NEA starts revaluation of power co-ops

The National Electrification Administration (NEA) will undertake a valuation to determine the true worth of the Davao del Norte Electric Cooperative (Daneco) in the face of a proposed buy-in by Aboitiz Power Corp. (APC).

"In fact, I have ordered the valuation of all the electric cooperatives especially those which are being eyed for joint venture formations by the private sector," NEA Administrator Conrado Estrella III told newsmen yesterday.

Estrella said several private energy-related companies have expressed interest in forming joint ventures with existing electric cooperatives aside from the APC.

Among the rural electric cooperatives that have been receiving feelers from the private sector are: Bataan Electric Cooperative II, Angeles Electric Coop., Pampanga Electric Coop., and Pangasinan Electric Coop.

Among the power firms which have expressed interest in forming joint ventures or buying into electric cooperatives are Salcon Power Corp., the Manila Electric Corp. and the Angeles Power Corp.

The move to reevaluate the electric cooperatives comes on the heels of a legal opinion by the Office of the Government Corporate Counsel (OGCC) regarding the buy-in of APC into the Davao del Norte Electric Cooperative Inc.

"We find no legal impediment to the proposal of Daneco to enter into a joint venture agreement with APC, as the contemplated project is in keeping with the existing laws and state policies on the matter," the OGCC said.

APC, which is a member of the Aboitiz group of companies, wants to acquire 70 percent of Daneco through a capital infusion of P301 million. The cash infusion will be used to pay off all of Daneco's existing obligations to the National Electrification Authority (NEA), financial institutions, employees' retirement benefits, and finally, to provide initial working capital.

It supplies electricity to Davao City through its subsidiary, Davao Light and Power Co. (Davao Light).

"The buy-in might transform Daneco into a private energy distributor thus losing all its privileges accorded a cooperative. It is also curious to learn what would be the impact on its members once it turns into a private entity," the NEA chief explained.

The plan to reevaluate the cooperatives was confirmed by Energy Secretary Mario Tiaoqui who said that the department has formed a body to undertake the valuation.

"We have formed a task force to review all the electric cooperatives not just for the purpose of knowing their viability for forming joint ventures with private companies. We also want to know how they will perform in undertaking the department's rural electrification program," Tiaoqui said.

He made the statement during the sighing of a memorandum of agreement (MOA) for the electrification of 10 barangays in Ormoc, Leyte. The accord involves the Department of Energy (DOE), the National Power Corp. (Napocor), the local government of Ormoc, the Philippine National Oil Co. (PNOC), and the NEA.