Private sector entry into rural electrification hit

Several groups of electric cooperatives decried President Duterte’s call for private companies to go into the rural electrification sector, saying this harped on erroneous, negative descriptions of small utilities like their members.

In a joint statement issued on Friday, the Philippine Rural Electric Cooperatives Association (Philreca), Philippine Federation of Electric Cooperatives (Philfeco), Philippine Association of Board of Directors of Rural Electric Cooperatives (Pabrec), and National Center of Electric Cooperatives Consumers appealed against “widespread misconception that power cooperatives are generally ineffective.”

Citing industry data, the groups said only 8 percent out of the 121 ECs in the Philippines were considered “problematic.”

The groups were reacting to a recent statement of the President to Department of Energy and the Energy Regulatory Commission to advance rural electrification by allowing the entry of the private sector to give communities more options on power service providers.

They said such statement “effectively clears the way for private investors to barge into rural electrification, which for so long has been left in the wheelhouse of community-owned distribution utilities.”

Philreca president Presley de Jesus said a policy on private sector participation in rural electrification program was based on a wrong premise—that there are nonperforming electric cooperatives that are considered barriers to total electrification.

De Jesus said most cooperatives had delivered on their mandate to help the government promote sustainable rural development through electricity.

“Therefore, they cannot be expected to peacefully yield their jobs anytime soon to the private sector,” he said.

De Jesus added that, while they welcome competition, cooperatives feared that a policy on the entry of deep-pocketed private firms in rural electrification “lays the groundwork for their [utilities] to give up the ghost” or die off.

Reynaldo Lazo, president of Pabrec, called on the government to protect the cooperatives against the encroachment of private companies.

In response to the President’s statement, the National Electrification Administration last month agreed that the cooperatives should prepare and submit in two months a master plan or roadmap for achieving full electrification in the rural areas by 2022.