Rationale and Policy Declaration
- The policy is grounded on the need to enhance distribution development under RA 10531 while considering the effects of climate change.
- Climate change is treated as the “new normal,” reflected in the increased intensity of natural disasters and calamities that damage or destroy electric cooperatives’ distribution lines and facilities.
- The policy requires electric cooperatives to prepare for destruction of electrical facilities caused by force majeure and fortuitous events.
- The policy declares that electric cooperatives shall set up a Disaster Resiliency Program and implement it through specific measures on emergency preparedness and restoration capability.
Goals and Program Objectives
- The program must ensure the availability of vital materials and equipment for immediate restoration/rehabilitation of distribution lines damaged by disasters and calamities.
- The program must establish ample stocks of materials and equipment for emergency rehabilitation/restoration of distribution lines damaged by both natural and man-made disasters and calamities.
- The program must assure that buffer stock specifications conform to the “Build Back Better” scheme.
Coverage: Who Must Comply
- The policy applies to all electric cooperatives.
- Electric cooperatives must establish the required disaster resiliency measures under the policy’s mechanics of implementation.
Key Definitions Used in the Policy
- Force majeure means an event resulting from elements of nature that cannot be reasonably anticipated or controlled, such as a typhoon, storm, tropical depression, flood, drought, volcanic emption, earthquake, tidal wave, or landslide.
- Fortuitous event refers to an act of war (declared or undeclared), sabotage, blockade, revolution, riot, insurrection, civil commotion, or any violent or threatening action.
- Buffer stock means a supply of materials held as reserve against shortages to be utilized during emergencies like typhoons and other calamities.
- The “Build Back Better” scheme means reconstruction/restoration of the lines stronger than the old/damaged structure, with primary consideration on strength of the materials and shorter spanning of the distribution line structure.
- Three phase (3I) in a distribution line represents a backbone or primary line with three (3) or four (4) conductors depending on whether the system is delta or grounded wye.
Core Obligations and Resiliency Measures
- Electric cooperatives must build a pool of linemen & electricians on a regional basis for emergency power restoration works during calamities and for normal-time sitio & households electrification projects.
- Electric cooperatives must establish a buffer stock composed of poles, insulated conductors, distribution transformers, electronic KwH meters, and service wires.
- Electric cooperatives must prepare distribution electric system designs in conformity with the “Build Back Better” scheme.
- Electric cooperatives must adopt a Regional Procurement process through the regional association to procure the identified buffer stock materials.
- Electric cooperatives must identify cost recovery for buffer stock and mobilization.
Buffer Stock Mechanics: Materials and Quantity
- Electric cooperatives must establish the buffer stock based on material and equipment importance, availability, and length of production time.
- The buffer stock materials are limited to the five items: pole, insulated conductor, distribution transformer, electronic KwH meter, and service wire.
- Quantity of buffer stock must be equivalent to 2%-6%, 10% and 20% of the electric cooperatives’ linear kilometer of 3I distribution length of lines.
- Costing must be based on the National Electrification Administration (NEA) Material Price Index.
- Material specifications and construction works must conform to NEA standards.
- The policy requires the use of Insulated Conductor #4/0 ACSR and Bare conductor #2/0 ACSR, and Steel Poles equivalent to Class 3 Wood Poles.
Funding, Submission, and NEA Financing
- Electric cooperatives must establish a fund for buffer stock, mobilization, and any attributable cost and expenses for immediate restoration/rehabilitation of distribution lines/system due to force majeure and fortuitous events.
- Buffer stock and expenses for force majeure and fortuitous events must be submitted to the ERC as part of the CAPEX Plan and/or sourced from RFSC (additional).
- Electric cooperatives must put up a sinking fund to cover mobilization for immediate deployment of personnel and vehicles during calamities/emergencies.
- NEA may provide a loan to electric cooperatives to help finance acquisition of buffer stocks and other attributable costs and expenses for immediate restoration/rehabilitation due to force majeure and/or fortuitous events.
Cost Recovery Process and Regional Procurement
- Electric cooperatives may recover costs of buffer stock and mobilization through a defined proposal-evaluation-approval sequence.
- The proposal for cost recovery on buffer stock quantity level and mobilization cost must be submitted to NEA Engineering for evaluation and review, and then submitted to the Deputy Administrator for Electric Distribution Utilities Services for approval.
- The approved NEA proposal must be included in the concerned electric cooperative’s submission to the Energy Regulatory Commission (ERC).
- After ERC approval, electric cooperatives must implement the following requirements:
- Purchase of materials must be done on a regional basis.
- Each electric cooperative in the region must determine its buffer requirements for pole, conductor, distribution transformer, KwH meter, and service wire.
- A Bids and Awards Committee (BAC) from the region composed of the member electric cooperatives must be created.
- The bidding of the total requirements of all electric cooperatives in the region must be centralized, either per lot/material basis, and must be published in a newspaper of national general circulation.
- The Terms of Reference for equipment and materials for bidding must be submitted to NEA for approval.
- The contract must be made individually or between each electric cooperative and the supplier, so contract awarding is on a per electric cooperative basis.
- Delivery of materials must be done by the supplier per electric cooperative.
- Each electric cooperative must have a Board Resolution requesting the regional association to conduct the purchase of materials in its behalf before the bidding process.
- The bidding procedure must follow NEA Memorandum No. 2005-030 on the Procurement Guidelines for Electric Cooperatives dated 07 October 2005.
- Replenishment must be made when 50% of material utilization has been reached.
Implementing Authority and Effectivity Rule
- The Administrator of NEA shall issue Rules and Regulations necessary to implement the policy.