Improving the
Viability and Competitiveness of Electric Cooperatives
Except for Ficelco,
all the electric cooperatives in the region have systems
loss levels above the 14 percent cap (Table 1). Moreover,
except for Canoreco and Ticao, systems loss levels of the
electric cooperatives increased in 2005 from their 2004
levels. Factors that affect this performance include: 1)
non-compliance of ECs with systems loss segregation
requirements; 2) increase in power pilferages due to high
power rates; and 3) low supply voltage in some ECs.
As part of its
mandate to prepare ECs in operating and competing in the
deregulated electric market, the National Electrification
Administration (NEA) provided assistance in developing a
system data for the segregation of systems loss as required
by the Energy Regulatory Council (ERC). The preparation and
issuance of Procurement Guidelines for ECs was also
undertaken during the year, as part of the review and
upgrading of regulatory policies with the objective of
enhancing the ECs' viability.
Formulation of
Policies
Recognizing the need
for ECs to become more competitive in the EPIRA environment,
several institutional policies were passed by the NEA Board,
to wit:
-
New Criteria for
Categorization. The new set of criteria was formulated
to measure the ECs’ compliance to the rules and
regulations by the players in the power industry. This
set of criteria is reflective of the pursuit of the
mandate of total electrification and capability to
provide efficient and reliable supply of power to the
member-consumers.
Initial evaluation
of the EC 2005 Categorization showed that only Ficelco
earned an A rating, while Camarines Sur IV slid down to B
rating. Two ECs obtained C and D ratings each, while 5 ECs
were rated E.
-
Adoption of the
Model Organizational Structure for ECs. This provides
for the creation of an Energy Trading Office and Energy
Retail Service Department in preparation for the spot
market and open access.
-
Revised Policy
on Selection, Hiring and Termination of
Service/Suspension of General Managers (GMs) and
Modified Qualification Standards for GMs. The policy
details a more competitive process and criteria in
appointing and/or terminating EC GMs.
-
Human Resource
Strengthening. The program was introduced to determine
the types and levels of intervention needed to improve
the EC managers’ core competencies.
The issue of unpaid
power arrearages of ALECO with the NPC amounting to Php
612.7 million, as well as its high systems loss rate of
21.26 percent remain unresolved. However, a rehabilitation
plan is now being prepared with the Multi-Sectoral Council
headed by Governor Fernando V. Gonzales. At present, two
options are being considered to address these problems: a)
the restructuring of the EC’s NPC account on achievable
terms and b) the involvement of private initiative, such as
the Investment Management Contract (IMC). One strong
possibility though, is the assumption of management of ALECO
by NPC, which is presently being seriously studied.
