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MAY O4 2023
MEMORANDUM No. 2 0 2 3 - 2 ,1

TO ALL ELECTRIC COOPERATIVES

SUBJECT 2023 Policy/Guidelines on Annual EC Overall Performance

Assessment

This is to provide you with the 2023 Policy/Guidelines on Annual EC Overall Performance
Assessment which was approved by the NEA Board of Administrators on April 25, 2023
under RB Resolution Number 2023-65.

The said Policy supersedes Memorandum No. 2019-045 "Amended Enhanced

Policy/Guidelines on Electric Cooperatives (ECs) Overall Performance Assessment".

This Policy shall take effect 15 days upon its filing with the University of the Philippines
(UP) Law Center pursuant to the Presidential Memorandum Circular No. 11 dated
October 9, 1992.

The Policy was filed with the UP Law Center on 02 May 2023.

NATIONAL ELECTRIFICATION
ADMINISTRATION

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www.nea.gov.ph
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NATIONAL ELECTRIFICATION ADMINISTRATION
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57 NIA Road, Government Cent!l Dillman, Quezon City 1100
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10 9105082030

02 May 2023

THE DIRECTOR
Office of the national Administrative Register
University of the Philippines Law Center
U.P. Law Center, Diliman
Quezon City

Sir:

Greetings of peace and good health!

Pursuant to Book VII, Chapter 2, Section 3 of the 1987 Administrative Code

of the Philippines, we are respectfully submitting to the U.P. Law Center, for
filing, publication and recording the attached certified true copies of the
"2023 POLICY/GUIDELINES ON ANNUAL ELECTRIC COOPERATIVE (EC)
OVERALL PERFORMANCE ASSESSMENT" promulgated by the National
Electrification Administration (NEA) in accordance with its authority under
Section 5 of P.D. No. 269 as amended.

Thank you very much for the usual and kind assistance of the U.P. Law
Center.

Very truly yours,

1: . . . . . . ,

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(02)8-929-1909
www.nea.aov.ph
 2023 Policy/Guidelines on Annual Electric Cooperative (EC)
Overall Performance Assessment

I. RATIONALE

Section 58 of RA 9136 otherwise known as the Electric Power Industry Reform Act (EPlRA)
of 2001 mandates NEA to:

1. Prepare the ECs to operate and compete under the deregulated electricity market;
2. Strengthen the technical capability and financial viability of the rural ECs; and
3. Review and upgrade regulatory policies to enhance the viability of rural ECs as electric
utilities.

On the other hand, RA 10531 or the NEA Reform Act of 2013 mandates NEA to:

1. Promote the sustainable development in the rural areas through rural electrification;
2. Pursue electrification program and bring electricity, through the ECs to the countryside,
even in missionary or economically unviable areas; and
3. Empower and enable ECs to cope with the changes brought about by the restructuring
of the electric power industry.

Pursuant to the said mandate and to address the heightened demands for power rate
reduction, security of power supply, reliability of service, 9..ood governanceJ, and m~~-.
co~sumer-~wners' (MCOs) empowerment, it is imperati r~~~q f'r..Yi~~.:~nwlj!'?J..,~~~~91i1!tl~I
existing Polley/Guidelines on Annual EC Overall Performa ce Ai~ssr.nent., ... o 1.,,.,,d11~,,1

II. OBJECTIVES

1. To establish parameters for EC performance assessm

2. To measure the ECs' financial, institutional, and technical performance, thus determining
credit worthiness; service reliability; development, empowerment and satisfaction of
member-consumer-owners (MC Os);
3. To serve as basis for crafting performance incentive mechanisms for ECs;
4. To establish accountability and responsibility in ECs' compliances and fiduciary
obligations; and

5. To ensure implementation of EC good governance and sound fiscal management.

Ill. POLICY

It shall be the policy of NEA to implement a set of performance parameters that will serve
as basis of the Annual EC Overall Performance Assessment.

IV. SCOPE

The performance parameters shall cover all ECs connected with the main power grid (on-
grid) and those ECs isolated from the main power grid (off-grid).

Page 1 of 17
V. PERFORMANCE ASSESSMENT CRITERIA

FINANCIAL PARAMETERS (40)

Performance
Performance Indicators Point Score
Level
1·. Leverage
Debt Ratio Up to 0.60 2
2. Liquidity Ratio
Working Capital Ratio At least 1. 00 2
3. Efficiency
a. Payment to Power Suppliers
On-Grid Off-Grid
a.1. GENCOs/Market
Current ECs ECs
Operators/lEMOP/NPC-SPUG)
10
a.2. Payment to Transmission
Company/ies (Main Grid/sub- Current 3 13
Transmission)
b. Payment to NEA Current 3
c. Payment to Banks/Other Financing
Current 3
Institutions -
d. Collection Efficiency
d.1. Averaoe 97% and above 5
d.2. Current to Current 99% and above 4
4. Result of Financial Operation,
inclusive of Reinvestment Fund for Positive 3
Sustainable CAPEX (RFSC)
Sub-Total 35
5. NEA Audit Rating Not less than 9n0,t,.. t:;
--··
TOTAL 1orr1rF Inf nu.:"~~ \1~~·,,.,•, ' rfl.Q, ,,ft<,,111~ Kt-:l~lSTE i
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DEFINITION OF TERMS, FORMULA AND SCORING SYST :11 MAY O2 t:J 1ID'
1. Leverage
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a. Debt Ratio measures the level of indebtedness or financial leverage of the EC. It is
used to measure the proportion of total assets that are financed by creditors.

Total Liabilities*
Debt Ratio=
Total Assets

* Excluding Accounts Payable - Subsidy, except for any subsidy funds that are for
return to NEA.

Debt Ratio Point Score

0.60 and below 2 -
0.61 to 0.70 1
0.71 and above 0

Page 2 of 17
2. Liquidity Ratio

Working Capital Ratio measures the EC's ability to cover the monthly operating costs.

Working Capital Funds*

Working Capital Ratio = Working Capital Requirements
(Monthly average power and non-power cost)

* Includes Cash and Cash Equivalent, Investments in Associate Organizations,

Security Deposits, Power Bill Deposits, Retirement Fund, Share Capital (for ECs
registered as stock cooperatives)

Working Capital Ratio Point Score

1 and above 2
0.75 to 0.99 1
0.74 and below 0

3. Efficiency

a. Payment to Power Suppliers (GENCOs/Market Operators/lEMOP and Transmission

Company/ies (Main Grid)/Sub-Transmission) refers to the EC's ability to pay its
Power Accounts as they fall due including VAT.

For purposes of assessment, the cut-off date is October of the year under review.

a.1. GENCOs/Market Operators/lEMOP/NPC-SPUG

For ECs with various power supply contracts/agreements with generating

companies, payment to all power providers should be considered current,
otherwise, arrearages in any of the generating companies shall result in the zero
(0) point score for this parameter.

Point Score
Status of Payment
On-Grid ECs Off-Grid ECs
Current; Restructured/Special Payment
10 13
Arrangement (SPA) - Current
Arrears 0 0

a.2. Transmission Company/ies (Main Grid)/Sub-Transmission)

For ECs with various transmission supply contracts/agreements with

transmission companies, payment to all power providers should be considered
current, otherwise, arrearages in any of the transmission companies shall result
in the zero (0) point score for this parameter.

Point Score
Status of Payment
On-Grid ECs Off-Grid ECs

Page 3 of 17

dJ/
b. Payment to NEA refers to the EC's ability to pay its maturing loans to NEA

Status of Payment Point Score

Current; Restructured/ SPA - Current 3
Arrears 0

Incentive Point:
• One (1) incentive point for every quarter of advance payment but not to exceed
two (2) incentive points.
• EC must consistently maintain the advance payment all throughout the year.
• EC with Restructured Accounts/Special Payment Arrangement (SPA) but with
advance payment are qualified to the incentive points
• ECs with no loan are excluded

c. Payment to Banks/Other Financing Institutions refers to the EC's ability to pay its
maturing loans to Banks/other Financing Institutions.

Status of Payment Point Score

Current; Restructured/SPA - Current 3
Arrears 0

*If the EC has no loan from banks/financial institutions, the point score attributable
for such shall be added to Payment to NEA and vice versa.

In the event that the EC has no loan from both NEA and other Banks/Fis, the total
six (6) points shall be re-allocated to all efficiency parameters, provided that, it
garnered points from the other efficiency parameters, as follows:

Efficienc~ Parameters Re-allocation

a. Payment to Power Suppliers
GENCOs/Market Operators/ IEMOP 2.00
Transmission Company/ies (MainGrid)/Sub-Transmission) 1.00
b. Collection Efficiency
Average 1.70
Current to Current 1.30
Total 6.00

d. Collection Efficiency (CE) refers to the capability of EC to collect power bills from
member-consumer-owners (current and overdue accounts).

Average Method
Collection for the Year
Average CE = Gross CAR Beg. + Gross Sales for the Year - Gross
Current Month Sales

Page 4 of 17
 Gross Consumer Accounts Receivable Beginning, Gross Sales, Gross Current
Month Sales and Collection for the Year are inclusive of VAT, UC, FIT All, and RFSC.

Percentage (%) Point Score

97.00 and above 5
95.00-96.99 4
93.00-94.99 3
91.00-92.99 2
90.00 -90 .99 1
89.99 and below 0

Current to Current Method

Collection for the Year
Current to Current CE = Gross Previous Month Sales + Gross Sales for the
Year- Gross Current Month Sales

Percentage (%) Point Score

99. 00 and above 4
98.00-98.99 3
97.00-97.99 2
95.00-96.99
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Demerit Points

a. Unliquidated Subsidy Funds

As a measure to facilitate liquidation of subsidy funds as required in the

Memorandum of Agreement (MOA) between NEA and the EC, demerit points shall
be given to ECs with unliquidated subsidy funds.

Status Demerit Point

a. Unliquidated subsidy funds for more than
3.00
one (1) year
b. Unliquidated total amount (PhP)
1O0M and above 2.00
60M to 99M 1.50
20M to 59M 1.00
Below 20M 0.50

b. Compliance with Universal Charge (UC)

Related Obligation refers to the ECs' compliance with the provisions of the Electric
Power Industry Reform Act, its Implementing Rules and Regulations and Energy
Regulatory Commission-approved Universal Charge (UC) Guidelines.

Status Demerit Point

a. Unremitted Monthly UC collection 0.50
b. Non-submission of UC Report 0.50

Page 5 of 17

IP
4. Result of Financial Operation, inclusive of RFSC refers to the amount of Net Margin
after all costs and expenses have been deducted.

Result of Operation (Net Margin, inclusive of

RFSC) Point Score

Positive 3
Neoative 0

5. NEA Audit Rating refers to the EC's final score on itemized audit findings by the
NEA-Electric Cooperative Audit Department (ECAD).

NEA Audit Rating (%) Point Score

90 and above 5
80 to 89 4
70 to 79 3
60 to 69 2
50 to 59 1
49 and below 0

However, ECs not audited or monitored by NEA for four (4) years or more may be rated
based on the latest External Audit Opinion at EC's request provided , that it obtained a
minimum of 80% total points for the other financial parameters for the year being rated.

The EC will be rated based on the following external audit opinion.

External Audit Opinion Point Score

Unqualified 4
Qualified 3
Adverse 0

GENERAL REQUIREMENTS

The assessment of financial parameters shall be based on the following :

1. Monthly Financial and Statistical Reports submitted through the NEA - Business
Intelligence Technology (NEA-BIT) web portal. ECs with Net Losses should submit
analysis/reasons/justification on the losses including the computation of power cost
passed-through the consumers
2. Latest Audited Financial Statement
3. NEA Audit Report
4. Status of NEA Loan Repayments
5. Status of Power Accounts with GENCO/s, Market Operators/lEMOP, NGCP, Sub-
Transmission, NPC-SPUG, Certification of Status of Payment of Power Accounts
from Power Providers (if applicable) and copy of ERC Docketed of Petition for
Dispute Resolution on Power Accounts and/or Copy of ERC Order/Decision on the
Case (if any). .

6 . Status of Fund Transfer to Nok~;6:e~;~-=e :i..~~;:~-iz.atiOQ.Ni~~ple's Organization

(NGO s /pos )
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 7. Status of compliance on Remittance of Monthly Collections and Reportorial on
Universal Charges (UC) with PSALM and/or Certificate of Compliance issued by
PSALM

INSTITUTIONAL-GOVERNANCE PARAMETERS (20)

Performance Indicators Performance Level Weight

I. Human Resource:
Leadership & Management I
1. Good Governance
a. Performance Rating of
Very Satisfactory 4
BOD
b. Performance Rating of GM Very Satisfactory 3
II. Stakeholders ~
1. Members' Participation/Involvement
a.AGMA 5% of total billed member-consumers 3

• 5% Voters Turn out of bona fide

member-consumers
b. District Election • Unopposed
3
• With NEA Approved Deferment
• Failure of Election

c. Active Participation and At least three (3) EC activities

Involvement of Member- participated in by MCOs
3
Consumer-Owners
(MCOs) in EC affairs
2. Action on Consumer
Compliant 2
Complaints/Requests
3. Customer Satisfaction Very Satisfactory 2
Survey

DEFINITION OF TERMS AND SCORING SYSTEM

I. HUMAN RESOURCE: Leadership and Management

1. Good Governance measures performance and capability anchored on actual duties

and responsibilities on mandate under relevant laws.

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Page 7 of 17

V
 a. Performance Rating of Board of Directors (BOD)

EC Board of Directors Performance Evaluation

Parameters Performance Level Required Document/s Rating
I. Attendance/Performance of Mandatory Activities
.. 80% of the total number of Summary of Board
Board meetings conducted meetings conducted duly
1. BOD Meetings 10
within the year should be certified under oath by
with proper quorum the Board Secretary
Certification of AGMA
2. Annual General attendance certified under
All members of the Board
Membership oath by the ISO Manager,
must have attended the 10
Assembly validated by the Internal
AGMA
(AGMA) Auditor and confirmed by
the Board Secretary
Attendance to mandatory List of trainings/seminars
trainings: CMC 1, 2 attended duly certified
3. Trainings/Seminars (Good Governance) & 3; under oath by the HR 10
EPIRA 101; and Power Manager/copy of
Suoolv Contractina Certificate of Attendance
Certification from the
Conducted at least 1 IEC Board Secretary;
4. IEC Activities
activity per district per Submission of Post 20
Conducted
quarter Activity Report by each
BOD
80% of Board
List of Board Resolutions
11. BOD Decisions Resolutions/policies should
passed within the year
Formalized through be geared towards the 10
certified under oath by
Board Resolutions improvement of EC
the Board Secretary
operation
List of Programs/Projects/
At least 2 New ..
111. Board's Strategic Innovations certified under
Initiatives
Programs/Projects/
oath by the Board
10
Innovation
Secretarv
No member of the Board
had been sanctioned by
IV. No Penalties
the NEA Board of Report from NEA
Imposed by NEA 20
Administrators (ADCOM, Corporate Secretary
Board
NEA Bulletin No. 35) for
the yec!r
All members of the Board
V. Peer/Subordinate Performance review
must have attained a Very 10
Rating ~~u.e..s.tiQr!O§ir.~L-.1·.s-·...
Satisfactory Rating . '
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ID) MAY 61, :~:.~ rJ])/

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Page 8 of 17
 The BODs rating shall be determined by the following scheme:

Rating Point S<:ore Adjectival Rating

90 - 100 4 Very Satisfactory -
80 - 89 3 Satisfactory
70- 79 2 Fair
69 and below 1 Poor

b. Performance Rating of General Manager

The performance rating of the General Manager shall be determined through the EC
Board of Directors, Department Managers/Area Managers and Self Rating Scheme
using the following weight:

Performance Rating of General Manager

Point
Parameters Standard
Score
I. BOD Rating Very Satisfactory 20%
II. Department/Area
Very Satisfactory 20%
Managers Rating
Ill. EC Operational Assessment (Comparative to previous year) 60%

CLUSTER 3 ECs (Single Digit- 8.5% cap)

• Maintain Single Digit/Reduction to within the 20
cap level
• Reduction of more than 1% but still above 15
the Cap level
• Reduction of 1% but still above the Cap level 10
• Reduction of less than 1% but still above the 5
cap level
CLUSTER 2 ECs (SL Cap-10.25%)
• Maintain the Cap level/Reduction to within 20
the cap level
1. System Loss
Reduction • Reduction of more than 1% but still above 15
the cap level
Efforts/Initiatives
• Reduction of 1% but still above the Cap level 10
• Reduction of less than 1% but still above the 5
cap level
CLUSTER 1 ECs (SL Cap -12%)
• Maintain the cap level/Reduction to within 20
the cap level
• Reduction of more than 1% but still above 15
the cap level
• Reduction of 1% but still above the Cap level 10
• R~tion of less than 1% but still above the
dao le~e1;·;·":'"'~j';· ·;' :·'···• ' . - . ' -- .
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Page 9of 17

IV
 a. 97% and above 20
b. If below 97%
• Increase of 1% and above 18
2. Collection • Increase of 0.90% to 0.99% 16
Efficiency • Increase of 0.80% to 0.89% 14
• Increase of 0.70% to 0.79% 12
• Increase of 0.60% to 0.69% 10
• Increase of 0.01 % to 0.59% 5
a. At least 1 month working capital for operating 10
expenses
b. Working capital is less than 1 month
3. Liquidity Level - 9
• 0.90 to 0.99
Cash General 8
• 0.80 to 0.89
Fund 7
• 0.70 to 0.79
• 0.60 to 0.69 6
• 0.50 to 0.59 5
4. Availability of
Retirement Availability of Fund 10
fund/plan
SAIDI & SAIFI Compliant 10
5. System 5
One (1) !\Ion-compliant (SAIDI & SAIFI)
Reliability
Two (2) !\Ion-compliant (SAIFI & SAIDI) 0
6. No penalties Has not been sanctioned by the NEA Board of
imposed by the Administrators for violation of Code of Conduct and
10
NEA Board Ethical Standards, NEA policies or other
administrative charges for the year
No pending labor cases or conflicts as certified
7. Leadership
under oath by the HR Manager and/or DOLE or 10
Functions
NLRC Certification
8. Complaints/
Response to/action on verified complaints lodged
Requests Acted 10
through NEA/DOE/8888/PCC
upon
Total 100

The GM's Performance level shall be determined using the following scheme:

Rating Point Score Adjectival Rating

90 -100 3 Very Satisfactory
80- 89 2 Satisfactory
79 and below 1 Fair

Submission of the BOD and GM's performance evaluation starts on January until the
28th day of February of each year. This is to provide sufficient time for the Institutional
group's assessment and validation of reports/information prior to the KPS Overall
Committee's annual rating period.

To ensure confidentiality of the said evaluations, all filled out evaluation forms (hard
copies) must be placedf'mosi:il5ii'ifttetirra--sealed-emt.e1ope or ECs may opt to submit
through virtual applicatio 'usirt{;it''a ·cledieated,:email ~F.i~rt, upon prior information and

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Page 10of 17
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II. STAKEHOLDERS

1. Members' Participation aims to intensify involvement and maximize participation of

the MCOs in the EC's annual affair and district election.

a. Annual General Membership Assembly (AGMA) Attendance

a.1 Major Criteria

AGMA Attendees Point Score

5% 3
3%to4% 2
1%to 2% 1

b. District Election Voters Turn-Out

b.1 Major Criteric1

Voters Turn-Out Point Score

5% Voters Turn out of bona fide member-
consumers
3
Unopposed candidate
With NEA Approved Deferment
Failure of Election
Belows% 1

c. Active lnvolvemunt /Participation and Interaction of the Member-

Consumer-Owners Organization on EC Programs and Activities

This refers to the participation of MCO representatives on district or barangay

levels on various EC affairs such as approval of EC's CAPEX by the General
Assembly, public hearing regarding Power Rate application,
identification/development of Livelihood Program for the marginalized member-
consumers, assistance in securing right-of-way and grant of permits/clearances
of SEP/BLEP beneficiaries from LGUs, campaign for improvement of collection
and/or non-pilferage of electricity, membership information and education
program, representative of member-consumer-owners in CBA/CNA
negotiations, and other seNice-oriented activities.

EC Activities Point Score

At least 3 activities participated in 3
2 activities participated in 2
1 activity participated in 1
Non-compliant 0

2. Action on Consumer Complaints/Requests

This refers to the number qtca.mpJai~_ t s/requests received_and acted upon by the EC
to validate its performanc in.providing -efficieiifservice towards attaining customer
Sa .ISfact·IOn.
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 Action on Complaints/Requests Point Score
Compliant 2
Non-Compliant 0

3. Customer Satisfaction Survey

This refers to the suNey conducted within the EC coverage area pertaining to the
level of customer satisfaction on its de r1very of seN1ce
· t o mem ber-consum ers-owners.
Customer Satisfaction Survey Point Score
Very Satisfactory 2
Satisfactory 1

GENERAL REQUIREMENTS

The assessment of the Institutional parameters shall be based on the following:

1. Reports on AGMA, District Elections, Capacity Building, MCO Participation on EC Affairs,

Customer SeNice Standard, and Action on Consumer Complaints submitted through the
NEA BIT.
2. Performance Evaluation Reports for BODs and GMs.
3. Customer Satisfaction SuNey Responses uploaded through official EC account.
4. Year-end Retirement fund based on Actuarial/Managed by Insurance Company

TECHNICAL PARAMETERS (20)

Point
Technical Parameter Passing Criterion
Score
1. System Loss
Within the cap 6
(Feeder loss cap by EC Cluster)
System Reliability
SAIFI 20 interruptions/consumer 7
SAIDI 2,700 minutes/consumer 7
TOTAL 20

DEFINITION OF TERMS, FORMULA, AND SCORING SYSTEM

1. Feeder Loss Cap. By virtue of ERC Resolution No. 20 series of 2017, the Distribution
System Feeder Loss Cap shall be used as standard level in the Electric Cooperatives
Clusters. This refer to the feeders' total technical and non-technical losses, that can be
recovered through system loss rates using the formula shown below:

\\'h,·r,·. . -
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-· ---s1., ..•.~-~\••··~
..,_l - :,
-, -
- Total Di:-lrih11ti11n Sj,h'lll IJ1.,, that \'all b,·
0r11~( c.f !r,._ "" 1: 1 ,1.,..I .nMINl,:..1,\.-\11<1~ N~,11STER! f\Tll\'\·r,·,I throu~h th,· SJ ,11·111 Loss ClwrJ;t', in
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Page 12 of 17
 Distribution Feeder Loss
EC CLUSTERS Point Score
Cap(%)
Within the Cap (12) 6
Cluster 1
Above the Cap 0
Within the Cap (10.25) 6
Cluster 2
Above the Cap 0
Within the Cap (8.25) 6
Cluster 3
Above the Cap 0

ELECTRIC COOPERATIVES CLUSTER

CLUSTER 1
BANELCO DIELCO MASELCO ROMELCO TISELCO
BASELCO FICELCO MOPRECO SIARELCO
BATANELCO IFELCO OMECO SIASELCO
BISELCO KAELCO ORMECO SULECO
CASELCO LUBELCO PALECO TAWELCO
CELCO MARELCO PROSIELCO TIELCO

CLUSTER 2
ABREGO CASURECO I ILECO If NEECO II - AREA 1 SAMELCO I
AKELCO CASURECO If ILECO Ill NEECO If - AREA 2 SAMELCO If
ALECO CASURECO Ill !NEC NOCECO SOLECO
ANECO CASURECOIV ISECO NONECO SORECO I
ANTECO CEBECO I ISELCO I NORECO I SORECO II
ASELCO CEBECO If ISELCO If NORECO II SUKELCO
AURELCO CEBECO Ill LANECO NORSAMELCO SURNECO
BATELEC I CENPELCO LASURECO NUVELCO SURSECO I
BENECO COTELCO LEYECO I PANELCO I SURSECO II
BILECO COTELCO-PPALMA LEYECO Ill PANELCO Ill TARELCO I
BOHECOI DANECO LEYECO IV PELCO I TARELCO If
BOHECO II DASURECO LEYECO V PELCO II ZAMECOI
BUSECO DORECO LUELCO PELCO Ill ZAMECO II
CAGELCO I ESAMELCO MAGELCO PRESCO ZAMSURECO I
CAGELCO II FIBECO MOELCII QUEZELCO I ZAMSURECO If
CAMELCO FLECO MOELCI II QUEZELCO II ZANECO
CANORECO GUIMELCO MORESCO II QUIRELCO
CAPELCO ILECO I NEECO I SAJELCO

CLUSTER3
BATELEC II PENELCO CENECO SOCOTECO II
MORESCO I SOCOTECO I LEYECO II ZAMCELCO

2. System Reliability is the indicator of the distribution system service performance towards
its customer and measured by the ·vefcigeffl]ffl~~r-:Ufinterraption-and average duration
of interruption within the specified erl6'd:·' "'·· ··· •·· ,.,, n.,,,.,,; ,,, .. 1, • fi r:i;1s 1E;;I
• ,..:11~1111 .. :111 ... v•' -t u1 1:: ~ . inJ k :;~ .. 1+1i,:..u ~

MAY C '"""
Page 13 of 17

tilJ
 a. System Average Interruption Frequency Index (SAIFI) refers to the annual average
number of sustained unscheduled interruptions experience by a customer.

Total No. of Sustained Customer Power Interruptions within a Given Period

SAIFI = Total No. of Customers Served within the Same Period

System Average Interruption Frequency Index (SAIFI)

Point Score
(No. of Interruptions Per Consumer Per Year)
20 interruptions/consumer and below 7
Above 20 interruptions/consumer 0

b. System Average Interruption Duration Index (SAIDI) refers to the annual average
duration of sustained unscheduled interruptions experienced by a customer.

Total Duration of Sustained Customer Power Interruptions within a Given Period

SAIDI=
Total No. of Customers Served within the Same Period

System Average Interruption Duration Index (SAIDI)

Point Score
(No. of Minutes of Interruption Per Year)
2,700 minutes/consumer and below 7
Above 2,700 minutes/consumer 0

Demerit Point:

A demerit of two (2) points shall be imposed against ECs which were not able to conduct
Competitive Selection Process (CSP) as scheduled in the Power Supply Procurement Plan
(PSPP); the list of ECs which were not able to conduct CSP on time, shall be provided by the
NEA Regulatory Affairs Office (RAO).

GENERAL REQUIREMENTS

The assessment of the technical parameters shall be based on the following

reports/documents submitted through the NEA-BIT; relevant publications from
regulatory bodies such as ERC and DOE; and other reporting means.

1. Reports

Reports Required Technical Paramaters

Description
Captured
Energy and Interruption
NEABIT DET 003-004 System Loss, SAIFI, SAIDI
Data
NEABIT DET 002 Power Supply Power Supply
NEABIT DET 008 Power Supplier Power Supply

A tiJW~~g;thi~GRule_s f~r S~tting t~~ DSL

2. ERC Resolutio~ 2~ Serief-of-2B1t::;_
Cap and Estabhsh1ng Pe . rmarl(;eJ~enUMAil,~ll~~,fP.r:01stnbut1on Eff1c1ency
Aomm1;; trativ\.- !WI'!~ Jn,1 nt"qu1;~tiuns i
MAY O1. 2023
ml '

Page 14 of 17
 LEVEL OF ELECTRIFICATION (20)

The assessment on the level of electrification shall be based on the following:

1. Accomplishment in attaining the total electrification of ECs' coverage areas as reflected

in the Status of Energization reports (Connections DET) submitted monthly through the
. NEA-BIT. Potential number of consumer connections shall be based on the issuances
of the Philippine Statistics Authority (PSA) on the results of Census of Population and
Housing and corresponding growth rates.
2. Electrification rate of each city and municipality will be considered in the computation of
the total electrification rate of each EC.
3. Identified areas under the NTF-ELCAC with Certification from the Provincial Command
of the Philippine National Police (PNP) or the Military; waived areas under Qualified
Third Party (QTP) with Certification from Department of Energy (DOE).
4 . Barangay Energization Matrix (BEM) in compliance with Memorandum to ECs No. 2022-
53.
5. Unified Sitio Electrification (USE) Database in accordance with Memoranda to ECs
dated March 24, 2021 and June 14, 2021.

Performance Indicator Electrification Level(%) Point Score

Increase the level of
consumer connections:
95 to 100 15
85 to 94 14
1. Status of Energization
75 to 84 13
65 to 74 12
51 to 64 11
Below 50 10
2. Barangay Energization Updated level of barangay
3
Matrix energization
Updated and complete
3. USE Database (Sitio
masterlist of sitios and 2
Masterlist)
euroks

DEMERIT POINTS

1. REPORTORIAL REQUIREMENTS (3)

A demerit of three (3) points shall be imposed against ECs for non-submission of any of the
following:
1. Financial Reports
2. Institutional Reports
3. Technical Reports
4. Energization Reports
5. Distribution Development Plan

Only the reports submitted on time with complete and accurate data shall be considered .

The data information shall be sourced from the NEA-BIT as provided by the
department/office Subject Matter Experts•'{SMt:'s}F1friri£t5mpliar.ili:e··of ECs to the DDP shall
be provided by the NEA Corporate Plann PfQ"~nJ.~: tQrQt~::1
~:.;:•.:~.'., ..~rG,s rH:

MAY O? t::::1
r~ - .,..• .~, ~ ·,:t y
!I .
! r~\
.•-
~.:!J~ ~ ~~.i? u•~ J~ ,-,-·
.;;1., u .
L.!..;
Page 15 of 17
1H · . _ ••. _ . _ ·-·--·---·-·· .. --. ,
 2. Show Cause Orders Issued by ERC to ECs (1)

A demerit of one point shall be imposed against ECs which received three (3) or more Show
Cause Orders rendered with final judgments and with imposed monetary penalties issued
by the ERC during the year under assessment. Show Cause Orders issued are for violation
of ERC rules and regulations.

VI. SUMMARY OF PARAMETERS

TOTAL NUMBER TOTAL POINT

PERFORMANCE PARAMETERS OF PARAMETERS SCORE

A. FINANCIAL 8 40
Leverage 1 2
Liquidity Ratio 1 2
Efficiency 4 28
Result of Financial Operation 1 3
NEA Audit Rating 1 5
8. INSTITUTIONAL AND GOVERNANCE 7 20
Human Resource 2 7
Stakeholders 5 13
C. TECHNICAL 3 20
System Loss 1 6
System Reliability 2 14
0. LEVEL OF ELECTRIFICATION 3 20
TOTAL 21 100

VII. OVERALL PERFORMANCE RATING SCHEME

Performance Rating Point Score

AAA Highest 95-100
AA High 90-94
A Good 85-89
8 Average 75-84
C Low 50-74
D Poor 49 and below

VIII. OTHER CONDITIONS

1. To earn Category AAA, the ECs must have complied with all the standards on System
Loss, Reliability Indices (SAIDI/SAIFI), Collection Efficiency, Result of Financial
Operations, Payment to Power Suppliers, conduct of District Election and AGMA. An
EC which failed to comply in any-ef- -tt'le·-~fetA-···listed-·parameters shall only be
categorized as "AA" notwithstandltlQ,<it~,tG>talsc.oreo't i9S:ru annv~.!

J:
( •,,,.,,,,:.. '.," ,,,,.,, , 1, l " t,,1,\l,C, -~ :

Im MAY o2 2:,J Page 16 of 17

. ----- '.=::-/
 2. Incentive points shall be given provided that the EC Overall Point Score shall not
exceed 100%.

IX. RESPONSIBILITY

1. ECs shall ensure compliance to the Policy on Governance pursuant to System

.Procedure in the Implementation of the National Electrification Administration - Business
Intelligence Technology (NEA-BIT) Section VI. Guidelines: Sub-section E. Data Entry
Template (DET) Submission: to wit:

(e) "The ECs shall ensure that all information is correct and accurate to reflect
the true state of health of the electric cooperative. This information shall
become the bases for assessment and early warning signals for crafting of
solutions that will improve the EC efficiency and seNice reliability. An affidavit
duly signed by the EC General Managers will be required to ensure the
correctness and completeness of all inputs in the DETs.

(f) The ECs are responsible and accountable for submitted data through the
DETs and the final outcome of Operational Reports

2. In cases of erroneous or false data submitted, the EC's final rating may retrogress after
validation without prejudice to motu proprio Administrative investigation.

3. The ECs are likewise responsible and accountable for the submission of additional
supporting documents/ documentary evidence that will substantiate and/or further justify
the truthfulness/ correctness of the submitted reports.

4. The NEA shall conduct validation of all documents submitted, if warranted.

5. Upon approval of the Administrator and confirmation of the Board of Administrators, the
results of the EC Overall Performance Assessment shall be released in the NEA website.

6. Any motion for reconsideration shall be entertained by the Administrator only. in

meritorious cases.

X. AMENDATORY CLAUSE

This supersedes Memorandum No. 2019 - 045, Series of 2019, "Amended Enhanced
Policy/Guidelines on Electric Cooperatives (ECs) Overall Performance Assessment".

XI. EFFECTIVITY

This policy shall take--effect 15 days upon filing with the University of the Philippines Law
Center pursuant to the Presidential Memorandum Circular No. 11, dated October 9, 1992,
and operationalize beginning the 2023 EC Overall Performance Assessment.

' NATIONAL ELECTRIFICATION

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