NEA Media Release



The Kalinga-Apayao Electric Cooperative, Inc. (Kaelco) has finally liquidated around P113-million worth of subsidy funds barely a month since the National Electrification Administration (NEA) assigned a project supervisor to manage the affairs of the struggling distribution utility. The amount was part of the P236-million financial aid used to bankroll several electrification projects from 2011 to 2018 for the benefit of rural communities in the Cordillera Administrative Region under the Kaelco franchise, Engr. Ricardo Pallogan has reported. Pallogan, who heads the Power Generation Operations Department of Benguet Electric Cooperative, Inc. (Beneco), was recently tapped by the NEA to help out Kaelco in its daily operations including the liquidation of its state-funded projects. Since assuming his post last June 8, he said P113-million out of the P236-million unliquidated funds for the Sitio Electrification and Barangay Line Enhancement projects of Kaelco from the NEA has already been cleared, which he described as their "biggest accomplishment" so far. NEA Administrator Edgardo Masongsong appointed Pallogan as project supervisor of Kaelco last May 31. As indicated in the office order, he is tasked to approve or reject board resolutions in consultation with concerned departments in the electrification agency. Pallogan is also authorized to review financial, institutional and technical reports including action plans for operational efficiency. He is likewise mandated to countersign checks, withdrawal slips, and other banking transactions, as well as perform further tasks that may be assigned for the purpose of operational efficiency. Up for the Challenge A native of Lubuagan, Kalinga, Pallogan admitted that being a project supervisor for Kaelco is not an easy assignment. He said he is aware of the tough challenges he would encounter given the present situation of the utility. His key priorities include creating a capital expenditure (capex) planning that will help improve distribution system efficiency and reliability, lower the system loss, increase the collection efficiency, as well as minimize the power interruptions within Kaelco's coverage area. Kaelco's system loss and collection efficiency stand at 12.18 percent and 88 percent, respectively, as of March 31, 2018. Pallogan said a Strategic Development Plan has been submitted to the NEA covering the period January to December, which contains the activities that aim to enhance operational performance in the financial and institutional operations of Kaelco. In an interview, the Beneco official promised that he will do his best for the betterment of Kaelco. "This is a big challenge. Hopefully, the Board and the employees will cooperate. To the consumers, I assure you that I will do my best," he said. To date, Kaelco has reached 47,915 households in its entire coverage area out of its 56,600 total potential connections. It is classified as an extra large electric cooperative (EC) and rated A by the NEA based on its 2017 EC Overall Performance Assessment. ###

NEA, DICT begin exploratory talks on bringing broadband to households


Officials of the National Electrification Administration (NEA) and the Department of Information and Communications Technology (DICT) began the discussion on expanding broadband access to households across the country. NEA Administrator Edgardo Masongsong met with the key officials of DICT headed by Acting Secretary Eliseo Rio, Jr. and Undersecretary Denis Villorente to explore possible arrangements of bringing broadband connectivity into rural areas by tapping the infrastructure of 121 electric cooperatives (ECs). During the meeting held on July 6 at the NEA's Queenie Room in Quezon City, DICT officials gave a presentation of the government's National Broadband Plan. They underscored the key roles the NEA and the ECs have to play in ensuring the successful implementation of the project. "This is very important because NEA has already access to 95 percent of households, especially in rural areas," Rio said, adding that the ECs supervised by the NEA can be internet service providers (ISPs) in their respective coverage areas. "We'll give you the internet access and you can bring it to your client. Then, they can now enjoy their electricity and they have internet access. This is also an added income," the official added. Administrator Masongsong described the meeting "a welcome development," and expressed the state-run agency's strong support to the government's National Broadband Plan. "We will support the National Broadband Plan of the government. We will work hand-in-hand and we will take care of the electric cooperatives," he said. The NEA chief said some ECs, particularly those in Mindanao, already have fiber-optic infrastructure in place so it would be easier for them to provide Internet services to communities they serve. Both NEA and DICT agreed to form a technical working group that will draft the framework agreement, which will include the financial arrangement with the ECs that have existing fiber optic cables in their distribution lines and possible funding for power utilities, which do not have fiber on their grid. Last June 8, DICT signed a tripartite agreement with the National Grid Corp. of the Philippines (NGCP) and the National Transmission Corp. (TransCo) for the utilization of spare optical fiber to accelerate the implementation of the National Broadband Plan. Under the agreement, the DICT is given the right to use and/or access certain spare Fiber Optic Cores (FOCs), vacant lots, tower spaces and related facilities of the NGCP, the current concessionaire of the TransCo-owned grid. Also present at the meeting were NEA Deputy Administrators Sonia San Diego (Electric Cooperatives Management Services) and Artis Nikki Tortola (Technical Services), Information Technology and Communication Services Department (ITCSD) Manager Roderick Padua, Office for Performance Assessment and Special Studies (OPASS) Department Manager Ana Rosa Papa, Management and Consultancy Services Office Acting Department Manager Reynaldo Cuevas, and Information Technology and Systems Development Division Manager Shirley Salvador. ###

Hearing set on Camelco's high electricity rates due to alleged overcontracting of power supply


State-run National Electrification Administration (NEA) will hold a hearing on the administrative complaint against the general manager and other officials of the Camiguin Electric Cooperative, Inc. (CAMELCO) in connection with allegations of overcontracted power supply agreements. The NEA Administrative Committee set the hearing for Thursday, July 5 at Camelco's headquarters in Mambajao, Camiguin. According to NEA Administrative Committee Chairman Atty. Vic Alvaro, the hearing has been scheduled as early as May. "On 26 June 2018, we received a letter from the Office of Congressman Xavier Jesus Romualdo, requesting the Committee to hold the hearing on July 5 in Camiguin, instead of in Misamis Oriental in view of the interest of the member-consumers of Camelco. Accordingly, the request for transfer of venue was granted," said the order signed by the Committee. The administrative case is a motu proprio investigation arising from the letter of Camiguin Rep. Xavier Jesus Romualdo asking the NEA to investigate Camelco's alleged overcontracting of its power supply, which have resulted in high electricity rates in the island province. On February 6, 2018, NEA Administrator Edgardo Masongsong issued a memorandum to the Committee to conduct a motu proprio investigation regarding Romualdo's letter. On May 31, a clarificatory hearing was held. Romualdo claimed that Camelco entered into power supply contracts with three power generating companies for a total contracted capacity of 10.73 MW, on top of the 2 MW from the Power Sector Assets and Liabilities Management Corp. (PSALM). However, the congressman said, Camiguin's power distributor's maximum peak demand is only 4 MW. He attributed the higher electricity rates in Camiguin to Camelco's alleged overcontracting. The NEA, the supervisory body of all electric cooperatives nationwide, is tasked with the implementation of the total electrification of the country, through the ECs. Any application for power rate adjustments of the ECs, however, undergo the review and approval of the Energy Regulatory Commission (ERC) through public consultation and hearing. Respondents of the administrative case are Camelco General Manager Adriano Ebcas, Board of Directors president Mario Sacal, and Board members Joseph Gaa, Rey Badilla and Dinnah Limpangog. ###

NEA hails signing of EC Emergency and Resiliency Fund law


State-run National Electrification Administration (NEA) on Wednesday (July 4) welcomed the signing into law of the bill establishing an emergency and resiliency fund for electric cooperatives (ECs). On June 29, President Rodrigo Duterte signed into law Republic Act 11039, also known as the "Electric Cooperatives Emergency and Resiliency Fund Act." The new law provides the ECs access to financial assistance during natural calamities for the immediate rehabilitation or reconstruction of damaged infrastructure. In a statement, NEA Administrator Edgardo Masongsong thanked President Duterte, saying the new law is a welcome development not only to 121 ECs supervised by the state-run agency but also to their member-consumer-owners (MCOs) across the country. "We believe this new measure reflects the Administration’s commitment to support ECs and their member-consumer-owners, as it assures the immediate rehabilitation of power facilities damaged by natural calamities and relieves them of the financial burden stemming from the cost of reconstruction," he said. The NEA chief also expressed his gratitude to the Senate and the House of Representatives, particularly the Energy committees of both chambers of Congress, saying the EC Emergency and Resiliency Fund Law addresses the needs of ECs that require government assistance in the aftermath of disasters. "The NEA looks forward to working with Congress and the Department of Budget and Management to ensure that the budgetary requirements of RA 11039 are fully integrated in the 2019 NEA budget," Masongsong said. Under RA 11039, the NEA will manage the EC Emergency and Resiliency Fund. The agency is also tasked to formulate policies in consultation with the National Disaster Risk Reduction and Management Council (NDRRMC) to ensure its effective implementation. The EC Emergency and Resiliency Fund will have an initial funding of P750 million, which shall be drawn from the NDRRMC funds. ###

NEA Statement on the Enactment of Republic Act 11039 (EC Resiliency Fund Law)


The NEA welcomes and expresses deep appreciation for the President's signing into law of Republic Act 11039 or the Electricity Cooperative (EC) Resiliency Fund Law. We believe this new measure reflects the Administration’s commitment to support ECs and member-consumer-owners, as it assures the immediate rehabilitation of power facilities damaged by natural calamities and relieves ECs and MCOs of the financial burden stemming from the cost of reconstruction. We likewise extend our gratitude to Congress, particularly the Energy committees of both the Philippine Senate and the House of Representatives, as the EC Resiliency Fund Law addresses the needs of ECs that require subsidies when disaster strikes. The NEA looks forward to working with Congress and the Department of Budget and Management to ensure that the budgetary requirements of RA 11039 are fully integrated in the 2019 NEA budget. ###

NEA releases 2017 EC Overall Performance Assessment


State-run National Electrification Administration (NEA) has released the results of the thorough assessment of the overall performance of the 121 electric cooperatives (EC) under its supervision. The 2017 EC Overall Performance Assessment showed an increase in the number of power distribution utilities that are fully compliant with the key performance standards (KPS) of the NEA. Based on the results, the ECs that were rated AAA rose to 87 from 78 in 2016. Of these, 33 ECs received an overall score of 100, which is higher than the 24 ECs that garnered 100 points from the previous assessment. Meanwhile, all power distributors in Regions VI (Western Visayas), VII (Central Visayas) and CARAGA attained AAA rating, making them the highest performers.Region VIII is the most improved region with 10 of its 11 ECs earning the AAA categorization from the state-run agency. Additionally, the assessment revealed 76 ECs maintained their AAA status while 20 ECs showed improvement in ratings, 11 of which were to AAA categorization level. The NEA evaluates and determines the overall performance ratings of all ECs annually using the two criteria—KPS (80 percent) and EC Classification (20 percent). The AAA rating is the highest score given by the NEA to ECs that indicates the power distributors' full compliance on four parameters, namely financial, institutional, technical and reportorial requirements. The D rating is the lowest. Scores and their corresponding ratings are as follows: 95-100 = AAA; 90-94 = AA; 85-89 = A; 75-84 = B; 50-74 = C; and 49 and below = D. Results of the recent assessment also showed that 83 percent or a total of 101 out of the 121 ECs supervised by the state-run agency have notched either AAA, AA or A status last year. Of the remaining 20 ECs, four improved their performance either from C to B or D to C; 13 ECs manifested improvement in total scores while three retained their performance level. NEA Administrator Edgardo Masongsong welcomed the results of last year's overall performance assessment of 121 ECs nationwide but he also pressed on them to keep upgrading their services and remain responsive to the needs of their member-consumer-owners (MCOs). "The results of this annual assessment of electric cooperatives also indicate that the institutional, financial and technical assistance readily given by the NEA are getting significant results in terms of developing the capacity and performance of the EC sector," Masongsong said. "Let me challenge the ECs to convert these categorization figures into more salient improvements in their services, as these must also be felt more by their respective member-consumer-owners," the NEA chief added. ###

NEA receives COA 'unqualified opinion' anew


The National Electrification Administration (NEA) has again received the highest rating audit from the Commission on Audit (COA), which validates the agency's efforts towards transparency in financial operations. The state auditor rendered an unqualified audit opinion on the fairness of presentation of the NEA's financial statements for the calendar year 2017, according to the latest COA Independent Auditor's Report (IAR), in effect stating that the state-run agency's financial records are in conformance with the Philippine Public Sector Accounting Standards. “We have audited the financial statements of the NEA... In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the NEA,” the IAR said. The report, signed by OIC Supervising Auditor Glorina Suson on May 22, covered the agency’s financial statements which comprise the financial position as of December 31, 2017, financial performance, statement of changes in equity and cash flows for the year ended. Since 2007, the NEA – tasked to implement the total electrification of the country – has been given an unqualified opinion by the state auditor. According to NEA Administrator Edgardo Masongsong, "the COA opinion is enough proof of the agency's steadfast resolve in adhering to sound resource management rules and compliance to duly-established accounting principles.” For 2017, the NEA registered a total assets of P23.813 billion, and total liabilities and equity of P23.813 billion. The state-run agency also recorded an income of P675.412 million with a net surplus of P152.648 million for the year. ###

NEA: EC electricity sales up 11% in first quarter compared last year


Electricity sales by electric cooperatives (ECs) in the first quarter of 2018 have reached 4,924 gigawatt hours (gWh), an increase of 11 percent compared to the same period last year, the National Electrification Administration (NEA) figures show. Data released by the NEA Information Technology and Communication Services Department (ITCSD) identified the residential sector as the biggest consumer of electricity, accounting for 2,506 gWh or 51 percent, followed by the commercial sector with 1,187 gWh or 24 percent. Electricity sales to the industrial sector came in at 881 gWh or 18 percent, public building electricity sales at 268 gWh or 5 percent, and others at 82 gWh or 2 percent. Latest NEA data also showed that of the total electricity sales, 2,371 gWh or 48 percent was transacted in Luzon, 1,164 gWh or 24 percent in Visayas, and 1,389 gWh or 28 percent in Mindanao. Compared to the same period in 2017, electricity sales by the ECs improved by 11 percent to 4,924 gWh from 4,417 gWh driven by the increased in consumption within the three major islands. NEA Administrator Edgardo Masongsong welcomed this development as this reaffirmed the significance of the ECs in driving rural economic growth. "These data show an upward trend in the demand for electricity in the rural areas, a positive surge in economic activity, including those in production, manufacturing and consumer trade being catered to and aptly provided by electric cooperatives in the past year," Masongsong said. "These numbers, while showing a direct correlation between the services of the electrification sector and national growth, also validate our contention that ECs drive the rural economy and continue to immensely contribute to the country's impressive numbers, despite challenges, as far as economic fundamentals are concerned," the NEA chief added. The state-run agency is mandated to implement the total electrification of the country. To date, the NEA in partnership with 121 ECs has energized more than 12 million households across the country. About 19,740 sitios, however, still do not have access to electricity. Of these, 1,702 sitios are identified as "off-grid" found mainly in Mindanao with 1,003, followed by Visayas with 557, and Luzon with 142. ###

NEA cited for compliance to '8888' hotline system


State-run National Electrification Administration (NEA) has been cited by the Office of the Cabinet Secretary (OCS) for its compliance with collaboration requirements for the implementation and operation of the 8888 Citizens' Complaint Hotline. Administrator Edgardo Masongsong received the Certificate of Collaboration from Undersecretary Dale Cabrera of the OCS-Strategic Action and Response Office (STAR) in a simple ceremony held Tuesday (June 19) at the NEA building in Quezon City. "This is to formalize our engagement. We hope to have a good cooperation under the administration of President Rodrigo Duterte," Undersecretary Cabrera said. The OCS-STAR recognized the NEA for its designation of focal and technical persons, attendance in the orientation and simulation seminars, and enrollment of the agency's online account with the 8888 hotline system. "We are elated by this recognition. This is a testament, not only to the NEA's adherence to the President's order to act with dispatch on public complaints but to the agency's culture of service which primarily puts the concerns of member-consumer-owners at the topmost of institutional priorities," Masongsong said. On October 14, 2016, President Rodrigo Duterte signed Executive Order No. 6 institutionalizing the 8888 Citizens' Hotline and Complaint Center under the direction and supervision of the Office of the Cabinet Secretary Leoncio Evasco Jr. This serves as “a mechanism where citizens may report their complaints and grievances on acts of red tape, as defined under Republic Act No. 9485 and other relevant laws, and/or corruption of any national government agency, government-owned or –controlled corporation (GOCC), government financial institution (GFI), and other instrumentalities of the government." The complaint center operates 24/7 excluding national holidays and work suspensions. ###

NEA engages Daneco breakaway group in dialogue


The National Electrification Administration (NEA) held a dialogue with members of the group that splintered from the Davao del Norte Electric Cooperative, Inc. (Daneco) amid their continuing defiance of court rulings in favor of the NEA-backed Daneco. Atty. Goldelio Rivera, the NEA Deputy Administrator for Legal Services, led agency officials in meeting with the Daneco faction headed by its representative Noel Quidilla after their brief demonstration outside the agency’s office in Diliman, Quezon City on Wednesday. The group was associated with the Cooperative Development Authority (CDA) whose registration currently hangs in the balance as it was deemed illegal in view of several court resolutions that were issued vis-a-vis the Daneco controversy. Be that as it may, the NEA officials listened to what the Daneco breakaway group had to say, including their requests for the removal of the lawfully-recognized organization put in place by NEA in 2012, the recognition of their registration at the CDA as a stock cooperative, and permission to regain control of the management and operations of the distribution utility in Davao del Norte. In response, Rivera and his fellow deputy administrators said they would relay their message to NEA chief Edgardo Masongsong. They also committed to look into the group’s other claims, such as the issuance of two electric bills that have been causing confusion among the power consumers. At present, only the legitimate Daneco organization backed by NEA has been recognized by financial institutions like banks and government instrumentalities like the Bureau of Internal Revenue (BIR). The judiciary had earlier ruled with finality on the issue with the Supreme Court affirming the Court of Appeals’ decision stating that the actions of the Daneco splinter goup were void from the beginning and that subsequent moves by the same––such as the holding of a referendum––were likewise null and void. On hand during the dialogue were NEA Deputy Administrators Sonia San Diego (Electric Cooperatives Management Services), Atty. Rossan Rosero-Lee (Special Concerns), Atty. Vicar Loureen Lofranco (Corporate Resources and Financial Services) and Director Nollie Alamillio (Instutional Development Department). Masongsong was not around to face the group as he was out attending a business meeting. In a statement, however, he assured all concerned parties that the rule of law shall apply with respect to the issue. "Let me assure all the parties to this long-running feud that all measures being taken by the NEA is in accordance with its mandate and the rule of law, with the end in view of finally removing the member-consumer-owners in Davao del Norte and Compostella Valley in the cross-fire. We are cognizant that they are the ones most affected by this,” he said. ###