Delinquent power cooperatives warned

AS MANY AS 29 electricity cooperatives could be taken over by the government due to overdue obligations or risk being cut off from their power sources, officials of the National Electrification Administration (NEA) and the Power Sector Assets and Liabilities Management Corp. (PSALM) have warned.

These cooperatives have failed either to meet their loan obligations to NEA or pay for electricity supply from state-held power plants, the officials explained.

In a letter dated Feb. 11, NEA Administrator Edita S. Bueno told PSALM President Emmanuel R. Ledesma, Jr. that 81 of the 109 electricity cooperatives under the former’s jurisdiction had obligations totaling P16.773 billion as of Sept. 30 last year.

Of that complement, 29 with overdue obligations totaling about P10.4 billion are at risk of being taken over by the state in order to ensure their continued operation.

NEA said that, of the 29, Lanao del Sur Electric Cooperative had the biggest liability of P4.3 billion, followed by Albay Electric Cooperative (Aleco) with P1.5 billion.

“For the 29 ECs (electricity cooperatives) with overdue power accounts, NEA will undertake the necessary action to address this major concern,” Ms. Bueno wrote.

“Just like the case of Aleco, NEA took over the operation of the electric cooperative on Feb. 11, 2011 to pave the way for its rehabilitation and entry of a new operator,” she recounted.

NEA took over the management of Aleco last week after the Philippine Electricity Market Corp. and the National Grid Corp. of the Philippines threatened to cut the province off the Luzon grid for unpaid fees.

Another P1.454 billion in overdue accounts from seven electricity cooperatives are under litigation in court or awaiting resolution from the Energy Regulatory Commission, the letter read.

Thirty-two cooperatives are current with their obligations totaling P1.785 billion, while the balance from 13 others involves value-added tax due, “some of which were already restructured/paid.”

For his part, Mr. Ledesma told reporters that PSALM will also take action on those that have not paid for the power they have used. “For electric cooperatives which require legal action, these were already referred to our legal group for appropriate action,” he said.

“For electric cooperatives due for disconnection, PSALM will send them a final demand letter before taking further action,” he added, warning that they “are vulnerable for [sic] disconnection in case they do not act on PSALM’s final demand letter.” –Businessworld