The cooperative bloc of party list representatives in the Lower House has asked the Department of Energy to compel rural electric cooperatives (RECs) to call a referendum among their members to determine if they wish to become real cooperatives and register with the Cooperative Development Authority (CDA) with their consumers as equity owners.
“We
are asking DOE and the National Electrification Administration (NEA) to require
all rural electric cooperatives under their supervision to call a referendum
among their member-consumers for this purpose as provided by law,” said Rep.
Isidro Q. Lico (ATING-KOOP party list) at a program and subsequent press
conference Sunday to launch the Cooperative Month celebration in this city and
Northern Mindanao (Region X).
Ating Koop Party List Rep. Isidro Q. Lico speaks during the Oct. 2 launching program of Coop Month in Region X.
The cooperative block of party list groups – Coop-NATCCO, Agricultural Sector Alliance of the Philippines, Inc. (AGAP), BUTIL Farmers’ Party, 1st Consumers Alliance for Rural Energy Partylist (1-CARE)); 1- United Transport Koalisyon / 1-UTAK and Adhikaing Tinataguyod ng Kooperatiba (ATING-KOOP) represent marginalized sectors of society which comprise the majority of the country’s population. Eight party list representatives and at least 20 other congressmen have declared their support for the initiative, Mr. Lico added.
However,
he clarified that the coop bloc is not pressuring RECs to become "true
cooperatives” but merely asking them to comply with the law by being
transparent about the status of their members capital contributions. Crucial to
the question of ownership are the rural electric cooperatives current manner of
booking members’ capital contributions for capital expenditures (Capex) in
their books.
“Instead
of declaring members’ payments for such, most rural electric coops are booking
these amounts as "donated capital accounts’ which is illegal,” Mr. Lico said.
The
By-Laws of cooperatives under PD 269 define members as “joint-owners” of cooperatives
with “equity in the assets” determined according to patronage. Upon
registration with CDA, all members’ equity are computed as “share capital”
covered by a Certificate of Share Capital specifying their respective amounts
of investments and entitling them to dividends, interest and other benefits
from net surplus. The coop bloc estimates equity contributions from some five
million members to RECs now total around P55-billion.
Of
the country’s present crop of 119 rural electric cooperatives, only 14 have so
far registered with the CDA and complied with the law by registering their members’
equity contributions as capital and issuing stock certificates denoting
ownership.
These
include Negros Occidental Electric Coop.; Palawan Electric Coop; San Jose
Electric Coop; Quirino Electric Coop; Pangasinan Electric Coops I and III;
Isabela Electric Coop; Sorsogon Electric Coop; Nueva Vizcaya Electric Coop;
Negros Oriental II Electric Coop; Abra Electric Coop and Agusan del Norte
Electric Cooperative.
Member-consumers
of RECs registered with the CDA are entitled to patronage refund and interest
on share capital when a net surplus is realized. Mr. Lico cited the case of a
member-consumer in Palawan where a single member-consumer received P60, 000 as
his dividends for the energy consumption of his business from PALECO.
Mr.
Lico said despite investing in the coops, member-consumers of many RECs have
neither been receiving their share of the profits due them as shareholders nor
been informed on the status of their equity contributions as coop
member/consumers.
Unless
the DOE and NEA compel rural electric cooperatives to disclose the true status
of members equity contributions, Mr. Lico said the coop bloc of party-list
congressmen and their allies in the Lower House would ask the Appropriations
Committee to sit on the budgets of DOE and NEA until coops are compelled to comply with this
requirement.
Earlier
this year, the Agusan del Norte Electric Cooperative (ANECO) opted to become the
first Mindanao-based REC to register with the CDA, breaching the 20% membership
threshold needed to qualify in a referendum last June 26 when 31, 000 or 28% of
its 110,000 member-consumers voted affirmatively for CDA registration.
As
such, it has since become eligible for tax exemptions and its member-consumers entitled
to dividends and other benefits such as patronage refunds as a CDA-registered
coop while keeping its eligibility for congressional allocations, grants, subsidies
and other assistance as a rural electric service cooperative.
Many
of the 14 RECs registered with the CDA have already managed to turn a profit
since they are now exempt from payment of corporate tax franchise tax, business
tax, real property tax and other taxes resulting in lower distribution rates.
In
a news report, Luis Manuel C. Corral, secretary general of the Association of Philippine Electric
Cooperatives (APEC) party list said the reduction in the cost of power
delivered by CDA registered RECs are lower by 25 to 40 centavos per kilowatt
hour (kWh) due to their tax exemptions from E-VAT and other local taxes .
Under
Section 4 Article 132 of Republic Act 9520 or The New Cooperative Code of the
Philippines, CDA registered RECs are also entitled to congressional
allocations, grants, subsidies and other financial assistance for rural
electrification coursed through the DOE, CDA or LGUs as well as to borrow
directly from local banks on flexible terms.
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