Cebu was still ecstatic over the victory of local beauty Kris Tiffany Janson in the Bb. Pilipinas beauty pageant (she bagged the title, Miss Philippines-Intercontinental 2014) when delegates of the Philippine Federation of Electric Cooperatives (Philfeco) descended on a plush resort hotel in Mactan, Cebu for the federation’s 9th General Assembly Meeting last Monday.
I happened to get wind of the event through my brother, Joe Mari who flew in from Bacolod City and invited me for lunch. I thought we would just catch up on each other’s lives but he came with Negros Occidental Electric Cooperative bigwig, John Peter Zayco Milan, who chairs the board of directors of NOCECO based in Kabankalan City. He sits as vice chairman of the federation. That’s how I gained my pass to the Philfeco gathering last April 1.
In case you didn’t notice, Philfeco (with 13 electric cooperatives under it) is at loggerheads with the National Electrification Administration (NEA) over the agency’s newfound supervisory powers over power co-ops. Among other powers granted by the National Electrification Administration Reform Act which took effect in May last year is the authority to take over ailing electric cooperatives (ECs).
Philfeco members question the constitutionality of RA 10153 because as full-fledged co-ops they are under the regulation of the Cooperative Development Authority (CDA). RA 10153 overlaps with provisions of the Cooperative Act of 2008, the organic law that governs the cooperative sector.
In August last year, Philfeco asked the Supreme Court to stop the implementation of the RA 10531, including its Implementing Rules and Regulations (IRR) for being unconstitutional. The case is pending.
If the situation merely called for making electric coop member owners decide whether to submit to NEA or CDA, the ferment could be easily rationalized. But observers say, there is more than meets the eye in the Aquino administration’s move to strengthen the NEA.
Since 1971, NEA has supervision and control over some 120 electric coops all over the country but the passage of the Electric Power Industry Reform Act of 2001 enabled electric coops to get out of the NEA control.
EPIRA granted electric coops the opportunity to convert in a stock cooperative under the Cooperative Development Authority by way of a referendum. Among 13 Philfeco members, support was overwhelming because the stock conversion into full-fledged cooperatives came with tax free incentives.
Under the EPIRA law, electric coops also operate in the energy sector under the regulation of the Energy Regulatory Commission (ERC). Many faltered in their operations due to mismanagement and intervention of politicians. Majority owe the state-run Power Sector and Assets and Liabilities Management Corporation (PSALM), formerly known as National Power Corporation.
PSALM handles the generation assets, IPP contracts and other existing assets of the former Napocor while Transco, another GOCC is responsible for the generation and transmission of electricity to power cooperatives, many of whom owe the state run firms hundreds of millions of pesos. A recent report said the indebtedness of the electric coops reached P30 billion.
Energy Secretary Jericho Petilla had made it clear the government will not condone the arrears but something has to give. With NEA’s step in powers, the government can take drastic steps like overhauling the policy making body and the management of a supposed ailing power co-op.
In some cases, NEA’s takeover comes with a twin-move to sell the franchise to a private group, raising suspicion whether NEA is out to help electric coops recover or paving the way for vested groups to gobble the energy distribution business being served by electric co-ops.
The takeover of San Miguel Corporation of the Albay Electric Company (ALECO) last year is being held as a case in point. ALECO had run into a massive debt of P3.6 billion to power suppliers. As if symbolic of ALECO’s management woes, on the day it was set to turn over the management to San Miguel after it paid a concession fee of P800 million, there was a massive blackout.
The takeover of ALECO by big business and NEA’s political muscle are sending shivers down the spines of power co-ops because according to a Philfeco official prior to the SMC takeover, heads of regional government agencies met in Legazpi City for a power summit. In that gathering, one announced the present administration looks at privatizing all power cooperatives before 2016.
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