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As a result of increasing operation costs and to lessen the burden on its consumers, the Ilocos Norte Electric Cooperative (INEC) has negotiated a PHP100 million loan with the Land Bank of the Philippines (Landbank). This strategic move will enable the cooperative to control its expenditure and at the same time provide its consumers with the ability to pay for electricity in installments.
The Anti-Bill Shock Loan Program
In a meeting on Tuesday, INEC acting general manager Cipriano Martinez explained the perks of the anti-bill shock short-term loan program of Landbank. This gives an opportunity for the distribution utilities (DUs) and electric cooperatives (ECs) to acquire working capital to manage periods of high power demand and rate by allowing the consumers to pay their electricity bills in installments.
This year, the power consumption in Ilocos Norte rose due to the El Niño phenomenon, as Martinez pointed out. The province recorded an increase of more than 60MW which is a 20% increase from the normal daily usage. The loan program becomes more significant and timely as the demand for the cooperative’s products and services rises.
Loan Details and Impact
The anti-bill shock program helps DUs and ECs to avail up to 80% of the incremental rise in the electricity consumption. However, the amount which is borrowed should not cross the repayment capacity and should not be more than three times the billing amount of power suppliers. The loan is presumably due within 270 days, although there is a 90-day extension possibility.
This financial strategy has enabled INEC to lower power rates by PHP1 this month to PHP9. 5266 per kilowatt hour. This reduction comes as a relief to consumers who are already struggling with high electricity charges.
Martinez thanked President Ferdinand R. Marcos Jr. and Governor Matthew Manotoc for approving and encouraging the use of the anti-bill shock program. This initiative not only sustains the operation of the cooperative but also enhances the consumers in Ilocos Norte.
Source: Ilocos coop taps Landbank lending facility for affordable power rates