Electric Cooperatives are private entities but receive sizeable government subsidies. Some provisions of the Magna Carta for Residential Electricity Consumers have weakened the implementation of the Anti-Pilferage Law, leading to an increase in system losses and inefficiencies among ECs. An example is Article 19 of the Magna Carta, giving the consumer the right to tender payment at the point of disconnection or provide a deposit representing the differential billing. Article 20, moreover, obliges the utility to continue providing service despite arrears of previous occupants of a building/dwelling place. Parts of Articles 16-25 give the consumer a reprieve from disconnection during holidays, funerals, or if the consumer is sick.
As of December 2010, the ERC has been in the final stages of amending both the Magna Carta for Residential Electricity Consumers and the IRR of the Anti-Pilferage Act. Earlier in 2009, the ERC had issued the Rules to reduce systems losses of ECs from 14 percent to 13 percent, and of private distribution utilities (PDUs) from 9.5 percent to 8.5 percent. The Rules for Setting EC Wheeling Rates (RSEC-WR) were issued to encourage efficiency and provide incentives for the ECs performance.
Barangays. As of July 31, 2010, 99.87 percent of all barangays were electrified, up from 99.39 percent in 2009 leaving only 54 barangays programmed for electrification until the end of 2010. From January 2009 to July 2010, the ECs provided electricity to 847 rural barangays. The 119 ECs in the country have achieved 99.94 percent energization relative to their respective franchise areas. The Mearlco and private investor-owned utilities (PIOUs), together with LGUs, have 27 and 7 remaining unenergized barangays, respectively.
Households. As of July 2010, the household connection level in the country had reached 74.0 percent. This means 14.204 million out of a total 17.534 million households19 have electricity connections.
Missionary areas. Large portions of the remaining unenergized barangays are mostly remote and with dispersed households that are difficult to energize, requiring extensive resources, time and effort. Electrification in some barangays, particularly those covered by solar projects, was found to be short-lived owing to the absence of a strong sustainable mechanism.
Based on the 2009 Missionary Electrification Development Plan (MEDP), the total projected capacity addition for Small Power Utilities Group (SPUG) areas was 26.69 MW, of which only 6.61 MW was added in 2009. For transmission and substation projects, a total of 226.01 km. of 69kV transmission lines and 50-MVA substations were projected. However, only 22.41 km. transmission lines were put up while the rest were in preconstruction stages. Likewise, no substation was put up in 2009. As for remote area electrification, 130 of 133 areas were electrified, an accomplishment of 97.74 percent.
The delay in implementation was due to limited funds, ROW problems for transmission and substation projects, deferment of T/L and S/S projects since NPPs preferred distributed generation, and failed biddings for the purchase of equipment.
The NPC Main Grid is no longer able to advance funds to finance the operations of SPUG, including project implementation, since the main grid plants were already sold. SPUG's funds come from its revenues and the UCME subsidy. In 2009, the UCME was approved only on the latter part of the year and was used for SPUG's operations and payments for the subsidies of New Power Providers (NPPs).
Of the latest approved UCME equivalent to PhP2.7 billion for each year from 2010-2013, only PhP533 million is allotted for capital spending. This amount is not enough to fund all projects and additional funding is required. SPUG is now looking for other sources of funds.
Under Rule 13 of the EPIRA-IRR, the DOE in coordination with NPC, NEA, NPPs, DUs and QTPs has prepared the MEDP 2011 with two major components, namely, missionary generation and remote area electrification, which includes the barangay and household electrification. This outlines the government's plan to implement policies and programs that will sustain the provision of adequate, reliable, and efficient supply of electricity in missionary or offgrid and remote areas and to enable these communities to receive the benefits of electrification.
SPUG covers 284 plants in 214 areas, with 14 areas being candidates for privatization. Of these 14 areas, the generation function of two areas was successfully taken over by private parties.
Missionary generation. Missionary generation includes the existing generation and associated delivery systems being managed by SPUG, NPPs and QTPs in small islands and isolated grids. The program involves improving reliability and efficiency through the replacement of old generating units and limiting the rental of units during emergency.
Remote area electrification. Consistent with the overall objective of total barangay electrification and household electrification, all remaining unelectrified barangays in small islands and isolated grids will be provided with electricity service. A total of 1,760 households are programmed for remote area electrification amounting to PhP169.714 million for the different missionary areas.
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19 Total number of households is based on 2000 Census