CDA urges power coops to register

By Elias O. Baquero

Friday, October 21, 2011

FOR their power rates to be tax-free, consumers should register their electric cooperatives with the Cooperative Development Authority (CDA).

This way, they become the real owners of their cooperatives and receive annual dividends.


This was the advice of CDA Executive Director Orlando Ravanera in a press conference yesterday.

He said electric cooperatives are cooperatives only in name and do not operate in a way that empowers the consumers and members.

Instead of being managed by the members, which is the principle of cooperativism, electric cooperatives are controlled by a few influential people, he said.

Former senator Agapito Aquino of the Philippine Cooperative Center said that because power is a service sector, electric cooperatives should be owned by the members and should be supervised and guided by CDA.

The electric cooperatives are supervised by the National Electrification Administration (NEA).

The electric cooperatives in Cebu are the Cebu Electric Cooperative (Cebeco) 1, Cebeco 2, Cebeco 3, Bantayan Electric Cooperative (Banelco) and the Camotes Island Electric Cooperative.

In Bohol, power distribution is undertaken by the Bohol Electric Cooperative (Boheco) 1 and Boheco 2, which are also run by businessmen.

Aquino said electric cooperatives should register with the CDA because while consumers appear to own the power utilities, they do not manage them.

In a press conference for the First Visayas Cooperative Congress at the Waterfront Cebu City Hotel yesterday, Ravanera urged power consumers to decide not to operate their electric cooperatives as private corporations.

He also said electric cooperatives should open their books of accounts to their members who are power consumers.

CDA 7 Director Alexander Patac said Republic Act 9520 or the Philippine Cooperative Code of 2008 gives electric cooperatives the option to register with the CDA, or with the Securities and Exchange Commission (SEC) as a private corporation.

If they choose to register with SEC, Patac said the electric cooperatives will become profit-oriented. They will also be required by the Bureau of Internal Revenue (BIR) to pay taxes, including the value-added tax (VAT), and as a consequence, power rates will increase.

But Concor Quisaot, assistant general manager for Cebeco 1, 2 and 3, disagreed.

“If they refer to tax exemption, they must consider that if sales of electric cooperatives are without VAT while its purchases have, the electric coop will be unable to recoup as its rate is on cash flow. It is disastrous and could lead to unimaginable inefficiency,” he said of proposals to register with the CDA, in a text message sent to Sun.Star Cebu.

In the press conference, Patac said RA 9520 mandates NEA to conduct a forum with the power consumers and inform them of their rights under the law.


NEA is also mandated to inform the power consumers of the advantages and disadvantages of registering with CDA or with SEC as a private corporation, after which, a referendum should be conducted.

The deadline for the registration of electric cooperatives with CDA is June 30, 2012.

Ravanera advised the consumers to work on the registration soon because the process takes time.

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