P750-M calamity fund for electric coops proposed

P750-M calamity fund for electric coops proposed

The Senate Committee on Energy will start deliberations next week regarding a proposed P750-million fund for electric cooperatives during typhoons, earthquakes and natural calamities.

Committee chairman Senator Sherwin Gatchalian said Senate Bill no. 1253, known as the Electric Cooperatives Disaster Management Fund Act, will provide P750 million in funds to electric cooperatives and serve as an alternative funding source for disaster repair and rehabilitation projects.

The fund will be used “for restoration and rehabilitation of power facilities and infrastructure damaged during typhoons, earthquakes, and other instances of natural calamities and fortuitous events.”

“Without a dedicated funding source for disaster repairs and rehabilitations, electric cooperatives have no choice but to seek interest-bearing calamity loans from NEA (National Electrification Administration),” Gatchalian said in a statement.

Calamity loans passed to consumers

The NEA calamity loans can take as long as two years before being converted into grants. Sometimes the loans are not converted at all due to budgetary constraints. These have a 10-year repayment period and one year grace period with an interest rate of 3.25 percent per annum.

“Under the current system, electric co-ops often have no choice but to pass on the costs of these calamity loans to consumers, resulting in higher power rates for people who are already struggling to put their lives back together in the wake of a calamity,” Gatchalian said.

“Essentially, it’s like handing out relief goods to calamity survivors and then asking them to pay for them later. This is a problem that needs to be addressed,” he added.

The proposed fund will also be used to finance disaster prevention, preparedness, and mitigation projects to be undertaken by electric cooperatives such as disaster vulnerability risk assessments and institutionalization of emergency response plans.

“The best medicine is always prevention. Therefore, the Electric Cooperatives Disaster Management Fund Act also aims to equip electric cooperatives with the resources they need to minimize damage caused by future storms and other natural disasters through the exercise of foresight and diligence,” Gatchalian said.

Comments

comments