(Delivered by ZANECO General Manager Adelmo P. Laput on August 23, 2012, during the culmination of the five-day celebration of the cooperative’s 40th founding anniversary.)

           Now we celebrate our 40th year anniversary.Three months ago I celebrated my seventh year as General Manager of the Zamboanga del Norte Electric Cooperative.It was not that easy and smooth. We have our share of ups and downs, of turn-ons and brownouts, of shortcomings and triumphs, of dealing with destructive criticisms and having the thrill of hearing praises from sensible people. Yet above all these, we as an electric cooperative endures, we overcome and we persevere toward the attainment of our shared vision of being “globally competitive, innovative and customer friendly electric cooperative, committed to provide reliable, efficient and reasonably priced power in Zamboanga del Norte.”

           Come to think of it, ZANECO was established in 1972 with seven directors and only three employees, including the pioneer general manager Transfiguracion T. Daarol. That time, the cooperativeobtained the original franchise area covering Dapitan City and six municipalities – Rizal, Sibutad, La Libertad, Pinan, Mutia and Polanco. Dipolog City then wasserviced by Visayan Electric Company or VECO.

           Forty years have come and gone, and today ZANECO rose to more than 200 regular employees and has energized all the580 barangays in Zamboanga del Norte’s 21 municipalities and the cities of Dipolog and Dapitan. Thirty five of these 580 barangays are off-grid that areenergized by solar power.

           Looking at it at thehousehold level, of the 145,284 target households,at least 90,000 are already energized leaving less than 57,000 households as the target of our energization, which is now on the sitio level. Our goal is to reach the remaining un-energized households within the next three years.

           On the technical side, we are doing our best to upgrade all our five substations located in Polo, Dapitan City; in Ubay, Polanco; in Nabilid, Roxas; in Mucas, Salug; and in Communal, Liloy. Three years ago we have upgraded Ubay Substation from 10 megavolt ampere to 20 mva capacity at the cost of P37 million.

           Right now, we are in the process of upgrading Roxas Substation from five mva to 10 mva capacity at the cost of P17 million.

           The Ubay Substation – and soon Roxas Substation – is ready to be fitted with SCADA system, or Supervisory Control and Data Acquisition system. This is an advanced technology in which our engineers can acquire data, monitor and control the distribution system from the nerve center, which is to be installed at the System Loss Reduction Division office under Engineer NeriLibradilla.

           In other words, with SCADA system, engineers manningour nerve center can detect trouble and can shut down any or all the feeders in our substations to prevent further damage. I would like to believe that this is the secret system that Engineer Libradillaused to keep his single blessedness. I think he has his own personal SCADA system because he can detect trouble before it reaches him. But please don’t think that marriage is all trouble.

           Anyway, the SCADA nerve center then directs our maintenance crew to where the trouble may be, provides assessment and nature of the problem and suggestshow to fix it.

           This will cut our reaction and troubleshootingtime by half because our crew will no longer be visually tracing fault from the substation down to the last electric pole as what we have been doing until now.

           Nevertheless, we are close to be a step high-tech. We already have started installing the SCADA system. And hopefully we can have its full operation, first with Ubay Substation, within the next two years.

           Meanwhile, a lot of our resources and efforts were focused on reducing our system loss. Last May, our system loss was 12.83 percent. We have to reduce this to single digit, because system loss up to 13 percent will be passed on to member-consumers.

           What are the causes of system loss? For one is the vegetation that touches our distribution lines. We are continually clearing our power lines from branches or even entire trees because, as we may have already know, vegetation that makes contact with our transmission lines may cause short circuit and wastes load that will become system loss.

           ZANECO has the right by law to clear our distribution lines from vegetation, and we have many chain saws for that. But it is never easy I tell you. Dihang nag-clearing mi sa National Highway sa Barangay Minaog, adunaydaghangmgabalikasugpagpanghimaraotgikansamganasukoapandilimagpailangamgalumulupyo. But they failed to realize or they just refused to understand that what we were doing was to protect our distribution lines, which in turn protects residents nearby from accidents that may even claim lives.

           In the first place, ngano man gud pud intawon nga magtanom man ug kahoy ubos sa linya sa koryente nga kun mutubo na ang ilang gipangtanom, segurado man gyod kining mopaingon sa atong mga alambre?

           And who will be blamed in case accidents in our distribution lines happen? It is still ZANECO. That’s why we have to be proactive to prevent untoward incidents. As they say, there is no second chance in accidents. It is always better to prevent it, rather than being left without anything else to do but regret after accidents happen.

           Aside from clearing of vegetation, we are also doing other measures to reduce system loss like strictly imposing upon our meter readers the eradication of reading error; change stuck-up and damaged meters; and replace old and small-capacity power lines with bigger and higher capacity wires.

           But of all the causes of system loss, pilferage is giving us the most headaches. Electricity that is being pilfered becomes system loss and is being paid by all of us, which is another headache. Calculating from the number of apprehensions made since last year, ZANECO is losing at least three million pesos to pilferage per month.

           The heartache that added to the headaches brought by rampant pilferage is knowing that those who steal electricity are better off than those who religiously and faithfully pay their bills. Kasagaran sa nasakpan nga nangawat ug koryente, kadto ra pud nga mga kwartahan – mga magpapatigayon, mga professionals, mga empleyado ug opisyales sa gobyerno, mga anak sa empleyado ug opisyales sa gobyerno. Sila tong mga desente kaayo tan-awon, patsada ug gipangsuot, maayo mo-estorya ug mosulod ra pud sa simbahan apan kawatan diay ug koryente.

           Naa gani dihay anak sa usa ka konsehal sa Dipolog nga gidaganan pa gyud ang iyang multa sa ZANECO tungod sa pagpangawat ug koryente.

           Let me say this clearly: don’t force us to be harsh. Stop stealing electricity. And those who are already caught, don’t jump off from your penalties or face the full force of the law.

Consider that as your final warning. Our anti-pilferage task force with help of the Philippine National Police and the National Bureau of Investigation is continuing on implementing Republic Act 7832 or the Anti-pilferage Act. The head of our anti-pilferage task force is devastatingly pretty and sexy, but I assure pilferers and those who are still contemplating of stealing electricity that she means business.

In due course, we have also started using pilferage-proof electric meters, which a Korean Company has designed exclusively for ZANECO. Last year, the Koreans brought a kind of electric meter that they claimed nobody has pilfered in Korea. But during a simulation test at our not-so-sophisticated laboratory, the visiting Korean engineers shook their heads in disbelief because the electric meter they bragged of was after all not pilferage-proof in the face of Filipino ingenuity. We know Filipinos are good, but sometimes in a bad way.

Subsequently, the Koreans conducted research in Dipolog City and found out that we have seven methods of pilferage. They made some adjustments with their meters and came out with the new model that we have started to use now: safe from the seven pilferage methods used in Dipolog and Zamboanga del Norte.

 Republic Act 7832 or the Anti-pilferage Act. The head of our anti-pilferage task force is devastatingly pretty and sexy, but I assure pilferers and those who are still contemplating of stealing electricity that she means business.

           Kun malutsan pa gihapon kanang metroha sa mga kawatan ug kuryente, na…naka-imbento na pud ang mga buluyagon ug ika-walo nga paagi sa pagpangawat ug koryente.

           Now, on the side of our collection of payments from member-consumers, our goal is to achieve 100 percent collection effectiveness – that is to collect the right amount and on time.

           The main reason is not the joy of collecting money, but the necessity of paying the right amount to the generation and transmission companies on time to avoid penalties.

           Perhaps a lot of our member-consumers do not know that every time our payments to the National Power Corporation, now the Power Sector Assets and Liabilities Management or PSALM, and the National Grid Corporation of the Philippines are delayed, we are being slapped with penalties. Parehas ra na kun mangutang tag kaldero sa Bombay o kaha sa intsik dayon dili ta kabayad sa binulan nga data, duna nay interes nga nakapatong sunod bulan.

           So, when member-consumers don’t pay on time, we cannot in effect pay on time to the generation and transmission companies. And since we cannot charge member-consumers with penalties for late payments, where will we get money to pay the penalties imposed on us by PSALM and NGCP?

           In the past, we sacrificed a portion of our budget intended for maintenance to pay the penalties of late payments. But we cannot tolerate this forever. That’s why we came up since July last year with FIT – STORM, which means Financial, Institutional and Technical – System Loss reduction, Technical upgrading, Operation on Collection, Recovery of Lost Revenue, Miscellaneous Order Execution.

           A lot of member-consumers don’t like FIT-STORM. That’s understandable because in FIT-STORM, all ZANECO employees are grouped into teams and go out to designated areas every second Tuesday and Thursday of the month to collect past due accounts and, if necessary, disconnect unpaid accounts.

           Our employees met a lot of resistance. They were lambasted, jeered, bullied, harassed and scared with bolos or guns. There was even an incident that ZANECO vehicles used in FIT-STORM were apprehended by members of the Dapitan City Police in an apparent retaliation after their office was included in disconnection due to non-payment of bills.

           But we have to do what we have to do. And a year of implementation of FIT-STORM has reaped positive results. Now we are paying current to NPC-PSALM and NGCP. Meaning sa current, on time.

           By the way, our Finance Manager Leonora Timtim is a good example of the way ZANECO employees should deal with member-consumers – that is to serve with your authentic sweet smile in your most amiable way. Ayawlangpudpahinaykikay basin mangasukoinyongmgabana.

           We complement our FIT-STORM with other means to obtain efficiency and at the same time ease up payment system like tapping the services of several banks to receive payment of electric bills. Aside from that, we also implement mobile tellering, in which tellers will go to pre-identified places to collect payments. This reduces expenses of member-consumers from remote areas whowould no longer go to our offices in Dipolog, Pinan, Sindangan and Liloy to pay their bills.

           Another not so prominent, but equally important improvement in our system is computerization. It easesup our employees’ work, increases efficiency and decreases errors.

           These improvementssupplemented with the widening of our teller area and customer services area not only benefited our employees, but above all our member-consumers are now served with all the comforts we can provide.

           In addition, we haveassigned special tellers in an exclusive area for the young at heart, the senior citizens. The seniors were some time ago at the helm of our society,directing it to where we are today. Now that they have passed on to us the responsibilities to build our future, it is just apt that we serve them with respect and gratitude.

           In our continuing effort to improve our services, we should also continue on improving our manpower. ZANECO is now winding up with its re-organization. There is no retrenchment, just rationalization of personnel and job descriptions.

           You see, there are personnel whose jobs were already overtaken by technological breakthroughs. That’s why we have to put them to other posts where they can be productive. Of course, with corresponding training to prepare and equip them to the new challenges.

           I believe it is also worthwhile to say that since I started as General Manager, we also instilled discipline within our ranks slowly yet steadily with utmost determination. Gone are the days when some or our fellow workers are drunk during work hours. Gone are the days when some of our workers collect additional charges from big member-consumers when they were already paid by ZANECO for their services rendered. I cannot deny that there are still wayward things that are happening;those are inevitable in any large organization. But we are doing our best to reduce, if not eradicate, it.

           Now let’s go to the sour issue of real property tax. Under Presidential Decree 259 from which wegot our legal personality, Electric Cooperatives were exempted from real property tax. But with the adoption of the Local Government Code in 1991, local government units have started to impose real property tax on Electric Cooperatives, including ZANECO, in 1994.

           We are bound by law to pay for whatever tax responsibilities we have. But we have been asking local government units to exempt us from real property tax on the reason that this will be passed on to member-consumers. Meaning, we will be having another round of power rate increase for real property tax.

           Dapitan City has condoned ZANECO’s real property tax. But in 2008, the City Government of Dipolog refused to pay its electric bills and demanded that ZANECO pay first its real property tax in Dipolog. Because of intense pressure from some board of directors who are no longer with us now, ZANECO loaned about 12 million pesos from the National Electrification Administration to pay under protest its real property tax in Dipolog.

           “Under protest” because the City Government of Dipolog imposed tax even onour electric poles, which are not real properties. Besides, the City Government of Dipolog did not bother to submit copies of their Tax Ordinance and proof of its publication that are the requirement for our petition before the Energy Regulatory Commission or ERC to pass on to member-consumers the payment of real property tax.

           Yet above everything, ZANECO is still knocking at the hearts of our local government leaders to exempt us from real property tax because it will be the member-consumers who will absorb the brunt of another electric rate increase.

           This was emphasized in President Noynoy Aquino’s State of the Nation Address in July 2011.

           However, despite their jumping off to Liberal Party and their claims of being advocates to the president’s motto “Matuwid na daan,” the City Government of Dipolog has again held hostage their payment of their electric bills from April to Juneand demanded that we pay them real property tax.

           They did this without even explaining why until now they still failed to give us copies of Dipolog City’s Tax Ordinance and proof of its publication.

           But this time, we did not falter. We refuse to be bullied by a local government unit, no matter how highly its leaders think of themselves.

           Ato man ganing putlan nang gagmayng mga miyembro-konsumante kun dili kabayad, kini pa kahang Dipolog nga gadawat ug dagkong Internal Revenue Allotment.

           We were about to cut the power supply to the City Government of Dipolog, but aborted it when the city paid its dues last July 25.

           And while our problem with real property tax is being litigated in court, we continue to face the real challenge of dealing with the unpredictable supply of electricity in Mindanao. The average electric consumption within our franchise area is at least 30 megawatts during peak hours. But the National Power Corporation or NPC told us that this year they could only provide a maximum of 25 megawatts.

           Luckily, were able to secure – ahead of other electric cooperatives in Mindanao – an authority from ERC to enter into contract with Therma Marine Corporation to provide us with an initial power of five megawatts to cover the shortfall of NPC.

           However, there are times, most often unexpected, that the 25 megawatts from NPC would still slump further whenever one or a couple of their generation units fail. That’s why we increased our contract with Therma Marine to nine megawatts.

           We are pleased to inform you that since January, ZANECO remained unaffected by power curtailment while other parts of Mindanao are experiencing three to four hours of rotating brownouts – some even went to as high as eight hours.

           First I would like to thank the men and women of ZANECO for our successful effort to spare our member-consumers from the rotating brownouts. We also give our sincerest thanks to Attorney Paul Gudmalin, president of the Dipolog City Chamber of Commerce and Industry and the SangguniangPanlalawigan of Zamboanga del Norte for recognizing our efforts to protect our member-consumers from the evils of power curtailment.

           The effect though is that we have to increase our power rates because we are buying more electricity from an independent power producer, which is using expensive diesel fuel to run their generators. However, a lot of our member-consumers say that the P1.40 average per kilowatt hour increase in their monthly consumption is better than experiencing the inconvenience and hassle of rotating brownouts.

           We just have to face it, cheap electricity in Mindanao is over. President Noynoy Aquino said it during the power summit in Davao City. But we can still prevent electric rates from further going up by preventing the privatization of Agus Hydro Electric Power Plant Complex in Lanao and the Pulangi Hydro Electric Power Plant Complex in Bukidnon.

           That’s why we are asking our member-consumers to help us lobby with our congressmen, we have three in Zamboanga del Norte, to help avert the privatization of the two hydro-power plant complexes. We also request 1-CARE representative to help us in our endeavor.

           On the other hand, we are supporting efforts of local government units to build renewable energy units. It will greatly decrease power rates because it will not be dependent on the volatile cost of fuel that we import.

           ZANECO itself has already made preparations to build run-of-the-river mini-hydro power plant in Bergado, Mutia. Indo-PhilElectric Company has agreed last year to build the mini-hydro electric power plant under build-operate-and transfer scheme, but until now the Department of Energy is yet to release a certification that is required for our application for water right.

           In all honesty, I admire the efforts of our government to rectify the things it has done or have failed to do that led to power crisis. But in all candor, I sometimes don’t understand what is going on with our government officials. We are encouraged to use alternative and renewable energy sources, but now that we are ready to build one, it seems they don’t like us to proceed.

           Nevertheless, we don’t have any other course of action but to continue on going forward. We will continue our pursuit to build that mini-hydro electric power plant; we will continue on upgrading our distribution system; we will continue going after pilferage; we will continue on improving the capabilities of our personnel; and we will continue working towards the attainment of our vision, which is to be “globally competitive, innovative and customer friendly electric cooperative, committed to provide reliable, efficient and reasonably priced power in Zamboanga del Norte.”

           Thank you very much, and God bless us all.