The National Electrification Administration (NEA) amended the policy/guidelines on the Annual Electric Cooperative (EC) Overall Performance Assessment to address the heightened demands for power rate reduction, security of power supply, reliability of service, good governance and member-consumer-owners' (MCOs) empowerment.
Based on the new performance assessment criteria, 40 points shall be granted to ECs with sound fiscal management. The Financial Parameters include leverage or level of indebtedness of the EC, liquidity ratio, efficiency, result of financial operation and NEA audit rating. Financial efficiency will be determined through the ECs’ collection efficiency, payment to power suppliers, payment to NEA and payment to banks/other financial institutions.
"Financial management is the bulk for me because I am taking it from the idea that it is the money of the consumers, not the coops, and it is my mandate to protect the money of the consumer-members,” NEA Administrator Antonio Mariano Almeda said in his press conference last February.
As a measure to facilitate the liquidation of subsidy funds as required in the Memorandum of Agreement between NEA and the EC, demerit points shall be given to ECs with unliquidated subsidy funds. Likewise, the NEA imposed a demerit point for Unremitted Monthly Universal Charge Collection and Non-submission of Universal Charge Report.
Under the Institutional-Governance Parameters, ECs will be given 20 points depending on the performance of their Board of Directors and General Manager, members' participation and involvement, action on consumer complaints/requests and customer satisfaction survey.
ECs will be assessed as well based on Technical Parameters such as system loss and system reliability, which also weigh 20 points. Their system loss must be within the cap issued by the Energy Regulatory Commission (ERC) while system reliability will be measured based on the number and duration of power interruptions.
"A demerit of two (2) points shall be imposed against ECs which were not able to conduct Competitive Selection Process (CSP) as scheduled in the Power Supply Procurement Plan (PSPP)," the agency added in its NEA Memorandum 2023-21.
Another criterion is the Level of Electrification. ECs can earn a total of 20 points depending on their Status of Energization, Barangay Energization Matrix and Unified Sitio Electrification (USE) Database or Sitio Masterlist.
The amended guidelines also stated that a demerit of three (3) points shall be imposed against ECs for non-submission of any of the following: financial reports, institutional reports, technical reports, energization reports and distribution development plan.
Moreover, a demerit of one point shall be imposed against ECs which received three (3) or more Show Cause Orders rendered with final judgments and with imposed monetary penalties issued by the ERC during the year under assessment. Show Cause Orders issued are for violation of ERC rules and regulations.
Furthermore, to earn Category AAA, the ECs must have complied with all the standards on System Loss, Reliability Indices, Collection Efficiency, Result of Financial Operations, Payment to Power Suppliers, Conduct of District Election and Annual General Membership Assembly (AGMA). An EC which failed to comply with any of the herein listed parameters shall only be categorized as "AA" notwithstanding its total score of 95 or above.
"We amended the criteria for EC Categorization to establish accountability and responsibility in ECs' compliances and fiduciary obligations, and to ensure implementation of EC good governance," Administrator Almeda explained.
The 2023 policy/guidelines on the Annual Electric Cooperative (EC) Overall Performance Assessment was approved by the NEA Board of Administrators on 25 April 2023. ###
