IN the past two weeks, the consumer advocacy group Partners for Affordable and Reliable Energy (PARE) has renewed its call for more realistic and consumer-sensitive standards to be applied to the granting of congressional franchises for electric cooperatives (ECs), as well as the National Electrification Administration’s (NEA) quarterly rating system. This subject last came up in March (see my column “Setting standards for congressional franchises,” March 22), but nothing has changed, and in fact, seems to have gotten even worse.
A perfectly infuriating example of this is the Department of Energy dispatching Undersecretary Mario Marasigan to star at the annual general membership assembly of Batangas Electric Cooperative I (Batelec I) at the beginning of last month, where he lauded the cooperative for moving up to “green” status in the NEA’s 4th quarter 2025 compliance report. Customers in both Batangas cooperatives, Batelec I and Batelec II, have been desperately lobbying for the Manila Electric Co. (Meralco) to take over service in their areas, due to frequent outages, unstable power and poor customer service from the cooperatives.
These are not a few malcontents either, but entire business groups and homeowner’s associations of large residential developments, as well as individual homeowners and businesses. Meralco is the natural choice, because it services Batangas City and its immediate surroundings, but in talking to some of the affected customers, it becomes clear that the real preference is “anybody but this damned co-op,” whichever one is involved.
In press releases issued on June 15 and June 22, respectively, PARE has called for co-op customers to have a say in the granting or renewal of franchises, which is entirely reasonable. “The approval process should not rely solely on technical reports and regulatory evaluations. It must also consider the actual experiences of consumers who pay for and depend on electric service every day,” PARE said in its June 15 statement. “We consumers pay our electric bills every month, and we deserve a voice in franchise renewals, deciding whether our cooperative has earned another 25 years of public trust. A franchise is not an automatic entitlement. It is a public trust that must be earned through affordable rates, reliable service, transparency and accountability.”
Evaluation gaps
In the 14 performance metrics that the NEA tracks for ECs, there are really only two that address performance from a customer perspective, and then only indirectly. These are the System Average Interruption Frequency Index (SAIFI), which is the number of times per year on average a customer will experience a significant power outage; and System Average Interruption Duration Index (SAIDI), which is the average duration of prolonged outages per year. The standards the NEA applies to ECs for SAIFI and SAIDI are 12 and 2,700 minutes, respectively, meaning that if you are an EC customer and experience a dozen power outages per year lasting a total of 45 hours, the NEA still thinks your EC is doing a good job.
In its June 22 statement, PARE explained that NEA’s evaluation system focuses on financial, operational, technical and institutional compliance, adding, “While these indicators are important, consumers question whether the framework captures the realities faced by households, businesses, farmers and communities that depend on electricity every day.” The group argues that NEA’s mandate must extend beyond evaluation. “As the agency tasked with assisting cooperatives, it must ensure that technical support, financial aid and regulatory interventions translate into real improvements in service quality and consumer welfare,” it said.
While I agree wholeheartedly with that sentiment, the issue exposes a big gray area with respect to regulating ECs. ECs are rate-regulated and regulated in terms of basic service compliance by the Energy Regulatory Commission (ERC), the same as any other distribution utility. The NEA’s role, on the other hand, is mostly fiscal, providing financial support and oversight to ECs, with the concern for day-to-day performance only being addressed to the extent that it affects an ECs financial stability and creditworthiness.
As the PARE group has recognized, over the years there has been some “scope creep” in NEA’s relationship with ECs to the extent that it is assumed to have far more regulatory power than it is actually allowed by its mandate. And because NEA’s expanded authority is assumed and not explicit, it can exercise it as it sees fit, leading to inconsistencies in regulation, and corrective intervention only when circumstances become so bad it cannot ignore them.
Congress needs to act
Thus, the problem does not really lie with NEA, but with Congress. Either the NEA should be completely legally mandated to be a strict regulator, or it should not; and if the choice of lawmakers is the latter, then there is perhaps no real reason for the NEA to exist.
That particular debate could be set aside, however, if Congress would adopt consistent standards for the granting or renewal of franchises. At the moment, there are no guidelines for Congress; the granting of franchises is done entirely based on feelings, or political accommodation to local interests. As I wrote in my March 22 column, meeting the NEA compliance standards (resulting in a “green” or “AAA” or “AA” rating for the EC) should be the minimum level of compliance, and along with that, the endorsement — or lack thereof — of the EC’s customers should be considered. I suggested earlier that a third-party “customer satisfaction” survey by a reputable survey firm could be used, but there are probably other workable alternatives.
Bluesky: @benkritz.bsky.social
Website: www.badmannersgunclub.com