Business World Online
Posted on July 29, 2013 11:08:06 PM
THE ENERGY department issued yesterday the implementing rules and regulations (IRR) of a law to strengthen and empower the National Electrification Administration (NEA) and electric cooperatives (ECs) in the country.
NEA is the agency in charge of overseeing the operations of 109 ECs across the country.
The NEA Reform Act prohibits relatives of public officials from being elected to the board of directors of ECs.
The said law also allows NEA to suspend delinquent board members of ECs.
In a circular published yesterday, the Energy department issued the law’s IRR, which provides “the framework of structural reforms of the NEA and ECs in pursuit of the country’s total electrification in an accelerated and sustainable manner....”
The law, according to the IRR, aims to promote sustainable development in rural areas through rural electrification.
The said law aims to empower and strengthen NEA to pursue the electrification program, providing electricity through the ECs to the countryside and other economically unviable areas.
It is also to empower and enable ECs to cope with the changes brought about by the restructuring of the electric power industry as provided in the Electric Power Industry Reform Act of 2001 (EPIRA; RA 9136).
Also, the IRR outlines the powers, functions and privileges of NEA. The agency, in order to strengthen the ECs, should “help them become economically viable and prepare them for the implementation of retail competition and open access....”
NEA should also ensure that all ECs comply with the timely submission of reportorial requirements. For its part, the agency should also prepare monthly and quarterly assessment reports on the ECs.
These reports, along with recommended policies to attain the objectives of the law, will be submitted by NEA to the Energy department and the Joint Congressional Power Commission.
NEA’s authorized capital stock is also increased to P25 billion, divided into 250 million shares with a par value of P100.
Under the EPIRA, NEA’s capital stock was P15 billion.
The law also gave NEA additional power over the ECs. The agency, as provided by the IRR, has the authority to issue orders, rules, and regulations and to conduct investigations on matters affecting ECs.
Likewise, the agency can issue preventive and disciplinary measures, including the suspension or removal and replacement of any or all of the members of the board of directors and officers of the ECs. It can also appoint independent board of directors in the ECs.
NEA was also given step-in right in cases of ailing ECs. “The NEA shall immediately step in and take over from its Board the operations of an ailing EC,” the IRR read.
“Within 190 days after takeover, the NEA may convert the ailing EC to either a stock cooperative registered with the CDA (Cooperative Development Authority) or a stock corporation registered with the SEC (Securities and Exchange Commission),” the IRR also said.
As for the ECs themselves, the IRR specified their mandates, power, functions and privileges. The ECs are allowed to participate in the bidding for National Power Corp. -- Small Power Utilities Group generating facilities, provided that there is no other qualified bidder.
“To ensure the long-term business and economic viability of ECs, the management, operations and strategic planning of ECs shall... be insulated from local politics,” the IRR also reads.
This means that a person may not be part of the board of directors or an officer if he/she or his/her spouse holds public office or has been a candidate in the last preceding local or national elections.
The IRR will take effect within 15 days of publication, or by the middle of next month. --C.A.M.C. Feliciano source
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