‘Strange’ explanation betrays NEA negligence

This is a reaction to the letter of Judith T. Alferez, director for public affairs of the National Electrification Administration (NEA). In her letter (“NEA no burden to government,” Opinion, 7/18/13), she took exception to the Inquirer’s July 9 editorial titled “Wasted subsidies,” which cited NEA as one of the government-owned and -controlled corporations where government subsidies are wasted.

Director Alferez explained that government subsidies are not used for NEA’s operations but for the electrification of barangays and sitios and for the rehabilitation of damaged distribution lines.

We regret to say that we find her explanation quite strange and unacceptable: The funds for the electrification of villages and sub-villages and for the rehabilitation of damaged distribution lines are supposed to be sourced from the Reinvestment Fund for Sustainable Capex or (RFSC) being imposed by the electric cooperatives on their member-consumers, with the approval of the Energy Regulatory Commission. This charge on a per kilowatt-hour basis ranges from P0.1508/kWh to P0.5324/kWh depending on the group category of the electric cooperative. But in the application for capex (capital expenditure) up to 2015, which the electric cooperatives filed in 2011, the RFSC charge will almost double. Clearly, this is a NEA burden that had been passed on and is still being passed on to consumers.

Another NEA burden to the government is the reported swelling of the electric cooperatives’ debt to power suppliers and service providers to a whopping P30 billion, the biggest of which is that of Lanao del Sur Electric Cooperative Inc. whose total debt amounts to P6.08 billion.

Since NEA controls these electric cooperatives by virtue of Presidential Decree No. 269 as amended by PD 1645, we believe that the root cause of this P30-billion debt of the electric cooperatives is NEA’s own institutionalized negligence. Thus, with NEA’s blatant failure to regulate the electric cooperatives, not only government subsidies to NEA are wasted but also its very own annual budget. Should the Senate and the House of Representatives decide to open the books of electric cooperatives, it will discover that even the Category A+ among them are incurring losses.

So where’s the NEA regulation of the monopolist electric cooperatives that are supposed to deliver stable, adequate, secured supply of electricity at the least cost?

—PETE L. ILAGAN,

president,

National Association of Electricity

Consumers for Reforms Inc.,

[email protected]