Napocor threatens delinquent power co-ops with disconnection

The National Power Corp. (Napocor) has total receivables of P7 billion from at least 199 electric cooperatives, according to data obtained from Napocor.

The bulk of the P7-billion or about P6.5 billion represents loans of electric co-ops in the major grids while the remaining P500 million are from island grids or those belonging to the small power utilities group (SPUG).

In a press conference over the weekend, Napocor OIC-president and chief executive officer Roland Quilala said most of the loans of the co-ops were accumulated over the years.

"Some of these electric co-ops were not able to remit the actual payment so their backlog ballooned to millions of pesos," he said.

He said the problem of huge collectibles from electric co-ops could also be attributed to the poor financial management of these small distribution utilities.

According to Quilala, those electric co-ops which fail to settle the required payment on time would be subject to disconnection.

He said they are now in the process of evaluating which ones of these electric co-ops would be disconnected from Napocor’s services.

Quilala said there are cases wherein the National Electrification administration (NEA) assumes operation of a problematic and debt-ridden electric co-op.

Once the NEA takes over an electric co-op, he said, it will in turn endorse the management of the said utility to Napocor.

This way, he said the Napocor will be able to recoup the unpaid loans of the said electric co-op.

For one, he said the NEA is eyeing to take over the operations of Lanao del Sur Electric Cooperative (LASURECO) which, at present, has the biggest obligation to Napocor amounting to P847 million.

Another electric co-op being eyed to be taken over by NEA is the Aklan Electric Cooperative (AKELCO) which owes Napocor some P110 million.

The Napocor official explained that since AKELCO has yet to be placed under the supervision of NEA, it would be subject for disconnection today.

"AKELCO has to pay P25 million by Monday or else we will disconnect them," he said.

Quilala said it’s time Napocor put more teeth on collecting receivables from the electric co-ops. "As far as we are concerned, we have always been lenient with the co-ops," he said.

He noted that they charge only P5 per kilowatthour for those co-ops in the small island grid while actual cost of producing power in that area amounts to P9 per kWh.

When asked if Napocor will not be liable for disconnecting the services of these electric co-ops since it is mandated to assist in the SPUG operations, Quilala said "this should not be viewed as political issue but a commercial matter."

He pointed out that they should be firm in teaching the electric co-ops a lesson to pay their debts on time.

He cited the case of Basilan Electric Cooperative (Baselco) which was able to come up with a P5-million payment after Napocor threatened to disconnect its services. Baselco owes Napocor some P205 million.

This week, Baselco should be able to pay another P6 million to Napocor to avoid another disconnection notice.

Quilala said the Napocor faces a financial dilemma. "We need to strictly monitor our receivables because of our tight financial position. While we understand that electric co-ops also have to deal with a lot of concerns in their operations, they should not forget Napocor also has plenty of obligations to deal with and delays in their payments to use also create a dent in our cash flow," he added.