NEA wants new bank tailor-fit for power coops

MANILA, Philippines - The National Electrification Administration (NEA) is calling for a tailor-fit bank to bankroll expansion and other requirements of electric cooperatives (EC).

Citing “tremendous potential,” NEA chief Edgardo Masongsong urged the Rural Electrification Financial Corp. to convert itself into a banking institution for the consumers.

However, if this is not heeded, he urged the consumers to create the EC Consumers Bank.

“With 11.8 million EC consumers all over the country, you hold tremendous potential. Imagine what you can do to challenge the old families in the banking and financial sector,” Masongsong said.

Out of 121 ECs monitored by the agency, 77 power coops are rated AAA which means they consistently increase efficiencies on financial, institutional and technical areas of their operations,

For other ECs that are “on the brink of bankruptcy,” NEA is looking to create more task forces to take over the operations of ailing coops.

The creation of task forces forms part of NEA’s legal power to exercise step-in rights both for ailing ECs and those whose operations can still be turned around.

“We are creating more task forces to cover the 10 electric cooperatives that are categorized as ailing,” Masongsong said. “When you say ‘ailing,’ there are so many parameters like the issue of financial capability, technical capability, institutional capability and legal capability.”

Step-in rights refer to the legal authority vested in the agency to implement interventions that will address an ailing EC’s arrearages in power supply purchases, high systems loss, low collection efficiency, operating loss, among others.

Task Force Duterte have been activated for Lanao Sur and Camarines area to enforce specific governance programs and help Lanao del Sur Electric Cooperative Inc. (Lasureco)/Lanao Sur Power and Camarines Sur III Electric Cooperative Inc. (Casureco III) become more economically and operationally viable.

Before that, Task Force Duterte Northern Davao Power was implemented earlier this year to take over the operations and management of Davao del Norte Electric Cooperative Inc. (Daneco) and ensure its compliance to NEA-set performance parameters and standards.

Daneco was recently categorized by NEA as “C” in the EC Overall Performance Assessment.