Allow ECs to exercise their right to choose

The contentious debate on whether or not electric cooperatives (ECs) should be registered with the Cooperative Development Authority (CDA) has gone on for so long. Much has been said about the issue. Allow me to join the discussion.

1. It is argued by some that ECs should be registered with the CDA so that they can avail themselves of tax exemptions. That is not necessary. By virtue of Presidential Decree 269, ECs are nonstock and nonprofit entities. And being nonprofit, the more reason they should be tax-exempt and not burdened with corporate tax, franchise tax, business tax, real property tax and other taxes. Besides, most of them barely break even. As it is, they are able to continue to serve their customers only because the National Electrification Administration (NEA) helps them with loans for almost all areas of their operation.

2. It is said that the bylaws of the ECs, pursuant to PD 269, expressly provide that the members should be “joint-owners” of these cooperatives with equity in the assets. Relative hereto, I raise the issue on the issuance of dividends. Do CDA-registered ECs issue dividends to the consumers?

It would be worthwhile to find out if the so-called members’ equity has been computed as shared capita, thereby entitling members to a share of earned interests and other benefits. For the record, ECs that are not registered with the CDA are giving  their member-consumers their share of ROI (return on investment) in the form of patronage refund. In fact, this is not given much importance by the ECs because they are focusing more on the government’s rural electrification program.

3. A shift of registration from the NEA to the the CDA must be decided in a general membership assembly. The management of the EC cannot make the decision on its own. Otherwise, it will go against the spirit of cooperativism and violate the democratic principle of majority rules. NEA’s control and supervision over the ECs is limited to their financial and technical operations. The question of where to register—with the CDA or NEA is an issue that the latter leaves to the member-consumers to decide.

4. There is no truth to the allegation that CDA-registered ECs are charging lower rates. Some CDA-registered ECs charge higher rates than non-CDA-registered ECs.

ECs should be given the freedom to choose whether they will register with the CDA or remain under the control and supervision of the NEA. They should not be compelled to register with the CDA.

The main issue here is not whether or not the ECs should be registered or privatized; the issue is the freedom of the ECs to choose for themselves whether they should continue to be registered with the NEA or with the CDA—an issue that should be best left for decision to the EC members.

—REGINALD B. TAMAYO,

chief of staff,

Office of the City Vice Mayor,

Marikina City