New NEA Law insulates electric cooperatives from local politics

POSTED: Friday, January 24th, 2014


One of the common problems of electric cooperatives nationwide had been the interference of local politicians and government officials in their management and operations, many times resulting to uncollected monthly bills and procurement anomalies.  This had been detrimental to the proper operation of the electric cooperatives in their objective of providing satisfactory and affordable power service to its member-consumers.


The administration of President Benigno Aquino had recognized this problem and had pushed under the leadership of former Energy Secretary Rene Almendras for the amendment of the NEA (National Electrification Administration) law to strengthen NEA’s oversight of these cooperatives and to protect the electric coops from the interference of local government officials.

The new NEA law that was passed as Republic Act 10531 in July of 2013 arrived under Section 2 to “(c) empower and enable electric cooperatives to cope with the changes brought about by the restructuring of the electric power industry, otherwise known as the “Electric Power Industry Reform Act of 2001.”

The NEA was similarly empowered to “(l) develop, set and enforce institutional and governance standards for the efficient operation of electric cooperatives such as, but not limited to, the observance of appropriate procurement procedure, including transparent and competitive bidding.  Such standards shall be enforced through a mechanism of incentives and disincentives to complying and non-complying electric cooperatives, respectively;”

The law now prohibits the election to the coops board of directors those who have immediate relatives in the local government offices including those who have recently run for elective office.  To assure that the members of the Board of Directors of coops have the necessary qualification to deal with the increasingly complex issues facing electric cooperatives, potential Directors are now required to have a minimum College Degree of 4-year course and should not be over the age of 70.

Local government officials who violate this law can now be subjected administrative disciplinary action and can be sued with the Office of the Ombudsman.  The NEA law provided under “SEC. 64-A. Penalties. – Any person who willfully violates any rule or regulation promulgated pursuant to the authority granted in this Act shall, upon conviction, be punished by a fine of not less than Fifty Thousand Pesos (P50,000.00) but not more than one (1) year, or both, at the discretion of the court:

That if the violation is committed by a government official or employee, including those in government-owned or –controlled corporations, such person shall, in addition to the penalty provided herein, be subjected to administrative disciplinary action.”


Many interpret the law to mean the end of the interference of local government officials in the elections to the board of directors of the Electric Coops of their handpicked political allies who are then used by the local government officials to push their personal agenda.  In the Island of Siquijor, the power development of the electric coop had been delayed for years reportedly due to the interference of LGU officials.

Government officials are known to interfere in power supply contracts in Palawan, Masbate and Occidental Mindoro.  In Oriental Mindoro, former Congressman Rodolfo G. Valencia is backing DMCI Power and Governor Alfonso V. Umali, Jr. is pushing for Emerging Power Resources, Inc.  In Marinduque, the local government unit there is reported to be interfering with even with a new 4-MW temporary power.

The new NEA Law is actually good news because the electric coops can now be free to make the decisions based on what is technically and economically correct for its member-consumers.


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