Managing in a Time of Turbulence
Tomorrow I fly again to Cebu to join Fr. Silva at the People’s Development Academy. He invited me to address over 80 newly-elected directors of electric cooperatives who are taking part in the Cooperative Management Course, or CMC.
Fr. Paking usually asks me to talk about how I got to know and appreciate the rural electrification program and the role of the electric cooperatives. I tell the directors that while their immediate concern is their individual coop, it is important that they see themselves as part of a larger movement.
This is especially important because of the changes ushered in by EPIRA. The policy environment is very different from the first 30 years of the electric coops. They were relatively secure in their franchise areas, and did not have to face competition. Now they can be challenged by “aggregators” and can lose their “big loads” should these be authorized by the Energy Regulatory Commission or ERC to have direct connection to the generation companies.
Should the electric coops convert themselves to stock coops, an option under EPIRA, they can be taken over by corporate investors who buy majority of the shares.
These new challenges come on top of the constant challenge to reduce systems loss to below 14 per cent, insure 100 per cent collection efficiency, and deliver reliable power at fully justified rates.
Advocates of EPIRA promised that privatization, deregulation and competition would bring down the price of electricity. That was specious, or at least short-sighted. How can prices go down when fuel costs keep rising?
Besides, the recurring pattern in the Philippines is that any reform agenda never gets fully implemented. Granting for the sake of argument that full privatization and deregulation will promote competition that will lower the prices, five years after EPIRA, only a small portion of the generation plants have been privatized.
Instead of deregulation, there is a powerful ERC that not only exercises authority over rates-setting, but also expands its intervention into other operational areas of the electric coops.
The electric coops operate in a situation where the old system is not in place anymore, but the new system is not yet in place either. Such a transition can only be fraught with turbulence.
The Board of Directors exercise oversight over management, especially the power of the purse. They represent the needed check and balance. But in these turbulent times, they also need to help the coop management navigate the course, and insure that the coop has a unified vision.
In conversations with veteran coop directors and managers, they acknowledge that the times call for more than the usual way of operating. I wonder how new directors will feel once they fully appreciate the challenges.
They cannot afford the luxury of a slow learning curve. The times call for accelerated learning, and anticipating surprises.
They can only hope and pray that such surprises do not include the equivalent of the bomb blast that killed Congressman Akbar tonight, and Congresswoman Luz Ilagan’s driver, the husband of Mayang, ISIS staff and Girlie’s friend.
