congressional franchise as mandated by Section 27 of RA 9136 or the Electrical Power Industry Reform Act (Epira) approved on June 8, 2001. Section 27 or the Franchising Power in the Electric Power Sector provides that the power to grant franchises to persons or utilities engaged in the transmission and distribution of electricity shall be vested exclusively in the Congress of the Philippines, and all laws inconsistent with this act, particularly but not limited to Section 43 of Presidential Decree No. 269 or the National Electrification Decree are hereby deemed repealed or modified accordingly.

The section however allows existing franchises to their full term provided that in the case of electric cooperatives, renewals and cancellations shall remain with the National electrification Commission under the National Electrification Administration for five years after the enactment of such act. BLCI, a private domestic corporation and not an electric cooperative, was created in 2001 but no evidence points out that it secured a congressional franchise. Without such, BLCI cannot be validly issued a certificate of public convenience and necessity (CPCN) and as such, it cannot increase basic charges, he said.

Meanwhile, Aumentado also asked the Commission on Audit (COA) through Bohol Cluster Head Charlita Leopoldo to conduct an audit of both utilities to determine its present value and that at the time of the sale including its franchise. He wants to determine its 2001 government valuation as the audit then was conducted only by a private appraisal firm. A current appraisal will also be a talking point for when Aumentado and Salcon will finally negotiate the buy back.

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