Gov’t agency vows to bring down power co-ops’ systems losses

MANILA, Philippines - Amid rising public sentiment against high power costs, the National Electrification Administration (NEA) on Monday vowed to bring down the systems losses of electric cooperatives to benefit electricity consumers. Under the Electric Power Industry Reform Act of 2001, electric cooperatives are allowed to charge systems losses of up to 15% to consumers. The NEA is supposed to help electric cooperatives bring it down to an average of 13% in 2008, 11% in 2009, and 9% in 2010. The NEA said cooperatives have been compliant with the goals, specifically citing the Misamis Oriental I Electric Cooperative, Inc. (MORESCO I) which holds the distinction of a single-digit systems loss since 1981. NEA Administrator Ms. Edita S. Bueno also cited the Cebu I Electric Cooperative, Inc. (CEBECO I) for maintaining a single-digit systems loss for 20 years, the Cebu III Electric Cooperative, Inc. (CEBECO III) for 13 years, and the Bohol I Electric Cooperative, Inc. (BOHECO I) and the Tablas Island Electric Cooperative, Inc. (TIELCO) for 10 years. To help electric cooperatives, the NEA has made available a financial credit facility for system loss reduction, aside from extending technical, institutional and management assistance. "Reasons for higher electricity rates vary in every electric distribution utility. As for the [electric cooperatives], the Systems Loss and Non-Power Cost (Operating Expenses) are two controllable costs affecting distribution rates. We will see to it that these losses are translated into savings," Ms. Bueno added. Programs to lower the systems losses of electric cooperatives consist of non-technical and technical programs. Non-technical programs include "benchmarking" and documentation of electric cooperatives best practices on systems loss reduction, among others. The NEA also reviews, approves and monitors their cash operating budgets; helps in outsourcing services; sets standard salary scales for officials and employees as well as early retirement programs; and reviews and approves their organizational structures. - BusinessWorld