Underperforming electric coops face franchise cancellation

Published February 2, 2019, 12:00 AM

by manilabulletin_admin

By Myrna M. Velasco

Delinquent electric cooperatives (ECs) must be warned that their franchises are at risk of being cancelled or revoked if the Department of Energy (DOE) finds them miserably failing on their mandate to efficiently serve electricity consumers.

Department of Energy (DOE) logo
Department of Energy (DOE) logo

That is in line with the energy department’s proposed comprehensive review of all ECs’ operations relative to compliance to the mandate of their respective service franchises.

Energy Secretary Alfonso G. Cusi announced that such shall form part of the government’s overall initiative to let them step up on their provision of quality service to Filipino electricity consumers.

The worst case scenario for non-performing ECs, it was indicated, will be for DOE recommending “the cancellation of their franchises.”

The energy department noted that while the ECs had been the State’s long-term partners in bringing electricity access to consumers in many rural and far-flung areas, “many ECs have failed to carry out their mandate for various reasons.”

It listed such failings to include inefficient management, corruption, unnecessary political interference as well as institutional conflicts. And for such, the DOE has specified Davao del Norte Electric Cooperative, Inc. (DANECO) as a case in point.

Fundamentally, the DOE indicated that it will scrutinize the manifest rise in subsidies in the so-called “missionary areas” – including those in Occidental Mindoro, Catanduanes, Marinduque and Tablas.

Relative to the planned review of the ECs, Cusi emphasized that he will direct the National Electrification Administration (NEA) “to submit the technical and financial performance reports of ECs for the last five years.”

Further, the ECs will be required “to submit their roadmaps and strategies for improving their services, operations and economic viability in the next three years.”

The department explained that “the review will be an inclusive process,” and part of that will be asking the ECs themselves “to identify their main challenges.”