Iloilo City’s power distribution utility Panay Electric Co. (PECO) is facing new legal cases following its failure to renew its license and settle P90 million real estate taxes it owes the city government.

business permit - Iloilo’s PECO in deeper trouble
3. Business Permits and Licensing Office head Norman Tabud confirmed that the Panay Electric Co. was unable to secure a business permit to operate in 2019. PHOTO COURTESY OF PHILIPPINE NEWS AGENCY

Norman Tabud, head of the Business Permits and Licensing Office (BPLO), confirmed that PECO was not able to secure a business license to operate in 2019.

The City Treasurer’s Office said PECO failed to pay an assessed P90 million and additional penalties since March this year in real estate taxes.

“[PECO] had failed to secure a business permit to operate since last year (2018) because of an instruction from the City Treasurer’s Office to hold in abeyance the issuance of the permit pending the company’s payment of its realty tax obligations,” Tabud said.

Such violations could affect PECO’s temporary Certificate of Public Convenience and Necessity (CPCN) from the Energy Regulatory Commission (ERC), which requires all distribution utilities to comply with all legal requirements for any business to operate in any area.

PECO is operating under a two-year temporary CPCN issued by the ERC.

More Electric and Power Corp. is seeking a franchise so it could take over the electricity distribution operation in Iloilo City.

Tabud said the real estate tax obligations owed by PECO to the city government arose from a new ruling of the city treasurer that the lot on which PECO’s aged electricity poles are planted are also taxable real estate.

In a memorandum to the Iloilo City BPLO last March 12, City Treasurer Jinny Hermano noted that under Section 252 of Tax Ordinance 2007-016 or the “Local Revenue Code,” all businesses can only secure business permits to operate.

Tabud, however, noted that PECO had paid its other business taxes arising from its operation. PECO has contested the City Treasurer’s ruling in a case filed with the Iloilo City Regional Trial Court, thus a standoff exists on whether the city government could stop PECO from operating until it secures its business permit.

“We must note that the amount owed by PECO to the city is now more than P90 million since the penalties are piling up,” Tabud said.

PECO is also being investigated by the ERC because of a complaint filed by Iloilo City Mayor Jerry Treñas in connection with old electricity poles that the latter said pose danger to residents and houses.

Under ERC Resolution 5, Series of 2008, any distribution utility granted a CPCN to operate a distribution system in any area must comply with standards set under the Philippine Grid Code and the Philippine Distribution Code, especially those that concern public safety, the ERC noted in calling the Bureau of Fire Protection (BFP) to provide a report on the incidents of safety violation by PECO because of the electricity pole fires.

Treñas asked the ERC to conduct the investigation and perform its function to protect consumers after the Iloilo City Fire Marshall and the BFP reported that in three days alone from October 19 to 21, nine PECO electricity poles caught fire either due to exploding transformers or severed transmission lines setting fire on the wood poles.

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