City wants PEZA franchise to distribute power at SRP

CEBU, Philippines - The Cebu City government is applying to be a power distribution utility for the South Road Properties.

A resolution, sponsored by Councilor Jose Daluz III, authorizing the city government to apply for a franchise to operate as a power distribution utility from the Philippine Economic Zone Authority is expected to be passed on Friday during the council’s regular session.

Under the Republic Act 7916 otherwise known as the Special Economic Zone Act of 1995, all utilities at the economic zones shall secure a franchise from PEZA before they can be allowed to operate.

The 300-hectare SRP, owned by the city government, was registered with PEZA after its declaration as a special economic zone by virtue of Presidential Proclamation no. 843.

Daluz said the city has to apply a franchise from Peza before it can be allowed to negotiate with the different power providers to supply electricity at the SRP.

“If we have a franchise, the Cebu City will be the one to look for power provider of the SRP,” Daluz said, adding the franchise is the first step in dealing with power sector.

According to Daluz, the franchise for power is the same thing for the 30-year contract with a consortium comprised of Pilipinas Water Resources Inc. (PWRI), Mactan Rock Industries and businessman Michel Lhuillier for the supply of water in the SRP.

The consortium entered into a joint venture with the city government to operate the city’s two desalination plants and supply water to the locators for a period of 30 years.

Last year, there was a proposed memorandum of agreement between the city government and the Visayan Electric Company (Veco) for power distribution at the SRP. But Daluz said the proposal did not materialize.

Under the proposed agreement, VECO was chosen as the power distributor of the 300-hectare facility because it still falls under its franchise area.

VECO holds a legislative franchise to construct, operate and maintain a distribution system for the conveyance of electric power to the end users in the cities of Cebu, Mandaue, Talisay as well as the municipalities of Minglanilla, Naga, San Fernando, Consolacion, and Liloan.

The power utility was designated as the distributor of electric power within the SRP provided that an access fee of 20 centavos for every kilowatt-hour is paid to the city. (FREEMAN)