NEA prioritizes subsidies to lowly rated power coops

MANILA, Philippines — State-run National Electrification Administration (NEA) will prioritize giving subsidy allocation to electric cooperatives (EC) with low electrification rate next year.

NEA administrator Edgardo Masongsong said the subsidy would be taken out from the proposed corporate operating budget (COB) of the agency for fiscal year 2020 based on the National Expenditure Program (NEP).

Based on the 2020 NEP, the NEA was given a P14.15-billion corporate operating budget. Of the amount, P1.75 billion will be financed by NEA’s internally generated funds, P1.53 billion as subsidy from the national government (NG), and the remaining P10.87 billion represents non-cash subsidy for the conversion of NG advances.

Of the total proposed budget, P1.162 billion has been warmarked for the continuation of the Sitio Electrification Program (SEP) next year, which will only cover 775 sitios across the country that still have no access to electricity. 

To determine which power coop should be prioritized in the sitio electrification fund, the agency has established a set of criteria.

Masongsong said ECs with electrification level of 74 percent and below, and with good project liquidation performance would be given the bulk of the subsidy allocation next year.

Other criteria factored in are power coops with problems on peace and order, financial liquidity, and those classified as “medium” and below.

“Electric cooperatives with energization level ranging 95 percent and above, based on the 2015 census without growth rate, shall be the least priority for allocation,” he said.

These ECs will be required to scout potential private investors for a joint venture, and international and local grants and programs, utilize their internally generated funds, and/or include in capital expenditure (capex) project application to the Energy Regulatory Commission (ERC).

“All other electric cooperatives which do not fall on the two categories shall be allotted with funding according to the degree of impact to the level of energization and least cost,” Masongsong said.

Meanwhile, the NEA chief also noted that of the P34.375 billion worth of government subsidies released to the ECs from 2011 to 2019, a total of P31.55 billion were already liquidated and only P2.82 billion remained unliquidated.

NEA has also committed to submit the masterplan detailing the agency’s strategies to help the national government realize the 100-percent electrification target by 2022.

Masongsong assured that the agency, in partnership with 121 ECs, would continue to explore and exhaust other means, as well as maximize national government subsidies for sitio electrification and barangay line enhancement programs, and grants and donations both from foreign and local institutions.

Next year’s proposed budget will allow the agency to meet its other targets for 2020, which include electrification of 38 local government unit/non-government organizations (LGU/NGOs) resettlement sites, and provision for the cost counterpart of the government of the Philippines on Japan International Cooperation Agency donation for ECs in the Bangsamoro Autonomous Region in Muslim Mindanao.