Rural utilities warn delayed bill payments to have serious impact on industry

THE delayed payment of power bills during the entire quarantine period will have a serious impact on the entire power supply chain, electric cooperatives warned.

Government orders to allow delayed payments during even the less strict forms of quarantine “will have a huge economic impact on the entire electric power supply chain,” the Philippine Rural Electric Cooperatives Association (Philreca) and National Association of General Managers of Electric Cooperatives (Nagmec) said in a joint statement issued late Wednesday.

“(E)lectric cooperatives can only absorb so much in terms of decreased or no cashflow that might result from the mandatory grace period or staggered payments,” they said.

The Department of Energy (DoE) in an advisory issued Sept. 23 ordered the energy industry to continue providing at least a 30-day grace period after the easing of stricter forms of quarantine and allowing installment payments on power bills in arrears. Rural utilities and their managers sought clarification from the government’s task force on emerging infectious diseases and the Joint Congressional Energy Committee whether a provision in Republic Act No. 11494, or the Bayanihan to Recover as One Act (Bayanihan II), compels them to relax their collection policies during the enhanced and modified enhanced community quarantine only, or throughout all forms of quarantine.

About 80% of consumer electric bill payments ultimately go to power suppliers, transmission firms, taxes, and pass-through charges, while the rest goes to the utilities, they said.

“If this meager amount will not be paid to the ECs (electric cooperatives), their operations will significantly be affected,” the two organizations said.

In the advisory, Energy Secretary Alfonso G. Cusi urged those “who are capable to pay” to settle their bills within the original due dates “to lessen the impact and help manage the cash flow in the energy supply chain.”

Philreca and Nagmec also requested the Energy Regulatory Commission (ERC) to allow them to take advantage of prompt- payment discounts even when they make partial payments to suppliers.

“Everything is still being studied for consideration,” ERC Commissioner Floresinda G. Baldo-Digal said in a message. The regulator has yet to issue its industry-wide guidelines to implement the DoE advisory. The organizations also asked the commission to adjust the capital recovery fee and minimum energy off-take provisions in their power supply agreements. — Adam J. Ang