Last of three parts
THE report by the Partners for Affordable and Renewable Energy (PARE) that summarized the various allegations it had received concerning the apparent meddling of the National Electrification Administration (NEA) in the efforts of the First Catanduanes Electric Cooperative (Ficelco) to secure an emergency power supply agreement (EPSA) is, as I have said in the previous two parts of this column, rather alarming if taken at face value. Taking it at face value leads one to the following conclusions:
– NEA, whether on its own or in coordination with the board president of Ficelco, Romeo Santos, and Ficelco’s management, pre-selected Vivant Corp. subsidiary Isla Dagyab Energy Corp. as the contractor for the 8-megawatt (MW) EPSA, to the extent that it either ordered or at least encouraged Ficelco to spend some P1.7 million to prepare a site for the anticipated diesel genset power plant; and
– When the Ficelco board reconsidered and instead awarded the contract to the competing SC Megaworld Construction and Development Corp., NEA retaliated against the dissenting board members — who were all of them, save for Santos — by placing them on “preventive suspension” for 90 days, although this was also reported in the local Catanduanes news as being for six months.
All of this raises serious questions about the reach of NEA’s regulatory role, and whether it is actually carrying out that role in good faith. According to its original mandate, NEA’s role is not regulation but rather support to electric cooperatives (ECs) through financing, and guidance on financial management and governance. On the face of it, NEA grossly overstepped its boundaries to intercede in what was essentially a day-to-day management concern of Ficelco, one that should remain within the purview of the cooperative’s “member-consumer-owners” to endorse or reject, and one whose rate impact on consumers and other details are subject to regulation by the Energy Regulatory Commission (ERC).
Questions
Of course, most things should not be taken at face value, and so the PARE group prepared a detailed list of questions and submitted them to NEA to allow the agency to clarify its side of the story “in the spirit of transparency, due process, and constructive engagement.”
Unfortunately, NEA did not deign to respond to these inquiries, at least not as of this writing, so “in the spirit of lighting a fire under the asses of public servants who have a duty to respond to the public they serve,” and with the permission of PARE, I will share them again here:
– What was NEA’s specific role and level of involvement in the EPSA2 procurement process undertaken by Ficelco?
– Can NEA clarify reports alleging that preparations for the installation of a generating facility within the Ficelco compound were initiated before the completion of the competitive procurement process?
– Did NEA issue any instructions, recommendations, directives, or communications regarding the preparation of the proposed project site prior to the conclusion of the procurement process? If so, what was the legal and regulatory basis for such actions?
– What factors were considered by NEA in evaluating the qualifications and technical capacity of the proponents that participated in the EPSA2 procurement process?
– What was the basis for issuing show-cause orders and preventive suspensions against the Ficelco directors who voted in favor of awarding the contract to the lowest calculated bidder?
– Does NEA consider the exercise of business judgment by an EC’s board of directors as a valid consideration when evaluating procurement-related decisions?
– How does NEA distinguish between regulatory oversight and intervention in decisions that are ordinarily within the authority of an EC’s board of directors?
– Has NEA undertaken or contemplated any review, evaluation, involvement, or intervention concerning the collective bargaining agreement (CBA) between Ficelco and its employees? If so, under what legal authority and for what purpose?
– What policies, guidelines, or safeguards does NEA have in place to ensure that regulatory actions do not unintentionally affect the independence of electric cooperative governance, procurement processes, labor-management relations, and board decision-making?
– In light of the concerns raised by member-consumer-owners, how does NEA respond to perceptions that some of its actions may constitute regulatory overreach rather than regulatory supervision?
– What mechanisms are available for member-consumer-owners to seek clarification, raise concerns, or participate in discussions regarding significant regulatory actions affecting their electric cooperative?
Perhaps the reason NEA has been reluctant to respond to these questions is that they cut right to the heart of the agency’s role in overseeing the Philippines’ 121 ECs, far beyond the relatively small issues concerning Ficelco. The answers to some of those questions, in turn, would surely encourage debate on the scale and scope of that role, whether NEA in its current guise is truly meeting its mandate, and perhaps, whether or not it ought to exist at all.
Ficelco responds
Those are discussions for another time, however. Turning back to the issue at hand, PARE sent the same set of questions to the management of Ficelco, which were answered within a few days by Ficelco General Manager Francis A. Gianan. Unfortunately, his responses do very little to allay suspicions that the eventual outcome — which, for the record, at least as reported by the Catanduanes Tribune on June 6, is a worse deal than what Ficelco was promised by SC Megaworld — was not the work of undue influence.
Gianan claimed that the board members who were eventually suspended by NEA acted inappropriately in selecting SC Megaworld after it had been disqualified by Ficelco’s technical committee. However, there is no clear documentation that it was, in fact, formally disqualified, and even if it had been, the grounds on which that disqualification would rest — namely, lack of 10 years’ experience in off-grid power supply and lack of 500,000 liters’ worth of fuel storage — were spurious. While Vivant Corp. certainly has vastly more experience and resources than SC Megaworld, the latter does have a record of providing small-scale generation for a couple of decades, and it had assured the Ficelco board it had made appropriate fuel storage arrangements.
Gianan also claimed that the preparatory construction work noted in PARE’s queries only began after May 29, once the EPSA with Isla Dagyab had been finalized, in anticipation of the arrival of new gensets on or after June 6. That is disturbing, because it is a flat lie; the May 14 Catanduanes Tribune news story about the EPSA includes a picture of said construction, showing it in a completed state or nearly so as of that date.
Thus, the questions about NEA remain unsatisfactorily answered. And until they are, Filipino households and businesses outside the areas served by bigger distribution utilities are going to continue to be at the mercy of a system lacking clear rules and accountability.
ben.kritz@manilatimes.net
Bluesky: @benkritz.bsky.social
Website: www.badmannersgunclub.com
