Electric co-ops still reeling from debtBy Amy R. Remo
Philippine Daily Inquirer
MANILA, Philippines—Electric cooperatives continue to reel from obligations to power-generation companies—now standing at P13.48 billion as of end-June this year—even after the government condoned P18 billion of their unpaid debt back in 2004.
Power utilities in Mindanao accounted for bulk of the total debt, owing power generators a total of P8.8 billion. Lanao del Sur Electric Cooperative (Lasureco) has a total of P3.3 billion in obligations, the biggest among electric cooperatives.
Energy Secretary Jose Rene D. Almendras said that because electric cooperatives are highly politicized in nature, mismanagement and financial problems usually take place.
According to Almendras, there are politicians who protect the board directors of electric cooperatives that do not remit payments to power-generation firms on time or who give donations or bonuses that should not have been given out in the first place.
At times, some of the electric cooperatives are being used to sway votes of consumers within a franchise area.
This matter is highly critical because it not only threatens the viability of electric cooperatives, to the detriment of the consumers concerned, but more importantly, the ballooning obligations hamper the potential investments in the power-generation sector, Almendras stressed.
He explained that there is a certain reluctance on the part of banks and other financial institutions to fund power projects of electric cooperatives that are delinquent in their payments to power-generating firms.
“We need new generation. No one will lend if the project does not have offtake arrangements that are acceptable to financial institutions. Even if the electric co-ops are willing to sign contracts, these contracts are not acceptable to the financial institutions if the electric co-ops are [financially] unhealthy,” Almendras said.
The solution being eyed now is to amend the charter of the National Electrification Administration which, according to Almendras, was merely a lending institution before.
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