Probe sought on electric coop's charges

by Arnell Ozaeta, ABS-CBN News Southern Tagalog

Posted at Aug 22 2011 10:25 PM | Updated as of Aug 23 2011 06:25 AM

BATANGAS, Philippines – Lawmakers from the Agricultural Sector Alliance of the Philippines (AGAP) and 5 other party-list groups are demanding an investigation on the alleged questionable electric charges being passed on to consumers by electric cooperatives.

AGAP Rep. Nicanor Briones sent a letter to rep. Joseph Emilo Abaya, Chairman of the Committee on Appropriations, asking the deferment of the approval of the budget of Department of Energy (DOE), National Electrification Authority (NEA), and Energy Regulatory Commission (ERC) until the questionable electric charges are clarified.

Included as petitioners are party-list Representatives Ponciano Payuyo of APEC, Jose Ping-Ay of COOP-NATCO, Agapito Guanlao of BUTIL, Isidro Lico of ATING COOP, and Erwin Tieng of BUHAY.

Briones also sent a letter to President Benigno Aquino III, seeking the assistance of the chief executive in stopping the said "illegal electric charges."

He said a number of Batangas II Electric Cooperative, Inc. (BATELEC II) consumers came to him and asked if the Member's Contribution to Capital Expenditure (MCC) amounting to P.226 per kilowatt hour being charged to them by the electric cooperative is legal.

This prompted Briones to investigate and he found out that the said charges are not credited as part of the member's stock capital contribution to BATELEC II, thereby depriving the consumers any stock dividends.

"Dapat ipaliwanag ng BATELEC II kung ano ang treatment nila sa libro ng capital expenditure or capex, ito ba ay donation, utang, o capital contribution ng ating consumer-members na maaring kumita ng dividendo," Briones said.

He said during a congressional budget hearing, NEA and ERC failed to explain when he asked what the capex was intended for and why it was not clearly explained to the consumers before adding it to their monthly electric bills.

"Hindi alam ng lahat ng mga konsumederos na may idinadagdag pala sa kanilang electric bill every month na hindi dapat dahil ito ay ilegal," Briones added.

Contributions to capex should have the consent of its consumers and should not be included in the electric charges. Investment on capex should be derived from net surplus, loans or investments from stockholders and should not be shouldered by the consumers, especially not without their approval, Briones said.

Briones said in May 2011 alone, BATELEC II had a sale of 56.39 million kilowatt hours. "Multiply it by P.226, that's a total of P12.7 million being charged to consumers as monthly capex without their consent."

"If you'll multiply it by 12, that's around P149 million a year and around P15 billion a year nationwide representing around 100 electric cooperatives in the country," he explained.

According to Briones, "out of 119 electric cooperatives nationwide, only 11 are registered under the Cooperative Development Authority (CDA) and Batelec II is not one of them."

"As such, BATELEC II, like most of the electric cooperatives, does not enjoy the tax exemption that is given to CDA registered cooperatives, hence, they charge higher electricity rates to its 9 million consumers," he added.

Zenaida Masangkay, Member Consumer Services and Public Relations Department manager of BATELEC II, admitted that they were collecting Member's Contribution for Capital Expenditures (MCC) from their consumers as approved by the Energy Regulatory Commission.

The ERC however, issued a resolution last July 6, 2011 (Resolution #14 series of 2011), changing the term MCC to Reinvestment Fund for Sustainable Capital Expenditures or RFSC.

Masangkay explained that the RFSC is a tariff or cost intended for the electric cooperative's projects duly approved by the ERC.

"Ang RFSC ay nakalaaan para pondohan ang amortization or debt service o pagkakautang ng cooperatiba na may kaugnayan sa mga proyektong expansion o pagpapalawak at rehabilitasyon ng mga linya ng kuryente na naayon sa capital expenditure plan," Masangkay explained.

She explained that the RFSC fund is placed in a separate account and could not be used for other expenditures.

Member-consumers are likewise not entitled for a refund because it is considered as "contribution in aid of construction (CIAC)" based on the ruling imposed by NEA to electric cooperatives such as BATELEC II, Masangkay said.

Meanwhile, in his letter to President Aquino, Briones appealed in adhering to the true ownership of the electric cooperatives, which he said, are the consumer-members.

Briones said BATELEC II is a "fake cooperative" since it is not registered under the Cooperative Development Authority. "Genuine cooperatives give dividends to its members relative to their stock contribution, an example of which is the Palawan Electric Cooperative (PALECO) which has already given P15-million dividend to its members."

"May we seek assistance in ensuring that these questionable MCC charges are stopped and the money collected should be accounted for and rightfully returned to its consumers," he said in his letter.

He also called for an election in General Membership Assembly to establish new leaders in BATELEC II.