P-Noy signs law strengthening NEA

MANILA, Philippines - President Aquino has signed into law the measure  strengthening the National Electrification Administration (NEA) through charter amendments.

The new law essentially gives NEA more teeth over electric cooperatives, some of which are financially bleeding and heavily indebted because of mismanagement and unpaid services.

For instance, the law strengthened NEA’s authorized capital stock to P25 billion from P1 billion.

It also allowed NEA to act as guarantor to electric cooperatives in their transactions to various parties including their power supply contracts.

Furthermore, NEA may now grant loans to electric cooperatives for the construction or operation of subtransmission and distribution facilities necessary to supply power to their service areas.

Another amendment provided by the new law is the so-called step-in rights in cases of ailing cooperatives.

“The NEA shall immediately step-in and take over from its board the operations of any ailing electric cooperative. Within a reasonable period after take-over, the NEA may convert the ailing cooperative to either a stock cooperative registered with the Cooperative Development Authority or a stock corporation registered with the Securities and Exchange Commission,” the legislation stated.

To further improve the operations of electric cooperatives, the approved measure also allows NEA to require the monthly submission of reportorial requirements as may be necessary relative to their operations.

The reports shall include cooperatives’ monthly financial reports, engineering reports, audited financial statements, annual cash operating budget, five-year investment plan as well as summary of complaints received.

In an interview with The STAR, NEA administrator Editha Bueno welcomed the charter amendments, saying that the new law strengthens NEA’s teeth over electric cooperatives.

“It strengthens NEA. This is important for us to be able to help us strengthen the electric coops,” Bueno said.