DOE orders review of franchise compliance by electric cooperatives

MANILA, Philippines — Energy Secretary Alfonso Cusi has ordered a review of the compliance of power coops  to the service requirements of their respective franchises after withdrawing the recommendation to cancel/revoke the franchise of 17 electric cooperatives (ECs).

The review is part of the Department of Energy’s (DOE) initiatives to improve power services in the provinces by enhancing EC performance.

Many ECs have failed to carry out their mandate for various reasons such as inefficient management, corruption, unnecessary political interference, as well as institutional conflicts as is the case with Davao del Norte Electric Cooperative (Daneco).

The DOE will also look into the rise in missionary subsidies in areas which include, among others, Occidental Mindoro, Catanduanes, Marinduque and Tablas.

Cusi said he would request the National Electrification Administration to submit the technical and financial performance reports of ECs in the last five years.

In addition, ECs will also be asked to submit their road maps and strategies for improving their services, operations and economic viability in the next three years.

“The review will be an inclusive process. We will ask the ECs to identify their main challenges and work with them in determining long-term and sustainable solutions. For transparency purposes, the results of the review will be made available to the public,” Cusi said.

Depending on the review’s findings, task forces may be created to assist underperforming ECs.

For non-performing ECs, on the other hand, the DOE may recommend the cancellation of their franchises.

“As we seek to attain total electrification of the country by 2020, we will ensure that all operating ECs are providing the best services to their consumers. Our fellow countrymen deserves nothing less,” Cusi said.

Philippine Rural Electric Cooperatives Association Inc. (Philreca), the country’s umbrella group for electric cooperatives (ECs), has slammed Cusi for recommending to the House of Representatives last Jan. 11 the revocation of franchise of 17 ECs which were “underperforming and financially and technically distressed.”

“Such recommendation was made without even giving due process to the electric cooperatives,” Philreca said.

Apart from Daneco, the other power coops are Abra Electric Cooperative, Albay Electric Cooperative, Basilan Electric Cooperative, Camarines Sur III Electric Cooperative, First Catanduanes Electric Cooperative, Lanao del Sur Electric Cooperative, Maguindanao Electric Cooperative, Masbate Electric Cooperative, Occidental Mindoro Electric Cooperative, Oriental Mindoro Electric Cooperative, Palawan Electric Cooperative, Pampanga III Electric Cooperative, Sulu Electric Cooperative, Tawi-Tawi Electric Cooperative, Ticao Island Electric Cooperative and Zamboanga City Electric Cooperative.

DOE Undersecretary Felix William Fuentebella, however, said the recommendation to Congress had already been withdrawn.

“The DOE sees the need to further evaluate and assess the present status and performance of the 17 electric cooperatives,” he said.

The group said that in the last four to five decades, ECs and NEA have successfully energized 78 provinces (100 percent), 1,475 cities and municipalities (100 percent), 36,057 barangays (99 percent), 123,198 sitios (83 percent); and 12,713 million household connections (85 percent).