2019News

DOE lists 8 ECs undergoing technical and financial review

By Lenie Lectura, March 6 2019; Business Mirror

https://businessmirror.com.ph/2019/03/06/doe-lists-8-ecs-undergoing-technical-and-financial-review/

Image Credit to Business World

The Department of Energy (DOE) has identified eight electric cooperatives (ECs) whose technical and financial performance are currently under review.

“We are now talking to eight ECs to fix the system,” said DOE Undersecretary Felix William Fuentebella on Monday.“We are not revoking any franchise. The issue here is how do we protect the good ECs, which are sometimes the target of private entities.… We will concentrate on the ailing ECs and help them.”

The review, among others, aims to identify the challenges of ECs and to find long-term and sustainable solutions. However, the DOE will not hesitate to consider other reasonable and legal options, as provided for under Republic Act 10531, or the National Electrification Administration Law, should ECs fail to live up to their respective mandates.

The eight ECs under review are Lanao del Sur Electric Cooperative Inc., Abra Electric Cooperative, Masbate Electric Cooperative Inc., Maguindanao Electric Cooperative Inc., Ticao Island Electric Cooperative Inc., Sulu Electric Cooperative Inc., Tawi-Tawi Electric Cooperative Inc. and Basilan Electric Cooperative Inc.

Fuentebella said results of the review will be out within the first half of the year. “Discussions are still ongoing. We [intend to hold a] roundtable discussion on March 6,” he said, adding that “it would be up to Congress” if their franchises will be revoked.

As far as the DOE is concerned, Fuentebella said the agency “will have to come up with detailed report” to be submitted to Cusi.

The DOE earlier recommended to the House of Representatives the cancellation of the franchises of 17 ECs. However, this was later withdrawn.

Meanwhile, National Electrification Administration (NEA) Administrator Edgardo Masongsong said his office did not submit a list of ECs whose franchise must be revoked.

“In fairness sa [to the] DOE secretary, meron tayong sinubmit na listahan [we have submitted a list] of 17 electric cooperatives on their status as electric cooperatives, status of their operations.… But, for the record, I did not recommend [the revocation of their franchises],” he said.

Masongsong reiterated that out of the 121 ECs currently operating in the country, only 10 are considered “ailing”—either they are financially bankrupt or technically incompetent—but the NEA is doing everything in its power to help turn them around.

He cited as an example the case of Camarines Sur III Electric Cooperative Inc., which used to swim in over a billion pesos of debts, but has since improved when the NEA stepped in to initiate some reforms.

Kasama ang Casureco-III doon sa 17, pero mula ’nung tinake-over natin [Casureco III is included in the group of 17 but as] early as January 2017, [it has improved]. Dati may utang na [It was previously indebted by as much as] P1.2 billion, ngayon [today its debts stands at] P584 million na lang [only]. Ibig sabihin, nagawa natin ang trabaho natin [Which means that we’ve done our job],” Masongsong said.

NEA has called for a dialogue between the ECs and the DOE to find a mutually acceptable resolution to rural electrification policy issues.

Masongsong’s statement came a day after the Philippine Rural Electric Cooperatives Association Inc. (Philreca), the umbrella group of 121 ECs in the country, called for the resignation of Cusi over alleged “abuse of power.”

“It is in this context that the National Electrification Administration calls on the leaders of our electric cooperatives and the officials of the Department of Energy to engage in a dialogue and find bases of unity and work together to reconcile their respective policy positions on issues that are relevant to an industry that affects the lives of 104 million Filipinos,” he added.

As such, Masongsong urged both Philreca and DOE to resolve differences through a constructive dialogue.

“Differences of opinion are part and parcel of any vibrant and dynamic democracy. But the developed democracies in the world have shown us that the path to prosperity lies in the ability of a nation’s leaders to sit down and work for the collective welfare of [the] people they have sworn to serve. It is my hope that the DOE and our ECs can do the same,” the NEA chief said.

Recently, Philreca passed a resolution declaring Secretary Cusi as “persona nongrata,” and calling for his immediate resignation over what they claimed “biases and pre-conceived negative notions against electric cooperatives, preference to private for-profit corporations and abuse of power.”

The group, likewise, pointed out Cusi’s “lack of genuine knowledge regarding rural electrification and cooperativism, and failure to recognize the success and gains of rural electrification and development not just because of the government through the National Electrification Administration but most especially because of electric cooperatives commissioned and considered implementing arm of the government.”

The resignation call follows the initial endorsement of Cusi on January 11 to the House of Representatives, through Speaker Gloria Macapagal-Arroyo, for the cancellation of the franchises of 17 ECs.

In expressing its opposition, Philreca described the move to cancel the franchises of 17 power co-ops as unjust and biased and was done without prior consultation with the concerned ECs. At the same time, the group said the recommendation has put the EC sector in a negative light.

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