MCO Regrets

I agree that what’s happening right now in central Negros is a portent of things to come in Benguet.

Their electric cooperative CENECO will be taken over by a private investor, which has already announced its attrition policy for gradually replacing the rank-and-file with their own people.

That’s just par for the course when you take over a company. You cannot rest easy with people in place who are throwbacks from the old setup. They will be resistent to change and will encumber the new owner with internal drag. Who needs that, so those at arm’s length shy of retirement will be urged to turn in their locker keys early, perhaps with a sendoff package that’s attractive enough, all things considered.

It will all be lawful, of course. Legal provisions for privatization will be meticulously followed to the letter. As I’ve written before, and no one believed me, only PD 269 does NOT emphasize privatization of electric cooperatives. All subsequent laws meant to “strengthen” PD 269 were funneling circumstances towards a more laissez-faire arrangement, with government letting go of active involvement in freemarket trade and making the private sector take over its role.

For the benefit of those who think they know everything, this slow ratcheting up of conditions towards privatization is NOT happening to BENECO for the first time. It is, in fact, how BENECO was born.

Before 1973, we oldtimers in Baguio paid our monthly electric, water and telephone bills to the City Government. The office was called “City Services” and although there was a satellite collection window at the west wing of City Hall, across the corridor from City Treasurer’s office, its main headquarters was located at the Department of Public Services (DPS) Compound in barangay Marcovillle.

Then with the enactment of several amendatory laws that mangled the old Public Service Act, specialized regulatory bodies were created to oversee the separate affairs of the water sector (called the Local Water Utilities Administration or LWUA), telephone and telecommunications (called the National Telecommunications Commission, which was subsequently subsumed under the DOTC) and electricity by the creation of—you guessed it—National Electrification Administration (NEA).

Thence, private money was harnessed in establishing private entities comprised of individual private citizens—called ‘cooperatives’ to whom the exclusive franchise to sell retail electricity was granted. Did this prove successful?

You bet. Can you imagine if the City Governnent was still running BENECO today? The place would be Nepotism Central for one thing, but more importantly collection efficiency would probably mimic that what’s happening at the city market.

Suffice it to say, BENECO demonstrated what can be accomplished if you just leave the people alone. They can steer what started as a virtually worthless franchise from rags to P4-BILLION in assets.

So I keep wondering why some people fall for the yarn that BENECO is so steeped and marinated in corruption it needs to be privatized again. “Massive corruption” is just a scarecrow phrase that some people used to discredit a perfectly effective regular board of directors, not one of whom has been indicted for stealing so much as a box of paper clips.

The story was different for the water sector. For some reason, it diverged from the populist and democratic path that electric cooperatives took.

“Water districts” is a misnomer because there are no water districts (plural) in Baguio. The whole city is just ONE district—and there are no “district elections” to constitute the board of directors of BWD. Each director is a handpicked appointee of the city mayor—which is probably what emboldened the idea to parallel the concept over at BENECO.

If you ask me, the sole reason why BENECO thrived in success and cutting-edge system innovation (SCADA is only one, if you look closely there are many features that makes BENECO unique from other neighboring EC’s, but that’s another post) is its very proactive and animated Member Consumers community—watchdogs non pareil.

Through the years, this dynamic community has headed off numerous attempts to ‘re-nationalize’ BENECO and place it back under the direct control (not just supervision) of NEA, to bring its nature closer to a water district.

NEA could not succeed because it didn’t know how to bypass strong public opinion that was jealously guarding its now-priceless BENECO franchise. But recently, as we know now, it had finally “broken the code.”

I was not complimenting NEA Administrator Almeda when I wrote a while back that President Bongbong Marcos was wise to appoint him because he was the best “closer” for this kind of deals. I was juxtaposing the ineffectiveness of his predecessor Emmanuel Juaneza whose approach to privatizing BENECO was to hand it over to a southern oligarchy HIMSELF. Not Almeda’s approach.

You will not find Almeda in the blatant picture if and when privatization does come avisiting BENECO. You will find its OWN board of directors committing hara-kiri in behalf of their constituents—just as you’re seeing it now in CENECO.

As to regrets—why didn’t we realize this way back in January?—that ship has sailed. Representatives of key stakeholders, including the MCOs and both the employees and supervisors’ unions were chief among those who met with Almeda in December 2022. They had all cut a deal for themselves, that January 12 walkover turnover at South Drive had all the trimmings of the “battle of Manila Bay.”

The only challenge that remains is not how to “re-empower” the MCO’s—you can never regain power you bargained away. Rather, the task is how to RECONSTITUTE the consumer community into a potent NEW FORCE.

My observation during the tri-occasion AGMA is that there DOES exist a groundspring of proactive member consumers with a footprint larger than the visible intrepid few still smarting from realizing their leader had forsaken them.

Unfortunately, that groundspring, after the AGMA, had receded back to eerie quiet and dormancy, but I could always be wrong.*