Decades of steady successes in rural electrification programs in the countryside may be placed in disarray with the entry of private corporate businesses, and unbridled privatization may dilute the role of people’s organizations enjoying protection under the law, the nationwide organization of electric cooperative managers warned.
In a press conference, the National Association of General Managers of Electric Cooperatives (NAGMEC) cautioned that the impending release of an Executive Order from Malanañang allowing private sector participation in rural electrification needs to be thoroughly re-evaluated.
NAGMEC President Sergio Dagooc expressed concern that cooperatives, which enjoy special protection under the Constitution as grassroots people’s organizations, may be pushed aside if pure corporate interests are allowed to dictate electrification programs in unserved and underserved areas in the country.
“Cooperatives such as electric coops (ECs) are mutual help organizations that uplift the lives of Filipinos who would otherwise have no access to capital and investment opportunities. Electric coops in particular perform a public service because they provide the electrification ecosystem in rural areas. So we’re hitting two birds with one stone here – we encourage people’s participation in countryside development and we provide electricity at the same time. With the planned entry of corporate entities, these will both be jeopardized,” Dagooc noted.
Electric coops encourage people’s participation in countryside development and provide electricity at the same time.
ECs currently enjoy exclusive electricity franchise privileges, allowing them to service rural areas. NAGMEC insists that if the plan to allow the private sector to engage in rural electrification pushes through, it should be under a set-up where all parties, including end-users, shall benefit.
“If there is no chance that our policy makers would reconsider, and the plan cannot be avoided anymore, we call for protection from over-reach and franchise area encroachment. Let private interests serve the underserved and unserved areas in our franchise but let it be done under a partnership with us, and not without us,” the NAGMEC head insisted.
Electric Cooperatives are non-stock, non-profit service corporations and over a hundred of them are registered with the National Electrification Administration (NEA) which wields administrative supervision authority over them by law. Less than 20 of the country’s 121 electric cooperatives have stock, profit orientation by virtue of their registration with the Cooperative Development Authority (CDA).
ECs, being mostly non-stock and non-profit in orientation, operate on a break-even revenue versus cost scheme as most collections go to capital expenditures, personnel services, maintenance activities, and other operating costs. They are largely considered as partners of the government in the implementation of the Rural Electrification Program which began in 1969 where it officially began extending electricity services to communities in provinces and other rural areas.
“Where was the private sector when they were needed the most? Many areas were ignored to suffer in darkness four decades ago because the private sector felt they were unprofitable; now that ECs have invested and toiled to put in place power lines and distribution infrastructure, the private sector will come in because it is now profitable for them? That is unfair to ECs.”
Adding fuel to the privatization debate is the Philippine Electric Cooperative Association (PHILRECA), which through its President Presley De Jesus said that government policy should be tempered with an acknowledgement of the role played by ECs.
“Policies should reflect a recognition of the countless gains we have brought to government coffers. Being partners of the government for 48 years now, we have not wavered in pursuing the mission of providing electricity to far-flung communities. Over 40 Million Filipinos in 12 Million household connections enjoy the benefits of stable and reliable electricity service. A large part of economic growth in the rural areas can be credited to what the electric cooperatives have accomplished so far,” De Jesus said.
Over 40 Million Filipinos in 12 Million household connections enjoy the benefits of stable and reliable electricity service.
PHILRECA stressed that despite their nation-building role, electric coops are now threatened because the private sector is intending to expand their investments and capital exposures in electricity distribution, beyond what is allowed by law.
For his part, Dagooc revealed that at least one prospective entrant from the private sector has aggressively demanded that electric cooperatives outrightly waive entire areas under their franchise.
“Congress already granted a franchise to an area covered by an electric cooperative in Bicol, while a private company was allowed to operate over an entire town under the franchise of another entity in MIMAROPA. I myself was asked to waive a portion of Dinagat Island in favor of a private operator.”
“Unless we seriously re-evaluate this privatization policy, decades of gains in grassroots participation in countryside development would be reversed and lost. Would we want to further disempower people in rural areas?” the NAGMEC chief asked.