Rural electrification has always been on top of the Government’s policy over the past decades. Government strongly believes that provision of electric services will yield more opportunities for improved quality of life, greater access to basic services and better infrastructure for rural development. Rural electrification therefore, is greatly directed towards socio-economic growth of the marginalized sectors, the fisher folks and farmers living in remote, far-flung, and un-electrified barangays of the country.
Historical Performance and Program Management
In support of the Government’s efforts to alleviate poverty, DOE launched a massive and focused action to increase and accelerate access to electricity services by the country’s un-electrified communities.
In 1999, the Accelerated Barangay Electrification Program (ABEP) was launched with the initial partnership of the following energy agencies: DOE, National Electrification Administration (NEA), National Power Corporation through its Small Power Utilities Group (NPC-SPUG), and PNOC-Energy Development Corporation (PNOC-EDC). Prior to the launching of ABEP, barangay electrification level only stood at 76.9%, having energized only 32,281 out of 41,945 total barangay coverage.
In 2000 the ABEP was renamed the “O’Ilaw Program.” Under the O’Ilaw Program, the IPPs were encouraged to participate as part of their corporate social responsibility. Under the O’ Ilaw and IPP Partnership, the Adopt-a-Barangay Scheme and Advance Financing Scheme were adopted. During this period, three IPPs participated, namely, PNOC-EDC, Mirant Philippines and Kepco Ilijan Corporation. The program also led to the creation of the Foundation for Rural Electrification and Economic Development (FREED) as mechanism to mobilize private fund for rural electrification. FREED was composed of Nestle Philippines, Pilipinas Shell Petroleum Corporation, First Private Power Corporation, CEO’s Inc, Credit Suisse and Smart Communications.
The Expanded Rural Electrification
To further strengthen and integrate efforts on rural electrification by both the Government and the private sector, and to further assist the DOE develop innovative and sustained policies and strategies consistent with the power sector reforms embodied in the Electric Power Industry Reform Act of 2001 or “EPIRA,” the Expanded Rural Electrification Program (ER Program) was established and an ER Program Team was created in April 2003. Unlike its predecessors, which focused was on barangay electrification; the ER Program involves the electrification of sitios and households.
Rural/Missionary Electrification in the Context of the EPIRA
Rule 7 of the EPIRA states that the obligations of the Distribution Utilities (DUs) include the provision of universal service within its franchise areas, over a reasonable time, including unviable areas, as part of its social obligations. The DUs however, must sustain the economic viability of its operations. Adjoining DUs may be allowed to service some areas that might not be viable for the relevant franchise holder but viable for other DUs.
In the event that after the DUs have already done their best but there still barangays remained unelectrified, Rule 14, Section 1 of the EPIRA states that such areas shall be opened to other qualified third parties.
Likewise, in the Rule 13, of EPIRA, SPUG shall be responsible for providing power and its associated power delivery systems in areas that are connected to the grid and cannot be serviced by DUs and other qualified third parties
Objective of ER Program and the ER Program Team Thrust
The ER Program envisaged to achieve 100% barangays electrification by 2008 and 90% household electrification by 2017. One of the main thrusts of the ER Program Team is to formulate and recommend policies and guidelines to implement rural/missionary electrification with greater private sector participation in a holistic and sustainable manner. Many of the previously electrified barangays particularly those of solar projects were found to be short lived due to absence of a strong sustainable mechanism. The ER Program Team is now spearheading the development of various innovative service delivery mechanisms towards achieving greater access to electricity services.