The Department of Energy (DOE) has officially directed power distribution utilities and electric cooperatives (ECs) on ‘extended no-disconnection policy’ for lifeline residential customers or those that have electricity consumption of 100 kilowatt-hours or less.

In an advisory issued by the energy department on February 5, it enjoined DUs and ECs “to implement a no disconnection policy due to non-payment of bills falling due by March 2021 for all electricity consumers whose consumption level are within the lifeline rate set by the Energy Regulatory Commission for the DUs’ franchise area.”

It was gathered that at least 2.6 million customers of Manila Electric Company (Meralco) will be covered by the ‘no disconnection’ edict; while in the service areas of the ECs, this will shelter more than 3.35 million customers from power service cut-off.

There is no end-date in the DOE advisory as to when the prolonged ‘no disconnection policy’ will cease or be lifted.

In the same DOE advisory, it also mandated that “all electricity consumers (lifeline and non-lifeline customers) who are still unable to pay may coordinate with their DUs to enter into socially equitable and manageable payment terms to prevent eventual disconnection of electricity services.”

The department added “we seek the solidarity of those consumers who are capable to pay to settle their bills within the original due dates to help manage the cash flow in the energy supply chain and ensure the continuous supply of electricity.”

The DOE further decreed that all DUs must “post this (advisory on no disconnection policy) in their respective websites and consumer welfare help desks.”

Nevertheless, the government-sanctioned policy on ‘no disconnection of electricity service’ is already putting the energy sector in a financially precarious position, that in the process could compromise investments on targeted service improvements and expansion projects due to severely strained cash flow, as sounded off by the Philippine Rural Electric Cooperatives Association Inc. (PHILRECA).

Over the longer term, this could also result in under-investments in the entire energy sector if the DUs and ECs cannot fully pay their power suppliers because of customers’ arrears that have been piling up – and yet their services cannot be discontinued because of the stretched ‘no disconnection’ fiat.

When that happens, many parts of the country will descend into brownout predicaments again – and the politicians will just conveniently blame the power utilities, although this is a policy ploy they have been pushing perceptibly to gain advance brownie points in the 2022 elections.

It has to be noted that series of ‘populist-leaning policies’ are being jostled in the industry – including the extension of lifeline subsidy rates for marginalized end-users.