DOE offers rescue package for ailing electric cooperatives

The Department of Energy (DOE) has come up with a rescue package for financially ailing electric cooperatives to aid them in implementing critical reforms to improve and restructure their operations.

In the recent annual general membership meeting and 25th anniversary of the Philippine Rural Electric Cooperatives Association, DOE Secretary Vincent Perez said poor performing electric cooperatives (ECs) should strive to achieve a single-digit loss percentage by 2010 if they want to continue being financially viable.

"I call on all ECs to work hand in hand with the Department of Energy, the National Electrification Administration (NEA) and the private sector to improve their efficiency of service, reduce systems losses and eventually lower their costs to consumers," Perez said.

The government has already established measures to assist struggling ECs in strengthening their technical capability and financial viability.

Just recently, the DOE issued guidelines in effecting greater private sector participation through the Investment Management Contract (IMC) wherein an investor will infuse risk capital and provide management expertise to ailing ECs.

Camarines Sur Electric Cooperative III (CASURECO III) was the first cooperative to avail of the IMC. It has a franchise to distribute electricity in Iriga, Baao, Bula, Nabua, Buhi, Bato and Balatan in Camarines Sur.

The NEA also instituted a policy that concretizes the cooperation between and among ECs. Through their Task Force Kapatid and Big Brother-Small Brother programs, better performing ECs are encouraged to assist the inefficient ECs in their efforts to improve their operations.

Some of the ECs that have tied up in this program are Bohol I Electric Cooperative Inc. (BOHECO I) to BOHECO II and Peninsula Electric Cooperative Inc. (PENELCO) to Central Pangasinan Electric Cooperative Inc. (CENPELCO).

To date, BOHECO II’s systems loss has gone down to only 12.26 percent from its record-high 17 percent annual average in 2001.

It is estimated that for every one percent reduction in system loss, a savings of P360 million is generated for the ECs.

"This savings will definitely add to the much needed funds to enhance the delivery of electricity in the rural areas," Perez said.