Loan of 9 more ECs condoned by ERC

The Energy Regulatory Commission (ERC) approved in its Commission meeting on July 14, 2004 the applications of nine (9) more electric cooperatives (ECs) for the condonation of their loan. This brings the total of approved applications with final authority to forty nine (49).

The ECs which have been granted loan condonation will experience rate adjustments. The nine (9) coops recently given a final authority by the Commission include COTELCO (-0.0899/kWh), BOHECO (-0.2057/kWh), SORECO II (-0.4124/kWh), PELCO III (-0.2055/kWh), INEC (-0.1590), LEYECO II (-0.0801/kWh), NORECO I (-0.0.6416/kWh), BISELCO (-0.0.5608/kWh), CASURECO I (-0.7774/kWh), and CAMELCO (-0.4364/kWh).

“The Commission is working hard to fast track the evaluation of loan condonation applications knowing that both the electricity consumers and the ECs will benefit from the write-off provided under the Electric Power Industry Reform Act (EPIRA),” ERC Chairman Rodolfo B. Albano, Jr. expressed. “The reprieve granted to ECs will either result in a downward adjustment in the electricity rates or cushion the impact of the removal of cross-subsidies as mandated by law,” the chief regulator added.

Fifty four (54) loan condonation requests from ECs are now in queue while the remaining fifteen (15) are with the Private Sector Assets and Liabilities Management Corporation (PSALM) for the final audit of their deferred loans.

With their loans condoned, the ERC head advises ECs to re-channel their funds to the improvement of their services to ensure safe, adequate, secure and quality supply of electricity at reasonable rates.

The condonation of the loans of electric cooperatives is mandated under Section 60 of R.A. 9136 otherwise known as the EPIRA. It states that “upon the effectivity of this Act, all outstanding financial obligations of electric cooperatives to NEA and other government agencies incurred for the purpose of financing the rural electrification program shall be assumed by the PSALM Corporation in accordance with the program approved by the President of the Philippines within one (1) year from the effectivity of this Act which shall be implemented and completed within three (3) years from the effectivity of this Act. The ERC shall ensure a reduction in the rates of electric cooperatives commensurate with the resulting savings due to the removal of the amortization payments of their loans.”

July 21, 2004