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PHILRECA: Government and private sectors need to unite to solve energy concerns

Philreca

During his visit to Palawan last Thursday, 4 November 2021, President Rodrigo Roa Duterte warned energy players in Palawan and in Iloilo that the government will expropriate and take over its services for their failure to solve energy concerns in their respective provinces.

While electric cooperatives in Palawan and Iloilo were not specifically named, President Duterte said that the coops were not able to keep up with the energy demand in their franchise areas.

He said that when Palawan was still a small community, there were no entrepreneurs operating there yet. But when it grew bigger like what happened in Iloilo, the President added that “the cooperative cannot keep up with progress.”

PHILRECA, the association of 121 electric cooperatives of which the electric cooperatives in Palawan and Iloilo are members, however, clarified that while some electric cooperatives have had their own share of challenges and problems in their operations, there are other concerns that fall outside the ambit of control and power of a distribution utility.

“The power supply chain is composed of many stakeholders – the generation and supply, transmission, distribution, and even the regulatory and support agencies of the government,” according to PHILRECA in a statement.

The Association added that the challenges may include instability and unreliability of power supply due to transmission line issues, vegetation, and circuit breaker and cut jumper concerns. Other non-technical concerns from delays in approval and implementation of CAPEX projects for improvements to operational challenges brought about by the pandemic can also cause medium- to long-term impact in an EC’s operation.

The energy concerns experienced by residents of Palawan, according to PHILRECA, is sometimes beyond the control of Palawan Electric Cooperative or PALECO as this goes to as far as bureaucratic inefficiencies within energy regulatory agencies.

In a congressional hearing conducted by the Committee on Energy of the House of Representatives, PHILRECA said that resource speakers raised other concerns such as reliability and stability of power supply, or promptness of approval of Terms of Reference for Competitive Selection Process including the Power Supply Agreement itself.

The association explained that the government, specifically the Department of Energy, has a big role to play in ensuring reliability and stability of power supply as it is mandated by Republic Act No. 7638, or the Department of Energy Act of 1992, to “ensure a continuous, adequate, and economic supply of energy with the end in view of ultimately achieving self-reliance in the country’s energy requirements.”

“The electric cooperative, as a distribution utility, can and will distribute electricity to the consumers, but in the absence of government support to augment generation capacity by inviting investors, which is beyond the control of distribution utilities like electric cooperatives, the public will eventually be affected,” added PHILRECA.

In the case of Iloilo, however, we do not see any problems in terms of capacity of the electric cooperatives to distribute electricity. The temporary spike in electricity rates that affected the member-consumers of some electric cooperatives in Region VI was due to damage submarine cable of NGCP, prompting the system operator to tapped expensive diesel plants for the supply of power requirements of the ECs,” explained PHILRECA on the President’s earlier comment that Iloilo is one of those cases showing that the ECs cannot keep up with progress.

The group added that “ECs are mere collection agents of power suppliers and the government for certain taxes. The increases in electricity rate that the consumers see in their bills are actually increases in generation charges.”

As regards the President’s comment that other parties – private players who have capital and experience – can be tapped to address the power outages experienced by the province, PHILRECA said that doing so might not solve the problem, but rather worsen it.

“Private and profit-oriented corporations are built that way – they operate as long as they would recuperate its investments and will have enough profit for its owners, which means that if they replace the electric cooperatives, there is a huge chance that electricity prices will increase,” PHILRECA explained.

“Thus, we call on government regulatory agencies to fulfill their mandate and support all power players as much as they can because addressing energy concerns cannot be resolved by any single electric cooperative nor by any power operator alone,” PHILRECA ended its statement with a call for action from the government as well.