A GROUP of mayors from ten municipalities served by the First Laguna Electric Cooperative Inc. (FLECO) has urged legislators to reject a measure granting a new franchise to the utility due to its alleged unreasonably high power rates and poor services.
In a petition sent to the House of Representatives, the executives of the local government units (LGUs) from Cavinti, Famy, Kalayaan, Mabitac, Paete, Pagsanjan, Pakil, Pangil, Siniloan, and Sta. Maria have appealed to lawmakers in both chambers of the legislature to deny a new franchise for FLECO.
FLECO applied for franchise renewal in December last year through House Bill 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.
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.
In their petition, the mayors urge the Senate and the House 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,” Soriano said.
According to the petition signed by the mayors, FLECO has 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 electricity in the least cost manner.
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 petitioners noted.
The petition stated that the seemingly high electricity rate of FLECO was 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 percent 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, the mayors said.
“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,” Soriano noted.
This was 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.
The mayors strongly object to the renewal of FLECO’s franchise even as they encourage the electric cooperative to develop solutions with the adjacent utility company to improve electricity services in the area.