DoE orders review of performance of electric cooperatives

February 1, 2019 | 6:42 pm  By Victor V. Saulon, Sub-Editor

https://www.bworldonline.com/doe-orders-review-of-performance-of-electric-cooperatives/

THE Department of Energy (DoE) on Friday ordered the review of electric cooperatives’ (ECs) financial and technical performance and warned those that failed to deliver of the cancellation of their franchises.

However, its call for review was followed by a statement by the Philippine Rural Electric Cooperatives Association, Inc. (Philreca) claiming that the DoE had already endorsed the revocation of 17 franchises in what the group called a “treacherous” act that disregarded due process.

In its statement, the DoE quoted Energy Secretary Alfonso G. Cusi as saying: “The review will be an inclusive process. We will ask the ECs to identify their main challenges and work with them in determining long-term and sustainable solutions. For transparency purposes, the results of the review will be made available to the public.”

Task forces may be created to assist underperforming distribution utilities depending on the review findings, the department said.

For non-performing ECs, the DoE may recommend the cancellation of their franchises, it added.

The review will look into the cooperatives’ compliance with the service requirements of their respective franchises, it said, adding that the move is part of the agency’s initiatives to improve power services in the provinces by enhancing ECs’ performance.

But Philreca said Mr. Cusi, on Jan. 11, 2019, recommended to the House of Representatives through Speaker Gloria Macapagal-Arroyo the revocation of the franchise of 17 electric cooperatives.

It said the secretary had “reasoned out” that the 17 electric cooperatives had been “underperforming and financially and technically distressed.”

Sought for comment on the Philreca statement, Energy Undersecretary William Felix B. Fuentebella, who acts as DoE spokesman, said in an online message that the “earlier recommendation to Congress has been withdrawn two days ago.”

He said the DoE “sees the need to further evaluate and assess the present status and performance of the 17 electric cooperatives.”

In its earlier statement, the department said that while ECs have been the government’s long-term partners in providing electricity in far-flung areas of the country, many have failed to carry out their mandate for various reasons.

The reasons cited include inefficient management, corruption, unnecessary political interference, as well as institutional conflicts, which is the case with Davao Del Norte Electric Cooperative, Inc.

The DoE said it would also look into the rise in missionary subsidies in areas such as Occidental Mindoro, Catanduanes, Marinduque and Tablas.

It said the Energy Secretary would request the National Electrification Administration (NEA) to submit the technical and financial performance reports of ECs for the past five years. The utilities will also be asked to submit their roadmaps and strategies for improving their services, operations and economic viability in the next three years.

Philreca said recommending the revocation of the electric cooperatives’ franchises “essentially and effectively disregarded the coops’ sacrifices during the last four to five decades.”

It said the partnership of electric cooperatives and NEA successfully energized 78 provinces (100%), 1,475 cities and municipalities (100%), 36,057 barangays (99%), 123,198 sitios (83%); and 12,713 million household connections (85%).

It said if the intention is for genuine total electrification, the best approach is still to support the electric cooperatives by rehabilitating and not disenfranchising them.