NEA, ECs on the spot-A A +A
Wednesday, August 21, 2013
THERE'S too much noise about ailing or debt infested electric cooperatives (ECs) in the country and the National Electrification Administration (NEA) has found itself on an unenviable position – that of defending itself against brickbats that it has failed to exercise its awesome powers to arrest the skid of these troubled ECs. The new law that revised the agency’s charter, RA 10531, has neither provided comfort nor a convenient excuse for NEA to shield itself from mounting criticisms that it has fallen short of providing the necessary shot in the arm to bail out the ECs out of their deep holes. The sentiment is that with or without the new law, the NEA has simply gone kaput.
Of course, there is no intention to demean, much less, belittle the NEA. After all, its juridical existence as a regulator for ECs whose business is highly technical and financially demanding, cannot be ignored. It’s just that the ECs are now painted on a bleak screen, owing to the magnitude of their debts and their inability to pay their power bills.
The ECs are wary over the way the NEA and the DOE are holding their cards. With a government making a strong pitch for privatization, the ECs are now fidgeting. They are worried the government might declare a policy to bid the ECs to private capital. The apprehension is not baseless. The Joint Congressional Power Commission (JCPC) of Congress, for one, has been open about privatization. In one of its hearings this Recloser has attended, Senator Sergio Osmena III, the commission chair, frowned over the ability of ECs to become profitable if their status of being non-stock and non-profit is not altered.
Then there's the NEA's so called “step in rights.” Now the NEA can practically take over the operations of ailing ECs, push the ECs into a management contract, convert the ECs into a stock cooperative or stock corporation, or move for the EC’s privatization. These options maybe are laudable. But since ECs are public utilities that deal with an essential need of millions of people, the impact of privatization must be fully studied.
The bottom line this Recloser has gotten seriously conscious about is the rate of power to be imposed on member consumers once ECs are operated on the motive of profit. It’s just so unfortunate that in this kind of business, member consumers bear the brunt of all pass on and pass through charges. The impact of these charges is like getting hit with bricks. Certainly, any overhaul for ECs will have a severe impact on the purchasing power of consumers.
Why not a Marshall Plan for ailing ECs instead? If this government can afford to allot P35 billion for its Sitio Electrification Program (SEP), one of Pres. Aquino’s flagship projects, it serves no harm if a massive economic rescue program for ailing ECs will be laid on the block. The plan could solve the riddle of the surging debts of ECs. Also, the plan could infuse fresh capital to acquire top of the line switches for an economic turnaround.
Around five percent of the country’s 119 ECs are saddled with problems on the payment of their amortizations. But why wait for the malaise of unpaid debts to spread among the ECs before the government decides to act? Pull the chest now and pour in the money. No more, no less.
But the move must come under certain conditions. One is for ailing ECs to be given a transition period to put their houses in order. They must do some housecleaning to rid their ranks of bad eggs. Two is for the ECs to secure well crafted and long term power supply contracts to secure their power demand. Three is for the NEA to police in the strictest terms possible the ECs performance and compliance with regulatory requirements.
The government has the Malampaya funds. The ECs are worth the bet.
Published in the Sun.Star Baguio newspaper on August 22, 2013.