AN ACT STRENGTHENING THE NATIONAL ELECTRIFICATION ADMINISTRATION
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AN ACT STRENGTHENING THE NATIONAL ELECTRIFICATION ADMINISTRATION
Republic Act No. 10531
May 7, 2013
Case Overview and Summary
Summary of Republic Act No. 10531 (National Electrification Administration Reform Act of 2013)Declaration of National Policy (Section 2)
- Promote sustainable development in rural areas through rural electrification.
- Empower and strengthen the National Electrification Administration (NEA) to pursue electrification program and bring electricity to the countryside, even in missionary or economically unviable areas.
- Empower and enable electric cooperatives to cope with changes brought about by the Electric Power Industry Reform Act of 2001.
Scope (Section 2-A)
- This Act establishes a framework for introducing structural reforms in the NEA and the electric cooperatives.
Definitions (Section 3)
- Defines terms such as "CDA", "DOE", "electric cooperative", "EPIRA", and "ERC".
Powers, Functions and Privileges of the NEA (Section 4)
- Authorized capital stock of NEA increased to Twenty-five billion pesos (P25,000,000,000.00).
- NEA is authorized and empowered to:
- Supervise the management and operations of all electric cooperatives.
- Exercise step-in rights as defined.
- Provide institutional, financial and technical assistance to electric cooperatives.
- Pursue total electrification of the country through electric cooperatives.
- Ensure economic and financial viability and operation of electric cooperatives.
- Restructure ailing electric cooperatives.
- Develop, set and enforce institutional and governance standards.
- Formulate and impose administrative sanctions and penalties.
- Serve as guarantor to qualified electric cooperatives.
- Grant loans to electric cooperatives.
- Borrow funds from any source, subject to Monetary Board approval.
- Exercise primary and exclusive jurisdiction in adjudication of complaints against electric cooperative officers, election disputes, and matters related to implementation of this Act.
- As a quasi-judicial agency, deputize local law enforcement agencies to enforce orders or decisions.
Supervisory Powers of the NEA Over Electric Cooperatives (Section 4-A)
- NEA has the power to:
- Issue orders, rules and regulations, conduct investigations, referenda and other actions on matters affecting electric cooperatives.
- Issue preventive or disciplinary measures, including suspension or removal and replacement of board of directors and officers of electric cooperatives.
- Appoint independent board of directors in electric cooperatives.
Step-in Rights in Cases of Ailing Cooperatives (Section 4-B)
- NEA shall immediately step-in and take over operations of any ailing electric cooperative.
- Within a reasonable period after take-over, NEA may convert the ailing cooperative to either a stock cooperative registered with CDA or a stock corporation registered with SEC.
- NEA may appoint or assign third persons to the Board of the electric cooperative until election of a new board is necessary.
Injunction or Temporary Restraining Order (Section 4-C)
- No injunction or temporary restraining order shall be issued against implementation of any NEA order, ruling or decision, except by the Court of Appeals, and only upon posting of a sufficient bond.
- Injunction shall only be effective for a period not exceeding sixty (60) days.
Powers of Electric Cooperatives (Section 16)
- Electric cooperatives have the power to construct, acquire, own, operate and maintain electric subtransmission and distribution lines along public lands and thoroughfares.
- Electric cooperatives have the power to construct, acquire, own, operate and maintain generating facilities within their franchise area, with preference given to their qualified bid in case of a tie for existing NPC-SPUG generating facilities.
Independence of the Board of Directors and Officers of Electric Cooperatives (Section 26-A)
- No person shall be elected or appointed as an officer or be eligible to run as a board member of an electric cooperative if certain conditions are met, such as holding public office, being a candidate in the last preceding local or national elections, being convicted of a crime involving moral turpitude, being terminated for cause from public office or private employment, being related to any member of the electric cooperative board of directors or management within the fourth civil degree of consanguinity or affinity, being a representative of a juridical person, or being employed by or financially interested in a competing enterprise or a business selling electric energy or electrical hardware to the cooperative.
Fit and Proper Rule (Section 26-B)
- NEA shall prescribe, pass upon and review the qualifications and disqualifications of individuals appointed or elected to electric cooperatives and disqualify those found unfit.
- Minimum qualifications of a director or officer of the electric cooperative are specified, such as being a Filipino citizen, a graduate of a four-year course, between 21 and 70 years old, of good moral character, a member of the electric cooperative in good standing for the last five years, an actual resident and consumer in the district for at least two years, and having attended at least two Annual General Membership Assemblies for the last five years.
Registration of All Electric Cooperatives (Section 32)
- Electric cooperatives may choose to remain as a non-stock, non-profit cooperative or convert into and register as a stock cooperative under CDA or a stock corporation under SEC.
- Regardless of the choice, NEA shall have authority over electric cooperatives to require submission of reportorial requirements related to their operations as electric distribution utilities.
- Electric cooperatives registered with CDA shall continue to enjoy benefits under this Act.
- Electric cooperatives registered with SEC shall no longer enjoy incentives provided for in this Act.
- NEA shall retain its supervisory and disciplinary power over electric cooperatives registered under CDA or SEC.
Incentives of Electric Cooperatives (Section 32-A)
- Electric cooperatives which comply with financial and operational standards set by NEA shall enjoy the following incentives:
- Entitled to congressional allocations, grants, subsidies and other financial assistance for rural electrification.
- Receive subsidies, grants and other assistance which shall form part of the donated capital and funds of the electric cooperatives.
- Avail of preferential rights granted to cooperatives under the Local Government Code of 1991 and other related laws.
- NEA may prioritize the grant of incentives in favor of electric cooperatives that are managed effectively and efficiently and comply consistently with its mandates and directives.
Penalties (Section 64-A)
- Any person who willfully violates any rule or regulation promulgated pursuant to this Act shall, upon conviction, be punished by a fine of not less than Fifty thousand pesos (P50,000.00) but not more than Five hundred thousand pesos (P500,000.00) or by imprisonment of not less than six (6) months but not more than one (1) year, or both.
- If the violation is committed by a juridical person, the penalty shall be imposed upon the official and/or employee responsible for the violation.
- 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, be subjected to administrative disciplinary action.
Congressional Oversight (Section 64-B)
- The Joint Congressional Power Commission created under Section 62 of Republic Act No. 9136 shall exercise oversight powers over the implementation of this Act.
Implementing Rules and Regulations (Section 16)
- Within sixty (60) days from the effectivity of this Act, the DOE shall, in coordination with the NEA and the CDA, and in consultation with the electric cooperatives, issue such rules and regulations as may be necessary to implement this Act.
Separability Clause (Section 17)
- If any provision of this Act is declared invalid or unconstitutional, the other provisions not affected thereby shall remain valid and subsisting.
Repealing Clause (Section 18)
- Article 132(3) of Republic Act No. 9520 and Section 30 of Republic Act No. 9136 (EPIRA) on NEA's authorized capital stock are hereby repealed.
- Any other provision of law, presidential decree, executive order, or rules and regulations inconsistent with the provisions of this Act or with the rules and regulations issued pursuant thereto are hereby repealed or modified accordingly.
Effectivity (Section 19)
- This Act shall take effect on the fifteenth (15th) day following its publication in at least two (2) newspapers of general circulation.
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AN ACT STRENGTHENING THE NATIONAL ELECTRIFICATION ADMINISTRATION
Republic Act No. 10531
•May 7, 2013
Republic of the PhilippinesCONGRESS OF THE PHILIPPINESMetro Manila
Fifteenth CongressThird Regular Session
Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand twelve.
REPUBLIC ACT No. 10531
AN ACT STRENGTHENING THE NATIONAL ELECTRIFICATION ADMINISTRATION, FURTHER AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 269, AS AMENDED, OTHERWISE KNOWN AS THE "NATIONAL ELECTRIFICATION ADMINISTRATION DECREE"
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
CHAPTER IPOLICY AND DEFINITIONS
Section 1. This Act shall be known as the "National Electrification Administration Reform Act of 2013″.
Section 2. Section 2 of Presidential Decree No. 269, as amended, is hereby further amended to read as follows:
"SEC. 2. Declaration of National Policy. – It is hereby declared the policy of the State to:
"(a) promote the sustainable development in the rural areas through rural electrification;
"(b) empower and strengthen the National Electrification Administration (NEA) to pursue the electrification program and bring electricity, through the electric cooperatives as its implementing arm, to the countryside even in missionary or economically...
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