It appears that the Department of Energy (DOE) with its heavy-handed demand that the “no disconnection” policy be extended for lifeline users, is using its considerable weight arbitrarily, and the electric cooperatives and other distribution utilities and their customers are the losers in this decision.
When you follow the developments, the DOE and the Energy Regulatory Commission ( ERC ) have failed in crafting financial assistance to qualified beneficiaries who bore the burden caused by the pandemic. Other than providing extension of payment, which has proven useless for these consumers as can be seen later in this piece, if a consumer has lost his income stream in the period just passed, an extension of payment cannot be used for an indefinite period. Eventually, one will reach the conclusion that some will never be able to pay the arrears.
In my opinion, electric cooperatives have to raise their voices even higher on issues like this. They have more lifeline customers than a distribution utility like let’s say, Meralco, and if we really think about it, considering that there is kwh consumption that lifeliners are not paying in their electricity bills, those amounts are subsidized by other consumers, so the extended delay of payment of bills becomes unfair to the paying customers.
On one side, there is the matter of the consumer. For example, if one has not been settling his accounts since the start of the pandemic in March last year, the bills will only continue to pile up.
Thus, viewed from this perspective, a “no disconnection” extension, while temporarily providing relief to the consumer, is fleeting, and it will only hurt more in the long run.
One must also take into account the financial capability of the electric cooperatives to sustain their operations without revenue, if customers continue to refuse payment. Each cooperative in the country has its own monthly fixed expenses, such as salaries and maintenance costs to maintain reliable service. On top of these are all the charges they have to pay to generation companies and power plant owners, to the transmission company, and costs to the government. For almost a year now, these cooperatives have been shouldering these costs while payment collection has been challenged.
It has already been reported that even the ERC is not keen on extending the “no disconnection” policy introduced last year. Instead, the agency will focus on providing them with more options to source power at low cost. In an event organized by the United States Agency for International Development and the National Renewable Energy Board, the ERC is on record as saying that despite the clamor for it, such an extension would not be sustainable in the long run, because up to now, it is not yet known how soon the NCR will be out of the General Community Quarantine. ERC made the precarious situation clear when it highlighted how not all power distributors, especially the country’s 121 electric cooperatives (ECs) — which were created to provide electricity to consumers at the least cost — can continue operating if they extend the grace period for unsettled bills.
Thus at the end of the day, both for the individual consumer, and for the energy family, the most economic and efficient work-around is clearly to accept that payments must be made, and all parties must make the effort to settle all bills, to the best of one’s capability. The distribution utilities and electric cooperatives have made it very clear that they will be very considerate in terms of payment plans, as long as the customers show intent to settle their bills in full. This responsibility lies on government and the private and public sectors now. It is the start of the New Year, and this is a good place to begin in terms of ramping up the economy and securing our power situation moving forward.
Atty. Vic Dimagiba is President of Laban Konsyumer Inc.