Seven electric cooperatives of the total 121 ECs nationwide continue to be “ailing,” the National Electrification Administration said in its latest report.
ECs labeled as “red” under NEA’s third-quarter 2021 assessment report were Abra Electric Cooperative, Masbate Electric Cooperative, Sulu Electric Cooperative, Lanao del Sur Electric Cooperative, Albay Electric Cooperative, Tawi-Tawi Electric Cooperative and Basilan Electric Cooperative.
The agency said the compliance report on the performance of ECs is summarized quarterly. It focuses on the assessment of the ECs’ performance on several aspects of operations, such as financial, operational, technical and institutional components.
The report aims to evaluate the performance of ECs to ensure early detection of adverse financial condition, to serve as triggers for NEA intervention in the EC operation and to institute preventive, remedial and mitigating measures prior to being categorized as ailing EC.
Assessment results during the period showed that aside from the seven ECs labeled as red, 46 ECs were labeled as green, 59 as yellow-1 and nine as yellow-2.
NEA said green ECs are able to meet all the seven performance standards and parameter.
“The number of green ECs continues to vary for the last few quarters while red ECs remained the same,” the report said.
Yellow-1 ECs are those which fail to comply with not more than three key performance standards and parameters while yellow 2 ECs fail to comply with four or more of the key performance standards and parameters.
NEA declares ECs as red or “ailing” when it has negative net worth for the last three years, accumulated 90 days arrears in power supply purchases and transmission charges, unable to provide electric service due to technical and/or financial inefficiencies and/or institutional problems, unable to efficiently perform its electric distribution utility obligations or continue in business due to organizational, external and internal factors and fail to meet other operational standards established by the NEA and unable to continuously support its Wholesale Electricity Spot Market prudential requirements.
The agency said there are five financial and operational standards and parameters used in the classification of ECs.
The performance of the ECs is presented in comparison with their performance from the previous year.
Under the Cash General Fund parameter, the ability of an EC to continue their daily operation for a span of one month is measured.
An EC is considered compliant by maintaining a higher working capital fund against the one-month working capital requirement.
Among the 121 ECs, there were 115 ECs evaluated with only 93 ECs being compliant.