New law to help local power cooperatives

BAGUIO CITY, Philippines  – Local power cooperatives, especially those facing financial difficulties,  are expected to get relief from  the stronger National Electrification Administration (NEA).

With its new charter signed by President Benigno Aquino III last May 17,  NEA will have better supervision over electric cooperatives, some of which are incurring heavy losses.

With the new NEA charter,  Loreto Seares Jr., general manager of the Abra Electric Cooperative (Abreco) said, step-in rights in cases of ailing cooperatives are provided.

Abreco was troubled with financial woes, leading to one supply disconnection in March because of unpaid dues. 

Abreco which has since registered with the Cooperative Development Authority, was unable to secure assistance from the latter, because the NEA said it could not  provide  “direction” like what is offered by CDA.

The new law will allow  Abreco  to seek heelp from NEA, which  has been  helping supervise electric cooperatives all over the country since 1972.

The new law also raised  NEA’s authorized capital stock to P25 billion from P1 billion. Likewise, it allows NEA to act as guarantor to electric cooperatives in their transactions to various parties including their power supply contracts.

NEA may now also grant loans to electric cooperatives for the construction or operation of subtransmission and distribution facilities necessary to supply power to their service areas.

Seares said Abreco's membership to the CDA will empower boards of cooperatives regarding electric distribution and to get better technical guidance in the business.

The new law will also help improve the operations of electric cooperatives, allowing NEA to require the monthly submission of reportorial requirements as may be necessary relative to their operations. 

“With CDA, there was none like it,”  Seares  said.

The reports shall include cooperatives’ monthly financial reports, engineering reports, audited financial statements, annual cash operating budget, five-year investment plan as well as summary of complaints received.

Seares said the new law will direct them to level-up efforts to rehabilitate Abreco toward better services to the 27,000 Abrenos member-consumers being supplied with power, while rectifying earlier errors that led to various woes in its financial dealings,  management priorities and actions including leadership directions.

The Abreco manager said he had earlier proposed to the board of directors of the Abreco to institute measures in the cooperative likened to the NEA schemes but was met with disagreement taking cue from its CDA membership. - Artemio A. Dumlao