Case Study

A COMPREHENSIVE STUDY ON CONVERSION OPTIONS 1

A Comprehensive Study on Conversion Options

for Oriental Mindoro Electric Cooperative, Inc. (ORMECO)

Moira Lee Araño-Vilan

University of Batangas


INTRODUCTION

RATIONALE

The purpose and ideal of Oriental Mindoro Electric Cooperative, Inc. (ORMECO)

like all other electric cooperatives throughout the country, is to achieve the total

electrification of the Philippines on an area coverage basis as provided for in Republic

Act 6038 and Presidential Decree 269 (1973), thus, it has the social obligation to

energize the rural countryside, even the remotest and non-viable areas, to realize the

national policies of social justice and equal access to basic power infrastructure,

economic growth and rural development.

With the enactment of Electric Power Industry Reform Act of 2001 (EPIRA)

comes the venturing clamor of converting electric cooperatives (EC) in to either stock

cooperative under the Cooperatives Development Authority (CDA), stock corporation

under the Securities and Exchange Commission (SEC) or remain as it is at present, a

non-stock, non-profit and service-oriented cooperative under the National Electrification

Administration (NEA).

This paper aims to inform the member-consumers, Board of Directors,

Management, employees and all the stakeholders of the Oriental Mindoro Electric

Cooperative, Inc. (ORMECO) in its quest towards conversion issues.

ORGANIZATION BACKGROUND

Oriental Mindoro Electric Cooperative, Inc. (ORMECO) is a non - stock, non-

profit rural electric cooperative duly organized under existing Philippine Laws and


Regulations. It was registered and incorporated with the National Electrification

Administration (NEA) on February 16, 1973 covering six (6) municipalities in the northern

part of Oriental Mindoro. The remaining nine (9) municipalities in the southern part of

Oriental Mindoro were covered by the incorporation and registration of ORMECO II on

July 15, 1997. On May 20, 1988 the two (2) coops were merged into what is known as

ORMECO, Inc. after which fourteen (14) municipalities and one city covered were

redistricted into seven (7), District I composed of Baco, San Teodoro and Puerto Galera;

District II is Calapan City; District III covers Naujan and Victoria; District IV consists of

Socorro and Pola; District V comprises of Pinamalayan and Gloria; District VI for Bansud

and Bongabong; District VII covered Roxas, Mansalay and Bulalacao. On June 26,

1988 ORMECO, Inc.’s power plant was turned over to National Power Corporation

(NPC) in compliance with a Memorandum of Agreement executed by NEA, NAPOCOR

and ORMECO, Inc.

In its 38 years of existence, ORMECO has become one of the most reliable and

trusted institutions in the Province of Oriental Mindoro. Although there were times that it

encounters different trials and hardships it was able to surpass them all through the help

and support from NEA, LGU’s, its member-consumers, BOD, management and staff.

As proof to ORMECO’s commitment to its member-consumers, the coop has

maintained its Category A+ Mega Large EC for 12 consecutive years and was consistent

awardee of EC of the Year Award (Mega-Large EC) (2008-2009), Best in Collection

Performance Award(1991, 1995-2009), General Manager of the Year Award (2008-

2009), and Special Citation for the Most Complying EC in Audit Evaluation (2007-2009)

and was also awarded Special Citation for ECs Attaining 100% Barangay Energization

(2009) in NEA Lumens Awards.


With ORMECO’s present situation, still there are clamors for conversion into a

stock cooperative or stock corporation which arises from some sectors of our society

and business-minded individuals with most likely vested interest and others with untold

intentions. The basis of their clamors was on the passing of the Republic Act No. 9136

(Electric Power Industry Reform Act of 2001) Chapter VII Section 57 gives the ECs the

options to convert to either stock cooperative under the Cooperatives Development

Authority (CDA), Stock Corporation under the Securities Exchange Commission (SEC),

or remain as non-stock under NEA.

REVIEW OF RELATED LITERATURE

It was the desire of the government to effect changes and reforms in the social,

economic, and political structure of our society. Studies have shown that electric power,

wherever introduced, stimulates the growth of industry and the economy in general.

Electric Cooperatives (EC) were organized under PD 269 as non-stock, non-

profit and service-oriented cooperatives. The ECs are developmental institutions

pursuing government’s social obligation of energizing the rural countryside, even the

non-viable areas, to attain the government policies of social justice and equal access to

basic power infrastructure, economic growth and rural development.

Prior to the organization of non-stock ECs, supply and distribution of electricity

was undertaken by private corporations and companies with profit orientation. Some

LGUs also operated their own electric systems.


However, electrification in the rural areas, perceived to be unviable or

unprofitable, was never undertaken.

This was the reason why these corporations registered under the Philippine Non-

Agricultural Cooperative Act supplying electric energy were converted into non-stock

cooperatives under Sec. 32 of Presidential Decree No. 269. Some LGU-operated

electric systems were also taken over by government through NEA.

With the organization of non-stock, non-profit ECs, missionary electrification was

hereby mandated through the implementation of area coverage basis. Thus, even the

unviable or unprofitable areas are now certain to experience the benefits of electricity.

LAWS THAT CREATED NEA

Republic Act 6038 (1969) - Declaring as national policy the total electrification

of the Philippines on an area coverage basis; Creating NEA as primary

agency responsible for executing the rural electrification program through the

electric cooperatives (ECs)

Presidential Decree 175 (Apr 14, 1973) - Giving authority to Dept. of Local

Government and Community Development through the Bureau of

Cooperatives Development to promote, organize, register, regulate, and

supervise all types of cooperatives.


Presidential Decree 269 (1974) - Converted NEA into a government owned

and controlled corporation with a capitalization of P 1 Billion

(www.nea.gov.ph/index.php/about-us/charter/pd-269)

Presidential Decree 501 (1974) – Transferred the supervision of ECs from the

Bureau of Cooperatives Development to NEA

Presidential Decree 1645 (1979 )- Broadened NEA’s lending and regulatory

power over the electric cooperatives with a capitalization of P 5 Billion

Republic Act 9136 (2001) - Provided NEA with additional mandate to prepare

ECs to operate & compete in a deregulated environment with a capitalization of P

15 Billion

LAWS THAT CREATED CDA

Republic Act 6938 (1990) - an act to ordain a Cooperative Code of the

Philippines (http://www.bcphilippineslawyers.com/republic-act-no-6938/)

Republic Act 6939 (1990) - which created the Cooperative Development

Authority (CDA), grants the Authority the sole power to register cooperatives.

http://www.bcphilippineslawyers.com/republic-act-no-6938/



http://www.nea.gov.ph/index.php/about-us/charter/pd-269


Thus, NEA’s power to register ECs had been transferred to the CDA.

Republic Act 9520 (2008) - an act amending the cooperative code of the

Philippines to be known as the "Philippine Cooperative Code of 2008"

(http://www.lawphil.net/statutes/repacts/ra2009/ra_9520_2009.html)

LAWS THAT CREATED SEC

COMMONWEALTH ACT No. 83 (October 26, 1936) - an act to regulate the sale

of securities, to create a Securities and Exchange Commission to enforce the

provisions of the same, and to appropriate funds therefore.

Republic Act 8799 (19 July 2000) enacts "The Securities Regulation Code". It

contains the declaration of State policy; definitions; authority of the "Securities

and Exchange Commission"; registration of securities; regulation of pre-need

plans; repertorial requirements; protection of shareholder interests; prohibitions

on fraud, manipulation and insider trading; regulation of securities market

professionals; exchanges and other securities trading markets; registration,

responsibilities and oversight of self-regulatory organizations; acquisition and

transfer of securities and settlement of transactions in securities; margin and

credit; general provisions. Repeals the Revised Securities Act (Batas Pambansa

blg 178), as amended, and sections 2, 4 and 8 of Presidential Decree 902-A, as

amended. (78 sections; pp. 182-262)

http://www.lawphil.net/statutes/repacts/ra2009/ra_9520_2009.html


WHAT IS THE LEGAL BASIS FOR CONVERSION OF ELECTRIC COOPERATIVES?

Republic Act 9136 (Electric Power Industry Reform Act of 2001) - Section 57

of EPIRA gives the ECs the options to convert to either stock cooperative under the

Cooperatives Development Authority (CDA), stock corporation under the Securities

Exchange Commission (SEC), or remain as non-stock under NEA.

OBJECTIVES

GENERAL

To achieve ORMECO’s member-consumers, Board of Directors, Management

and employees’ awareness towards the issues of converting ORMECO into a stock

cooperative under Cooperative Development Authority (CDA) or a stock corporation

under Securities and Exchange Commission (SEC) or to remain as a non-stock, non-

profit service oriented electric cooperative registered under National Electrification

Administration (NEA) through the support and cooperation of an active member-

consumers base.

SPECIFIC


1. To generate interest and increase awareness of member-consumers on

ORMECO’s present status particularly in its nature and accomplishments.

2. To be able to present the commonalities and differences of between a non-profit

and service-oriented electric cooperative under the National Electrification

Administration (NEA), or a stock cooperative under Cooperative Development

Authority (CDA) or a stock corporation under Securities and Exchange

Commission (SEC).

3. To encourage participation and to draw support from member-consumers on

ORMECO’S conversion issue.

INTERVENSIONS FOR IMPROVEMENTS

A. PROCEDURES/MECHANICS

Chapter III of the NEA Guidelines in the Conduct of Referendum

enumerates the procedures/mechanics, to wit:

Article 10 In-House Activities

10.1 Board Resolution scheduling the district(s) date (s), venue (s) and

time of the assembly must be passed by the Board of Directors;

10.2 Board Resolution appropriating the corresponding budget for their

Activities is imperative;


10.3 The concerned departments of the coop shall prepare and

execute the requirements set under the said Board Resolutions;

10.4 The institutional Services Department shall prepare in not less

than twenty (25) days before the General Assembly or District Meetings the

sanitized masterlist of voters in alphabetical order and classified according to

district, municipalities and barangays to facilitate registration and voting; and

10.5 The Board Member of the concerned district shall be responsible

in ensuring the success of the assembly/referendum in that district; and shall

likewise preside in the district assembly meeting/s.

Article 11 Major Activities in the Program

11.1 Determination of attendance from the registration of voters.

Only bonafide members shall be allowed to register in the

masterlist prepared by the electric cooperative.

(a) Where meetings are held simultaneously (meetings held on

the same day at various venues/barangays), the total number

of votes shall be determined on a cumulative basis;

(b) Where meetings are held sequentially (meetings held one after

the other in different days in different venues/barangays), the

same procedure in (a.1) shall be followed.

11.2 Introduction by the Presiding officer

11.3 Presentation of the issues related to conversion


(a) Presentation of the historical profile of the cooperative

(b) Presentation for the positive side/advantages.

(c) Presentation for the negative side/advantages

(d) Open Forum

11.4 Process of voting (casting of votes through secret balloting and

the subsequent canvassing of the ballots)

11.5 Declaration of the Results by the Presiding Officer

11.6 Adjournment

Article 12 Documentation

12.1 Preparation of the minutes of the meeting indication the highlights,

particularly the over-all decision of the bonafide members

(whether to convert or not to convert).

12.2 If the vote is for conversion.

(a) Certificate of Election to Convert. A Certificate of Election

to Convert shall be executed and acknowledged on behalf of

the EC by its board president or vice-president under its seal,

attested by its secretary, stating: (1) the name of the

cooperative; (2) the address of its principal office; and (3) that

the members of the cooperative have duly voted that the


cooperative converted into a stock corporation or a stock

cooperative;

(b) The board president or vice-president who executed the said

Certificate shall execute an Affidavit which shall state that the

statements in the certificate are true.

B. ACTION PLAN FOR THE REFERENDUM ON CONVERSION

Option No. 1

Convince the Board not to pass and approve any resolution to conduct a

referendum. After all, based on the guidelines Article 10, the power to schedule a

meeting for referendum is vested upon the Board.

Convince the Board not to appropriate fund for the referendum.

Option No. 2

If there is an overwhelming clamor to conduct a referendum, let the

proponents bring the matter to the General Assembly for approval.

During the assembly, utilize all the employees to vote against the move. Give

quota for every employee to bring at least ten (10) relatives or friends to vote against

the move.

In ORMECO, there are 289 employees. If these could bring at least ten (10)

for every employee, the negative votes will raise 2,890 votes. This is very difficult to

outsmart.


Other than the employees, transport all the Barangay Power Association

(BAPA) Members to vote against the referendum. But before transporting the BAPA

members, there must be extensive information campaign to convince them.

Option No. 3

If the Board will pass and approve a resolution to conduct a referendum, let

the resolution be approved and confirmed by the General Assembly. When General

Assembly comes, use Option No. 2.

Option No. 4

If the General Assembly approved the resolution to conduct a referendum, we

will face the real battle of information in the coverage area.

Pre-Referendum Period

a. Consolidate all the pertinent data regarding the advantages and

disadvantages of the three options of electric cooperatives.

b. Study the effect of conversion of the electric coops that have converted

into stock cooperative.

c. If possible initiate Lakbay-Aral to the converted ECs like SORECO I,

CANORECO, NORECO II, and PANELCO I.

d. Get the data from the Cooperative Development Authority the number of

coops registered. How many are operational and non-operational. If

possible research the reasons why there were many coops that gone in

their business. (data should per region)

e. Scout potential employees to be utilized as speakers of the coop.


f. Create a “Speakers Bureau” coming from the member-consumers to

campaign in favor of the coop. If possible, the member should also be an

active officer of coops registered under the CDA.

g. Conduct Training and Workshop for the “Speakers Bureau”. If possible

the seminar shall be conducted regionally so that they can learn other

ideas from sister ECs.

h. Schedule the Information Drive for the captured supporters such as

BAPA, MSEAC.

i. After conducting info drive to the captures supporters, conduct same

activity with the barangays, non-government associations, religious

organizations and other associations.

j. Initiate interviews with print media, radio hopping and other media outlets

using the speakers’ bureau.

k. Lobby with the local officials in every municipality and city or in the

province.

l. Convince the unenergized barangays and the remote barangays to pass

a resolution address to the public officials preserved the missionary

program of the coop by retaining as non-stock non-profit.

Referendum Period

a. Determine first the following:


1. What is the Name of the Game? Referendum

2. What is the Rule of the Game? Guidelines on Conversion

3. How to Win? Two Kinds of Winning:

i. Not to Get the Quorum

ii. Get the Quorum and Win the Votes

4. Since it is a Referendum, how many votes we need?

5. Who will Get that Votes?

6. How to Get that Votes?

7. What we need to Get that Votes?

8. What are our Strengths? Our Weaknesses?

9. What are the Strengths and Weaknesses of our Enemy? Know Your

Enemy.

b. Sanitize the Master List to institute “One member One Vote” and to avoid

flying voters.

c. Implement the ID System for every member-consumer to ensure true

identity in the voting.

d. Identify and assign leader and speaker bureau in every municipality and

city.

e. Conduct pulong-pulong, meeting and info drive for the member-

consumers in every barangay of the municipality.

f. List the names of the member-consumers who have attended the

information drive. They will be the first priority to be hauled or transport

during the actual referendum.


Strategy in Information Battle

a. Speak on people’s language

b. Do not use highly technical language

c. Use character-strategy offense against CDA speakers

d. Cite substantial evidence or bad experiences of CDA coops that

failed. Use news reference.

e. Dictate the tempo of the campaign

f. Use guerilla technique in making leaflets and paraphernalia

Non-stock, NON-PROFIT Coop - SERBISYO ang DALA!

Stock, Profit Coop – Pakay ay GANANSYA!

Stock Corporation – pang KAPITALISTA!

Hwag Kayong Paloko! NON STOCK – NON PROFIT COOP

Tayo !

Stock at PROFIT Coop – tataas ang taripa ng kuryente!

Stock Corporation – tayong lahat mangangamote!

Non-stock, NON-PROFIT Coop – dito tayo, para sa mga

mahihirap ito!

g. Send letters to all barangay captains and member-consumers

h. Utilize the meter-readers in distributing the leaflets.


i. Use the radio program in propagating the cause of the non-stock non-

profit. Invite credible people (councilor, barangay captain, religious

leaders and other key officers in the locality) to speak the missionary

spirit of the non-stock non-profit.

j. Make comprehensive primer of the three options.

k. It has been said that prophets were rejected in their own place. EC

should exchange speakers.

l. Get the capital investment of every sitio, purok, barangay, municipality

for figure presentation.

m. Highlights the bad effect of the converted coop based on the

experience of the EC converted coops.

n. Encourage all EC employee free-lancers columnist to write in their

column the ill effects of the conversion. This will be used as reference

of other coops during the campaign period.

District Assembly Prior to Referendum

a. Assigned vehicle to transport the member-consumers who will cast

their votes for the referendum.


b. Prioritize the transport of the captured supporters like the BAPA,

MCEC, MEC-DEC and other organizations that manifested their

support for the non-stock non-profit EC.

c. Prioritize in giving the ID of these captured supporters.

d. Implement strictly the identification before any person can cast his/her

vote in the referendum.

e. During the District Assembly, assign spokesperson who will ask

troubled-questions to the pro-CDA speakers.

f. Design possible questions that will trap the pro-CDA speakers.

g. Hang streamers manifesting support for the non-stock non-profit EC.

h. Assign people who will distribute leaflets supporting the non-stock

non-profit EC.

i. During the presentation campaign, let the Stock Corporation and

Stock Cooperative speak first, so that they could no longer refute the

arguments of the Non-stock, non-profit stand.

Post Referendum

a. Assign person to monitor, record and document all the activity of the

Referendum.


b. If the coop lost in the referendum, try to look for any possible

technicality that can be used for filing of protest against the result. If

possible, the person who will lodge the protest is not an employee.

c. If the coop won the referendum, call for a press conference to

announce the result.

d. Send the result to all public officials of the locality including the

concerned national agencies and officials.

METHODOLOGY

Table 1 - Elements of Commonalities/Differences

NON-STOCK STOCK

COOPERATIVE

STOCK

CORPORATION

Governing

Law

PD 269 as amended

by PD 1645 –

governs the

organization &

registration of

electric coops which

are non-stock, non-

profit & service

RA 6938 – The

Cooperative Code of

the Phil. Governs the

registration &

regulation of the

stock cooperatives.

The Corporation

Code or Batas

Pambansa 68

defines stock

corporation as an

artificial being

created by law which

has capital stock


oriented

cooperatives.

divided into shares

Policy

Declaration

PD 269 rationalizes

the distribution of

electricity on an area

coverage basis and

the setting up of

cooperatives for

power distribution to

attain total

electrification. NEA

extends financial,

technical and

institutional

assistance to ECs.

The Code

underscores the

principle of

subsidiarity which

means that the

cooperative sector

has primacy over the

state in initiating and

regulating within its

ranks…

The government

maintains a policy of

non-interference in

its management and

operation.

The code establishes

a new concept of

business

corporations so that

they are not merely

entities established

for private gain but

effective partners of

the National

Government in

spreading the

benefits of capitalism

for the social and

economic

development of the

country.

Governing

Body

NEA is tasked with

organizing, financing

and supervising

electric cooperatives.

Under RA 9136 or

EPIRA, NEA is

further mandated to

The CDA shall

regulate only the

internal affairs of the

converted ECs (Art.

98).

The SEC has the

absolute jurisdiction,

supervision and

control over all

corporations.


act as guarantor of

ECs in operating and

competing under the

deregulated

electricity market

Capital

Sources

• government loans

• Subsidies

• Assistance in all

aspects of

operations.

• reinvestment fund

• membership fees

• Share capital of

members.

• A member can hold

a maximum of 20%

of the share capital.

• Loans and

borrowings

• Revolving capital

which consists of

deferred payments

of patronage

refunds or interest

on share capital

subsidies,

donations, grants,

aids and assistance

from local or foreign

institutions.

• Capital is

principally derived

from the contribution

of shareholders

received in

consideration for the

issuance of stock.

• Raise capital

from loans or

advances by

creditors. Gets

capital from its

profits or earnings

which are reinvested

in the business.

Democratic

Control

• The general

membership is the

• The general

membership is the

• Stockholder

who owned majority


supreme authority.

• The Board of

Directors is elected

per district.

• Observes the

one-member one-

vote policy. Proxy

voting is NOT

allowed.

supreme authority.

• Power is

distributed on a

one-member one-

vote policy

regardless of the

amount of money

they invest.

• Proxy voting

is discouraged.

of the shares of the

corporation controls

the business

• No

democratic control

vested in its

subscribers.

• Proxy voting

is allowed.

Quorum of

General

Assembly

Meetings

Coops having

less than 1,000

members: 5% of all

members present

in person

Coops having

more than 1,000

members: 5% of

all members or 100

whichever is lesser

present in person

25% of all the

members entitled to

vote.

The by-laws

may provide for a

quorum with more

or less than the

25% of all the

members entitled to

vote.

Consists of

the stockholders

representing a

majority of the

outstanding capital

stock.

A majority

vote is sufficient to

decide any

question properly

presented

Ownership

and Control

Owned by

the member-

consumers who

Real owners

are those members

who give share

The ultimate

control of the

corporation


pay P5.00

membership fee.

Power is

distributed on a

one member-one

vote policy.

The directors

are elected by the

members in the

district they

represent.

capital.

Power is

distributed on a

one-member one-

vote policy

regardless of the

amount of money

they invest.

The directors

are elected at large

by the members.

depends upon the

vote of the

stockholders.

The right to

vote is an incident

of ownership of

stock. Proxy

voting is allowed.

The Directors

are elected by the

stockholders.

Supervision

and Control

While

management is

vested in the

Board, NEA

exercises

supervision and

control over ECs.

NEA has the

right to be

represented and

participate in all

Board meetings

The CDA has no

quasi-judicial, only

conciliatory power

under Sec. 8 of RA

6939

The Board of

Directors

formulates policy

and directs the

conduct of its

business

operations.

Actual

management is

delegated to the

officers who are

responsible to the

Board.

Tax Treatment Permanently Exempt if: Corporations are


exempt from

paying income

taxes.

For a period

ending 31

December of the

30th full calendar

year after the date

of the organization

of the EC, or until it

shall become

completely free of

indebtedness

exempted from the

payment of:

A. All national

Government, local

government and

municipal taxes

and fees, and;

All duties on

imports of foreign

goods acquired for

its operations.

Transacts

business with

members

only

If transacts

business with

non-

members:

exempt from

income and

sales taxes if

it has less

than P10M

reserve funds.

exempt from all local

business taxes, fees

and charges imposed

by LGUs including

payment of Real

Property Tax

subject to all

applicable taxes,

local and national.

Purpose of Energizes Generate Operates for


Creation rural areas be it

viable or not.

Service

oriented and does

not generate profits

for their members.

Gives rural

folks the

opportunity to

meaningfully

participate in their

own development.

This will mean

lower rates that

would attract big

companies to put

up or relocate in

the rural areas thus

spurring economic

development.

profits for its

owners.

Concentrates

operation on areas

which are less

costly to energize.

This allows

stockholders to

have more returns

on their

investments.

Concentrates

on areas which are

viable.

business rather

than for service.

Poor folks in

the countryside will

have to pay the

costs to enable the

corporation to

recover the

investments made.

If they cannot

pay, there will be

no power in their

communities.

Concentrate

on areas which are

viable.

Debts Electrification

loans incurred by

the EC as of June

26, 2001 were

assumed by

Enjoys full

condonation of

loans upon

compliance with EO

119, and if

If conversion

is done within 5

years from the

completed

condonation, it shall


PSALM.

Result: Rates

reduction

commensurate to

amount of the

removed

amortization cost.

New loans

after June 26, 2001

are not included in

the loan

condonation.

conversion will be

done after 5 years

from date of loan

condonation.

If conversion

is done within 5

years from the

completed

condonation, it shall

pay to PSALM the

total debts. The

repayment cost

shall be passed on

to the consumers in

their bills

pay to PSALM the

total debts and

interests.

Conversion

can be done after 5

years so that the

corporation will not

be required to pay

PSALM.

Dividends and

Patronage

Refund or

Credit

All member-

consumers can

receive patronage

credit/refund if EC

has sufficient

margins

Paid in

accordance with

NEA guidelines.

Only those

who have share

capitals are entitled

to receive dividends

and patronage

refund based on

accumulated

margin.

If patronage

refund is based on

Stockholders

can receive

dividends based on

100% retained

earnings and shall

be distributed

proportionally to

stocks

subscriptions.


Greater

advantage to

members in terms

of patronage

refund.

consumption, big

loads (commercial,

industrial) will

benefit most.

Impact on

Rates/Income

Tax

Please refer to Table 2

Table 2 - IMPACT ON RATES/INCOME TAX

EFFECT ON RATES

(Residential Class)

Non-stock EC

(NEA)

Stock EC

(CDA)

Stock

Corporation

(SEC)


Current Billing Rate (P/kwh)

Power Cost

Distribution/Supply/Metering

Universal Charge

Local Tax

VAT

Other Credits

P 4.4093

1.4493

0.0398

0.0500

0.2589

(0.4652)

P 4.4093

1.6893

0.0398

-

0.2589

(0.4652)

P 4.4093

1.6893

0.0398

0.0500

0.2589

(0.4652)

Total P 5.7421 P 5.9321 P 5.9821

Rate Increase/kwh due to:

Local Tax

Return on Rate Base

(Profit)

P 0.05

-

P -

0.24

P -

0.24

Source: Based on Misamis Oriental Electric Cooperative, Inc.’s (MORESCO) Study

RESULTS AND DISCUSSIONS

INSTITUTIONAL ASPECTS


1. Is conversion of ECs voluntary?

Yes. Section 57 of EPIRA states that ECs are given the options to

convert to either stock cooperative under the Cooperative Development

Authority (CDA), stock corporation under the Securities and Exchange

Commission (SEC). And nothing in this Act shall deprive ECs of any right or

privilege granted to them under PD 269, as amended and other existing laws.

EC conversion is optional, and needs the approval or consent of the

member-consumers. The decision to convert is best left to the judgment of the

member-consumers.

2. Why are the ECs given the option?

The EPIRA speaks about, among others privatization of the National

Power Corporation (NPC), and the National Transmission Corporation

(TRANSCO) and the infusion of private capital in the ECs. The EC consumers

can now have the choice to fully own their cooperative, thereby relieving the

government from putting up more capital to this business.

3. Are there guidelines to follow in the process of conversion?

Yes, Section 7 (c) (I), Rule 7 of the EPIRA Implementing Rules and

Regulations has vested exclusively upon NEA the duty to promulgate the

guidelines for the conduct of a referendum by the ECs in order for them to

exercise their option to convert. President Gloria Macapagal-Arroyo has also


issued Administrative Order No. 112 directing NEA to take full and sole authority

and responsibility in the conversion of ECs.

On 29 July 2004, the NEA Board of Administrators passed Resolution No.

93 approving the “Guidelines in the Conduct of Referendum by Electric

Cooperatives” (GCREC). The GCREC was published in the Official Gazette on

05 January 2005. The GCREC was further amended on October 5, 2005 to

include some relevant provisions. The amended guidelines were published in

The Manila Times on October 26, 2005.

4. What are the methods of conducting series of meetings and referendum?

For purposes of consulting the member-consumers on the conversion

issue, the series of district meetings may be undertaken:

SIMULTANEOUSLY – wherein meetings are held on the same day at

various venues; or

SEQUENTIALLY – wherein meetings are held one after the other in

different days in different venues.

In these meetings, the member-consumers shall be informed of the

positive sides/advantages, and negative sides/disadvantages of conversion so

that they could decide intelligently and objectively on the issue.

Right after the open forum, a referendum will be held wherein each

bonafide member shall cast his/her vote, through secret ballot, whether he/she

is in favor or against conversion.


5. What is the Quorum requirement for Conversion?

Under the Guidelines, the required quorum and number of votes needed

for conversion:

The required quorum to conduct a valid referendum shall be at least a

majority (50% plus 1) of all bonafide members of the electric

cooperatives.

The approval of at least a simple majority (50% plus 1) of the required

quorum shall be considered a valid decision for conversion.

6. Can ECs register with CDA/SEC without conversion?

No. It is null and void because it violates Article 14 (5) of RA 6938

(Cooperative Code) which states:

“No cooperative shall be registered unless the article of cooperation

is accompanied with a sworn statement of the treasurer elected by

the subscribers showing that at least twenty five per centum (25%)

of the total subscription has been paid.”

Further, Rule 7, Section 7 (ii) (Structural & Operational Reforms Between

and among Distribution Utilities)of EPIRA Implementing Rules and Regulations

(IRR) states that:


“ (ii) ECs converted into Stock Corporation shall be registered with

the SEC in accordance with the Corporation Code, while those

converted into Stock Cooperative, shall be registered with the CDA:

Provided, however, that the ECs which opt to remain as Non-stock

Cooperatives shall continue to be registered with the NEA and shall

be governed by the provisions of Presidential Decree No. 269, as

amended.”

7. Is the provisional registration still effect until now as claimed by CDA?

No. It had already lapsed on May 4, 2000. There was no other extension

granted by CDA and NEA.

It is to be that CDA and NEA issued a Joint Memorandum Circular dated

October 1997, signed by CDA Chairman Jose C. Medina, Jr. and NEA Chairman

Francisco L. Viray and duly approved by Executive Secretary Ruben D. Torres.

The Joint Memo Circular had extended the conversion period for a period of

three (3) years, from May 4, 1997 to May 4, 2000.

Since RA 9136 (EPIRA) took effect on June 26, 2001, any move for EC

conversion should be governed by the provisions of Section 57 of EPIRA.

8. What is then the legal process of Conversion should the coop decide to

convert into stock coop under CDA or stock corporation under SEC?


Prior to registration as stock EC, the applicant EC should have already

opted first to convert from non-stock, non-profit cooperative to stock cooperative

under CDA or stock corporation under SEC. The process for the exercise of the

option to convert has been laid down by NEA in its Amended Guidelines in the

Conduct of Referendum for Conversion prior to registration with the appropriate

government agency. These guidelines were promulgated pursuant to Section 57

of RA 9136 and Subparagraph (i), paragraph ©, Section 7, Rule 7 of the

Implementing Rules and Regulations of RA 9136.

9. What should be followed before registration with CDA or SEC?

Chapter VI of the Guidelines provides that:

Within 180 days from the date of approval of the conversion to stock

corporation with SEC or stock cooperative with CDA, the EC shall file with the

SEC or CDA as the case may be the following:

Articles of Conversion

Amended By-Laws, and

Treasurer’s affidavit on the payment of subscriptions of the members or

shareholders.

The Articles of Conversion shall contain among others, the authorized

capital stock, subscribed capital stock and paid up capital stock of the EC and

the respective subscriptions and payments for subscriptions of the members or

shareholders listed in alphabetical order.


The electric cooperative shall furnish the NEA Certified True Copies of

the documents. Such documents are needed before NEA would issue its

favorable endorsement.

10. Does NEA’s authority over ECs cease once registered with CDA or SEC?

ART. 132. Effects of Registration with the Authority.

(1) Upon the effectivity of this Code, electric cooperatives that are duly registered

with the Authority, and issued a certificate of registration, shall no longer be

covered by Presidential Decree No. 269, as amended by Presidential Decree

No. 1645

(2) The electric cooperatives registered with the Authority with existing loans

obtained from the NEA after June 26, 2001 shall continue to observe the

terms of such loans until full payment or settlement thereof;

(3) Except as provided in the immediately preceding paragraph, the NEA shall no

longer exercise regulatory or supervisory powers on electric cooperatives

duly registered with the Authority.

11. What are the powers of the General Assembly of a stock coop?

Article 34 of RA 6938 provides the following powers which cannot be

delegated.


To determine and approve amendments to the articles of cooperation and

by-laws;

To elect or appoint the members of the board of directors, and to remove

them for cause;

To approve development plans of the cooperative; and

Such other matters requiring a two-thirds (2/3) vote of all the members of

the general assembly, as provided in this Code.

12. In a stock coop, is there a possibility that a mere resolution of the General

Assembly could help destabilized the operations of the EC?

Yes. This is what happened to CDA-registered Sorsogon II Electric

Cooperative (SORECO II). During the coop’s 18th Annual General Membership

Assembly (AGMA) on 19 July 1998, a mere motion by a consumer (which was

duly seconded) declaring vacant all the positions of the Board of Directors, as

well as the position of the General Manager, had destroyed the institutional

foundation of the coop. Because the incumbent Board and the incumbent

General Manager did not relinquish their positions even if an Interim Board of

Directors and an OIC-General Manager had already been appointed, viva voce,

by the Assembly. As a result, SORECO II was unfortunately divided into two

factions: SORECO II (Incumbents, NEA side) and SORECO II (Interim, CDA

side). Not only that the member-consumers, local officials and all sectors were

confused, the cooperative that was once very viable had collapsed.


13. What is the method of electing Board of Directors in a stock

coop/corporation?

While under PD 269, Directors of non-stock EC are elected per district,

Directors of a stock EC will be elected at large; hence, is possible that most, if

not all, of the Directors will come from the same municipality/city. Some districts

will thus have no representations in the Board of Directors to detriment of the

member-consumers in the area. In the stock corporation case, Directors are

elected by the stockholders.

14. What are the powers of the Board of Directors in a stock coop?

Article 39 of RA 6938 provides that the board of directors shall “direct and

supervise the business, manage the property of the cooperative and may, by

resolution, exercise all such powers of the cooperatives as are not reserved for

the general assembly.”

Since the Code promotes the principle of subsidiarity, the Board of

Directors of stock EC has complete autonomy and independence from

government intervention. However, if this principle is not practiced rightly by the

Board of Directors who is managing the coop, it will bring about internal

squabbles among officials, employees and consumers that may disrupt the

delivery of electric service.


15. In case of internal conflict, how would it be settled?

There is no immediate availability of government intervention in a stock

EC because CDA, having no quasi-judicial powers, can only mediate or

conciliate (Sec. 8, RA 6939). The settlement of Disputes on EC registered with

CDA shall be in accordance with conciliation/mediation mechanisms embodied in

the coop’s By-Laws and applicable laws. If these fail, the matter shall be settled

in a court of competent jurisdiction (Art. 121, Coop Code).

While in non-stock ECs, NEA, having quasi-judicial powers under PD 269

as amended, will use its regulatory and supervisory powers over ECs in order to

resolve immediately such internal conflict to save the coop from eventual

financial and institutional destruction.

16. What is the role of the General Manager in a stock coop?

The General Manager of a stock coop is purely a mere implementor of

whatever policy or resolution that the Board of Director will pass, even if he/she

finds that such policy or resolution is disadvantageous to the coop. If he/she

disagrees with such policy or resolution and does not implement the same,

he/she could be arbitrarily suspended or even without due process. This was

what happened to former SORECO II General Manager Joey Cubias.

Unlike in a non-tock coop, NEA has promulgated a policy that clearly

defines the specific duties and responsibilities of the General Manager and Board


of Directors. This is to avoid unnecessary interference of the Board of Directors

in the management functions of the General Manager.

FINANCIAL ASPECTS

1. Who are the “real owners” in a stock coop?

To become “real owners”, members in a stock coop must contribute share

capital in order to be entitled to the rights and privileges of a bonafide member.

Only those members who infused capital are the “real owners” who are entitled to

receive dividends or patronage refund.

2. What is the maximum amount of share capital a consumer can own?

Art. 74 of RA 6938 provides that a member can own 20% of the share

capital of the coop. Thus, it is possible that only few rich people can become

members.

It will be unfortunate for the thousands of existing member-consumers of

the EC, who cannot afford to put up share capital, because they will be

disenfranchised.


3. What is the effect of conversion on loan condonation?

Section 60 (Debts of Electric Cooperatives) of EPIRA provides that:

“Within five (5) years from the condonation of debt, any

electric cooperative which shall transfer ownership or control of its

assets, franchise or operations shall repay Power Sector Assets and

Liabilities Management (PSALM) Corp. the total debts including

accrued interest thereon.”

This is also provided under Article IV of the Memorandum of Agreement

(MOA) between NEA and PSALM Corp. signed on October 3, 2003 also provides

that:

“In case of transfer of ownership or control of the EC assets,

franchise or operations within five (5) years from the affectivity of the

assumption by PSALM Corp. of the Rural Electrification Loan(s), the

particular EC shall repay PSALM Corp. the total debts including

interest thereon, assumed by PSALM Corp. as prescribed by Section

8 of EO 119 and Section 60 of RA 9136.”

4. Is there a possibility that rates will increase?

Yes. Since the member-consumers are expecting dividends (interest on

share capital) and patronage refunds, it is necessary to increase the rates to

insure that there is profit or net surplus to distribute annually.


In a stock- and profit-oriented coop/corporation, the frequency of rate

increase is most probable since conversion will require the EC to have a return

on rate base (RORB) or return on investment (ROI), which could be 8% minimum

to 12% maximum, which at present is not being considered under the cash-flow

method under non-stock EC.

Further, if the condoned loans will be revoked by PSALM because of the

change of nature of EC (from non-stock to stock EC), rates will increase because

the EC shall pay PSALM Corp. the total debts including interest thereon. As a

result, the amortization cost of this loan shall be re-imposed on the rates.

5. Is the stock EC exempt from paying local taxes?

The stock ECs are tax-exempt if:

Article 61: ECs do not transact any business with non-members or the general

public.

Article 62: Accumulated reserves and undivided net saving are not more than

P10M. If more than P10M, EC shall pay full income tax (on amount allocated for

interest on capital) and sales tax (on sales to non-members.

Exempt from the payment of income and sales taxes for a period of ten

(10) years only.


6. Can ECs avail of the tax exemption privileges if they opt to remain non-

stock coop?

Yes. Pursuant to Sec. 39 of PD 269, the ECs are still permanently

exempt from paying income taxes and, for a period ending on 31 December of

the 30th full calendar year after the date of the organization of the EC, or until it

shall become completely free of indebtedness, whichever event first occurs, shall

be exempt from the payment of:

(a) All National Government taxes and fees, and

(b) Of all duties or imports on foreign goods acquired for its operations.

7. Is it better to pay local taxes and remain non-stock than becoming stock

EC?

Yes. The taxes which the EC pays to the local government can be used

for the economic development of the area. Actually, the amount to be

incorporated in the rates for payment of local taxes (franchise, business and real

property) is much lower than 8-12% RORB that will be added to the rates if the

EC converts to stock coop or stock corporation.

To illustrate, based on computation, the management of Batangas II

Electric Cooperative, Inc. (BATELEC II) will have to increase P0.94/kwh (RORB


and interest on Revoked Condoned Loans), as compared to P0.03/kwh increase

for payment of Franchise (P0.014/kwh) and Real Property (P0.16/kwh) Taxes, if

the EC remains non-stock.

8. Is the 5% Reinvestment fund part of the built-in contribution of member-

consumers in a non-stock ECs?

No. The reinvestment, as part of the rates, is considered as a

contribution-in-aid of construction, and is used to cover the depreciation cost of

EC assets. It is part of the operating cost, and not considered as equity of

owners.

9. Is the Amortization Cost part of the built-in contribution of member-

consumers in a non-stock ECs?

No. It is a embedded in the rate, but it is utilized in the day-to-day

operations of the EC. It cannot be treated as equity of members for distribution.

10. Is there a need to contribute additional paid-up capital to fully comply with

the paid-up capital required under the Articles of Cooperation?


Yes. Because the reinvestment fund and paid amortization are already

fixed assets, so the coop has to raise cash to cover increases in operating cost

and for the much needed capital investment.

11. Will non-stock ECs still receive subsidies for rural electrification from the

government?

Under PD 269, NEA is mandated to extend full assistance (Financial,

Institutional and Technical) to non-stock, non-profit electric cooperatives.

12. What will happen to the existing loan of ECs with NEA once they convert?

As provided in the loan contract, the existing loans will become due and

demandable once the ECs convert to stock cooperative or stock corporation.

13. What will happen to the remaining remote unenergized barangays and

sitios once the EC becomes stock cooperative?

Since it is financially unviable to energize these barangays and sitios, it is

possible that the coop will no longer extend the lines to these areas because it

will entail millions of investment and is not a profitable undertaking. It is to be

noted that an average cost to energize a barangay and sitio is P1.2 million to

P2.0 million, and P0.3 million to P0.5 million, respectively.


It is also possible that stockholders may decide to cut off the services in

the existing energized but unprofitable remote areas, especially if these areas

are hit by natural calamaties.

TECHNICAL ASPECTS

1. Can NEA withhold its technical assistance to the ECs once they convert?

Yes. Under PD 269, NEA is mandated to extend full assistance

(Financial, Institutional and Technical) to non-stock, non-profit ECs. Thus, NEA

can withhold technical assistance to stock ECs, if it needs to prioritize its

assistance to non-stock, non-profit ECs.

IMMERSION

ECs Who Conducted Referendum

Sultan Kudarat Electric Cooperative (SUKELCO) – conducted referendum on

July 24,2010. Out of 11,158 (18% of 60,450 total membership) member-

consumers who casted their votes, 6,815 (61%) favors to remain a non-stock EC


under NEA, while there are only 4,180 (37%) voted for stock cooperative under

CDA and 163 (1%) chose to be a stock corporation under SEC.

South Cotabato II Electric Cooperative (SOCOTECO II) - conducted

referendum on March 2, 2008

SOCOTECO Final and Official Referendum Result (March 02, 2008)

Districts NEA SEC CDA TOTAL

No. of Member-

Consumers

Percentage of

Participation

Gen. Santos City 1 976 28 109 1,113 30,983 4%

Gen. Santos City 21

1,342 48 98 1,488 11,117 13%

Gen. Santos City 3 1,376 68 136 1,580 25,726 6%

Polomolok 947 32 160 1,139 15,727 7%

Tupi 814 20 94 928 5,635 16%

Alabel 568 28 71 667 4,606 14%

Malapatan 919 28 79 1,026 3,479 29%

Malungon 1,551 20 45 1,616 5,228 31%

Glan 859 18 328 1,205 5,558 21%

Phase II

Kiamba

Maasim

Maitum

2,689 83 132 2,904 10,602 27%

Average

Total 12,041 373 1,252

13,666 118,661 12%


Source: National Electrification Administration Data

ECs Who Withdrew Registration with CDA

Sorsogon II Electric Coop., Inc. (SORECO II) is a CDA registered EC since

1996 issued Board Resolution No. 320, S-2010 expressing SORECO II’s

intention to convert itself from a CDA to a NEA registered coop and Board

resolution No. 321, S-2010 which is requesting nea to issue a Php 23 million

letter of guarantee to Avoitiz Power for and in behalf of SORECO II.

Peninsula Electric Cooperative (PENELCO) in Bataan issued Resolution No.

592, Series of 2008 Authorizing the withdrawal and cancellation of the Board

Resolution No. 533, S. 2007 and to Retain its Registration with the NEA with the

following reasons:

a. Failure to comply with the requirements as provided under RA 6938 and

6939

b. OGCC Opinion No. 220, Series of 2008, dated 30 Sept. 2008

Zambales II Electric Cooperative (ZAMECO II) issued Resolution No. 36,

Series of 2008 requesting for the Immediate Withdrawal and/or Cancellation of

ZAMECO II’s Registration with the CDA with the following reasons:

a. Registration was hastily initiated, facilitated and implemented by the 7

former BOD members who were removed from office by NEA


b. Did not comply with the mandatory requirements of RA 9136 (ex.

Referendum)

c. OGCC Opinion No. 220, Series of 2008

Electric Company Registered under Securities and Exchange Commission (SEC)

The Manila Electric Company (formerly known as Manila Electric Railroad And

Light COmpany) also known as MERALCO or Meralco, is the Philippines' largest

distributor of electrical power.

MERALCO is the Metro Manila's only electric power distributor and holds the

power distribution franchise for some 22 cities and 89 municipalities, including the whole

of Metro Manila and Mega Manila region. (en.wikipedia.org/wiki/Meralco)

Reaction from Stakeholders

Zambales Sangguniang Panlalawigan

Resolution No. 2008-406 : “Vehemently Denouncing the Act of the CDA

in Registering ZAMECO II as a Stock Cooperative for Non-Compliance of

http://www.wikipedia.org/wiki/Meralco

http://en.wikipedia.org/wiki/Mega_Manila

http://en.wikipedia.org/wiki/Metro_Manila

http://en.wikipedia.org/wiki/Metro_Manila


Legal Requirements in Accordance with the Guidelines Before Its Actual

Conversion and Permanent Registration” (i.e. No Public Consultation, No

Referendum and No NEA Endorsement)

NEA Position on the Conversion and Registration of ECs as recently approved by

the NEA Board of Administrators (NEA-ECs: Firming Up the Road Map for Service

Excellence (2008))

ECs which have converted from non-stock to stock for profit can no longer be

extended government subsidy funds by virtue of the change of business

orientation. Stock cooperatives should raise their own capital. Government

cannot provide subsidy funds to private electric distribution utilities organized

as stock. The absence of government regulation with the non-application of

Sections 3, 5 and 7 of PD 1645 will no longer qualify them to receive subsidy

from NEA.

The Commission on Audit (COA) citing the Philippine Constitution dictates that

government funds shall be exclusively used for public purpose. NEA is used

as the implementing arm of the government, among others, in accounting for

utilization of funds, in accordance with Government Rules and Regulations.

NEA has the custodial responsibility of ensuring that public assets should not

be privately misappropriated.


Without government supervision over the ECs, the attainment of total

electrification of the country will be greatly jeopardized. NEA and the ECs are

the only identified long time partners in charge of the Rural Electrification

Program, now entering its 40th year.

Cooperative Development Authority (CDA) reaction on how to deal with converted

ECs.

“None of our CDA people has come from electric cooperatives, that’s why when

these cooperatives register with us, we will be confused and lost,” CDA

Executive Director Niel A. Santillan said. (Reference : CDA at a loss on how to

deal with co-ops - Phil. Daily Inquirer, Dec. 2, 2005)

CDA Chairman Ruben Conti said that of the estimated 28,000 cooperatives in

the country, half or about 14,000, are on the verge to collapse. (14,000 Coops

Collapsing, says official - Phil. Daily Inquirer, August 12, 2005)

Luis Manuel Corral, Secretary General of the party-list group Association of

Philippine Electric Cooperatives (APEC) admitted that despite the incentives (i.e.

tax exemptions, congressional allocations, grants, subsidies and other financial


assistance for rural electrification which can be coursed through the Department

of Energy, the Authority or local government units."), only 11 out of the 119 ECs

are registered with the CDA.

Among the ECs that signed up for CDA are Negros Occidental Electric

Cooperatives (NOCECO 2); Palawan Electric Cooperative (PALECO);

Pangasinan Electric Cooperative 1 and 2 (PANELCO); Nueva Vizcaya Electric

Cooperative (NUVELCO); Negro Oriental Electric Cooperative (NORECO 2);

Abra Electric Cooperative (ABRECO), Isabela Electric Cooperative (ISELCO);

Sorsogon Electric Cooperative (SORECO) and Quirino Electric Cooperative

(QUIRELCO).

These ECs have a total of 1.2 million member consumers.

(www.sunstar.com.ph/manila/cda-coops-sell-cheaper-electricity)

2008 Legislative investigation on high power rates of Meralco

Meralco is facing a Philippine legislative inquiry/investigation for alleged

excessive pricing. The government has considered a plan to take over Meralco, to

reduce electricity bills. Meralco and National Transmission Corporation (Transco)

blamed each other for the high power rates. Meralco also blames high power generation

costs, high transmission costs and government taxes imposed on the electricity sector

from power generation to distribution. Government Service Insurance System

(Philippines) President Winston Garcia, however, blamed Meralco's inefficiency, its

"bloated bureaucracy" and its sourcing of power from independent power producers

http://en.wikipedia.org/wiki/Government_Service_Insurance_System_(Philippines)

http://en.wikipedia.org/wiki/Government_Service_Insurance_System_(Philippines)

http://en.wikipedia.org/wiki/National_Transmission_Corporation

http://en.wikipedia.org/wiki/Philippine


(IPPs) also owned by the Lopezes, and the need to amend the Electronic Power

Industry Reform Act of 2001. Oscar Lopez, said that if GSIS would buy the shares of

Meralco, they must buy in whole cash. Many businessmen also say that taking over

Meralco is not the way to reduce electrical price. It depends on the government and the

president. As other people say, this issue is only to hide the ZTE NBN scandal and other

more issues. A perceived lack of general understanding regarding the issue of system

loss, inherent in the business of utilities prompted Meralco's former holding company

First Philippine Holdings to issue advertisements explaining systems loss.

(en.wikipedia.org/wiki/Meralco)

CONCLUSIONS

After studying the facts as well as other information about the conversion of

electric cooperatives in the Philippines into a stock cooperative under CDA or stock

corporation under SEC or retain its status quo under NEA, I therefore conclude that the

outcry of some sectors of our society to change the corner-stone on which it was

founded, and convert its very nature of being a non-stock, non-profit and service –

http://en.wikipedia.org/wiki/Philippine_National_Broadband_Network_controversy


oriented cooperative to a profit-oriented cooperative or corporation will be a threat on

ORMECO’s future and stability. Furthermore, the destiny of ORMECO, being one of the

most reliable and trusted institutions in the province and the only remaining electric

cooperative in Region IV-B under NEA with a categorization of A+ Mega Large EC relies

on the responsibility and power of its member-consumers, Board of Directors,

management and employees to fight and stand for what they think will be the best for

our cooperative. If ORMECO will be converted into either stock cooperative or stock

corporation, then the sacred goal of total electrification of the Province of Oriental

Mindoro will not be realize. It is like taking to the people residing in remote sitios/areas

their only hope to improve their lives through the benefits of having an efficient, reliable,

and affordable electric service.

RECOMMENDATION

Member-consumers cannot be expected to participate actively in EC activities

and affairs, much less cooperate, if they cannot appreciate these because of lack of

awareness and knowledge of at least the basic aspects of ORMECO operations. It is


important for ORMECO to have an active, supportive and well-informed membership

base to serve as the foundation of all its efforts towards conversion issues.

Thus, to strengthen ORMECO institution, it will entail an aggressive, sustained

and grassroots-based information and educational campaign. This will not only heighten

awareness but will ultimately work for a positive attitude and behavior towards ORMECO

developing the member-consumers’ sense of involvement.

References


2008 Legislative investigation on high power rates. Retrieved from

en.wikipedia.org/wiki/Meralco

Bueno, E. (2010). Message. ORMECO Annual Report 2010, 5

Cariño, D., (December 2, 2005). CDA at a loss on how to deal with co-ops, Philippine

Daily Inquirer

Lotilla, R., Billena, W., Khonghun, J., & Bueno, E. (2005). Amended guidelines in the

conduct of referendum,1-7

MSN/Sunnex (2010). CDA coops sell cheaper electricity. Retrieved from

www.sunstar.com.ph/manila/cda-coops-sell-cheaper-electricity

NEA Board of Administrators (2008) NEA-ECs: Firming Up the Road Map for Service

Excellence, 3-5

NEA Consumer Development & Protection Division (2007). Primer on EC Conversion

1-7

Quiros, J., (August 5, 2005). 14,000 coops collapsing, says official, Philippine Daily

Inquirer, A18

Presidential Decree 269 (1974). Retrieved from

www.nea.gov.ph/index.php/about-us/charter/pd-269

Presidential Decree 1645 (1979). Retrieved from

www.nea.gov.ph/index.php/about-us/charter/pd-1645

Republic Act 6938 (1990). Retrieved from http://www.bcphilippineslawyers.com/

republic-act-no-6938

http://www.bcphilippineslawyers.com/%20republic-act-no-6938

http://www.bcphilippineslawyers.com/%20republic-act-no-6938



http://www.sunstar.com.ph/manila/cda-coops-sell-cheaper-electricity

http://www.wikipedia.org/wiki/Meralco


Republic Act 9136 (2001) Retrieved from

www.nea.gov.ph/index.php/about-us/charter/ra-9136

Republic Act 9520 (2008).Retrieved from http://www.lawphil.net/statutes/repacts/ra2009/

ra_9520_2009.html

http://www.lawphil.net/statutes/repacts/ra2009/

http://www.nea.gov.ph/index.php/about-us/charter/ra-9136

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