ORMOC CITY -- The head of National Electrification Administration’s (NEA) said they would be hard-pressed to fulfill their mandate to energize remote areas after the budget department has proposed to slash by more than 77 percent their requested budget of PHP5.2 billion next year, leaving them with only PHP1.163 billion.
NEA Administrator Edgardo S. Masongsong, in an interview here Tuesday, said they were encouraged to submit a budget proposal of PHP5.2 billion following President Rodrigo Duterte’s directive for them to provide all Filipinos access to electricity.
The budget department, however, is only willing to give PHP1.163 billion, almost 36 percent lower than NEA’s PHP1.817 billion budget this year.
According to the Philippine Statistics Authority, 1.9 million households were without electricity in 17,000 sub-villages as of last June 30.
Masongsong said providing electricity to all the 17,000 sub-villages will require PHP23 billion, but the PHP1.163 billion approved outlay will only energize 775 sub-villages.
The Leyte-V Electric Cooperative, which covers the northwestern part of the province, is proposing the electrification of 2,412 households in 69 sub-villages at a cost of PHP59.1 million, to be funded by NEA next year.
Masongsong said NEA will have to resort to other means to implement its Rural Electrification Program (REP), such as the financial benefits to host communities of power generators as outlined by Energy Regulation (ER) 1-94.
Based on this regulation, all generation companies and/or energy resource developers are obligated to set aside one centavo per kilowatt hour of their total electricity sales as financial benefits to host communities.
He, however, noted that this benefit has limitations. While ER 1-94 funds have accumulated to PHP6 billion, only 50 percent can be used for REP while the other half goes to local governments to finance their livelihood and environmental projects, only host communities of generating companies can have access to ER1-94.
Masongsong said another strategy is to allow electric cooperatives (ECs) to implement the REP by including it in their capital expenditures, to be funded by internally-generated funds or loans.
This has to be approved by the Energy Regulatory Commission and might entail rate increases to recover the cost, he said.
ECs, he said, can also attract private sector participation to REP by forging joint ventures with investors, and they can waive the responsibility of energizing unviable areas to qualified third parties.
Out of the 995 areas that have been waived, only six have attracted takers where micro grids are being developed.
Masongsong added that NEA can still fulfill its mandate despite limited funds but it would be more challenging.
“Implementing rural electrification is still possible but on a longer timeframe,” he said. (PNA)
