The Philippine Rural Electric Cooperatives Association (PHILRECA) has expressed its opposition to a bill that seeks to grant a franchise to the Negros Electric and Power Corp. (NEPC).
The said bill, House Bill No. 9310, seeks to grant NEPC a franchise to establish, operate, and maintain a distribution system in the cities of Bacolod, Silay, Talisay, and Bago, as well as the municipalities of Murcia and Don Salvador Benedicto. These areas are currently being served by Central Negros Electric Cooperative, Inc. (CENECO).
In its position paper submitted to House Committee on Legislative Franchises, PHILRECA argued that the bill violates Section 27 of the Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001, which states that “all existing franchises shall be allowed to their full term.”
Currently, CENECO still has 7 years before its franchise expires. “Killing CENECO’s franchise will run counter to the provisions of EPIRA,” PHILRECA explained.
PHILRECA, an organization of 121 electric cooperatives (ECs) nationwide, stressed that any call for corporate takeover of non-profit, service-oriented ECs like CENECO is “anti-people.”
“The concept of having electric cooperatives is the only way to democratize the ownership of public utilities,” the associated stated. “There is no need to give the ownership and the control of a basic utility to one person or family only. Besides, where were they when the unviable areas needed electricity?”
PHILRECA suggested that instead of disenfranchising the distribution utility, the government should support the ECs to the fullest extent.
The ECs have been dedicated partners of state-run National Electrification Administration (NEA) in bringing electricity to rural and remote areas across the nation.
“For more than 50 years, we relied on electric cooperatives as they risked their lives to energize the countryside, especially the far-flung areas which big, for-profit corporations neglected because there is no potential of profit,” PHILRECA said.
“The electric cooperatives do not intend to profit or be rewarded for their sacrifices, but allowing them to continue being the government’s partner for electrification is not only going to be beneficial to the member-consumer-owners, but more importantly, this is the right thing to do,” it added.
PHILRECA also cited loopholes in the process and conduct of the Joint Venture Agreement between CENECO and NEPC.
One of which is CENECO is not an ailing EC. Under the National Electrification Administration Reform Act of 2013, ailing ECs may enter into a partnership with qualified private sector investors under several frameworks including joint venture.
“However, CENECO is not an ailing electric cooperative,” PHILRECA pointed out.
It added that the EC is classified as “AA,” the second highest rating an EC can receive based on NEA’s assessment of its financial, institutional, and technical performance.
PHILRECA also said the conduct of referendum violates the provisions under Implementing Rules and Regulations (IRR) of Republic Act No. 10531.
Based on Section 23d (v) of IRR of RA 10531, a referendum may only be conducted 10 years from the last conducted referendum.
CENECO conducted a plebiscite on June 24 and 25, July 1 and 2, 2023, six years after its last referendum in 2017.
Furthermore, PHILRECA said the conduct of proxy voting is also a violation of the provisions in IRR of RA 10531.
Section 23d (iv) of IRR of RA 10531 states that “each bona fide member-consumer shall be entitled to one vote. The voting shall be done through secret balloting, and no proxy voting shall be allowed.”