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NEA plans to modify norms for evaluating co-ops

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THE NATIONAL Electrification Administration (NEA) has proposed changes to the way it evaluates the performance of electric cooperatives by including their energization level among the parameters, the agency said on Thursday.

In a statement, NEA Director Ana Rosa D. Papa announced the proposal, which will measure the number of consumer connections a power electric cooperative achieves under a given timeline.

The data will be based on the official reports and documents a cooperative submits through the NEA business intelligence technology web portal.

Under its existing system, NEA evaluates and determines the overall performance of power distribution utilities annually using two criteria: key performance standards (KPS), which account for 80%; and the cooperatives’ classification, which makes up 20%.

Ms. Papa, who heads NEA’s office for performance assessment and special studies, said the set of criteria is designed to measure power co-ops’ financial, institutional and technical performance, as well as “to promote accountability and responsibility in their compliances and fiduciary obligations.”

The agency has solicited comment from stakeholders on the proposed changes to the performance assessment guidelines before submission to the NEA board of administrators for approval.

Once approved and published in a newspaper of general circulation, the agency will implement the revised policy guidelines starting next year. The new measure will serve as basis for coming up with the performance incentive mechanisms for cooperatives.

“The mandatory assessment on the performance of non-profit distribution utilities in the country started way back in 1982 to keep track of the viability of their operations economically and financially. Since then, the rules and guidelines have evolved and changed significantly,” NEA said.

“From 1982 to 1993, the state-run agency based the parameters on what was stipulated under Presidential Decree No. 269, otherwise known as the ‘National Electrification Administration Decree,’ in which power distribution utilities were categorized into four letter grades — A to D,” it added.

From 1994 to 2011, the categories were expanded to six — A+, A, B, C, D and E. This was also during the passage of Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001.

In 2012, NEA introduced its KPS, which covered financial, institutional, technical and reportorial compliance of the co-ops as part of the overall evaluation of their operational performance.

From 2013 to 2017, the agency revised its rules and guidelines based on the provisions of RA 10531 or the NEA Reform Act of 2013, which called for it to develop financial and operational parameters to serve as the basis for its intervention.

The revision includes the co-ops’ classification, which covered seven financially driven standards and parameters such as accounts payable to the National Grid Corporation of the Philippines, the system operator.

Under the current policy guidelines, the power utilities are rated from AAA as the highest to D as the lowest. — Victor V. Saulon

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