JCPC sets review of electric cooperatives

By Myrna M. Velasco – February 12, 2019, 10:00 PM
from Manila Bulletin

The Joint Congressional Power Commission (JCPC) is inclined to initiate a review on the performance of the electric cooperatives (ECs) – since the oversight power of the body is seen fast-tracking requisite recommendation on the revocation of franchises of ailing power utilities.

Senate Committee on Energy Chairman Sherwin T. Gatchalian said his proposal “is for JCPC to do the review – so Congress and Senate will already be represented all at one time.”

Then from the outcome of the scrutiny of the power utilities’ performance and manner of service deliveries, the JCPC can already readily recommend the cancellation of their respective legislated franchises.

“We can initiate the review of the electric cooperatives’ performance and adherence to their franchise mandates because we have to strengthen accountability and we cannot just make do with business-as-usual mode of service delivery,” the lawmaker said.

And once specified ECs are already out of their service domains, Gatchalian noted the government can exercise several options on how to take over and/or inject capital into these weak-performing utilities. His proposal is to pursue the review process in coordination with the Department of Energy.

One mode, he said, could be preliminary government takeover of the EC through the National Electrification Administration (NEA) then offer it eventually to a private investor; option two is to dangle it directly to a willing private investor through expropriation proceedings; and three, a third party investor will come in to secure a new franchise then it will just pay the EC or distribution utility with the corresponding wheeling charges on the use of its power lines and load networks.

“We already know that there are coops with very inefficient service, or they are financially bankrupt; or have not been performing according to the mandate of their franchise – so let’s call a spade a spade,” Gatchalian stressed.

He added “let’s review them (ECs). If we need to revoke their franchises, then we shall do it, so the people will not be left at the raw end of the deal.”

Gatchalian qualified that he is firmly supporting the call of Energy Secretary Alfonso G. Cusi on the review of the ECs’ performance – chiefly the 17 electric cooperatives that the DOE had earlier recommended to have their franchises abrogated.

“Their franchises can be revoked and let another party be issued a new franchise – either through another EC or any other cooperative style – but for me, I’m open to private sector participation,” he said.

Gatchalian further indicated “the other option is for government to temporarily takeover. The government can take initial control of the EC, and then just offer it eventually to a private sector taker.”