Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 269)
The main purpose of the NEA is to promote, encourage, and assist the total electrification of the Philippines on an area coverage basis, particularly through the organization, promotion, and development of electric cooperatives to attain this objective.
The NEA is a public corporation with powers vested in a Board of Administrators composed of a Chairman and four members, including the Administrator as an ex officio member. The Chairman and members are appointed by the President, and the Administrator manages day-to-day operations.
The State declares the policy to pursue the attainment of total electrification in an orderly and vigorous manner and to promote and support all public service entities supplying electric service, especially electric cooperatives, to achieve area coverage electrification.
Electric cooperatives are nonprofit, cooperative, membership corporations organized under this Decree (or converted under it) that supply electric service on an area coverage basis at the lowest cost consistent with sound management and economy.
The NEA can make loans to public service entities, especially cooperatives, for the construction or acquisition, operation, maintenance, restoration, improvement, or enlargement of electric generation, transmission, and distribution facilities, and for financing wiring and purchase of electric appliances for consumers.
Members, officers, employees, or agents of the NEA cannot participate in matters affecting entities in which they or their relatives up to the third degree have an interest. Violations may result in removal from office and criminal penalties including fines or imprisonment.
Franchises for electric service areas are regulated by the NEA, which has the power to grant, repeal, alter, or condition franchises to ensure the most rapid electrification of the nation on an area coverage basis, including revoking franchises of those not providing adequate, dependable service.
Cooperatives must operate for the mutual benefit of members and patrons, making no unreasonable preference or discrimination in rates or services, and furnishing service on an area coverage basis. Excess receipts are refunded to patrons or used to maintain cooperative operations.
Cooperatives operating in conformity with this Decree are permanently exempt from income tax and, for up to thirty years after organization or conversion or until indebtedness is fully paid, exempt from all national and local government taxes, franchise fees, import duties, and other charges related to their operations.
The NEA can refuse approvals for new loans, withhold loan advances, withhold technical assistance, foreclose on secured properties, and petition courts or administrative agencies to enforce compliance with loan agreements and regulations.
'Area coverage' means providing dependable and adequate electric service to all persons within a franchised geographic area who request service and comply with reasonable terms, regardless of location, to financially sustain the cooperative's operation and promote total electrification, including into less profitable or thinly settled areas.
Amendments require presentation to the members with notice including the proposed amendment summary, approval by two-thirds of votes cast at a meeting, and filing of executed and acknowledged articles of amendment with the NEA for certification and effectivity.
The Administrator must be a person of known integrity, competence, and experience in technical and executive fields relevant to NEA’s purposes, appointed by the President and removable only for cause.
The NEA can sue and be sued but is generally immune to suits for acts ex delicto unless it consents otherwise.
The Board has a Chairman and four members serving six-year terms (except initial appointments with staggered terms), meets regularly at least twice a month, and requires a majority vote for decisions, with the presence of at least three members constituting a quorum.