Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

Fifteenth Congress
First Regular Session

HOUSE BILL NO. i019

Introduced by Honorable Cresente C. Paez and Honorable Jose R. Ping-ay

EXPLANATORY NOTE

This bill seeks to transfer to the Energy Regulatory Commission (ERC) the
regulatory and supervisory powers over electric cooperatives duly registered with the
Cooperatives Development Authority (CDA) thereunder.

The National Electrification Administration (NEA) was created by virtue of
Presidential Decree (PD) No. 269 primarily to organize, finance and regulate electric
cooperatives (ECs) throughout the country. The law was later amended by PD 1645 by
increasing the capitalization and broadening the lending and regulatory powers of the
NEA. With the enactment of Republic Act (RA) No. 6938, otherwise known as the
Cooperative Code of Philippines, as amended by Republic Act No. 9520, ECs are given
the option to register either with the CDA or with the NEA.

The Energy Regulatory Commission was created under RA 9136, otherwise
known as the Electric Power Industry Reform Act of 2001, as the independent regulatory
body for the restructuring of the ECs. The ERC issues guidelines on the assumptions of
the rural electrification loans of ECs by the Power Sector Assets and Liabilities
Management (PSALM) Corporation for the purpose of financing the rural electrification
program. Thus, the proposed measure will likewise allow electric cooperatives to enjoy
certain benefits and privileges, among others, particularly in the upgrading or
rehabilitation of electricity distribution.

In view of the foregoing, the approval of this bill is earnestly sought.

cresngre@parz



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

Fifiteenth Congress
First Regular Session

HOUSE BILLNO.__ 1019

Introduced by Honorable Cresente C. Paez and Honorable Jose R. Ping-ay

AN ACT
TRANSFERRING TO THE ENERGY REGULATORY COMMISSION THE
SUPERVISORY POWERS OVER ELECTRIC COOPERATIVES REGISTERED
UNDER THE COOPERATIVES DEVELOPMENT AUTHORITY

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

SECTION 1. The supervision over electric cooperatives duly registered with
the Cooperatives Development Authority (CDA) pursuant to Article 132 of Republic Act
No. 6938, otherwise known as the Cooperative Code of the Philippines, as amended by
Republic Act No. 9520, is hereby transferred to the Energy Regulatory Commission,
hereinafter referred to as the “Commission.”

Upon the effectivity of this Act, all CDA registered electric cooperatives shall
now be covered by the provisions of this Act as well as the rules and regulations of the
Commission: Provided, ‘That the security of tenure and the collective bargaining

agreement between the cooperative management and its employees shall be respected,

with no diminution to existing salaries, emoluments, ranks and other benefits.

Except as provided in the immediately preceding paragraph, the National |

Electrification Administration (NEA) shall no longer exercise regulatory or supervisory
powers on electric cooperatives duly registered with the Commission.
Electric cooperatives registered with the Commission are entitled to congressional

allocations, grants, subsidies and other financial assistance for rural electrification which


can be coursed through the Department of Energy, the Commission and local
government units. The electric cooperatives can avail of the financial services and
technical assistance provided by the government financial institutions and technical
development agencies on terms respecting their independence as autonomous
cooperatives.

All condoned loans, subsidies, grants and other assistance shall form part of the
donated capital and funds of the electric cooperatives and as such, shall not be sold,
traded nor be divided into shareholdings at any time; these donated capital or fund shall
be valuated for the sole purpose of determining the equity participation of the members:
Provided, That in the case of dissolution of the cooperative, said donated capital shall be
subject to escheat.

SEC. 2. Within sixty (60) days after the effectivity of this Act, the Secretary
of Energy shall issue the rules and regulations necessary for the effective
implementation of this Act.

SEC. 3. Article 132 of Republic Act No. 6938, otherwise known as the
Cooperative Code of the Philippines, as amended by Republic Act No. 9520, is hereby
repealed. All other laws, decrees, executive orders, proclamations, rules and regulations,
and issuances, or parts thereof, which are inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.

SEC. 4. This Act shall take effect fifteen (15) days after publication in the
Official Gazette or in two (2) national newspapers of general circulation.

Approved,