DOE says no takers for 995 areas under QTP electrification program

By Lenie Lectura - September 7, 2018

https://businessmirror.com.ph/doe-says-no-takers-for-995-areas-under-qtp-electrification-program/

A top official of the National Electrification Administration (NEA) on Thursday said there are 995 areas managed by various electric cooperatives (ECs) that qualify under the Department of Energy’s (DOE) qualified third party (QTP) program.

“There are 995 areas waived by ECs, but no takers as far as QTP is concerned. There are 11 areas with takers for QTP, but only six are operational,” NEA Administrator Edgardo Masongsong said.

The QTP is designed to attract alternative service providers and private investments in rural electrification, in line with the DOE’s thrust to achieve a 100-percent household electrification target by 2022.

The DOE had said that interested firms must pass the accreditation process. QTP firms must have the power generation and distribution facilities to service remote areas where the distribution lines of power cooperatives cannot be immediately extended. Once accredited, QTP firms can select areas for development and implement their plan upon approval from the DOE.

Masongsong said the QTP is one of the several options that will help achieve total electrification. Other options include subsidy, grant or donation, private-sector participation (PSP) and own spending of ECs.

He shared the concern of ECs who are opposed to the entry of private sector in the franchise areas assigned to ECs.

“ECs don’t want to give up their franchise. They don’t want the private sector to take over. They, however, welcome joint venture instead,” said the NEA chief.

He also welcomed the proposal of Solar Philippines to put up solar-battery mini grids that will benefit 200,000 Filipinos in 12 towns.

“I support mini grids,” said Masonsong. “ I will be happy if [it] will participate in the BASULTA [Basilan-Sulu-Tawi-Tawi] area  because the energization level there is only 33 percent.”

Last week Solar Philippines announced it is bringing 24/7 power to 12 towns in provinces, including Mindoro, Palawan, Masbate, Cagayan, Aurora, at zero cost to government. It aims to bring 24/7 power to 500,000 Filipinos by the end of 2018 under its Solar Para sa Bayan project. “We hope this will not only benefit these towns, but create healthy competition that benefits consumers across the country.

“If the mere specter of competition inspires electric utilities to improve their services, that is an affirmation of the need for healthy competition. If the entry of companies like us will end the complacency of incumbent monopolies, then our mission is accomplished,” Solar Para sa Bayan President Leandro Leviste said.

Earlier, the National Association of General Managers of Electric Cooperatives (Nagmec) challenged the private sector to “prioritize remote, underserved locations first if they were truly sincere about supplying power to the countryside.”

“We accept Nagmec’s challenge, so hope they stop opposing attempts by the private sector to enter these poorly served areas—as we’ve already done in 12 towns. The towns’ requests for better electric service have been ignored for years. Yet now they’re being served by an alternative provider, certain co-ops would prefer these towns [to] have no power at all,” Leviste said.

Nagmec’s President Sergio Dagooc warned that “any effort on electrification done without government subsidy is not sustainable,” adding that “only the ECs sustained it for close to five decades now because the government subsidized the cost.”

In response, Leviste noted that Solar Para sa Bayan is already operating without government subsidies because “we started this for a social mission…[and] not to make the most profit, but to help the greatest number of our fellow Filipinos,” Leviste added.

“What is needed is for the government to allow private investors to use new technologies to serve consumers on a nonexclusive basis.”

The NEA has requested P25 billion to subsidize ECs to reach the estimated 2,399,108 households that lack electricity, with 529,952 in Luzon; 524,040 in the Visayas; and 1,345,116 in Mindanao. The DOE has noted that resources are insufficient to reach 100 percent electrification by 2022.

In light of this, Malacañang is reportedly preparing an executive order to encourage private investment in rural electrification.

Leviste noted: “We believe consumers should be given new choices for better service at lower cost, especially if it means zero government subsidies and does not prejudice the non-exclusive right of anyone else to offer even better options to consumers. A recent Pulse Asia survey showed at least 82% of Filipinos want new options for electric service — so the question is, why would anyone would want to deprive consumers this choice?”

“We can’t see how anyone can object to healthy competition that benefits consumers. Instead of trying to stop the entry of competition, we hope others will focus their energies on making affordable, reliable electricity a reality for every Filipino,” he said.