Power co-ops mark major gains

Several of the country’s erstwhile poor-performing and debt-ridden electric cooperatives (ECs) are marking a significant turnaround in both financial and operational performance as a result of major reforms encouraged by the government and implemented by the cooperatives themselves.

This was reported by Energy Secretary Vincent S. Perez Jr. who said the vastly improved performance by the rural electric cooperatives sector "guarantees not only continuing affordability of power supply in the rural areas, but also reliability and efficiency."

"Reliable, efficient and affordable power supply in the regions are critical to the growth of rural-based businesses and enterprises and to the creation of jobs in the countryside," Perez pointed out.

Among the ECs that have registered major performance improvement recently are Bohol II Electric Cooperative (BOHECO II), the Central Pangasinan Electric Cooperative (CENPELCO), and the Aklan Electric Cooperative (AKELCO).

Their turnaround has been largely helped by the "big brother-small brother" program and management reforms initiated by the National Electrification Administration (NEA). The NEA oversees the operation of 119 ECs nationwide.

Perez, who also chairs NEA, said that previously, 47 of the country’s 119 ECs were going through serious financial and management problems. Most of the debts were in the form of unpaid accumulated electric bills.

Seventeen of the most problematic coops were in Luzon, two in the Visayas and four in Mindanao.

The number has since changed. NEA Administrator Fr. Francisco Silva said the turnaround by a good number of ECs came with the implementation of the Performance Improvement Plan (PIP) and the Rehabilitation and Efficiency Plan (REP).

"This was put in place in view of the demand for improved service efficiency and reliability," Silva explained. The plans were set in place in January this year and are expected to be completed by June.

Big Brother-Small Brother

There are more good-performing ECs rather than floundering ones, Silva noted. He said 55 of the 119 coops "are actually rated A+, which means they are well-managed, they pay their obligations on time, and they provide their customer with excellent service."

This fact alone gave us hope that the others can further improve and get themselves out of the mire they were in, Silva said. It was just a matter of helping them become more efficient, he added.

This was the basis for the introduction of the "big brother-small brother" concept which saw well-performing RECs helping struggling cooperatives improve their financial and operational performance, Silva said.

The concept was applied in the cases of BOHECO II which was assisted by BOHECO I; of CENPELCO, which was helped by the Peninsula Electric Cooperative (PENELCO) of Bataan; and of AKELCO which was rescued by a "coalition" of various ECs, including Cebu Electric Cooperative (CEBECO) and the Iloilo I Electric Cooperative (ILECO I).

The success of the concept is anchored on the strength of the cooperatives spirit in the country, Silva said. The NEA administrator, himself, has been a pillar of the cooperatives movement and once served as head of the Cebu Electric Cooperative (CEBECO), one of the country’s most successful ECs.

ECs are among the oldest and most successful aspect of the cooperatives movement in the country, he underscored.

National strategy

According to Perez, the improvement in the efficiency and productivity of RECs "is an important cog in President Arroyo’s strategy to reduce the cost of electricity in the country and ensure reliable power supply".

"The President Arroyo is confident that efficient electric cooperatives "can help bring about long-term benefits, especially affordable power rates, to customers in the provinces."

Cheaper electricity, in return, is expected to spur the growth and expansion of countryside-based industries and enterprises.