Republic of the Philippines

House of Representatives

Quezon City, Metro Manila

SIXTEENTH CONGRESS,
First Regular Session

3054

House Bill Number

Introduced by Representative EDGARDO ‘ERM’ RAMA MASONGSONG

EXPLANATORY NOTE

In December 2012, the Philippines was struck by one of the most devastating
typhoons, the super typhoon “PABLO”, internationally known as ‘BOPHA’. It was the
strongest tropical cyclone that ever hit the southern part of the country and considered
to be the deadliest catastrophe in 2012. It cost the lives of 1,067 people, 834 were
feported missing and left thousands of families homeless. Houses and government
infrastructures such as bridges and roads were destroyed. Basic services, i.e.
communications, water and electricity, were also interrupted. The cost of damages to
infrastructure, agriculture, and private properties caused by this single typhoon was
estimated at Php36,949,230,987.07.' With the extreme havoc wrought by ‘Pablo’, the
President declared the State of National Calamity on December 7, 2012 in several
provinces, municipalities and cities heavily affected by the said typhoon.

In every disaster, the task to assist for the relief of victims and survivors has
become challenging and daunting, especially for government agencies tasked to
implement relief services with their bureaucratic procedures. Government response to
disasters is always plagued with delay, inefficiency and at times with corruption. The
Survivors of typhoon Pablo, for instance, had to storm the DSWD regional office in
Davao to denounce the agency's failure to distribute 10,000 sacks of rice among the
victims, and for alleged corrupt practices in managing relief funds. " It was an
unfortunate incident that manifests one of the ill effects of disasters and calamities, as
well as the ineptness of government response to disasters.

Being one of the most disaster-prone countries in the world and giving
emphasis to the increased vulnerability of the population due to poverty and the
changing weather patterns and climate change, the need to explore all efforts possible
to mitigate the ill-effects/consequences of disasters that may pose to the safety of
people and security of properties is imperative. The Philippine government has taken
great strides in recent years in improving its disaster preparedness management
capacity. We also bear witness to the growing participation of various non-government
institutions in providing relief operations in times of calamities and disasters. These are
some of the developments in risk reduction and management that must be a source of
Filipino pride.


However, with disaster risk expected to increase, enormous challenges in
responding to emergency situations remain. Despite stronger commitments from the
government and emerging participation of the private sector, there remain gaps that
need to be filled to fully provide support to vulnerable groups during and after
calamities. Hence, this legislative proposal is crafted in line with the government's
thrust to promote shared responsibilities and collaborative practices among the various
sectors of society. This is an attempt to bridge the remaining gaps in disaster
management by building the capabilities of our citizenry, in particular the electric power
consumers, in times of crisis. Instead of being just recipients of assistance from the
government agencies and private sectors, there would be a working machinery from
the victims themselves, making sense of social mobilization and faster recovery.

This bill proposes a mandatory contribution of one peso (P1.00) per month for
each electric consumer served by distribution utilities, which shall be called the
“Electric Consumers’ Emergency Fund” or ECEF. The creation of the fund is an
appropriate vehicle to offset or mitigate the loss and damages experienced by the
marginalized communities particularly the electric consumers and assist distribution
utilities for the restoration of services. The assistance will be in a form relief operations
or loan in times of calamities, such as floods, tornadoes, earthquakes, typhoons, and
other natural disasters. To ensure the legitimate use of the funds, a transparent
mechanism shall be established and institutionalized where information and services
are accessible to the electric consumers who are the sole owner of the Fund.

This bill is also intended to shield the electric consumers from more charges.
that will be imposed by distribution facilities in recovering expenses incurred in
restoring power in disaster areas. The ERC allows ECs to impose additional charges
to electric consumers as payment for post, power lines and transformers destroyed by
calamites. Thus, in every disaster, electric consumers, victims or not, are charged with
the expenses incurred in restoring power in the affected areas.

In view of the foregoing reasons, | urge our colleagues for the expeditious
approval of this measure.

EDGARDO ‘ERM’ RAMA MASONGSONG

' National Disaster Risk reduction and Management Council (NDRRMC), NORRMC Update, SitRep No. 38 re Effects
of Typhoon “PABLO” (Bopha), 25 December 2012, 6:00 AM.

* http://www. sunstar.com.ph/davao/local-news/2013/02/26/tyshoon-survivors-ransack-dswd-office-davao-
270152. Accessed on 30” August 2013.



Republic of the Philippines

House of Representatives

Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

3054

House Bill Number

Introduced by Representative EDGARDO ‘ERM’ RAMA MASONGSONG

AN ACT
CREATING AN ELECTRIC CONSUMERS’ EMERGENCY FUND (ECEF) FOR
DISASTER RELIEF AND SOCIAL AMELIORATION, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Title. - This Act shall be known as the “Electric Consumers’
Emergency Fund (ECEF) of 2013",

SEC. 2. Declaration of Policy. - It is the policy of the State to promote shared
responsibilities and collaborative practices of the Filipino people in times of disasters,
calamities, and natural hazards.

SEC. 3. Statement of Objectives. - Towards this end, the State shall develop
initiatives to effectively achieve the following objectives:

(a) To establish, develop and foster community-based engagement or
promote active participation of the communities in disaster risk reduction
and management,

(b) To mobilize all available resources for the mitigation of damages in
disaster and calamity stricken areas,

(c) To provide for an integrated nationwide provident savings system as an
enabling tool for participatory governance; and

(d) To provide immediate relief and social amelioration to victims of disasters,
calamities, and other natural hazards.

SEC. 4. Definition of Terms. - The following terms shall mean:


(a)"AMRECO” refers to the Association of Mindanao Rural Electric
Cooperatives.

(b) "AVEC" refers to the Association of Visayas Electric Cooperatives.

(c) “Board” refers to the duly constituted Board of Trustees of the Electric
Consumers’ Emergency Fund.

(d) “Calamity” refers to an event causing great and often sudden damage or
distress such as typhoons, earthquakes, tornadoes, floods, among others.

(e) “Capacity” refers to a combination of all strengths and resources available
within a community, society or organization that can reduce the level of risk, or effects of
a disaster. Capacity may include infrastructure and physical means, institutions, societal
coping abilities, as well as human knowledge, skills and collective attributes such as
social relationships, leadership and management. Capacity may also be described as
capability

(f) "Civil Society Organizations” Or "CSOs" refers to stakeholders outside
government bureaucracy whose aims are neither to generate profits nor to seek
governing power. CSOs unite people to advance shared goals and interests. They have
a presence in public life, expressing the interests and values of their members or others,
and are based on ethical, cultural, scientific, religious or philanthropic considerations
CSOs include nongovernment organizations (NGOs), professional associations,
foundations, independent research institutes, community-based organizations (CBOs),
faith-based organizations, people's organizations, social movements, and labor unions.

(9) ‘Consumer’ or “End-User” refers to any person or entity who is the
registered customer of the electric utility being supplied with electricity by any distribution
utility

(h) “Department of Social Welfare and Development” or “DSWD” refers to the
government institution responsible for the protection of social welfare rights and
promotion of social development.

(i) "Disaster Risk” refers to the potential disaster losses in lives, health status,
livelihood, assets and services, which could occur to a particular community or a society
over some specified future time period

(j) “Distribution Utility’ refers to any electric cooperative, private corporation,
government-owned utility or existing local government unit which has an exclusive
franchise to operate a distribution system in accordance to Republic Act No. 9136,
otherwise known as the Electric Power Industry Reform Act of 2001.

(k) “Electric Cooperative” refers to a distribution utility organized pursuant to
Presidential Decree No. 269, as amended, or as provided in Republic Act No. 9136.

() "Emergency" refers to unforeseen or sudden occurrence, especially
danger, demanding immediate action


(m) "Fund" refers to the Electric Consumers’ Emergency Fund (ECEF) created
under this Act, an independent regulatory body owned by the electric consumers, which
is involved in mobilizing provident funds primarily to serve as an emergency fund in
times of calamities and disasters in the country.

(n) “Grant” refers to cash assistance conferred to the electric consumers or
members and distribution utilities to immediately address basic human needs and
mitigate the damages of properties in times of natural disasters and calamities.

(0) "Hazard" refers to a dangerous phenomenon, substance, human activity or
condition that may cause loss of life, injury or other health impacts, property damage,
loss of livelihood and services, social and economic disruption, or environmental
damage.

(p) “Member” or “Contributor” refers to the registered electric consumer who
pays the mandatory monthly contribution of one peso per month.

(q) “Month” refers to the elapsed time between two succeeding meter
readings, at least twenty-eight (28) days apart but not to exceed thirty-one (31) days.

(1) “Multi-Sectoral Electrification Advisory Council” or "MSEAC” refers to the
organization of ten (10) sectoral representatives, as mandated by the National
Electrification Administration, for every district/municipality to serve as effective
complements in the institutional strengthening of the Electric Cooperatives (ECs).The
MSEAC is composed of representatives from the following sectors: agro-fishery,
barangay council, business, civic, education, local government, media, religious, youth,
and women. In this Act, it may include the sectors of farmers/peasants, indigenous
people, urban poor, workers, and women.

(s) “National Electrification Administration” or “NEA” refers to the government
agency created under Presidential Decree No. 269, as amended by Republic Act No.
9136 and Republic Act No. 10531

(t) “National Disaster Risk Reduction and Management Council’ or
“NDRRMC’ refers to the government agency under the Department of National Defense
which is responsible for ensuring the protection and welfare of the people during
disasters and emergencies.

(u) “Natural Disasters’ refers to major adverse effects resulting from natural
processes of the Earth that are beyond the acts of human beings such as typhoons,
earthquakes, volcanic eruptions and their resultant effects like flood, flash floods,
landslides and tsunamis brought about by the geographical location and physical
environment of the Philippines. Disaster impacts may include loss of life, injury, disease
and other negative effects on human, physical, mental and social well-being, together
with damage to property, destruction of assets, loss of services, social and economic
disruption and environmental degradation.

(v) “Social amelioration” refers the act of relieving the victims of calamities and
disasters.


SEC. 5. Fund System. - To carry out the purposes of this Act, there is hereby
created the Electric Consumers’ Emergency Fund (ECEF), herein to be referred to as.
the Fund, a mutual savings system for electric consumers.

To ensure full protection of stakeholders, the Fund shall be an impartial and
independent regulatory body, with principal office to be set up in Metro Manila and
satellite offices in Mindanao and the Visayas.

SEC. 6. Fund Coverage. - Coverage in the Fund shall be mandatory upon all
registered consumers of any electric distribution utility, regardless of sector (residential,
commercial or industrial).

SEC. 7. Fund Generation and Contributions. — All registered electric
consumers or end-users shall contribute One peso (P1.00) every month to generate the
provident savings of the Fund. The one peso contribution will be reflected at the monthly
billing statements for electricity and shall form part of the total bill of every registered
customer or end-user.

SEC. 8. Membership Term. — Membership in the Fund shall be dependent to
the registration with a distribution utility. Any member whose registration is revoked
based on the criteria set by the distribution utility shall also be considered a non-
member.

SEC. 9. Provident Character. - The Fund shall be private in character, non-
profit, owned wholly by the members, administered in trust and applied exclusively for
the benefit of the electric consumers or end-users.

SEC. 10. Uses of the Fund. — On the existence of a natural disaster or
declaration of a state calamity in a certain municipality/city, province, or region, the Fund
shall mobilize its team and conduct ocular visits at the affected areas. The Fund may
also coordinate with the relevant government agencies to avoid duplication of assistance
and to effectively assess the form of assistance to be accorded to member households,
distribution utilities, and other entities defined in this Act. The uses of the Fund are
herein as follows:

(a) Relief Operations - The Fund may organize relief operations to the
victims of natural disasters, calamities and other hazards through the
electric consumers’ organizations, and may closely coordinate with the
National Disaster Risk Reduction and Management Council (NDRRC),
Department of Social Welfare and Development (DSWD), and other
relevant government agencies for the increased capacity and mitigate
disaster risks of the victims. With the assurance of speedy delivery of
relief services, a portion or percentage of the Fund shall be allocated to
provide immediate food, water, clothing, medicine, among others to
victims of disaster. The organizational structure of the Multi-Sectoral
Electrification Advisory Council (MSEACs) and regional association of
electric cooperatives shall be tapped in the relief services.

(b) Rehabilitation Projects — In supplement to government programs and
projects, the Fund may provide a grant to the members for the repair

4


and rehabilitation of severely damaged distribution facilities of electric
cooperatives, housing, including electrical and water connections.

Provided, That the beneficiary member has not availed of this grant for
the same year.

Provided, Further, That the allocation for the rehabilitation projects as
specified in this Act shall not exceed twenty percent (20%) of the total
collection of the Fund in the previous year.

() Loan Facility — The loan facility in this Act must not be construed by
the Fund as a money-making venture and, therefore, only minimal
interests shall be considered for the interest of the electric consumers.
Any of the following is eligible to apply for a loan immediately after
natural disasters, calamities, and other forms of hazards:

i, Registered customer or end-user of any distribution utility in
calamity or disaster stricken areas,

ii Electric Cooperatives and other distribution utilities. Provided,
That the loan is intended for the repair and restoration of
distribution lines and facilities damaged by a calamity or
disaster.

iii, Civil society organizations (CSOs) whose members are
likewise electric consumers.

SEC. 11. Implementing Body. — The Electric Consumers’ Emergency Fund
created under this Act, shall implement the provisions hereof.

SEC. 12. Powers and Functions of the Fund. - The Fund shall have the
powers and functions specified in this Act and the usual corporate powers:

(a) To maintain a provident fund, which shall consist of contributions made by
the electric consumers;

(b) To formulate, adopt, amend and/or repeal rules and regulations necessary
to carry out the provisions and purposes of this Act, as well as the
effective exercise of the powers and functions, and the discharge of duties
and responsibilities of the Fund, its officers and employees:

(c) To adopt or approve the annual and supplemental budget of receipts and
expenditures including salaries and allowances of the Fund personnel, to
authorize operating expenditures and disbursements of the Fund as may
be necessary and proper for the effective management and operation of
the Fund;

(4) To set up its own accounting and computer systems; to conduct continuing
actuarial and statistical studies and valuations to determine the financial
feasibility of the Fund and its project; to require reports, compilations and

5


analysis of statistical and economic data, as well as make such other
studies and surveys as may be needed for the proper administration and
development of the Fund:

(e) To approve appointments in the Fund except appointments to positions
which are policy determining, primarily confidential or highly technical in
nature according to the civil service rules and regulations: Provided, That
all positions in the Fund shall be governed by a compensation and
position classification system and qualification standards approved by the
Fund's Board of Trustees based on a comprehensive job analysis, wage
compensation study and audit of actual duties and responsibilities:
Provided, further, That the compensation plan shall be comparable with
prevailing compensation plans in the private sector and shall be subject to
‘the periodic review of the Board no more than once every four (4) years
without prejudice to yearly merit reviews or increases based on viability.
The Fund shall, therefore, be exempt from any laws, rules and regulations
on salaries and compensations;

(f) To design and adopt an early retirement incentive plan for its own
personnel;

(9) To establish field offices and to conduct its business and exercise its
powers in these places;

(h) To design processes that shall serve the best interests of the electric
consumers within a reasonable timeframe;

(i) To determine, fix and impose minimal interest and penalties due from the
borrowers of the Fund;

(j) To create a mechanism of disseminating information to the electric
consumers and ensure transparent use of the funds;

(k) To exercise such powers and perform such acts as may be necessary,
useful, incidental or auxiliary to carry out the provisions of this Act.

SEC. 13. Board of Trustees. — The corporate powers and functions of the Fund
shall be vested in and exercised by the Board of Trustees which shall be composed of
the following

(a) One (1) representative each from the Regional Association of Electric
Cooperatives representing Mindanao, Visayas and Luzon (i.e. AMRECO,
AVEC and Luzon Association) ;


(b)

(©)

(d)

(e)

Two (2) representatives each from Luzon, Visayas and Mindanao chapters
of electric consumers’ organizations, specifically the regional Multi-
Sectoral Electrification Advisory Council (MSEAC);

The representatives herein specified shall be elected by the MSEAC
officers starting from the municipal/district to provincial and regional
levels.

The representative from a non-stock, non-profit and service-oriented
institution which implements socio-economic development programs and
projects;

The President/Chief Executive Officer (CEO) of the Fund, as a member;

The Chairperson of the National Disaster Risk Reduction and Management
Council (NDRRMC), as advisory member;

The Secretary of the Department of Social Welfare and Development
(DSWD), as advisory member.

Upon approval of this Act, the Board of Trustees shall convene and elect from
the MSEAC representatives the following positions: Chairman, Vice Chairman,
Secretary, Treasurer and any other position the Board of Trustees deemed necessary

SEC. 14. Powers of the Board. — The Board shall have the following powers:

(a)

(b)

(o)

(a)

(e)

To formulate policies, rules and regulations to carry out effectively the
functions of the Fund under this Act;

To promulgate such rules and regulations as may be necessary or proper

for the effective exercise of the powers and functions, as well as the
discharge of the duties and responsibilities of the Fund, its officers and
employees;

To authorize expenditures of the Fund in the interest of effective
administration and operations; to adopt from time to time the budgets for
said purposes;

To approve the annual and supplemental budget of receipts and
expenditures and disbursements as may be necessary and proper for the
effective management and operation of the Fund;

To condone, in whole or in part, penalties imposed on loans of
members/borrowers who, for justifiable reasons prescribed by the Board,
failed to pay on time any obligation due to the Fund;

To approve the Fund's organizational and administrative structures and
staffing pattern, and to establish, fix, review, revise and adjust the

7


appropriate compensation package for the officers and employees of the
Fund;

(@) To exercise such powers deemed necessary to carry out the powers and
accomplish the purposes for which the Fund is established.

SEC. 15. Rule-Making Power. -The Board of Trustees is hereby authorized to
make and change relevant rules and regulations, which shall be published in accordance
with law or at least once in a newspaper of general circulation in the Philippines, to
provide for, but not limited to, the following matters:

(a) The effective administration, custody, development, utilization and
disposition of the Fund;

(b) Fund earnings and their distribution;
(c) Disaster or emergency relief operations;
(d) Loan assistance programs to the electric consumers;

(e) Other matters that, by express or implied provisions of this Act, shall
require implementation by appropriate policies, rules and regulations.

SEC. 16. Powers and Duties of the President/Chief Executive Officer. — The
President/Chief Executive Officer (CEO) shall be elected by the Board of Trustees and
has a fixed term of office of five (5) years.

The President/CEO shall execute and administer the policies and resolutions
approved by the Board of Trustees, prepare its agenda and direct and supervise the
operations and management of the Fund. The President/CEO, subject to the approval of
the Board in case of approval of managerial positions and above, and the confirmation of
the Board in below that of manager level, shall appoint the personnel of the Fund,
remove, suspend or otherwise discipline them for cause and prescribe their duties and
qualifications, in accordance with existing civil service laws, rules and regulations, to the
end that only competent personnel may be employed.

SEC. 17. Financial Assistance and Donations. - The Fund may accept
donations of any form from individuals and organizations to be used for the sole purpose
of providing relief operations to disaster or calamity stricken areas: Provided that, such
donations and financial assistance are accounted for and distributed in a transparent
manner.

SEC. 18, Exemption from Tax, Legal Process and Lien. — All laws to the
contrary notwithstanding, the Fund and all its assets and properties, all contributions
collected, as well as all supplies, equipment, papers or documents shall be exempt from
any tax, assessment, fee, charge, or customs or import duty; and all benefit payments
made by Fund shall likewise be exempt from all kinds of taxes, fees or charges, and
shall not be liable to attachments, garnishments, levy or seizure by or under any legal or

8


equitable process whatsoever, either before or after receipt by the person or persons
entitled thereto, except to pay any debt of the member to the Fund. No tax measure of
whatever nature enacted shall apply to the Fund, unless it expressly revokes the
declared policy of the State in Section 2 hereof granting tax exemption to the Fund. Any
tax assessment against the Fund shall be null and void.

SEC. 19. Administration Costs. - The Fund shall bear the costs of its
administration and development, in such amounts and for limits as the Board of Trustees
may deem appropriate, but not exceeding two percent (2%) of the Net Fund Assets of
the previous year, excluding operating cost directly relating to the lending operations of
the Fund.

SEC. 20. Audit. - The Board of Trustees shall designate services of external
(independent) qualified accountants to conduct periodic external audit of the Fund and
all its transactions.

SEC. 21. Remittance of Contributions. — (a) All electric cooperatives and other
distribution utilities shall act as the collecting agents of the one peso (P1.00) collection
from all connections, regardless of sector.

(b) As collecting agents, electric cooperatives and distribution utilities shall remit
the collections to the Fund immediately five (5) working days after collection of each
billing cycle. Penal sanctions shall be imposed to the collecting agents who fail to remit
the collections in two (2) successive months.

SEC. 22. Right to Information and Transparency of the Fund. — In order to
ensure transparency of the Fund, the central office and all satellite offices must provide a
bulletin board where major announcements and documents issued in relation to the
utilization of the funds shall be posted.

The Fund shall ensure that information and data are provided in easily
understandable forms and media and freely available and directly accessible to the
electric consumers.

SEC. 23. Implementing Rules and Regulations. — The implementing rules and
regulations to effectively carry out the provisions of this Act shall be adopted and
promulgated by the Board of Trustees of the Electric Consumers’ Emergency Fund not
later than ninety (90) days after the approval of this Act, in consultation with electric
consumers as members. The IRR to be adopted shall be published in at least one (1)
national newspaper of general circulation.

SEC. 24. Interpretation and Construction. — Any doubt in the meaning of any
provisions of this Act or in the implementing rules and regulations promulgated pursuant
to this Act shall be resolved in favor of the electric consumers.

SEC. 25. Separability Clause. - If, for any reason, any provision of this Act, or
the application thereof to any person or circumstances, is held invalid or unconstitutional,
the remaining provisions not affected thereby shall continue to be in force and effect


SEC. 25. Repealing Clause. - Other laws, decrees, executive orders, or rules
and regulations, or parts thereof inconsistent with or contrary to the provisions of this Act
or its purposes are hereby amended or modified accordingly.

SEC. 26. Effectivity. - This Act shall take effect fifteen (15) days after the
completion of its publication in the Official Gazette or in at least two (2) national
newspapers of general circulation.

Approved,

10