Inadequate power bill collections after the lifting of the extended Enhanced Community Quarantine (ECQ) is forcing the First Catanduanes Electric Cooperative, Inc. (FICELCO) to seriously consider seeking a short-term loan of P20 to P30 million to pay its power suppliers.
General Manager Raul V. Zafe told the Tribune that it still generates enough cash to pay the salaries and benefits of its employees during the period, it would not have enough for its operational expenses afterwards.
Its biggest customers, the malls and schools, particularly the Catanduanes State University, are closed, he said, and would account for minimal power bills.
While the power consumption of residential consumers has certainly increased, he doubts majority would be able to pay their bills in full immediately after the lockdown due to lack of income and livelihood opportunities.
It may be recalled that the Energy Regulatory Commission (ERC) allowed the cooperatives to give their customers a 30-day grace period for the payment of electric bills, on top of the cancellation of surcharges and power disconnections for end users who failed to pay on time. Subsequently, it also extended by 30 days the deadline for payments of all fees to power generators.
Working on behalf of the cooperatives, the National Electrification Administration (NEA) is backing an appeal by electric cooperatives for an indefinite extension—indefinitely or until their business operations return to normal—of the deadline for them to pay their obligations to power generation and transmission companies.
It also gave the cooperatives the go-signal clearance to secure short-term loans from other financial institutions to mitigate the economic repercussions of coronavirus disease 2019 (COVID-19) on their commercial operations.
Under the NEA Loan Policy No. 14-A, ECs may secure short-term loans from sources other than NEA like banks, financing companies and other established financial intermediaries, as long as they are reasonable and appropriate.
Power co-ops may borrow money from financial institutions to augment monthly collection deficiencies that would cover their power bills; to facilitate working capital requirements; and for the purchase of maintenance vehicles.
Terms and conditions of the loans must also be “fair and equitable,” such that repayment period shall not exceed three years; interest rates are reasonable, and at the lowest, if possible; and the amount of loan shall not exceed three times the EC’s average power billings.
“No encumbrance of real properties, or a substantial portion of other properties or assets, will be made by the ECs,” NEA Administrator Edgardo Masongsong stated, adding that proper documentations of the loan/s must be submitted to the NEA upon resumption of its normal business operations.