AMIDST PRIVATE SECTOR MOVES: Consumers will decide on electric coops’ future

By Francis Allan L. Angelo

The member consumers of electric cooperatives (EC) have the final say on the issue of private corporations partnering or taking over power distribution services in their areas.

National Electrification Administration (NEA) Administrator Antonio Mariano Almeda told Daily Guardian on Air last April 26 that Presidential Decree 269 or the NEA Decree, as amended by Republic Act 10531 (NEA Reform Act of 2013) has prescribed several modes for private participation in power distribution via ECs.

NEA was created to administer and supervise ECs which were initially tasked to handle rutal electrification.

Among these modes is the investment management contract where a corporation will manage a cooperative and use its own capital to improve power distribution infrastructure.

Another mode is a joint venture (JV), just like the one between Central Negros Cooperative (Ceneco) and Primelectric Holdings Inc/Negros Electric and Power Corp (NEPC) of businessman Enrique Razon.

Almeda said JVs require approval by majority of the EC’s member-consumer-owners (MCOs) as it would involve the disposition of assets owned by the cooperative.

“That’s what happened to Ceneco since it involved the assets of the cooperative that will be taken over the private firm in exchange for an amount,” Almeda explained.

Regardless of the mode, Almeda said NEA’s main role in mergers or takeovers by private corporations is to ensure “that the law is followed” in the operationalization of partnerships or agreements.

As regards the entry of MORE Power, Iloilo City’s power distributor and sister firm of Primelectric/NEPC, into the franchise areas of Iloilo Electric Cooperatives (Ileco) I, II, and III, Almeda said the presence of a private firm should foment healthy competition which will benefit the MCOs.

As to the Ceneco JVA, Almeda said the franchise bill is already in the Senate, and once the latter approves it, Primelectric will release an agreed amount to Ceneco and NEPC will take over the assets and power distribution services.

The Razon-led firms will pay for 100 percent of Ceneco’s distribution assets – 70 percent in cash and 30 percent in shares in NEPC.

NEPC is ready to invest more than P2 billion to upgrade Ceneco’s services and infrastructure.

Almeda said that aside from Ceneco, Zamboanga City Electric Cooperative (Zamcelco) has entered into a 25-year Investment Management Contract (IMC) with Crown Investment Holdings, Inc. and Desco, Inc. (Crown-Desco) in 2018.