State-run National Electrification Administration (NEA) has put up stringent mechanisms that would prevent any dubious power deals and ensure no over-contracting.
NEA Administrator Edgardo Masongsong issued the statement after the Energy Regulatory Commission (ERC) ordered the review of the bilateral contracts entered into by the distribution utilities and generation companies amid reports of alleged over-contracting.
Masongsong assured the NEA is exerting all necessary means to ensure that all electric cooperatives adhere to duly established laws, rules and regulations on power supply agreements (PSAs).
“The NEA, immediately after we took over the reins of the agency, instituted reforms to ensure that consumers’ rights are protected and promoted – from service-related issues to power supply agreements which may, if overlooked, unnecessarily entail additional generation costs to the detriment of the paying end-users,” he said.
The NEA chief cited the establishment of the Regulatory Affairs Office (RAO) whose tasks include the review of PSAs between the ECs and power generators.
“This office gets to filter the contracts before they are submitted to ERC for approval. Therefore, even before ERC takes jurisdiction over these PSAs, the NEA already exercises its mandate through the RAO as a consumer-protection mechanism precisely to filter onerous, unfair and dubious arrangements that are disadvantageous to the interests of EC member-consumer-owners,” he said.
According to ERC Chairperson and CEO Agnes VST Devanadera, some ECs have already been asked to explain their reported generation rate increase due to newly approved power supply contracts.
An attached agency of the Department of Energy (DOE), the NEA has the supervisory powers over 121 ECs as mandated under Republic Act 10531, otherwise known as the “National Electrification Administration Reform Act of 2013.” ###