NEA and power coops want higher rates

CEBU, Philippines - The National Electrification Administration and electric cooperatives nationwide will seek higher electricity rates to set up a mobilization fund in the event of extraordinary losses and expenditures arising from natural calamities, unforeseeable circumstances and risk factors.

The NEA board of administrators recently passed such a policy that aims to authorize the cooperatives to establish a sinking fund from a certain percentage of their accumulated margins to cover extraordinary losses and expenditures.

In a statement, NEA administrator Edita Bueno said that a petition on the matter will be filed before the Energy Regulatory Commission for the latter’s approval.

Aside from this, NEA also plans to establish a pool of electricians/linemen to be trained in coordination with the Technical Education and Skills Development Authority.

NEA said that it will also encourage the electric cooperatives to have a buffer stock of electrical poles, materials and hardware good for at least two months.

It can be recalled that when super typhoon Yolanda struck the northern part of Cebu, it left 34 electric cooperatives operating within the area with about P4.92 billion pesos in losses due to total or partial damage in distribution lines, substations and sub-transmission lines, NEA said.

It took more than three months for electric cooperatives in northern Cebu to restore its power lines.

NEA added that the guidelines of the policy stipulate that if the electric cooperatives have accumulated margin, it shall transfer a certain amount to appropriated margin for extraordinary losses.

“The appropriated margin for extraordinary losses shall be deposited to a restricted sinking fund account. The disbursement from the sinking fund and the recognition of expenses shall be through normal disbursement and work order procedures,” the statement read.

The sinking fund, NEA said  shall not exceed 20 percent of the Net Utility Plant of the cooperatives and shall be solely utilized for extraordinary losses and expenditures arising from unforeseeable circumstances (force majeure), natural calamities and other risk factors.

Cebu has five electric cooperatives namely the Cebu Electric Cooperative I, II and III, the Bantayan Island Electric Cooperative Incorporated and Camotes Electric Cooperative Incorporated.

Data from www.kur-yente.org.ph shows the following effective power rates for residential customers consuming 400kilowatt hours only.

For CEBECO I it is P10.3888/kwh as of March 2014, for  CEBECO II P9.3829/kwh as of July 2014, CEBECO III P6.9403/kwh as of June 2014,  BANELCO P11.6220/kwh as of September 2013 and CELCO P8.7539/kwh as of July 2014. — /BRP (FREEMAN)