Loans, loans, loans – is this good or bad?
By Artemio A. Dumlao
Bangued, Abra – A loan assistance from the National Electrification Administration (NEA) intended to upgrade into quality service, human resource management and internal fiscal rehabilitation efforts could resuscitate the still financially hard-up Abra Electric Cooperative (Abreco).
Just like any other electric cooperative in the country, we are still in a situation wherein its not within out financial capability to implement the much needed infrastructure projects for our power distribution network, Abreco general manager Loreto Seares Jr. said adding, their capital expenditure plan could not suffice without the support of agencies like the NEA.
One major project of Abreco, Seares Jr. said, is the installation of a 5 MVA substation proposed two years ago. “Its implementation is long overdue”, the power cooperative executive said explaining that Abreco’s sub Station is already 94% loading as of 2014. With that status, the 5 MVA should have been installed on that same year, he said. “The installation of the 5MVA is much needed to support the existing overloaded substation of the cooperative to ensure quality power to its 40,000++ consumers.” We are asking a P25M loan from NEA for the substation installation, Seares Jr. said.
Abreco is also asking NEA for a P20 million loan for the retirement benefits of its downsized employees. This is needed, Seares Jr. explained, to effectively implement our downsizing program and personnel reorganization to be consistent with the recommended total number of employees as per NEA guidelines. He pointed out that downsizing or reorganizing Abreco’s workforce is expected to lower its cost of operation as projected in its Department of Energy-approved “Rehabilitation Plan”.
Abreco further pointed out that without the “Retirement Benefit Loan” from NEA, it will be impossible for Abreco to downsize its workforce. “To implement the reorganization without the benefits will surely result to legal cases filed against Abreco’s management,” Seares Jr. said. Thus it will be more costly for the cooperative, he added. “Abreco will not be able to attains its financial projections as per rehabilitation plan if we will not be able to implement the reorganizational plan as per guidelines of NEA.”
The power cooperative is also asking NEA to grant a P23M “Prudential Guarantee Loan”, which according to Seares Jr., is a much needed for the cooperative for it to be able to settle one of its requirements to its power supplier WESM (wholesale electricity spot market) to continuously supply the much needed power for Abreco’s franchise area.
Several months ago, SNAP cut off its power supply agreement with Abreco, forcing the cooperative to buy electricity from WESM.***Artemio A. Dumlao***