Energy committee chairman flags P2.5B in unliquidated subsidies to rural utilities

By Adam J. Ang – October 25, 2020 | 6:27 pm
from Business World

THE National Electrification Administration (NEA) violated its own policy of halting subsidies to rural utilities with a backlog of unliquidated previous funding, the chairman of the Senate energy committee said.

Senator Sherwin T. Gatchalian said P2.5 billion in subsidies remain unaccounted for between 2016 and 2019, citing reports from the Commission on Audit.

He said the NEA apparently violated its own 2016 order, which states that “no new subsidy fund will be released to the EC (electric cooperatives) for new Sitio Electrification Program or Barangay Line Enhancement Program projects unless the previously funded projects are completed and funds are fully liquidated.”

The NEA in its response said the bulk of the amount, or P2.3 billion, involves ongoing projects while the completed ones still require inspection prior to acceptance by the agency.

“Only around P200 million are due for liquidation,” said Milagros A. Robles, NEA’s Financial Services Department manager, during a Senate committee hearing on its proposed budget for 2021.

“There must be some end to this because this is a hanging issue,” Mr. Gatchalian said, noting that the agency kept lending to electric cooperatives despite unliquidated balances.

“In 2021, we need to make sure that this does not happen again, and you (will) have reforms implemented so these (unliquidated balances) will not grow,” he added.

Due to travel restrictions imposed during the pandemic, the agency cannot conduct physical inspections of completed projects. Earlier in the month, it adopted virtual checks of electrification projects in remote communities.

The NEA has yet to update the number of unaccounted subsidies issued to rural utilities.

In 2021, the government has allocated P1.6 billion for the electric cooperatives’ Sitio Electrification Program, sufficient for 1,085 sitios, according to NEA. There are still some 12,000 rural villages or 1.7 million households that are yet to be energized.

The agency initially requested P7.5 billion from the Budget department for the program next year, and has said it needs around P15 billion to achieve full electrification by 2022.

As of June, there were 13.85 million powered households out of 14.34 million still unenergized communities, based on data from the 2015 census.