Why not break Daneco indeed?

Sept. 30-Oct. 6, 2010

EDITORIAL/COMMENTARY

Now we have formal proposal of dividing Davao del Norte Electric Cooperative coming from no less than the mayors of Compostela Valley. The showing of mayors’ interests verily signals a formal quest of the province to have their own electric cooperative.

The mayors contended with practical arguments: Daneco has since been servicing a so wide area, and according to Laak Mayor Rey Navarro, reelected president of the mayors’ league of the province, it has been servicing inefficiently given its troubled accounts and decadent power infrastructructures. For Monkayo Mayor Manuel Brillantes Jr, breaking up Daneco would give opportunity for two managements to have more focused service besides that it gives easier way in managing smaller service areas.

Mayor Navarro is right to remind everyone that Daneco is a cooperative in the first place and as such, it is owned by the members, and by their owning, they should share dividends and have patronage refund. It would seem that since then Daneco membership have never tasted receiving any dividend. The P100 given to each member attending the annual general membership assembly (AGMA) is not a dividend. It is an expense being a money given for the transportation of attending members. But has Daneco experienced to become really profitable in operations that it gave dividends during its 40 years of existence?

Since the GM Jose Amacio time, financial woes have been the order of the days of Daneco, that until the present OIC GMship (we demarcate the history of Daneco by reign of GM, whether OIC or regular one) old and new debts mix and pile up while new external charges, obligations and taxes due to demand and supply forces as well as due to governmental rules and yes, due to the remedies made by the board of directors and management owing to Daneco’s own inefficiencies, inherited and bad debts, systems losses and others. But, so sorry always, it has always financial statements on the red at the end of the last day of the fiscal year.

It seems there would be no end to the suffering of the over 126,000 Daneco membership from carrying the cross of high power costs and financial losses that the managements and boards of directors of Daneco have been addressing time and again and to no end.

Now why not share this Daneco burden, to each according to its own limits, capability and resources? Each province has its own competitive advantages. Comval has good water resources and abundant waterfalls it could tap to have renewable energy. It has a lively mining industry forming its phalanx of industrial users, 11 local government units and a Capitol which have been contributing big power payments for Daneco. The same, Davao del Norte has these- with Tagum City boasting high industrial and commercial users with its malls and bustling commerce. If the 2005 population census be the gauge, Comval and Davao del Norte (less the population of Panabo, Carmen and Sto. Tomas which are catered by Davao Light) share about 70 percent and 30 percent of the residential users, respectively. But since the jewel commercial city of Tagum has been cross-subsidizing the rural electrification in the two provinces by contributing almost a half of Daneco’s power bill payments (while not yet including the industrial-commercial Panabo City), Comval’s getting of a huge chunk of residential consumers is just fair enough to make two power enterprises equally earning.

Daneco’s breaking up is like dividing a so wide farm that has long been stricken with pests and farm diseases with infertile soil disallowing it to become productive, a prospect so hard enough for its few farm managers to contain and eradicate as when they introduce solution at the frontage areas they end up already being at a lose and confused past the middle-end section of the farm, knowing that what they have introduced at the start have begun decaying and attacked by other pests and farm problems that newly set in.

It is quite clear that focused management and service under a divided turf is the key in addressing Daneco’s problems owing from a so wide service area it has been servicing inefficiently through the decades. The sharing of costs, assets, resources and obligations is just a matter of computation, accounting and auditing. The legal tenacity of the proposal is shown in the prior breaking up of other electric coops in other parts of the country. The effects to compensation like the doubling of the salary and renumerations for the additional management and board of directors and the hiring of new manpower resulting from the separation can be better seen as generation of employment and opportunities, while the matter can be keyed on with rightful budget increases within the usual revenue-neutral regime of power coops so long as the end justifies the means. The end here we mean is the final profitability and extrication from indebtedness and inefficiency of the power coop and the salvation from the high power costs that the Daneco members always suffer nowadays. It is a question of profitability and consumers’ satisfaction that counts, and not the management-boasted inroads to coming to terms with NEA’s rating standards and protocols.

Verily, the Comval mayors’ proposal to break Daneco into two power coops has much leg to stand on while their first clamor is in itself an ex cathedra, an accomplished fact for the political feasibility of the long-overdue breaking up of the Daneco.- Cha Monforte

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