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Chapter 1

INTRODUCTION

Background of the Study

Pilferage is lost electricity because of theft, illegal connection and

defective metering. Pilferage has corresponding financial cost and is

charged to electricity consumers through the Electric Cooperatives (ECs)

as Systems Loss charge. Part of this pilferage cost is being subsidized by

ECs in figures that reach millions of pesos. If not effectively managed,

pilferage can financially cripple the operations of an EC resulting for its

closure. ZAMCELCO of Zamboanga City and ALECO of Albay fell prey to

this pilferage that they have now closed business and were taken over by

private company.

Having gained national concern, the Philippine Congress

promulgated Republic Act 7832 or the Anti-Pilferage of Electricity Act in

1994 declaring that pilferage of electricity is illegal and a criminal act.

Consequently, the Energy Regulatory Commission (ERC) supplemented

that all ECs were discharged with the duty or task of both computing and

charging pilferage to consumers and of eliminating pilferage, because in

due time its financial cost will be totally absorbed by the ECs as provided

in RA 7832.
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Furthermore, RA 7832 also provided that all Distribution Utilities

(DUs) and Electric Cooperatives (ECs) were given a period upon which they

were allowed certain percentage of the pilferage losses to be passed on to

their consumers and thereafter such percentage will gradually be reduced

to zero.

Thus, ECs had become duty bound to implement RA 7832 in order

to sustain its existence and survival. However, in order to carry out the

duty legally, the law required that all anti-pilferage operations of ECs must

be escorted by an officer of the law (Philippine National Police (PNP) or the

Barangay Officials (BO)). Unfortunately, at the time of the study, the said

escort was voluntary on them part of the PNP or the Barangay.

With all the challenges mentioned, implementing RA7832 required

strategic planning, effective implementation and mutual support from law

enforcers. Such factors influenced the decision of the researcher to

conduct this study in order to assess the level of effectiveness of the

implementation of RA 7832 by CENECO and to identify the challenges that

obstruct for its successful implementation.

This study was further dissected on the two areas which the

researcher considers to be vital in the study namely, the use of modern

technology and operational resources. Because of the complex and

technical nature of the electricity, it was imperative CENECO shall also

be abreast with the current times especially in the knowledge and use
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modern technology relevant to pilferage monitoring, detection and

prevention because the approach and methods of modern day pilferers

were also evolving with the use of their own version modern technology.

In conjunction, because of progressive reduction in Systems Loss cap as

prescribed by Government regulators like ERC and NEA, CENECO had

to continuously upgrade and upscale the operational resources

necessary for achieving the prescribed and reduced Systems Loss

Statement of the Problem

This study aimed to assess the effectiveness and challenges in the

implementation of RA7832 in CENECO in response to the challenges of

tightening government regulation and to the threat of evolving modern

technologies that were used by pilferers for the calendar year 2019.

Specifically, this study aimed to answers the following questions:

1. What is the profile of the respondents in terms of the following

variables:

a. Length of Service

b. Highest Educational Attainment.

c. Level of Management Position

2. What is the level of effectiveness of implementing RA7832 as

perceived by respondents in the following areas:

a. Modern Technology

b. Operational Resources
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3. What is the level of effectiveness of implementing RA 7832 as

perceived by the respondents when grouped according to the

aforementioned variables?

4. Is there a significant difference in the level of effectiveness of the

implementation of RA 7832 as perceived by the respondents when

grouped and compared according to the aforementioned variables?

5. What are the challenges that hinders the successful implementation

of RA 7832 as perceived by the respondents?

Hypothesis

There is no significant difference in the level of effectiveness as

perceived by the respondents in the implementation of RA 7832 in

CENECO.

Assumption of the Study

The level of effectiveness in the implementation of RA 7832 in

CENECO varies to a certain extent.

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Study Variables, Indicators and Categories

Variables Indicators Categories

Length of Service Length of time the Shorter (below 14 years),
respondent has worked in
CENECO Longer (14 years and above)

Highest Highest level of education Lower,

educational the respondent has
attainment completed Higher

Level of Level of Management Middle Management,

Management
Position Top Management

Theoretical Framework

This study was anchored on the Effectiveness Theory and

Organizational Effectiveness (Hall, R.H., 1980). Its approach to

effectiveness was pro-managerial approach. It was fully understandable

because it was the Management that had the power to make decisions

that will impact the effectiveness of any undertaking particularly in the

implementation of RA 7832 in CENECO. This was the reason why middle

and top management were made as the main respondents for the study.

On the other hand, the concept of implementation had been

described and defined in terms of five dimensions that need to be

measured: adherence—program implementation as described; dose—

frequency and duration of the exposure to the program; quality of

delivery—manner in which the program is delivered; participant

responsiveness—the degree to which participants were engaged; and

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program differentiation—critical features that distinguishes the program

(Perez, 2015).

Effectiveness can be investigated both in its substantial

characteristics (that is, in its ability to reach the pre-established purpose)

and in its procedural characteristics (that is, whether it is undertaken

according to established expectations) (Cashmore et al., 2004). Since the

goal had been clear (Implementation of RA7832), this study had focused

on the assessment of methodologies and resources toward attaining

effective implementation. Approach to Organizational effectiveness was

characterized by 2 basic models: the goal model and the resource

acquisition model. The researcher chose the use of modern Technology

for the goal model and operational resources for the resource acquisition

model as it was considered to be the two most important areas for the

study. Also considered part of the study was the identification of

challenges the obstructs the successful implementation of RA 7832.

Technological advancement evolves continuously such that

CENECO must continuously upgrade itself with new and advance ideas of

implementing RA 7832. The fundamental device where pilferage occurs is

on the kWh metering system. Modern-day pilferers continuously do

research on how they can creatively manipulate the metering system in

order to pilfer electricity unsuspectedly. In parallel developments, modern

meters at that time were then provided with new features that were
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intended to intelligently detect some tampering while proactively providing

more data that can inform the ECs of possible pilferage.

On Operational Resources, it was to be verified if the existing

manpower resources in anti-pilferage program were still appropriate and

effective and if Personnel were substantially capacitated. It was also noted

that ECs do not conduct night time apprehension and the area offices were

“on their own” and were seldom assisted by the Apprehension Section of

Bacolod City. At the time of Study, Area Offices had no Apprehension Units

to help them in legally undertaking RA 7832 within their area. In some

cases, there exist some apprehension activities that developed into legal

case and CENECO had no reliably stable legal assistance to the said

problem.

Conceptual Framework

This particular study was conducted to determine CENECO’s level

effectiveness in the implementation of RA 7832 as perceived by the

respondents and as influenced by the three (3) variables considered such

as length of service, highest educational attainment and level of

management position.

The areas that were considered in determining the level of

effectiveness of the implementation of RA7832 were Technological

advancement and Operation Resources.

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The effectiveness of CENECO’s implementation of RA7832 were

measured by comparing its current level achievement on several relevant

factors that the researcher deems significant. Measurement captured

information about these systems through their attributes (also known as

characteristics, features, or properties). These attributes considered were

either directly or indirectly observable (Cropley, 1998:238). For this

purpose, the researcher decided to use questionnaires as data capturing

instrument and rating as form of measurement. For the level of

effectiveness in the implementation of RA 7832, the rate level used were

from the scales of 1 to 5, with 1 representing “Not Serious”, 2 “Somewhat

Serious”, 3 “Moderately Serious”, 4 “Highly Serious”, and 5 “Very Highly

Serious”.

Challenges were identified by requesting respondents to fill out a

blank sheet of their identified challenges together with the questionnaire.

The most common challenges were compiled as reference for introducing

corresponding solutions, all aimed at elevating the effectiveness of

implementation of RA 7832.

Scope of the Study

This study was conducted in CENECO franchise area in the cities of

Bacolod, Bago, Silay and Talisay as well as the municipalities of Murcia

and Don Salvador Benedicto for the month of December 2019 as assessed

by 62 respondents using total enumeration, employing a self-made

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questionnaire, the descriptive research design, the descriptive and

comparative analytical schemes and statistical tools of frequent count and

statistical scoring, mean and Mann-Whitney U test.

Significance of the Study

This study was conceived to be beneficial to the following:

Central Negros Electric Cooperative, Inc. Consumers-Members.

The core beneficiaries of this study are the member-consumers of

CENECO. They would directly benefit from the cost reduction impact of

the study.

Central Negros Electric Cooperative, Inc. Managers. This study

would help capture concerns and issues that can be used as inputs of the

management in the formulation of a responsive and effective Strategic Plan

that can eliminate the pilferage in CENECO.

Central Negros Electric Cooperative, Inc. Employees. The

success of this study would result to cost reduction in operation and

provide savings to the company that can be translated into potential

incentives for the employees.

Other Electric Cooperatives Officials. As electric cooperatives in

the Philippines were similarly structured, they could use this study to

assess the level of effectiveness in their respective cooperatives and

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determine the challenges in the implementation of RA 7832 to help them

plan better against pilferage.

Members of the Philippine Congress. Success in the

implementation of R.A. 7832 could mean the realization of its goals and

objectives in helping the government implement its law to protect its people

from the financial effects and hazards of pilferage, and to penalize the

pilferage criminals.

Philippine National Police Official. As an implementing arm of the

law, they would realize the value of their assistance to CENECO in putting

RA 7832 to work for the benefit of the consumers and ECs.

Present Researcher. The researcher would be able to gain a deeper

understanding of the effectiveness and extent of challenges of CENECO in

the implementation of 7832, and share this research to help CENECO

fulfill its mission of delivering the best service to its consumers.

Future Researchers. This study would serve as a reference for

future research covering the similar topic.

Definition of Terms

In order to have a better understanding of the study, the researcher

defined the following terms conceptually and/or operationally in

alphabetical order.
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Anti-Pilferage Act. Conceptually and operationally, refers to

Republic Act Number 7832 promulgated in the year 1994 is a law declaring

pilferage as a crime. It prescribes penalty and provides for the recovery of

cost of pilferage. Operationally, it is defined as the anti-pilferage law

(lawphil.net, 2000).

CENECO. Conceptually and operationally, refers to Central Negros

Electric Cooperative Inc. whose main office is located at Mabini Street

Bacolod City.

Challenges. Conceptually, refers to something that by its nature or

character serves as a call to battle, contest, special effort, etc. (Turner

2017)

Operationally, refers to the anticipation obstacles that prevents

CENECO from achieving zero pilferage.

Effectiveness. Conceptually, It is a measure of the extent to which

a specific intervention, procedure, regimen, or service, when deployed in

the field in routine circumstances, does what it is intended to do for a

specified population. (Wojtczak, 2002)

In this study, the term refers to degree of how the resulting efforts

of ECs meet its target expectations and planned actions.

Highest Educational Attainment. Conceptually refers to the

highest level of education completed in the educational system of the

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country where the education was received. (Principles and

Recommendation for Population and Housing Censuses, Revision 1)

Operationally, refers to the diploma of highest academic education

achieved by the respondent (i.e. College or below, or Masteral or Higher).

Implementation. Implementation is a strategy consisting of all the

decisions and activities required to turn strategic choices into

reality. (Favaro,2015I

Operationally, refers to the daily anti-pilferage activities of CENECO.

Length of Service. Conceptually, refers to the number of years a

respondent is employed to the company including previous relevant job.

(CENECO Handbook,2017)

In this study, the variables were dichotomized to below 14 years of

service, and 14 years and above.

Position. Conceptually, refers to the vertical hierarchy of position in

reference to the management level pyramid (Principles of Management,

2016).

As used in this study, Position refers to the level of Management

position and is dichotomized into two categories: Middle Management –

Supervisory and below, or Top Management - Division Head and higher.