Omnibus Rules and Regulations on the Registration of Electric Cooperatives Under Republic Act No. 6938 ( IRR of RA 6938 )
February 10, 1994
February 10, 1994
OMNIBUS RULES AND REGULATIONS ON THE REGISTRATION OF ELECTRIC COOPERATIVES UNDER REPUBLIC ACT NO. 6938 (THE COOPERATIVE CODE OF THE PHILIPPINES)
Pursuant to the provisions of Article 122 of Republic Act No. 6938, otherwise known as the Cooperative Code of the Philippines and with the end in view of harmonizing the provisions of said Code with that of Presidential Decree No. 269, as amended, the Cooperative Development Authority (CDA), created under Republic Act No. 6939, and the National Electrification Administration (NEA), created under P.D. No. 269, as amended, do hereby jointly promulgate the following rules and regulations for proper guidance and compliance by electric cooperatives;
RULE I
Definition of Terms
SECTION 1. As used in these Rules, the following shall be construed as:
a. Electric Cooperatives (ECs) shall mean those corporations and/or cooperatives organized and existing under P.D. No. 269, as amended, or a cooperative supplying or empowered to supply service which have heretofore been organized under Republic Act No. 2023, otherwise known as the Philippine Non-Agricultural Cooperatives Act, whether converted under P.D. No. 269, as amended, or not. IEcaHS
b. All the words/terms defined in Article 5 of R.A. No. 6938, the Rules and Regulations Implementing Certain Provisions of the Cooperative Code of the Philippines, and Section 3 of P.D. No. 269, as amended, except letters "q" and "r", shall have the same meaning under these Rules.
c. PHILRECA shall mean the Philippine Rural Electric Cooperatives Association.
RULE II
Nature and Purpose of Organization of Electric Cooperatives
SECTION 1. Under Section 15 of P.D. No. 269, as amended, ECs are non-stock, non-profit membership cooperatives, and principally organized for the purpose of supplying, and of promoting and encouraging the fullest use of electric light and power service within their respective franchise areas.
SECTION 2. Subject to the favorable indorsement of NEA under Rule VII hereof, and their compliance with the requirements set forth under Rule III hereof, ECs as defined in Rule I, Section 1 (a) of these Rules, may heretofore be converted into stock cooperatives, and in addition to the immediately preceding section, engage and undertake any or all of the activities enumerated under Article 6 of R.A. No. 6938. IDAEHT
SECTION 3. Any proposition for conversion of ECs into stock cooperatives shall be submitted to the members in a General Membership meeting called for the purpose whereby a two-thirds (2/3) majority vote of all the members present shall be needed to approve the same.
RULE III
Requirements for Registration with the Authority
SECTION 1. Existing ECs which shall choose to register as cooperatives with the CDA shall submit the following documents:
a. A certified copy of the Articles of Incorporation and By-laws filed with the NEA;
b. A copy of the Certificate of Registration with the NEA;
c. Duly audited financial statements for the last two calendar or fiscal years, as the case may be;
d. Copies of the loan agreements between the ECs and the NEA;
c. A sworn statement executed by the treasurer stating the names of the Directors of the EC, the amount of its authorized share capital, subscribed share capital, and the paid-up share capital, contributed by the members;
f. The favorable indorsement of the National Electrification Commission (NEC) as the government agency authorized to grant, amend, alter, repeal and/or modify franchises for power generation, transmission, and distribution; and
g. The favorable indorsement of the NEA tasked with carrying into effect the declared national policy objectives on rural electrification.
RULE IV
Membership in ECs
SECTION 1. Membership in ECs shall be open to all subscribers/users of the services offered by the cooperatives to the general public. Such statements and the requirements for membership shall be prescribed in the by-laws of the cooperatives.
SECTION 2. The cooperative may prescribe its by-laws that a member must have no unsettled or outstanding obligation to the cooperative, or must not have been found guilty of electric pilferage, or have been removed for cause as a member or director of an EC. CDAcIT
SECTION 3. Membership education seminars shall be conducted by the cooperative in coordination with the CDA, the NEA, and the PHILRECA, in order to inculcate in the members the principles of cooperativism, and to appraise them of their rights, duties, and obligations under R.A. No. 6938, and P.D. No. 269, as amended.
RULE V
Articles of Cooperation
SECTION 1. The Articles of Incorporation of ECs filed and registered with the NEA pursuant to P.D. No. 269, as amended, shall insofar as applicable and within the purview of Article 14 of R.A. No. 6938 be considered as Articles of Cooperation of ECs applying for registration with the CDA.
SECTION 2. In case of ECs which qualify for conversion into stock cooperatives as provided for in Rule II hereof, said Articles of Incorporation shall, at the time of registration with the CDA, be supported by the requirements enumerated in Rule III of these Rules. cTSHaE
SECTION 3. Within one (1) year from the issuance of the certificate of registration with the CDA, the Articles of Incorporation shall be amended by the cooperative, in accordance with the provisions of R.A. No. 6938.
RULE VI
By-Laws
SECTION 1. The existing by-laws of ECs as approved by the NEA pursuant to P.D. No. 269, as amended, shall insofar as applicable and within the purview of Article 15 of R.A. No. 6938 be adopted and used by said cooperative applying for registration with the CDA.
SECTION 2. In case of ECs which qualify for conversion into stock cooperatives as provided for in Rule II hereof, the said NEA-approved by-laws shall be harmonized with the provisions of Article 15 of R.A. No. 6938.
SECTION 3. Within one (1) year from the issuance of the certificate of registration by the CDA, the by-laws shall be amended in accordance with the provisions of R.A. No. 6938, if necessary.
RULE VII
Conditions for Issuance of NEA Indorsement
SECTION 1. ECs seeking registration with the CDA shall obtain the favorable indorsement of the NEA as required in Rule III, Section 1 (g) hereof, Provided, That the EC is current in its amortization payments with the NEA.
RULE VIII
Cut-Off Date for Registration with CDA
SECTION 1. ECs shall have three (3) years from the date of effectivity of these Omnibus Rules and Regulations within which to qualify for registration with the CDA. For this purpose, the CDA, NEA, and PHILRECA shall immediately and jointly evolve a plan to qualify electric cooperatives pursuant to Article 122 of R.A. No. 6938. After the lapse of the aforecited period, such cooperatives shall undergo the required procedures for registration of new cooperatives, including the submission of an economic survey. TIaCcD
RULE IX
Effect of Registration with CDA
SECTION 1. ECs which qualify for registration with the CDA and for which a certificate of registration was issued by the CDA under its official seal pursuant to Article 16 of R.A. No. 6938 within the period provided for in Rule VIII of these Rules, shall from the date of issuance of the certificate of registration no longer be covered by the provisions of Sections 3 and 5 of P.D. No. 1645; Provided, however, That said cooperatives shall continue to be covered by the pertinent provisions of P.D. No. 269, as amended, Provided, further, That any and all existing contractual obligations of said cooperatives and the conditions therein imposed consequential of their various loan agreements with the NEA shall remain in full force and effect, and shall not be impaired by reason of said registration.
SECTION 2. Once permanently registered with the CDA, the ECs shall be governed by the provisions of Article 98 of R.A. No. 6938 with respect to the internal affairs of the cooperative, and shall fall under the jurisdiction of the CDA. IcTEAD
SECTION 3. The NEA shall continue to exercise its regulatory and supervisory powers over ECs with respect to matters relating to the franchise, capitalization and investment requirements, equipment and facilities, rate studies, and other matters affecting their public service operations.
SECTION 4. The registration of ECs with the CDA shall in no way affect the rights and status of employees of the ECs, its properties, liabilities, and its on-going projects.
RULE X
Capital, Property and Funds
SECTION 1. Capital Sources. — ECs registered with the CDA may derive their capital from any or all of the following sources:
a. Members share capital;
b. Loans and borrowings, including deposits;
c. Revolving capital which consists of the deferred payment of patronage refunds of interest on share capital;
d. Subsidies, donations, legacies, grants, aids, and such other assistance from local or foreign institutions whether public or private; and SECcIH
e. Other legal sources.
SECTION 2. In case of transfer and/or assignment of the share capital contribution and/or interest, the provisions of Articles 74 and 76 of R.A. No. 6938 shall apply.
RULE XI
Allocation and Distribution of Net Surplus
SECTION 1. The allocation and distribution of the net surplus, if any, of registered ECs shall be in accordance with the order of distribution prescribed in Article 87 of R.A. No. 6938.
RULE XII
Loan Obligations
SECTION 1. The conditions in the loan agreements entered into between the EC and the NEA prior to the registration with the CDA shall remain in full force and effect until such time as the loan shall have been fully paid.
RULE XIII
Construction and Interpretation
SECTION 1. These Omnibus Rules and Regulations shall be liberally construed and interpreted to promote public interest, and assist electric cooperatives in registering under R.A. No. 6938, and thereby be qualified and entitled to all incentives, benefits, and privileges provided thereunder.
RULE XIV
Miscellaneous Provisions
SECTION 1. The CDA and the NEA are hereby authorized to issue joint circulars, bulletins, and/or memoranda to implement the provisions of these Omnibus Rules and Regulations in consultation with the PHILRECA.
SECTION 2. Section 1 (c), Rule III hereof, shall be complied with at anytime within the three-year period from the effectivity of these Omnibus Rules and Regulations.
RULE XV
Effectivity
SECTION 1. These Omnibus Rules and Regulations shall take effect thirty (30) days after publication in the Official Gazette.
DONE in Manila, Philippines, on this 10th day of February, 1994.
RECOMMENDING APPROVAL:
COOPERATIVE DEVELOPMENT AUTHORITY
NATIONAL ELECTRIFICATION ADMINISTRATION
By: (SGD.) EDNA E. ABERILLAChairperson
By: (SGD.) EMMANUEL N. PELAEZChairman
APPROVED:
(SGD.) FIDEL V. RAMOSPresident of the Philippines