NEA to tighten rules on ERC performance

Published June 23, 2019, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2019/06/23/nea-to-tighten-rules-on-erc-performance/

Government-run National Electrification Administration (NEA) will include the “energization level achieved” by an electric coop (EC) as it tightens the new matrix and guidelines in the assessment of the overall operational performance of the country’s ECs.

As noted by NEA Director Ana Rosa Papa, head of the agency’s performance assessment and special studies, the proposed modifications in the “performance assessment” criterion shall include the energization level reached by each EC.

The agency explained that “electrification level is measured by the number of consumer connections a power coop achieves under a given timeline based on the official reports and/or documents it submitted through the NEA business intelligence technology (NEA-BIT) web portal.”

Under the Duterte administration, the electrification level achieved by an EC is an important gauge of its performance because it has been the President’s mandate that they pursue 100 percent household electrification throughout the duration of his term.

Presently, NEA noted that it evaluates and determines the all-inclusive performance of the ECs on two main criteria: One is the key performance standards (KPS) which accounts for 80-percent; and the other delves with “EC classification” which takes the balance of 20 percent.

The specified criteria, according to Papa, had been designed “to measure the power coop’s financial, institutional and technical performance.” At the same time, they assess how the ECs “promote accountability and responsibility in their compliances and fiduciary obligations.”

On the revised performance assessment guidelines, NEA indicated that it already sought comments from stakeholders – and the next step will be submission to the NEA Board for approval.

“Once approved and published in a newspaper of general circulation, the NEA will implement the revised policy guidelines beginning next year,” the agency emphasized, adding that such “will also serve as basis for crafting the performance incentive mechanisms for the ECs.”

The mandate on the performance assessment of the ECs had been instituted as early as the 1980s, primarily as a frame “to keep track of the viability of their operations economically and financially,” NEA explained.