Electric coops do not need CDA: lawyer

By Loui S. Maliza

Monday, November 28, 2011

A LAWYER said electric cooperatives do not need to be registered with the Cooperative Development Authority (CDA) to become stronger in servicing its concessionaires.

Lawyer Chito Oclarit said electric cooperatives are created by law under the supervision of the National Electrification Administration (NEA).

“That’s why we’re not fake,” Oclarit said in response to allegations that most of electric cooperatives are actually operating not as “genuine cooperatives.”

Oclarit is one of the legal counsels for the Misamis Oriental Rural Electric Service Cooperative in Laguindingan town, Misamis Oriental.

He said once the electric cooperatives register with the CDA, it would practically become as stock organization.

“And if we become as stock cooperative, our rural electrification projects would be stopped. We cannot anymore help the rural areas to be energized. We already exist 40 years ago, and this is our program to energize even those areas that are not viable,” he said.

Running well

Out of 119 electric cooperatives, only 12 registered with the CDA.

“But most of them went bankrupted,” Oclarit said.

He said electric cooperatives are “running well,” and do not need the supervision of the cooperative agency.
“If we become as stock cooperative, maybe only five people control certain electric cooperative,” he warned.

The lawyer even said electric cooperatives branded as “fake” are earning that it can even finance its rural energization programs.

Tax exemption and dividends

According to the CDA, electric cooperatives are tax exempt if registered with the cooperative department. But according to Oclarit, it would be more advantageous for the power providers to stay under the umbrella of the NEA.

“Electric cooperatives are taxed up to one percent only and we give return of investment (ROI) in the form of dividends to the members from eight to 12 percent. What if these dividends are used to energize the rural areas, it would be more advantageous to the government. Even President Benigno Aquino supports the rural electrification programs of these electric cooperatives,” he said.

As non-stock non-profit organization, electric cooperatives are giving ROIs to its concessionaires in the form of “patronage refund.”

“We’re not looking at returning the investments of the consumers… we are concentrating on our rural electrification programs. We need to give priorities to the people first before dividends,” he said.

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