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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 269
PRESIDENTIAL DECREE NO. 269 -
CREATING THE "NATIONAL ELECTRIFICATION ADMINISTRATION" AS A
CORPORATION, PRESCRIBING ITS POWERS AND ACTIVITIES, APPROPRIATING THE
NECESSARY FUNDS THEREFOR AND DECLARING A NATIONAL POLICY OBJECTIVE FOR
THE TOTAL ELECTRIFICATION OF THE PHILIPPINES ON AN AREA COVERAGE
SERVICE BASIS, THE ORGANIZATION, PROMOTION AND DEVELOPMENT OF ELECTRIC
COOPERATIVES TO ATTAIN THE SAID OBJECTIVE, PRESCRIBING TERMS AND
CONDITIONS FOR THEIR OPERATIONS, THE REPEAL OF REPUBLIC ACT NO. 6038,
AND FOR OTHER PURPOSES
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chanroblesvirtualawlibrary
WHEREAS, it
is the desire of the government to effect changes and reforms in the
social, economic, and political structure of our society;chanroblesvirtualawlibrary
WHEREAS, detailed studies have clearly emphasized the very close
correlation between consumption of energy and gross national product.
Electric power, wherever introduced, stimulates the growth of industry
and the economy in general;chanroblesvirtualawlibrary
WHEREAS, electrification of the entire country, one of the primary
concerns of the government in order to bring about the desired changes
and reforms, can be hastened by rationalizing the distribution of
electricity;chanroblesvirtualawlibrary
WHEREAS, rationalization, which implies the adoption of all measures
necessary to obtain the maximum benefit at the minimum expenses, can be
achieved by:cralaw:red
1. Establishing island grids and integrating power
generating systems.
2. Consolidating electric distribution franchise
systems. The existence of small franchise system impede the progress of
total electrification, as such small and isolated systems are
antithetical to the economies of scale.
3. Implementing the area coverage concept, which will
allow the construction of lines to thinly settled areas which are most
costly to electrify, provided that the losses from these lines can be
reasonably absorbed by the more profitable lines.
WHEREAS, under Republic Act No. 6038, dated August 4, 1969,
Presidential Decree No. 40 and Letter of Instruction No. 38, dated
November 7, 1972, the National Electrification Administration was given
certain powers, duties, and functions to attain total electrification
on an area coverage basis; to set up cooperatives for the distribution
of power; and to determine privately-owned public utilities which
should be permitted to remain in operation;chanroblesvirtualawlibrary
WHEREAS, to attain total electrification in the most effective and
efficient manner, there is a need to further strengthen and make more
flexible the organizational structure of the National Electrification
Administration by converting it into a corporation, wholly-owned and
controlled by the government, possessed with borrowing authority and
corporate powers;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the
Constitution as Commander-in-Chief of the Armed Forces of the
Philippines, and pursuant to Proclamation No. 1081, dated September 21,
1972, and General Order No. 1, dated September 22, 1972, as amended, do
hereby repeal Republic Act No. 6038 and do hereby decree, order and
make as part of the law of the land the Charter of the National
Electrification Administration, which reads as follows:cralaw:red
CHAPTER I
Policy and Definitions
Section 1. Title. — This Decree shall be referred to
as the "National Electrification Administration Decree."
Section 2. Declaration of National Policy. — The
total electrification of the Philippines on an area coverage basis
being vital to the welfare of its people and the sound development of
the Nation, it is hereby declared to be the policy of the state to
pursue and foster, in an orderly and vigorous manner, the attainment of
this objective. For this purpose, the State shall promote, encourage
and assist all public service entities engaged in supplying electric
service, particularly electric cooperatives, which are willing to
pursue diligently this objective.
Because of their non-profit nature, cooperative character and the heavy
financial burdens that they must sustain to become effectively
established and operationally viable, electric cooperatives,
particularly, shall be given every tenable support and assistance by
the National Government, its instrumentalities and agencies to the
fullest extent of which they are capable; and, being by their nature
substantially self-regulating and Congress, having, by the enactment of
this Decree, substantially covered all phases of their organization and
operation requiring or justifying regulation, and in order to further
encourage and promote their development, they should be subject to
minimal regulation by other administrative agencies.
Area coverage electrification cannot be achieved unless service to the
more thinly settled areas and therefore more costly to electrify is
combined with service to the most densely settled areas and therefore
less costly to electrify. Every public service entity should hereafter
cooperate in a national program of electrification on an area coverage
basis, or else surrender its franchise in favor of those public service
entities which will. It is hereby found that the total electrification
of the Nation requires that the laws and administrative practices
relating to franchised electric service areas be revised and made more
effective, as herein provided. It is therefore hereby declared to be
the policy of the State that franchises for electric service areas
shall hereafter be so issued, conditioned, altered or repealed, and
shall be subject to such continuing regulatory surveillance, that the
same shall conduce to the most expeditious electrification of the
entire Nation on an area coverage basis. chanroblesvirtualawlibrary
Section 3. Definitions. — As used in this Decree, the
following words or terms shall have the following meanings, unless a
different meaning clearly appears from the context;chanroblesvirtualawlibrary
(a) "NEA" shall mean the National Electrification
Administration, "Board of Administrators" shall mean the Board of
Administrators, and "Administrator" shall mean the Administrator, all
as provided for in this Decree.
(b) "Cooperative" shall mean a corporation organized
under Republic Act No. 6038 or this Decree or cooperative supplying or
empowered to supply service which has heretofore been organized under
the Philippine Non-Agricultural Cooperative Act, whether covered under
this Decree or not.
(c) "Public service entities" shall mean (1) a
cooperative, (2) the NPC, and (3) local governments and privately-owned
public service entities in operation which furnish and are empowered to
furnish retail electric service.
(d) "Person" shall mean any natural person, firm,
association, cooperative, corporation, business trust, partnership, the
National Government or any political subdivision, agency or
instrumentally thereof.
(e) "Service" shall mean electric service, either at
wholesale or retail, including the finishing of any auxiliary or
related service.
(f) "Dependable and adequate service" shall mean
service that, consistent with normal standards and levels of service
based upon good utility management and operating practices, is
sufficient in quantity, having regard for the demands for service
currently existing and reasonably anticipated within the foreseeable
future, and that is accessible on a constant and continuous basis
except for outages occasioned by the need for normal repair,
maintenance, construction or renovation work or by acts beyond the
reasonable ability of the public service entity to prevent or control.
(g) "Area" shall mean (1) the geographic area
franchised to a public service entity or (2) any lesser geographic area
for the furnishing of retail service to which a public service entity
pursuant to this Decree borrows, or may apply to borrow, funds from the
NEA, or may otherwise secure loans with the approval of the NEA, to
finance the acquisition or construction and operation, maintenance or
renovation of service facilities.
(h) "Area coverage" shall mean dependable and
adequate service that, on the basis of reasonable and standard
extension and service policies, rates, charges and other terms and
conditions, will be or is being made available to all persons within
the affected area as above defined who request such service and are
able and willing to abide by and comply with all such reasonable and
standard terms and conditions, regardless of the relative location of
such persons within the affected area or of their proximity to existing
or proposed service facilities: Provided, That the financial
feasibility of the public service entity's entire operation is not
thereby impaired.
(i) "Interest rate per centum per annum" shall mean
an interest rate that is accrued solely upon the unpaid balance of any
loan principal which has actually been advanced to a borrower and upon
any interest payment which has become due or been deferred and has not
been paid by the borrower; computed on an annual basis.
(j) "Loan" shall mean a loan the total principal
amount of which, as and when required for application to the purposes
thereof, is, at the time of the making thereof, assured from funds that
are or will become available therefor.
(k) NEDA" shall mean National Economic and
Development Authority or any successor instrumentality that may
hereafter be established to perform the same or substantially similar
function; "NPC" shall mean National Power Corporation; and "NEDA-FS"
shall mean National Economic and Development Authority-Foreign Source.
(l) "Board of Power and Waterworks" shall mean Board
of Power and Waterworks or any successor board, agency or
instrumentality that may hereafter be established to perform the same
or substantially similar functions.
(m) "Franchise" shall mean the privilege extended to
a person to operate an electric system for service to the public at
retail within a described geographic area, whether such privilege had
been granted by the Congress, by a municipal, city or provincial
government or, as herein provided, by the NEA.
(n) "Non-profit" shall mean that a cooperative shall
not engage in business for the purpose of making a profit for itself or
its patrons, but it shall not mean that a cooperative may not account
on a patronage basis to its patrons for any receipts in excess of its
expenses in relation to its operations in serving such patrons or in
relation to investment of any of its surplus funds pending their use by
the cooperative or their refund to patrons; nor shall it mean that such
excess receipts may not be refunded to its patrons, or may not be
converted into patron- furnished capital subject to later redemption
and retirement by the cooperative.
(o) "Board" shall mean the board of directors of a
cooperative.
(p) "Household" shall mean a non-seasonal dwelling
capable of receiving service safely, including apartments and other
dwelling combinations. chanroblesvirtualawlibrary
(q) "Congress" shall mean the President during his
exercise of Martial Law, or the National Assembly under the new
Constitution of 1973, whichever is the case at any given time.
(r) "President" shall mean the President of the
Philippines during the existence of Martial Law, or the Prime Minister
when the National Assembly comes into existence.
CHAPTER II
The National Electrification Administration
Section 4. NEA Authorities, Powers and Directives. —
The NEA is hereby authorized, empowered and directed to promote,
encourage and assist public service entities, particularly
cooperatives, to the end of achieving the objective of making service
available throughout the nation on an area coverage basis as rapidly as
possible; and for such purpose it is hereby, without limiting the
generality of the foregoing and in addition to other authorizations,
powers and directives established by this Decree, specifically
authorized, empowered and directed:cralaw:red
(a) To have a continuous succession under its
corporate name until otherwise provided by law;chanroblesvirtualawlibrary
(b) To prescribe and thereafter to amend and repeal
its by-laws not inconsistent with this Decree;chanroblesvirtualawlibrary
(c) To adopt and use a seal and alter it at its
pleasure;chanroblesvirtualawlibrary
(d) To sue and to be sued in any court: Provided,
That NEA shall, unless it consents otherwise, be immune to suits for
acts ex delicti;chanroblesvirtualawlibrary
(e) To make contract of every name and nature and to
execute all instruments necessary or convenient for the carrying on of
its business;chanroblesvirtualawlibrary
(f) To make loans to public service entities, with
preference to cooperatives, for the construction or acquisition,
operation and maintenance of generation, transmission an distribution
facilities and all related properties, equipment, machinery, fixtures,
and materials for the purpose of supplying area coverage service, and
thereafter to make loans for the restoration, improvement or
enlargement of such facilities; Provided, That the public service
entity supplying for a loan, if neither a cooperative nor a local
government, must be in operation at the time of application;chanroblesvirtualawlibrary
(g) To promote, encourage and assist public service
entities and government agencies and corporations having related
functions and purposes, with preference to cooperatives, in planning,
developing, coordinating, establishing, operating, maintaining,
repairing and renovating facilities and systems to supply area coverage
service, and for such purpose to furnish, to the extent possible and
without change therefor, technical and professional assistance and
guidance, information, data and the results of any investigation,
study, or receipt conducted or made by the NEA;chanroblesvirtualawlibrary
(h) To approve or disapprove any loan from other
lenders to public service entities which at the time are borrowers from
NEA under sub-paragraphs (f) or (i) of this section, and thereafter,
pursuant to Section 10 (b) to disapprove advances of loans from other
lenders;chanroblesvirtualawlibrary
(i) To make loans for the purpose of financing the
wiring of premises of persons served or to be served as a result of
loans made under sub-paragraph (f) of this Section, and for the
acquisition and installation by such persons of electrically-powered
appliances, equipment, fixtures and machinery of all kinds for
residential, recreational, commercial, agricultural and industrial
uses, such loans to be made directly (1) to public service entities
which have received loans under sub-paragraph (f) of this section,
which entities shall in turn relend such funds to persons served or to
be served by them, or (2) to any persons served or to be served by
public service entities which have received loans under sub-paragraph
(f) of this section: Provided, That at no time shall the total loans
made under this sub-paragraph (i) to a public service entity and/or to
persons served or to be served by such entity exceed twenty-five (25%)
per centum of the outstanding loans to such entity made under
sub-paragraph (f) of this section;chanroblesvirtualawlibrary
(j) To so cooperate, coordinate and exchange such
information, studies and reports with, and to seek such cooperation and
coordination from, other departments, agencies and instrumentalities of
the National Government, including the NPC, as will most effectively
conduce to the achievement of the purposes of this Decree;chanroblesvirtualawlibrary
(k) To borrow funds from any source, private or
government, foreign or domestic, and, not inconsistently with section
8, to issue bonds or other evidences of indebtedness therefor and to
secure the lenders thereof by pledging, sharing or subordinating one or
more of the NEA's own loan securities;chanroblesvirtualawlibrary
(l) To receive from Cooperatives all articles of
incorporation, amendments, consolidation, merger, conversion and
dissolution, and all certificates of changes in the location of
principal offices and of elections to dissolve, and, upon determining
that such are in conformity with this Decree, to certify the same, to
file them in the records of the NEA, and to maintain a registry of such
filings the provisions of Act No. 1459, as amended, to the contrary
notwithstanding;chanroblesvirtualawlibrary
(m) To acquire, by purchase or otherwise (including
the right of eminent domain, which is hereby granted to the NEA, to be
exercised in the manner provided by law for the institution and
completion of expropriation proceedings by the National and local
governments,) real and physical properties, together with all
appurtenant rights, easements, licenses and privileges, whether or not
the same be already devoted to the public use of generating,
transmitting or distributing electric power and energy, upon NEA's
determination that such acquisition is necessary to accomplish the
purposes of this Decree and, if such properties be already devoted to
the public use described in the foregoing, that such use will be better
served and accomplished by such acquisition; Provided, That the power
herein granted shall be exercised by the NEA solely as agent for and on
behalf of one or more public service entities which shall timely
receive, own and utilize or replace such properties for the purpose of
furnishing adequate and dependable service on an area coverage basis,
which entity or entities shall then be, or in connection with the
acquisition shall become, borrowers from the NEA under sub-paragraph
(f) of this section; and Provided further, That the costs of such
acquisition, including the cost of any eminent domain proceedings,
shall be borne, either directly or by reimbursement to the NEA,
whichever the NEA shall elect, by the public service entity or entities
on whose behalf the acquisition is undertaken; and otherwise to
acquire, improve, hold, transfer, sell, lease, rent, mortgage, encumber
and otherwise dispose of property incident to, or necessary, convenient
or proper to carry out, the purposes for which NEA was created;chanroblesvirtualawlibrary
(n) At least annually, not later than June 30th, to
report to the President and when the same comes into existence, the
Prime Minister and the National Assembly, on the status of
electrification of the Philippines, including a comprehensive reporting
of loans made, loan funds advanced, loans secured from other sources
and the advances thereof, the names and locations of the borrowers, the
number of services contemplated by such loans, the number actually
receiving service as a result of such loans, the number of electrified
and the remaining number of unelectrified households throughout the
Nation, the amounts of usage by consumers, loan and other activities
programmed for the ensuing year, and all such other information and
data as will accurately reveal the progress being made toward the
achievement of the purposes of this Decree; and to publish such report
for dissemination to and use by other interested departments, agencies
and instrumentalities of the National Government and by borrowers under
this Decree; and
(o) To exercise such powers and do such things as may
be necessary to carry out the business and purposes for which the NEA
was established, or which from time to time may be declared by the
Board of Administrators to be necessary, useful, incidental or
auxiliary to accomplish such purposes; and generally, to exercise all
the powers of a corporation under the Corporation Law insofar as they
are not inconsistent with the provisions of this Decree.
Section 5. National Electrification Administration;
Board of Administrators; Administrator. — (a) For the purpose of
administering the provisions of this Decree, there is hereby
established a public corporation to be known as the National
Electrification Administration. All of the powers of the corporation
shall be vested in and exercised by a Board of Administrators, which
shall be composed of a Chairman and four (4) members, one of whom shall
be the Administrator as ex-officio member. The Chairman and the three
other members shall be appointed by the President of the Philippines to
serve for a term of six years. Provided, That the terms of the first
appointees shall be six years for the Chairman and one member and three
years for the two other members, respectively, and that the term of the
ex-officio member shall be co-terminous with his term as the
Administrator. All vacancies, except through expiration of the terms,
shall be filled for the unexpired term only. The Chairman and every
member of the Board of Administrators shall be entitled to a per diem
of not more than three hundred pesos for each meeting actually attended
by them; Provided, That the total of such per diems shall not exceed
one thousand five hundred pesos per month per member.
The Board of Administrator shall meet regularly at least twice a month
and as often as the exigencies of the agency's affairs demand.
The presence of at least three members shall constitute a quorum which
shall be necessary for the transaction of any business. The affirmative
vote of a majority of the members present shall be necessary for the
approval of any resolution, decision or order, except when a greater
vote is required as sometimes hereinafter provided. In the absence of
the Chairman at a Board meeting duly called, the Administrator as
ex-officio member shall preside. chanroblesvirtualawlibrary
The Board shall, without limiting the generality of the foregoing, have
the following specific powers and duties.
(1) To implement the provisions and purposes of this
Decree;chanroblesvirtualawlibrary
(2) To formulate and adopt policies and plans, and to
promulgate rules and regulations, for the management, operation and
conduct of the business of the NEA;chanroblesvirtualawlibrary
(3) To adopt and, as may be necessary from time to
time, to amend annual budgets for the NEA's borrowing and lending
programs and for the agency's administration; Provided, That copies of
such budgets shall be submitted to the President or the appropriate
committee of and as determined by, the National Assembly, when it comes
into existence, within fifteen (15) days from the transmission thereof
to the NEDA; and Provided, further, That the administrative budget and
any amendments thereto shall be subject to the approval of NEDA;chanroblesvirtualawlibrary
(4) To fix the compensation of the Administrator and
of the Deputy Administrators, subject to the approval of the President
of the Philippines; and
(5) To establish policies and guidelines for
employment on the basis of merit, technical competence and moral
character, and, upon the recommendation of the Administrator to
organize or reorganize NEA's staffing structure, to fix the salaries of
personnel and to define their powers and duties.
(b) The management of NEA shall be vested in the
Administrator, who shall be a person of known integrity, competence and
experience in technical and executive fields related to the purposes of
this Decree. He shall be appointed by the President of the Philippines
and shall not be removed except for cause.
The Administrator shall have the following powers and duties: chanroblesvirtualawlibrary
(1) To execute and administer the policies, plans and
program, and the rules and regulations, approved or promulgated by the
Board of Administrators;chanroblesvirtualawlibrary
(2) To submit for the consideration of the Board of
Administrators such policies, plans and programs as he deems necessary
to carry out the provisions and purposes of this Decree;chanroblesvirtualawlibrary
(3) To direct and supervise the operation and
internal administration of the NEA and, for this purpose, to delegate
some or any of his powers and duties to subordinate officials of the
NEA;chanroblesvirtualawlibrary
(4) Subject to the guidelines and policies
established by the Board of Administrators, to appoint and fix the
number and compensation of subordinate officials and employees of the
NEA: Provided, however, The provisions of the Civil Service Law and
Position Classification Law shall not apply to the appointment and
compensation of any such subordinate official or employee;chanroblesvirtualawlibrary
(5) For cause, to remove, suspend, or otherwise
discipline any subordinate official or employee;chanroblesvirtualawlibrary
(6) To prepare an annual report on the activities of
the NEA at the close of each fiscal year and to submit a copy thereof
to the President of the Philippines and when it comes into existence,
the Prime Minister and the appropriate committee of, and as determined
by, the National Assembly; and
(7) To exercise such other powers and duties as may
be vested in him by the Board of Administrators.
In case of absence or disability of the Administrator, he shall
designate any of the Deputy Administrators who shall act in his place.
(c) The Auditor General shall be ex-officio Auditor
of the NEA. The provisions of Section 584 of the Revised Administrative
Code, as amended by Republic Acts Numbered 2266 and 2716, shall apply
to the Office of the Representative of the Auditor General in the NEA.
Section 6. Capital Stock. — The authorized capital
stock of NEA is one billion pesos (P1B) divided into ten (10) million
shares having a par value of one hundred (P100.00) pesos each, which
shares are not to be transferred, negotiated, pledged, mortgaged, or
otherwise given as security for the payment of any obligation. The sum
of fifty million pesos (P50M) of the capital stock has been subscribed
and paid wholly by the government of the Philippines in accordance with
the provisions of Republic Act Numbered Twenty-seven hundred seventeen,
and Republic Act Numbered Sixty hundred thirty-eight.
The remaining nine hundred fifty million pesos (P950M) shall be wholly
subscribed by the government of the Philippines and shall be paid as
follows:cralaw:red
(a) The sum of one hundred ninety five million pesos
(P195M) worth of goods and services from Japanese Reparations for the
eighteenth, nineteenth and twentieth year schedule, which is hereby
allocated to NEA;chanroblesvirtualawlibrary
(b) The sum of ten million pesos (P10M) for the
fiscal year 1973 and the same amount each year for the next two fiscal
years making a total sum of thirty million pesos (P30M) representing
proceeds of the sale of reparation goods, which are hereby allocated to
NEA;chanroblesvirtualawlibrary
(c) The sum of fifty three million five hundred
thousand pesos (P53.5M) for the fiscal year 1973 and the same amount
each year for the next nine (9) fiscal years from the general revenue,
which are hereby appropriated;chanroblesvirtualawlibrary
(d) The sum of one hundred thirty million pesos
(P130M) representing fund or physical assets which NEDA-FS may make
available to the NEA for loan purposes;chanroblesvirtualawlibrary
(e) The sum of sixty million pesos (P60M)
representing proceeds corresponding to the share of the National
Government in all franchise taxes paid by electric service entities; and
(f) Such sums as may be appropriated and/or allocated
by the President or the National Assembly, when it comes into
existence, from time to time as the financial needs of the NEA shall
require until the authorized capital stock is fully paid-up.
Section 7. Loan Standards. — In making a loan
authorized in Section 4, the Board of Administrators is hereby
authorized, empowered and directed:cralaw:red
(a) Before making such loan, to determine and certify
that (1) the project or projects being financed thereby are financially
feasible for the purpose of, and will result in, area coverage in the
area or areas to be affected thereby; (2) funds are or will be
available for the total advance of such loans to the borrower on the
schedule contemplated by the loan agreement; and (3) in the NEA's
judgment and security for such loan is reasonably adequate and the
principal of and interest upon such loan will be repaid on schedule and
within the time agreed;chanroblesvirtualawlibrary
b) To require that such loan be self-liquidating
within a term to be fixed by the NEA;chanroblesvirtualawlibrary
c) To impose upon the loan principal an interest
charge to be fixed by the NEA;chanroblesvirtualawlibrary
d) To fix the schedule for repayment of the principal
of and the interest upon such loan in installments recurring not more
than every quarter, which installments may be in unequal amounts and
larger in the later years of the loan term than in the earlier years;chanroblesvirtualawlibrary
e) To require in the loan agreement that the
borrower's rates, charges, rules and regulations, policies and all
other terms and conditions affecting its extension and furnishing of
service shall be such as to assure achievement of the loan purposes,
and that the same shall be filed with and for such purpose approved by
the Board of Administrators before being put into effect or charged by
the borrower; and
(f) Subject to the foregoing, to establish and
require compliance with such procedures, rules and regulations as the
Board of Administrators may determine to be necessary or appropriate to
assure that the purposes of such loan will be timely achieved and that
the loan agreement and the provisions of this Decree will be complied
with.
Section 8. Contracting Indebtedness: Conditions,
Privileges, Exemptions, Sinking Fund, Guarantees. — Whenever the Board
of Administrators determines that to accomplish the purposes of Chapter
II of this Decree it is necessary to contract indebtedness, it shall by
a resolution, adopted by the affirmative votes, of at least three
members, to declare and authorize the NEA's execution or issuance of,
and establish the terms and conditions to be contained in, such bonds,
loan agreements or other evidences of indebtedness necessary therefor.
Such resolution shall become valid and effective upon approval by the
President of the Philippines upon recommendation of the Secretary of
Finance.
(a) With respect to domestic indebtedness to be
incurred by the NEA, the terms and conditions to be contained in such
bonds or other evidences of indebtedness, and other conditions,
privileges, exemptions and guarantees attaching thereto, shall include
the following:cralaw:red
(1) Such bonds or other evidences of indebtedness (a)
shall be in registered form and transferable at the Central Bank of the
Philippines; (b) shall not be sold at less than par; (c) shall be
payable ten years or more from date of issue, as may be determined by
the Secretary of Finance before their issuance, but shall be
redeemable, upon the election of the Board of Administrators, after
five years from such date of issue; and (d) shall bear interest at an
annual rate to be determined before their issuance by the Secretary of
Finance. The interest may be payable quarterly, semi-annually or
annually, as determined by the Secretary of Finance in consultation
with the Monetary Board of the Central Bank of the Philippines before
date of issuance, and both the principal and interest shall be payable
in legal tender of the Philippines.
(2) The bonds or other evidences of indebtedness
shall be exempt from the payment of all taxes by the Republic of the
Philippines, or by any authority, branch, division, political
subdivision thereof, which facts shall be stated upon their face; and
they shall be receivable as security in any transaction with the
National Government or any of its branches, subdivisions,
instrumentalities and its owned or controlled corporations in which a
security is required.
(3) The sinking fund shall be established by the
National Electrification Administration in such manner that the total
annual contributions thereto, accrued at such rate of interest as may
be determined by the Secretary of Finance in consultation with the
Monetary Board, shall be sufficient to redeem at maturity the bonds
issued under this subsection. The sinking fund shall be under the
custody of the Central Bank of the Philippines, which shall invest the
same, subject to the approval of the Board of Administrators and the
Secretary of Finance in consultation with the Monetary Board; Provided,
That the proceeds thereof shall accrue to the NEA.
(4) The Republic of the Philippines hereby guarantees
the payment by the NEA of both the principal and the interest of the
bonds or other evidences of indebtedness, and shall pay such principal
and interest in case the NEA fails to do so; and there are hereby
appropriated out of the general funds in the National Treasury not
otherwise appropriated the sums necessary to make the payments so
guaranteed; Provided, That the sums so paid by the Republic of the
Philippines shall be refunded by the NEA; and Provided, further, That
the NEA, to assure such refunding, shall establish such reserves or
sinking funds and comply with such other restrictions and conditions as
the Secretary of Finance may prescribe and establish for that purpose.
(b) With respect to foreign indebtedness to be
incurred by the NEA, such may be contracted, in the form of loans,
credits, convertible foreign currencies, or other forms of
indebtedness, from foreign governments or any international financial
institution or fund source, including foreign private lenders. The
total outstanding amount of such indebtedness, exclusive of interest,
shall not exceed five hundred million Unites States dollars (U.S.
$500M) or the equivalent thereof in other currencies. The President of
the Philippines, by himself or through his duly authorized
representative, is hereby authorized to negotiate and to so contract
with foreign governments or any international financial institution or
fund source in the name and on behalf of the NEA; and is further
authorized to guarantee, absolutely and unconditionally, as primary
obligor and not merely as a surety, in the name and on behalf of the
Republic of the Philippines, the repayment of any indebtedness thereby
contracted and the payment thereon of any due interest charge, up to
the limited amount authorized by the foregoing, which shall be over and
above the amounts which the President is authorized to guarantee under
R.A. 6142, and also to guarantee the performance of all or any of the
obligations undertaken by the NEA in the territory of the Republic of
the Philippines pursuant to loan agreements entered into pursuant to
this sub-paragraph (b). Any indebtedness contracted under this
sub-paragraph (b) and the payment of the principal thereof and of any
interest or other charges thereon, as well as the importation of
machinery, equipment, materials, supplies and service by the NEA, paid
from the proceeds of any such contracted indebtedness, shall also be
exempt from all direct and indirect taxes, fees, imposts, other charges
and restrictions, including import restrictions, by the Republic of the
Philippines, or by any authority, branch, division or political
subdivision thereof.
Section 9. Authority to Extend Loans and Release or
Subordinate Securities. — Whenever in its judgments such is necessary
or desirable to achieve the purposes of this Decree, and particularly
if such is necessary to make or keep a project operationally viable,
the Board of Administrators is hereby authorized and empowered (a) by
agreement with the borrower, to extend the time of payment of principal
or interest, or both, beyond the loan agreement term of any loan made
by the NEA under this Decree, or to defer, for not in excess of seven
years, the time when the repayment schedule for principal or interest,
or both, shall begin, or to reschedule payments of principal or
interest, or both, or when more of the foregoing is sufficient, to
compromise any amount owing by a borrower to the NEA subject to
provision of existing laws; and (b) upon the NEA's determination that
such is necessary or desirable for the purpose of enabling a borrower
to accomplish the purposes for which it has already received an NEA
loan and that such will not result in any diminution of the security
of, or of the ability of the borrower to repay, any outstanding
indebtedness of the borrower below the level of such security and
ability were additional borrowings from another lender not undertaken,
to release any after-acquired property clause contained in any lien the
NEA holds on a borrower's properties to, or to share any such lien on a
co-equal basis in proportion to their respective loans with, or to
subordinate any such lien in favor of, any other lender of funds to a
public service entity or to the NEA for relending to public service
entities for the purposes for which loans are authorized under this
Decree. chanroblesvirtualawlibrary
Section 10. Enforcement Powers. — If any public
service entity which has borrowed funds from the NEA, or from any other
lender with the NEA's lawfully required prior approval, shall default
in its principal or interest payments, or shall fail, after notice from
the NEA, to comply with any other term or condition of the loan
agreement or of any rule or regulation promulgated by the NEA in
administering the provisions of this Decree, the Board of
Administrators is hereby authorized and empowered in its discretion to
do any or any combination of the following:cralaw:red
(a) Refuse to make, or give my lawfully required
approval to, any new loan to the borrower;chanroblesvirtualawlibrary
(b) Withhold without limitation the NEA's
advancement, or withhold its approval for any other lender with respect
to which the NEA has such approving power to make advancement, of funds
pursuant to any loan already made to the borrower;chanroblesvirtualawlibrary
(c) Withhold any technical or professional assistance
otherwise being furnished or that might be furnished to the borrower;chanroblesvirtualawlibrary
(d) Foreclose any mortgage or deed of trust or other
security held by the NEA on the properties of such borrower, in
connection with which the NEA, may, subject to any superior or co-equal
rights in such lien held by any other lender; (1) bid for and purchase
or otherwise acquire such properties; (2) pay the purchase price
thereof and any costs and expenses incurred in connection therewith out
of the revolving fund; (3) accept title to such properties in the name
of the Republic of the Philippines; and (4) even prior to the
institution of foreclosure proceedings, operate or lease such
properties for such period, and in such manner as may be deemed
necessary or advisable to protect the investment therein, including the
improvement, maintenance and rehabilitation of systems to be
foreclosed, but the NEA shall, within five years after acquiring such
properties in foreclosure proceedings, sell the same for such
consideration as it determines to be reasonable and upon such terms and
conditions as it determines most conducive to the achievement of the
purposes of this Decree; or
(e) Take any other remedial measure for which the
loan agreements may provide.
In addition to the foregoing, the Board of Administrators may, at its
own instance and in the name of the NEA, petition any court having
jurisdiction for such purpose or any administrative agency possessing
regulatory powers for such purpose (including the Board of Power and
Waterworks) to issue such order and afford such lawful relief as may be
necessary.
No borrower shall, without the approval of the Board of Administrators
and of any other lender holding or sharing a lien on such borrower's
properties, sell or dispose of the property, rights, franchises,
permits or any other assets acquired and/or mortgaged pursuant to the
provisions of this Decree until all outstanding indebtedness to the NEA
and any other such lender, including all interest owing thereon, shall
have been repaid; Provided, That the NEA may by appropriate rule or
regulation grant general permission to borrowers to dispose of
incidental properties (excluding real property), rights, franchises,
permits or other assets no longer deemed necessary or useful in
conducting the borrower's operations.
No cooperative shall borrow money from any source without the Board of
Administrator's prior approval; Provided, That the Board of
Administrators may, by appropriate rule or regulation, grant general
permission to cooperatives to secure short-term loans not requiring the
encumbering of their real properties or of a substantial portion of
their other properties or assets.
Section 11. Execution of Public Works Acts. — The NEA
shall execute all electrification projects that may be authorized in
any Public Works Acts; and for this purpose it may call for assistance
and cooperation consistently with Section 4 (j).
Section 12. Conflict of Interest. — (a) No member,
officer, attorney, agent or employee of the NEA shall in any manner,
directly or indirectly, participate in the determination of any
question affecting any public service entity or other entity in which
he is directly or indirectly interested or any person to whom he is
related within the third degree of affinity or consanguinity. Any
person violating the provisions of this subsection shall be removed
from office and shall upon conviction be punished by a fine not to
exceed ten thousand (P10,000.00) pesos or imprisonment not to exceed
five years, or both.
(b) No officer or employee of the NEA or any
government official who may exercise executive or supervisory,
authority over the NEA, either directly or indirectly, for himself or
as the representative or agent of others, shall become a guarantor,
endorser, surety for loans from the NEA to others, or in any manner be
an obligor for money borrowed from the NEA. Any such officer or
employee who violates the provisions of this subsection shall be
punished by a fine of not less than one thousand pesos (P1,000.00) nor
more than five thousand (P5,000.00) pesos, or imprisonment for not less
than one year nor more than five years, or both.
(c) No loan shall be granted by the NEA to any person
related to any member of the Board of Administrators or to the
Administrator within the third degree of consanguinity or affinity, or
to any corporation, partnership, or company wherein any member of the
Board of Administrators or the Administrator is a shareholder;
Provided, That the foregoing prohibition shall not apply to a
cooperative of which any member of the Board of Administrators or the
Administrator or any such relative is a member. Violation by any member
of the Board of Administrators or the Administrator of the provisions
of this subsection is sufficient cause for this removal by the
President of the Philippines; and the violator shall furthermore be
punished as provided in subsection (b).
(d) No fee, commission, gift, or charge of any kind
shall be exacted, demanded, or paid for obtaining loans from the NEA.
Any officer, employee or agent of the NEA or the government exacting,
demanding or receiving any fee, commission, gift or charge of any kind
for service in obtaining a loan shall be punished by a fine of not less
than one thousand nor more than three thousand pesos, or imprisonment
for not less than one year nor more than three years, or both.
(e) Any person who, for the purpose of obtaining,
renewing, or increasing a loan or the extension of the period thereof,
on his own or another's behalf, shall give any false information or
cause through his intrigue or machination the existence and production
of any false information with regard to the identity, situation,
productivity or value of security, or with regard to a point which
might affect the granting or denial of the loan, whether the latter has
been consummated or not, and any officer or employee of the NEA who
through connivance shall allow by action or omission such false
information to pass unnoticed, thereby causing damage to the NEA or
exposing the latter to the danger of suffering such damage, shall be
punished by a fine of not less than the amount of the loan obtained or
applied for nor more than three times such amount, or imprisonment for
not less than three months nor more than three years, or both.
(f) Any officer or employee of the NEA who violates,
or causes or permits another person to violate, and any other person
who violates ords or abets the violation of, any provision of this
Decree not specifically punishable in the preceding subsections shall
be punished by a fine not exceeding two thousand (P2,000.00) pesos, or
imprisonment not exceeding one year, or both.
Section 13. Supervision over NEA; Power Development
Council. — The NEA shall be under the supervision of the Office of the
President of the Philippines. All orders, rules and regulations
promulgated, and all appointments made by the NEA as well as
transactions subject to the authority and jurisdiction of the NEA
involving more than five hundred thousand (P500,000.00) pesos shall be
subject to the approval of the Office of the President of the
Philippines.
In order to achieve coordination and cooperation among different
agencies and sectors having to do with electrification and power
development, there is hereby created a Power Development Council whose
Chairman shall be a person or official designated by the President of
the Philippines, and its members shall be the manager of the NPC, the
NEA Administrator, the Director General of the NEDA, the Chairman of
the Board of Power and Waterworks, a representative of electric
cooperatives to be chosen by a national association of electric
cooperatives, and a representative of the Private sector.
The Council shall have a Secretariat to be headed by an Executive
Secretary and staffed by such number of personnel as may be determined
by the Council. In order to augment the expertise necessary in the
performance of its functions, the council may secure the detail of
personnel, either on a part-time or full-time basis, as well as other
forms of assistance from other government offices and agencies,
including government- owned or controlled corporations. The
qualifications and compensation of the personnel of the Secretariat
shall be determined by the Council, but their appointments shall be
made by the Chairman.
The salaries, expenses, operating expenses and such other necessary
financial outlays for PDC shall be provided for from a special annual
assessment to be determined by the Chairman of PDC and paid by the NEA
and NPC.
The Council shall adopt an integrated plan of electrification and power
development, coordinate the activities and operations of all sectors
involved in electrification, and recommend such policies and measures
to the proper authorities and parties concerned as it may deem
necessary to achieve the total electrification objective declared in
this Decree.
Section 14. Exemption From All Taxes, Duties, Fees,
Imposts and Others Charges by Government and Governmental
Instrumentalities. — The NEA shall devote all its returns from its
capital investments as well as excess revenues from its operation to
attain its objectives. To enable the NEA to pay its indebtedness and
obligations and in furtherance and effective implementation of the
policy enunciated in this Decree, the NEA is hereby declared
exempt: chanroblesvirtualawlibrary
(a) From the payment of all taxes, duties, fees,
imposts, charges, costs and restrictions to the Republic of the
Philippines, its provinces, cities, municipalities, and other
government agencies and instrumentalities, including the taxes, duties,
fees, imposts and other charges provided for under the Tariff and
Customs Code of the Philippines, R.A. 1973, as amended by Presidential
decree No. 34 dated October 27, 1972, and Presidential decree No. 69
dated November 24, 1972, and filing and service fees and other charges
or costs in any court or administrative proceedings in which it may be
a party;chanroblesvirtualawlibrary
(b) From all income taxes, franchise taxes and realty
taxes to be paid to the National Government, its provinces, cities,
municipalities and other government agencies and instrumentalities;chanroblesvirtualawlibrary
(c) From all import duties, compensating taxes and
advance sales tax, wharfage fees on import of foreign goods required
for its operations and projects; and
(d) From all taxes, duties, fees, imposts, and all
other charges imposed directly or indirectly by the Republic of the
Philippines, its provinces, cities, municipalities and other government
agencies and instrumentalities, on all petroleum products used by the
NEA in the generation, transmission, utilization and sale of electric
power.
CHAPTER III
Electric Cooperatives
Section 15. Organization and Purpose. — Cooperative
non-stock, non-profit membership corporations may be organized, and
electric cooperative corporations heretofore formed or registered under
the Philippine non-Agricultural Cooperative Act may as hereinafter
provided be converted, under this Decree for the purpose of supplying,
and of promoting and encouraging the fullest use of, service on an area
coverage basis at the lowest cost consistent with sound economy and the
prudent management of the business of such corporations.
Section 16. Powers. — A cooperative is hereby vested
with all powers necessary or convenient for the accomplishment of its
corporate purpose and capable of being delegated by the President or
the National Assembly when it comes into existence; and no enumeration
of particular powers hereby granted shall be construed to impair any
general grant of power herein contained, nor to limit any such grant to
a power or powers of the same class as those so enumerated. Such powers
shall include but not be limited to, the power:cralaw:red
(a) To sue and be sued in its corporate name;chanroblesvirtualawlibrary
(b) To have existence for a period of fifty years;chanroblesvirtualawlibrary
(c) To adopt a corporate seal and alter the same;chanroblesvirtualawlibrary
(d) To generate, manufacture, purchase, acquire,
accumulate and transmit electric power and energy, and to distribute,
sell, supply and dispose of electric energy to persons who are its
members and to other persons not in excess of ten per centum of the
number of its members; Provided, however, That a cooperative may
furnish electric cold storage or processing plant service to
non-members without limitation; and Provided, further, That a
cooperative which acquires existing electric facilities may continue
service from such facilities without requiring such persons to become
members, but such persons may become members upon such terms as may be
prescribed in the cooperative's by-laws;chanroblesvirtualawlibrary
(e) To assist persons to whom service is or will be
supplied by the cooperative in wiring their premises and in acquiring
and installing electrically powered-appliances, equipment, fixtures and
machinery for agricultural, commercial and industrial uses by the
financing thereof or otherwise, and in connection therewith to wire, or
cause to be wired, such premises, and to purchase, acquire, lease as
lessor or lessee, sell, distribute, install and repair such
electrically-powered appliances, equipment, fixtures and machinery;chanroblesvirtualawlibrary
(f) To assist persons to whom service is or will be
supplied by the cooperative in constructing, equipping, maintaining and
operating electric cold storage or processing plants, by the financing
thereof or otherwise;chanroblesvirtualawlibrary
(g) To construct, purchase, lease as lessee, or
otherwise acquire, and to equip, maintain, and operate, and to sell,
assign, convey, lease as lessor, mortgage, pledge, or otherwise dispose
of or encumber, electric transmission and distribution lines or
systems, electric generating plants, lands, buildings, structures,
dams, plants, and equipment, and any other real or personal property,
tangible or intangible, which shall be deemed necessary, convenient or
appropriate to accomplish the purpose for which the cooperative is
organized;chanroblesvirtualawlibrary
(h) To purchase, lease as lessee, or otherwise
acquire, and to use, and exercise and to sell, assign, convey,
mortgage, pledge or otherwise dispose of or encumber franchises,
rights, privileges, licenses and easements;chanroblesvirtualawlibrary
(i) To borrow money and otherwise contract
indebtedness, and to issue notes, bonds, and other evidence of
indebtedness, and to secure payment thereof by mortgage, pledge, or
deed of trust of, or any other encumbrance upon, any or all of its then
owned or after-acquired real or personal property, assets, franchises,
or revenues; Provided, That any borrowing from, or any encumbering of
its properties as security in favor of, any lending sources other than
the NEA shall require the prior approval of the NEA Administrator and
his certification that such is in furtherance of the purposes and is
consistent with the provisions of this Decree, and that such borrowing
and/or encumbering will not diminish the security of, or of the ability
of the cooperative to repay, any then-outstanding indebtedness of the
cooperative to the NEA or any other lending source below the level of
such security and ability were such additional borrowing not being
undertaken;chanroblesvirtualawlibrary
(j) To construct, maintain and operate electric
transmission and distribution lines along, upon, under and across
publicly owned lands and public thoroughfares, including, without
limitation, all roads, highways, streets, alleys, bridges and
causeways; Provided, That such shall not prevent or unduly impair the
primary public uses to which such lands and thoroughfares are otherwise
devoted;chanroblesvirtualawlibrary
(k) To exercise the power of eminent domain in the
manner provided by law for the exercise of such power by other
corporations constructing or operating electric generating plants and
electric transmission and distribution lines or systems;chanroblesvirtualawlibrary
(l) To become a member of other cooperatives or
Corporations or to own stock therein, provided such cooperatives to
corporations are engaged in a business or activities germane to or
having a reasonable relation to the business or activities of the
cooperative, its members, its directors, or its employees;chanroblesvirtualawlibrary
(m) To conduct its business and exercise its powers
within or without the province or provinces in which its supplies
service;chanroblesvirtualawlibrary
(n) To adopt, amend and repeal by-laws;chanroblesvirtualawlibrary
(o) To fix, maintain, implement and collect rates,
fees, rents, tolls, and other charges and terms and conditions for
service; Provided, That by appropriate rules and regulations the NEA
shall require that such shall be in furtherance of the purposes and in
conformity with the provisions of this Decree; and
(p) To do and perform any other acts and things, and
to have and exercise any other powers which may be necessary,
convenient or appropriate to accomplish the purpose for which the
cooperative is organized.
Section 17. Name. — The name of a cooperative shall
include the words "Electric" and "Cooperative", and the abbreviation
"Inc.". The name of a cooperative organized under this Decree shall be
distinct from the name of any other cooperative already organized or
converted under this Decree. The foregoing requirement shall not apply
to any cooperative which becomes subject to this Decree by complying
with the provisions of Section 31.
Section 18. Incorporators. — Five or more persons,
including cooperatives, may organize a cooperative in the manner
hereinafter provided.
Section 19. Articles of Incorporation. — The articles
of incorporation of a cooperative shall recite that they are executed
pursuant to this Decree and shall state: (a) the name of the
cooperative; (b) the address of its principal office; (c) the names and
addresses of the incorporators; and (d) the names and addresses of its
original directors, who shall constitute the board until the first
election of the board by the members; and may contain any other
provisions not inconsistent with this Decree that are deemed necessary
or advisable for the conduct of its business. Such articles shall be
signed by each incorporator and acknowledged by at least two of the
incorporators (or on their behalf, if they are cooperatives). It shall
not be necessary to recite in the articles of incorporation the purpose
for which the cooperative is organized or any of its corporate powers.
Section 20. By-Laws. — Unless reserved to the members
in the articles of incorporation, the power to adopt and thereafter to
amend or repeal by-laws shall vest in and be exercised by the board,
the affirmative votes of a clear majority of all directors in office,
after due notice to all directors, being requisite for such purpose.
The by-laws shall set forth the basic rights and duties of members and
directors and may contain any other provision for the regulation and
management of the affairs of the cooperative not inconsistent with its
articles of incorporation or this Decree.
Section 21. Members. — Each incorporator of a
cooperative shall be a member thereof, but no other person may become a
member thereof unless such other person agrees to use services
furnished by the cooperative when made available by it. Membership in a
cooperative shall not be transferable, except as provided in the
by-laws. The by-laws may prescribe additional qualifications and
limitations with respect to membership.
The provision of any law or regulation to the contrary notwithstanding,
an officer or employee of the government shall be eligible for
membership in any cooperative if he meets the qualifications therefor
and he shall not be precluded from being elected to or holding any
position therein, or from receiving such compensation or fee in
relation thereto as may be authorized by the by-laws; Provided, That
elective officers of the government, except barrio captains and
councilors, shall be ineligible to become officers and/or directors of
any cooperative. For this purpose, individual permission need not be
obtained from the proper head of office; Provided, however, That this
authority shall not be construed as a permit to the government officer
or employee concerned to devote official time to the affairs of the
cooperative.
Section 22. Meetings of Members. — (a) An annual
meeting of the members of a cooperative shall be held at such time and
place as shall be provided in the by-laws.
(b) Special meetings of the members may be called by
the President, by the board, by any three directors or, unless a
smaller number or percentage be prescribed in the by-laws, by not less
than 100 members or five per centum of all members, whichever shall be
the lesser.
(c) Except as otherwise provided in this Decree and
unless otherwise provided for in the by-laws, written or printed notice
stating the time and place of each meeting of the members and, in the
case of special meetings, the purpose or purposes for which the meeting
is called, shall be given to each member, either personally or by mail,
not less than ten days nor more than twenty- five days before the date
of the meetings. If mailed, such notice shall be deemed to be given
when deposited in the Philippine mail with postage prepaid, addressed
to the member at his address as it appears on the records of the
cooperative.
(d) Unless the by-laws prescribe the presence of a
greater or lesser percentage or number of the members for such purpose,
a quorum for the transaction of business at all meetings of the members
of a cooperative having not more than 1,000 members shall be five per
centum of all members, present in person, and of a cooperative having
more than 1,000 members shall be five per centum of all members or 100,
whichever is lesser, present in person. If less than a quorum is
present at any meeting, a majority of those present in person may
adjourn the meeting from time to time without further notice.
(e) Each member shall be entitled to one vote of each
matter submitted to a vote at a meeting of the members. Voting shall be
non-cumulative and in person, but, if the by-laws so provide, may also
be by mail or by proxy.
Section 23. Waiver of Notice. — Any person entitled
to notice of a meeting may waive notice in writing either before or
after such meeting; however, his attendance shall constitute a waiver
of notice of such meeting, unless such person participates therein
solely to object to the transaction of any business because the meeting
has not been legally called or convened.
Section 24. Board of Directors. — (a) The business of
a cooperative shall be managed by a board of not less than five
directors, each of whom shall be a member of the cooperative or of
another which is a member thereof. The by-laws shall prescribe the
number of directors, their qualifications other than those prescribed
in this Decree, the manner of holding meetings of the board and of
electing successors to directors who shall resign, die or otherwise be
incapable of acting. The by-laws may also provide for the removal of
directors from office and for the election of their successors.
Directors shall not receive any salaries for their services as such
and, except in emergencies, shall not receive any salaries for their
services to the cooperative in any other capacity without the approval
of the members. The by-laws may, however, prescribe a fixed fee for
attendance at each meeting of the board and may provide for
reimbursement of actual expenses of such attendance and of any other
actual expenses incurred in the due performance of a director's duties.
(b) The directors of a cooperative named in any
articles of incorporation, consolidation, merger or conversion shall
hold office until the next annual meeting of the members and until
their successors are elected and qualify. At each annual meeting of, in
case of failure to hold the annual meeting as specified in the by-laws,
at a special meeting called for that purpose, the members shall elect
directors to hold office until the next annual meeting of the members,
except as otherwise provided in this Decree. Each director shall hold
office for the term for which he is elected and until his successor is
elected and qualifies.
(c) Instead of electing all the directors annually,
the by-laws may provide that each year half of them or one-third of
them, or a number as near thereto as possible, shall be elected on a
staggered term basis to serve two-year terms or three-year terms, as
the case may be.
(d) A majority of the board of directors in office
shall constitute a quorum.
(e) The board shall exercise all of the powers of a
cooperative not conferred upon or reserved to the members by this
Decree or by its articles of incorporation or by-laws.
Section 25. Districts. — The by-laws may provide for
the division of the territory served or to be served by a cooperative
into two or more districts for any purpose, including, without
limitation, the nomination and election of directors. The by-laws shall
prescribe the boundaries of the districts, or the manner of
establishing such boundaries, the manner of changing such boundaries,
and the manner in which such districts shall function.
Section 26. Officers. — The officers of a cooperative
shall consist of a president, vice-president, secretary and treasurer,
who shall be elected annually by and from the board. When a person
holding any such office ceases to be a director, he shall ipso facto
cease to hold such office. The offices of secretary and of treasurer
may be held by the same person. The board may also elect or appoint
such other officers, agent, or employees as it deems necessary or
advisable and shall prescribe their powers and duties. Any officer may
be removed from office and his successor elected in the manner
prescribed in the by-laws.
Section 27. Amendment of Articles of Incorporation. —
A cooperative may amend its articles of incorporation by complying with
the following requirements; Provided, however, That a change of
location of principal office may be effected in the manner set forth in
Section 28. The proposed amendment shall be presented to a meeting of
the members, the notice of which shall set forth or have attached
thereto the proposed amendment or an accurate summary thereof. If the
proposed amendment, with any changes, is approved by the affirmative
vote of not less than two-thirds of the total votes cast thereon at
such meeting, articles of amendment shall be executed and acknowledged
on behalf of the cooperative by its president or vice-president and its
seal shall be affixed thereto and attested by its secretary. The
articles of amendment shall recite that they are executed pursuant to
this Decree and shall state: (1) the name of the cooperative; (2) the
address of its principal office; and (3) the amendment to its articles
of incorporation. The president or vice-president executing such
articles of amendment shall make the annex thereto an affidavit stating
that the provisions of this section with respect to the amendment set
forth in such articles were duly complied with.
Section 28. Change of Location of Principal Office. —
A cooperative may, upon authorization of its board or members, change
the location of its principal office by filing a certificate reciting
such change of principal office, executed and acknowledged by its
president or vice-president under its seal attested by its secretary,
in the place provided for in Section 34.
Section 29. Consolidation. — Any two or more
cooperatives (each of which is hereinafter designated a "consolidating
cooperative") may consolidate into a new cooperative (hereinafter
designated the "new cooperative"), by complying with the following
requirements:cralaw:red
(a) The proposition for the consolidation of the
consolidating cooperatives into the new cooperative and proposed
articles of consolidation to give effect thereto shall be submitted to
a meeting of the members of each consolidating cooperative, the notice
of which shall have attached thereto a copy of the proposed articles of
consolidation or an accurate summary thereof. chanroblesvirtualawlibrary
(b) If the proposed consolidation and the proposed
articles of consolidation, with any amendments, are approved by the
affirmative vote of not less than two-thirds of the total voted cast
thereon by each consolidating cooperatives voting thereon at each such
meeting, articles of consolidation in the form approved shall be
executed and acknowledged on behalf of each consolidating cooperative
by its president or vice-president and its seal shall be affixed
thereto and attested by its secretary. The articles of consolidation
shall recite that they are executed pursuant to this decree and shall
state: (1) the name of each consolidating cooperative and the address
of its principal office; (2) the name of the new cooperative and the
address of its principal office; (3) a statement that each
consolidating cooperative agrees to the consolidation; (4) the names
and addresses of the directors of the new cooperative; and (5) the
terms and conditions of the consolidation and the mode of carrying the
same into effect, including the manner in which members of the
consolidating cooperatives may or shall become members of the new
cooperative; and may contain any other provisions not inconsistent with
this Decree that are deemed necessary or advisable for the conduct of
the business of the new cooperative. The president or vice-president of
each consolidating cooperative executing such articles of consolidation
shall make and annex thereto an affidavit stating that the provisions
of this section with respect to such articles were duly complied with
by such cooperative.
Section 30. Merger. — Any one or more cooperatives
(each of which is hereinafter designated a "merging cooperative") may
merge with one or more other cooperatives by complying with the
following requirements:cralaw:red
(a) The proposition for the merger of the merging
cooperatives into the surviving cooperative and proposed articles of
merger to give effect thereto shall be submitted to a meeting of the
members of each merging cooperative and of the surviving cooperative,
the notice of this shall have attached thereto a copy of the proposed
articles of merger or an accurate summary thereof.
(b) If the proposed merger and the proposed articles
of merger, with any amendments, are approved by the affirmative vote of
not less than two-thirds of the total votes cast thereon by each
cooperative voting thereon at each such meeting, articles of merger in
the form approved shall be executed and acknowledged on behalf of each
such cooperative by its president or vice-president and its seal
affixed thereto and attested by its secretary. The articles of merger
shall recite that they are executed pursuant to this Decree and shall
state: (1) the name of each merging cooperative and the address of its
principal office; (2) the name of the surviving cooperative and the
address of its principal office; (3) a statement that each merging
cooperative and the surviving cooperative agree to the merger (4) the
names and addresses of the directors of the surviving cooperative, and
(5) the terms and conditions of the merger and the mode of carrying the
same into effect, including the manner in which members of the merging
cooperatives may or shall become members of the surviving cooperative
and may contain any other provisions not inconsistent with this Decree
that are deemed necessary or advisable for the conduct of the business
of the surviving cooperative. The president or vice- president or each
cooperative executing such articles of merger shall make an annex
thereto an affidavit stating that the provisions of this section with
respect to such articles were duly complied with by such cooperative.
Section 31. Effect of Consolidation or Merger. — (a)
In the case of consolidation, the existence of the consolidating
cooperative shall cease and the articles of consolidation shall be
deemed to be the articles or incorporation of the new cooperative; and
in the case of merger, the separate existence of the merging
cooperatives shall cease and the articles of incorporation of the
surviving cooperative shall be deemed to be amended to the extent, if
any, that changes therein are provided for in the articles of merger;chanroblesvirtualawlibrary
(b) All rights, privileges, immunities and franchises
and all property, real and personal, including without limitation
applications for membership, all debts due on whatever account and all
other chooses in action of each of the consolidating or merging
cooperatives shall be deemed to be transferred to and vested in the new
or surviving cooperative without further act or deed;chanroblesvirtualawlibrary
(c) The new or surviving cooperative shall be
responsible and liable for all liabilities and obligations of each of
the consolidating or merging cooperatives, and any claim existing or
action or proceeding pending by or against any of the consolidation or
merger had not taken place, but the new or surviving cooperatives shall
be substituted in its place; and
(d) Neither the rights of creditors nor any liens
upon the property of any such cooperatives shall be impaired by such
consolidation or merger.
Section 32. Conversion of Existing Corporation. — Any
corporation heretofore organized or registered under the Philippine
Non-Agricultural Cooperative Act and supplying or having the corporate
power to supply electric energy may convert itself into a cooperative
under this Decree by complying with the following requirements, and
shall thereupon become the subject to this Decree with the same effect
as if originally organized hereunder: chanroblesvirtualawlibrary
(a) The proposition for the conversion of such
corporation and proposed articles of conversion to give effect thereto
shall be submitted to a meeting of the members or stockholders of such
corporation, the notice of which shall have attached thereto a copy of
the proposed articles of conversion or an accurate summary thereof.
(b) If the proposition for the conversion and the
proposed articles of conversion, with any amendments, are approved by
the affirmative vote of not less than two-thirds of the total votes
cast thereon by members at such meeting, and/or, if such corporation is
a stock corporation or has both members and voting stockholders, by the
affirmative vote of the holders of not less than two-thirds of those
shares of the capital stock of such corporation represented at such
meeting and voting thereon, articles of conversion in the form approved
shall be executed and acknowledged on behalf of such corporation by its
president or vice-president and its seal shall be affixed thereto and
attested by its secretary. The articles of conversion shall recite that
they are executed pursuant to this Decree and shall state: (1) the name
of the corporation and the address of its principal office prior to the
conversion into a cooperative; (2) a statement that such corporation
elects to become a cooperative, non-profit, membership corporation
subject to this Decree; (3) its name as a cooperative; (4) the
addresses of the principal office of the cooperative; and (5) the names
and address of the directors of the cooperative, and (6) the manner in
which members or stockholders of such corporation may or shall become
members of the cooperative; and may contain any other provisions not
inconsistent with this Decree that are deemed necessary or advisable
for the conduct of the business of the cooperative. The president or
vice-president executing such articles of conversion shall make and
annex thereto an affidavit stating that the provisions of this section
were duly complied with in respect to such articles. The articles of
conversion shall be deemed to be the articles of incorporation of the
cooperative.
Section 33. Dissolution. — A cooperative may be
dissolved in the following manner: The proposition to dissolve shall be
submitted to the members of the cooperative at any annual or special
meetings, the notice of which shall set forth such proposition. The
members at any such meeting shall approve, by the affirmative vote of
not less than a majority of all members of the cooperative, the
proposition that the cooperative be dissolved (hereinafter designated
the "certificate") shall be executed and acknowledged on behalf of the
cooperative by its president or vice-president under its seal, attested
by its secretary, stating: (1) the name of the cooperative; (2) the
address of its principal office; and (3) that the members of the
cooperative have duly voted that the cooperative be dissolved. Also, an
affidavit, made by its president or vice-president executing the
certificate, shall state that the statements in the certificate are
true. Upon the filing of the certificate and affidavit as provided for
in Section 34, the cooperative shall cease to carry on its business
except to the extent necessary for the winding up thereof, but its
corporate existence shall continue until articles of dissolution shall
have been filed. The board shall immediately cause notice of the
dissolution proceedings to be mailed to each known creditor of and
claimant against the cooperative and to be published once a week for
two successive weeks in a newspaper of general circulation in the
territory in which the principal office of the cooperative is located.
The board shall wind up and settle the affairs of the cooperative,
collect sums owing to it, liquidate its property and assets, pay an
discharge its debts, obligations and liabilities, other than those
patrons arising by reason of their patronage, and do all other things
required to wind up its business; and, after paying or discharging or
adequately providing for the payment or discharge of all its debts,
obligations and liabilities, other than those to patrons arising by
reason of their patronage, shall distribute any remaining sums and/or
unliquidated assets, first, to patrons for the pro rata return of all
amounts standing to their credit by reason of their patronage; second,
to members for the pro rata repayment of membership fees; and third, to
patrons for the amounts of any outstanding contributions ind of
construction they have made. Any sums and/or unliquidated assets then
remaining shall be distributed in such manner as provided in the
cooperative's articles of incorporation or by-laws, which may provide
for distribution of such sums or assets on a patronage basis to persons
who were members in one or more prior years or for transfer thereof to
a new cooperative to succeed the one being dissolved. The board shall
thereupon authorize the execution of articles of dissolution, which
shall be executed and acknowledged on behalf of the cooperative by its
president or vice-president, and its seal shall be affixed thereto and
attested by its secretary. The articles of dissolution shall recite
that they are executed pursuant to this Decree and shall state: (1) the
name of the cooperative; (2) the address of its principal office; (3)
the date on which the certificate of election to dissolve was filed;
(4) that there are no actions or suits pending against the cooperative;
(5) that all debts, obligations and liabilities of the cooperative have
been paid and discharged or that provision to the extent possible has
been made therefor; and (6) that the provisions of this section have
been duly complied with. The president or vice-president executing the
articles of dissolution shall make the annex thereto an affidavit
stating that the statement made therein are true. chanroblesvirtualawlibrary
Section 34. Filing of Articles and Certificates. —
Articles of incorporations, amendment, consolidation, merger,
conversion, or dissolution and certificates of changes in the location
of principal offices and of elections to dissolve, when executed and
acknowledged and accompanied by such affidavits as may be required by
applicable provisions of this Decree, shall be presented to the
Administrator for filing in the records of his office. If he shall find
that such conform to the requirements of this Decree, he shall so
certify and shall file such in the records of his office. Upon such
certification and filing, the incorporation, amendment, consolidation,
merger, conversion, dissolution or certificate provided for therein
shall be in effect.
Section 35. Non-profit, Non-discriminatory, Area
Coverage Operation and Service. — A cooperative shall be operated on a
non-profit basis for the mutual benefit of its members and patrons;
shall, as to rates and services make or grant no unreasonable
preference or advantage to any member or patron nor subject any member
or patron to any unreasonable prejudice or disadvantage; shall not
establish or maintain any unreasonable difference as to rates or
services either as between localities or as between classes of service;
shall not give, pay or receive any rebate or bonus, directly or
indirectly, or mislead its members in any manner as to rates charged
for its services; and shall furnish service on an area coverage basis;
Provided, That for any extension of service which if treated on the
basis of standard terms and conditions is so costly as to jeopardize
the financial feasibility of the cooperative's entire operation, the
cooperative may require such contribution ind of construction, such
facilities extension deposit, such guarantee of minimum usage for a
minimum term or such other reasonable commitment on the part of the
person to be served as may be necessary and appropriate to remove such
jeopardy, but no different in standard rates for use of service shall
be imposed for such purpose.
The by-laws of a cooperative or its contracts with members and patrons
shall contain such reasonable terms and conditions respecting
membership, the furnishing of service and the disposition of revenues
and receipts as may be necessary and appropriate to establish and
maintain its non-profit, cooperative character and to ensure compliance
with this section. No bona fide applicant for membership on non-member
patronage who is able and willing to satisfy and abide by all such
terms and conditions shall be denied arbitrarily, capriciously or
without good cause.
Section 36. Disposition of Property. — (a) The board
of a cooperative shall have full power and authority, without
authorization by the members thereof, to authorize the execution and
delivery of a mortgage or a deed of trust, or the pledging or
encumbering otherwise, of any or all of the property, assets, rights,
privileges, licenses, franchises and permits of the cooperative,
whether acquired or to be acquired, and whenever situated, as well as
the revenues therefrom, all upon such terms and conditions as the board
shall determine, to secure any borrowing by or indebtedness of the
cooperative.
(b) A cooperative may not otherwise sell, lease or,
except by consolidation or merger, otherwise dispose of the property
(other than merchandise and property which shall represent not in
excess of ten per centum of the value of the cooperative's total
assets, or which in the judgment of the board are not necessary or
useful in operating the cooperative) unless such sale, lease or, except
in the case of consolidation or merger, other disposition is (1)
authorized by the affirmative vote of not less than a majority of all
members of the cooperative and (2) consented by the NEA and any other
lending source which then holds a lien on any of the cooperative's
properties.
Section 37. Non-Liability of Members for Debts of
Cooperative. — No member shall be liable or responsible for any debts
of the cooperative and the property of the members shall not be subject
to execute therefor.
Section 38. Limitation of Actions. — No action or
suit may be brought against a cooperative, or against any agent,
servant or employee thereof, by reason of the maintenance of electric
transmission or distribution lines, or any related equipment,
facilities or machinery, or any real property after the expiration of a
period of five (5) years of continuous maintenance of such lines or
related equipment facilities or machinery.
Section 39. Assistance to Cooperatives; Exemption
from Taxes, Imposts, Duties, Fees; Assistance from the National Power
Corporation. — Pursuant to the national policy declared in Section 2,
the Congress hereby finds and declares that the following assistance to
cooperative is necessary and appropriate:cralaw:red
(a) Provided that it operates in conformity with the
purposes and provisions of this Decree, cooperative (1) shall be
permanently exempt from paying income taxes, and (2) for a period
ending on December 31; of the thirtieth full calendar year after the
date of a cooperative's organization or conversion hereunder, or until
it shall become completely free of indebtedness incurred by borrowing,
whichever event first occurs, shall be exempt from the payment (a) of
all National Government, local government and municipal taxes and fees,
including franchise, filing, recordation, license or permit fees or
taxes and any fees, charges, or costs involved in any court or
administrative proceeding in which it may be a party, and (b) of all
duties or imposts on foreign goods acquired for its operations, the
period of such exemption for a new cooperative formed by consolidation,
as provided for in Section 29, to begin from as of the date of the
beginning of such period for the constituent consolidating cooperative
which was most recently organized or converted under this Decree:
Provided, That the Board of Administrators shall, after consultation
with the Bureau of Internal Revenue, promulgate rules and regulations
for the proper implementation of the tax exemptions provided for in
this Decree.
(b) The National Power Corporation shall, except with
respect to the National Government, give preference in the sale of its
power and energy to cooperatives, and shall otherwise provide the
maximum support of and assistance to cooperatives of which it is
capable, including assistance in developing dependable and reliable
arrangements for their supplies of bulk power, either from itself, or
from other sources. In pursuance of the foregoing policy, the National
Power Corporation shall not, except upon prior written agreement
approved by the cooperative's board, compete in the sale of power and
energy which without regard to the location of the point of delivery
thereof, will be utilized and consumed within any area franchised to a
cooperative.
Section 40. Exemption from Board of Power and
Waterworks and Securities Exchange Commission. — (a) Cooperatives shall
be exempt from regulation by the Board of Powers and Waterworks.
(b) The provisions of the Securities Act shall not
apply to any note, bond or other evidence of indebtedness issued by any
cooperative or to any mortgage, deed of trust, indenture or other
instrument executed to secure the same. The provisions of said Act
shall not apply to the issuance of membership certificates or any other
evidence of member or patron interest by a cooperative. chanroblesvirtualawlibrary
CHAPTER IV
Franchises; Regulation of Cooperatives
Section 41. Applicability. — This Chapter shall apply
only to electric franchises as in Section 3 defined. It shall not be
applicable to franchises for any other utility service or to those
separable portions of franchises covering any other type of utility
service though such franchises may also cover electric service. The
Board of Administrators shall hear and determine all questions which
may arise under this section.
Section 42. Repeal of Franchise Powers of Municipal,
City and Provincial Governments. — The powers of municipal, city and
provincial governments to grant franchises, as provided for in Title 34
of the Philippines Statutes or in any special law, are hereby repealed;
Provided, That this section shall not impair or invalidate any
franchise heretofore lawfully granted by such a government or repeal
any other subsiding power of such governments to require that electric
facilities and related properties be so located, constructed, operated
and maintained as to be safe to the public and not to unduly interfere
with the primary use of streets, roads, alleys and other public ways,
buildings and grounds over, upon or under which they may be built.
Section 43. Franchising Powers Delegated to the NEA.
— The power hereafter to grant and thereafter to repeal, alter or
amended new franchises, to repeal, alter or amend all franchises
heretofore granted by the Congress (or by the President or by the
National Assembly after it comes into existence), and to repeal, alter
or amend all franchises heretofore granted by any municipal, city or
provincial government, is hereby delegated to the NEA, whose Board of
Administrators shall, acting as a Commission, administer the provisions
of this Chapter. Provisions of Republic Act 2677 to the country
notwithstanding, no municipality shall hereafter initiate the
operation, or after December 31, 1973, continue any operation
heretofore initiated, of any service for sale at retail unless it shall
first obtain a franchise from the NEA in accordance with the provisions
of this Chapter. In exercising the powers herein delegated, the NEA
shall at all times seek to serve the National objective of the most
rapid total electrification of the Philippines on an area coverage
basis. Without limiting the generality of the foregoing sentence, the
NEA is hereby authorized, empowered and directed:cralaw:red
(a) Within one hundred eighty days after the
effective date of this Chapter (and periodically thereafter, at least
once annually) to notify and require every person holding a franchise
to report to it, within not less than ninety days after such notice, an
accurate description of the geographic area encompassed in such
franchise, the number of households therein receiving adequate and
dependable service, the number of households therein receiving service
which is not adequate and dependable, the number and type of other
retail customers therein receiving adequate and dependable service or
service which is not adequate and dependable, the approximate total
number of households therein, the date such franchise was granted and
such other information and data as the NEA for the purpose of
implementing this section may require, and, on the basis of such
reports and otherwise, including complaints:cralaw:red
(1) to review such franchises to determine whether
the holders thereof are furnishing service on an area coverage basis or
are engaged in effective measures to furnish such service within a
reasonable time;chanroblesvirtualawlibrary
(2) to repeal and cancel any franchise if the NEA
finds that the holder thereof is not then furnishing, and is unable or
unwilling within a reasonable time to furnish, adequate and dependable
service on an area coverage basis within such area; and
(3) to alter and condition such or other existing
franchises and to issue new franchises to the end of assuring area
coverage service throughout the Nation as in this Decree contemplated;
Provided, That no franchise shall be altered, conditioned, repealed or
cancelled, and no franchise shall be granted, without first affording
the holder thereof, or the contending applicants therefor, if such be
the case, and any other interested parties opportunity for hearing; and
(b) Upon determining, after affording opportunity for
hearing to all interested parties, that such is necessary or
appropriate to assure or expedite the furnishing of service on an area
coverage basis, to require any public service entity to interconnect
its generation, transmission or distribution facilities or related
facilities with, and through such interconnection to exchange, sell or
purchase power and energy with, to or from or to transmit power and
energy on behalf of, any other public service entity or, if it so
requests or consents, the NPC; and, if such public service entities
(and, if such be the case, the NPC) are unable between or among
themselves to agree upon such, to establish the manner and degree, to
fix and apportion the financial responsibility and sharing of costs,
and to determine the other terms and conditions of such
interconnection, exchange, sale, purchase or transmission; Provided,
however, That the provisions of Section 45 to the contrary
notwithstanding, the provisions of this paragraph shall apply to
industrial plants, factories, mills, mines and similar or other power
generating entities in which case they shall qualify as public service
entities for purposes of Section 4 (f).
Section 44. Preference to Cooperatives. — Whenever
two or more public service entities are affected by and have competing
or conflicting interests with respect to the granting, repeal,
alteration or conditioning of the same franchise or franchises, and one
or more of such entities are cooperatives, the NEA shall accord
preference to a cooperative over any other type of public service
entity ( and shall prefer one cooperative over another) unless and
except to the extent that an order in favor of another type of public
service entity (or of another cooperative) will, as found by the NEA,
result both earlier and ultimately in the furnishing and extending of
area coverage service (1) to a greater number of households, (2) over a
larger geographic area, and (3) on the basis of the same or lower
rates, charges and fees. chanroblesvirtualawlibrary
Section 45. Furnishing Service Without a Franchise
Prohibited. — No person shall furnish or extend service to the public
within any area for which such person has not been granted a franchise
or after such a franchise has been repealed and cancelled or so
conditioned or altered as to prohibit service therein; Provided, That
such service may be continued and extended therein, and the NEA, after
affording opportunity for hearing to any interested party, may by order
require that it be so continued and extended until service to the
customers of such person is made available by a public service entity
lawfully authorized to serve therein.
Section 46. Additional Regulation of Cooperatives by
the NEA. — In addition to the other ways in which cooperatives are
subject to regulation by the NEA as provided in this Decree, the NEA,
on its own motion or upon complaint but only after affording
opportunity for hearing to all interested parties, is empowered to and
shall (1) require a cooperative to extend or improve service upon the
NEA's determination that such should be done in furtherance of the
purposes of this Decree and that such may reasonably be done without
undue impairment of the feasibility of the cooperative's operation and
financial condition; and (2) require a cooperative to cease and correct
any practice or act which the NEA determines to be in violation of the
provisions of Section 35, and in connection with such authority it may
require a cooperative to file with the NEA, and to make accessible to
any person upon request therefor, copies of all rates, charges,
contract forms, fee or deposit schedules, by-laws, and service rules
and regulations.
Section 47. Hearings and Investigations. — The NEA is
empowered to conduct such hearings and investigations and to issue such
orders as are necessary for it to implement the provisions of this
Chapter, and in connection therewith, without necessary of previous
hearing, to require any public service entity or the officials thereof
to furnish to it such information and data, including statements of
accounts, schedules of rates fees and charges, contracts, service rules
and regulations, articles of incorporation, by-laws, audit reports and
other internal records, documents, policies and procedures, as will
enable the NEA to be sufficiently informed in exercising its powers and
authorities; Provided, That no order shall issue finally determining
and substantially affecting any right of any person subject to the
NEA's jurisdiction without first affording such person and any other
interested person opportunity for hearing as a party in the hearing
proceeding.
Section 48. Parties and Intervenors in NEA's
Proceedings. — Public service entities or any other interested person
may invoke the NEA's exercise of its powers and authorities provided
for in Section 43, 44, 45, 46 and 47 by filing verified applications or
complaints with the NEA, and the NEA, on its own motion solely, may
institute proceedings in connection with all matters coming under its
jurisdiction as provided for in said sections. In any proceeding
conducting by the NEA, including proceedings to establish NEA rules and
regulations, all persons having a substantial interest therein shall,
upon petition therefor, be permitted by the NEA to intervene as full
parties, and the NEA, in its discretion, may permit persons having an
insubstantial interest therein to intervene as a full party or on such
limited basis as the NEA may prescribe.
Section 49. NEA Rules and Regulations. — The NEA
shall establish appropriate rules and regulations to carry out the
provisions of this Chapter IV, including rules for the conduct of NEA
investigations, proceedings and hearing; and shall timely publish the
same when adopted or amended to the end that all persons affected
thereby shall be given reasonable notice thereof.
Section 50. Notice. — (a) With respect to any NEA
proceeding, investigation or hearing (including such as are for the
purpose of establishing NEA rules and regulations) which may
substantially affect the rights or interests of any person or persons
(including the general public or the National Government or any
department, agency, instrumentality of political subdivision thereof,
if such be the case), the NEA shall cause timely notice in writing to
be furnished to, or served upon, or appropriately published to such
person or persons to the end of affording them reasonable opportunity,
as a party or otherwise, directly to participate, or otherwise to have
their positions, views and interests adequately presented to or
represented, in such proceedings, investigation or hearing.
(b) Upon the completion of any such proceeding,
investigation or hearing, the NEA shall cause timely notice of any
order issuing thereupon to be furnished to, or served upon, or
appropriately published to any person or persons (including the general
public or the National Government or any department, agency,
instrumentality or political subdivision thereof, if such be the case)
who will be directly affected thereby. Such notice shall be
supplementary to, not in conflict with or in lieu of, the notices and
services otherwise provided for in this Chapter. chanroblesvirtualawlibrary
Section 51. Hearings Conducted by Board of
Administrators or any Member Thereof— NEA hearings pursuant to this
Chapter may be conducted by the Board of Administrators en banc or by
any one or more members thereof, as the Board of Administrators may
decide; Provided, That the Administrator shall preside when the Board
of Administrators sits en banc; Provided, further, That all hearings
shall be of record; and Provided finally, that findings,
determinations, orders and rulings based upon such hearings shall
require the affirmative majority of all the members of the Board of
Administrators upon the certification, to become a part of such
findings, determinations and orders, on the part of any member of the
Board who was absent from the hearings that he has read the record of
the same.
Section 52. Compensation. — The members of the Board
of Administrators and other hearing officers as the Board of
Administrators may designate shall be entitled to per diem for each
hearing actually conducted or attended by them in such amount as may be
fixed by the President of the Philippines.
Section 53. Hearing Rules; Contempt. — All hearings
and investigations conducted by the NEA shall be governed by rules
adopted by the NEA, and in the conduct thereof the NEA shall not be
bound by the technical rules of legal evidence; Provided, That the NEA
or such member of the Board of Administrators when conducting a
hearing, may summarily punish for contempt by a fine not exceeding two
hundred pesos (P200.00) or by imprisonment not exceeding ten (10) days,
or both, any person guilty of misconduct in the presence of the hearing
or so near the same as to interrupt the hearing, proceeding, session or
investigation including cases in which a person present at a hearing,
proceeding, session or investigation refuses to be sworn as a witness
or to answer as such when lawfully required to do so. To enforce the
provisions of this section, the NEA, or such member thereof, may, if
necessary, request the assistance of the municipal police for the
execution of any order made for said purpose.
Section 54. Subpoenas; Contempt. — (a) The NEA may
issue subpoenas and subpoenas duces tecum, for witness in any matter of
inquiry pending before it, and require the production of all books,
papers, tariffs, contracts, agreements, and all other documents which
it may deem necessary in any proceeding. Such process shall be issued
under the seal of the NEA, signed by one of the members of the NEA
Board of Administrators, and may be served by any person of full age,
or by registered mail. In case of disobedience to such subpoena, the
NEA may invoke thed of the Supreme Court, or of any Court of First
Instance of the Philippines in requiring the attendance and testimony
of witnesses and the production of books, papers and documents under
the provision of this Chapter, and the Supreme Court, or any Court of
First Instance of the Philippines within the jurisdiction of which such
inquiry is carried on, may, in case of contumacy or refusal to obey a
subpoena, issue to any public service entity subject to the provisions
of this Decree, or to any person, an order requiring such public
service entity or person to appear before the NEA and produce books and
papers if so ordered and give evidence touching the matter in question;
and any failure to obey such order of the Court may be punished by such
court as contempt thereof.
(b) Any person who shall neglect or refuse to answer
any lawful inquiry or produce before the NEA books, papers, tariffs,
contracts, agreements, and documents, or other things called for by the
NEA if his power to do so, in obedience to the subpoena or lawful
inquiry of the NEA, upon conviction thereof by a court of competent
jurisdiction, shall be punished by a fine not exceeding five thousand
pesos (P5,000.00) or by imprisonment not exceeding one year, or both in
the discretion of the court;chanroblesvirtualawlibrary
(c) Any NEA Board Member shall have the power to
administer oaths in all matters under the jurisdiction of the
NEA; chanroblesvirtualawlibrary
(d) Any person who shall testify falsely or make any
false affidavit or oath before the NEA or before any of its members
shall be guilty of perjury, and, upon conviction thereof in a court of
competent jurisdiction, shall be punished as provided by law;chanroblesvirtualawlibrary
(e) Witnesses appearing before the NEA in obedience
to subpoena or subpoena duces tecum shall be entitled to receive the
same fees and mileage allowance as witnesses attending Courts of First
Instance in civil cases;chanroblesvirtualawlibrary
(f) Any person who shall obstruct the NEA or any
member of the NEA Board while engaged in the discharge of official
duties, or who shall conduct himself in a rude, disrespectful or
disorderly manner before the NEA or any NEA Board Member while engaged
in the discharge of official duties, or shall orally or in writing be
disrespectful to, offend or insult any of the NEA board members on
occasion or by reason of the performance of official duties, upon
conviction thereof by a court of competent jurisdiction, shall be
punished for each offense by a fine not exceeding one thousand pesos
(P1,000), or by imprisonment not exceeding six months, or both, in the
discretion of the court.
Section 55. Testifying. — No person shall be excused
from testifying or from producing any book, document, or paper in any
investigation or inquiry by or upon the hearing before the NEA when
ordered so to do by the NEA, except when the testimony or evidence
required of him may tend to incriminate him. Without the consent of the
interested party, no member or employee of the NEA shall be compelled
or permitted to give testimony in any civil suit to which the NEA is
not a party, with regard to secrets obtained by him in the discharge of
his official duty.
Section 56. Depositions. — The NEA may, in any
investigation, proceeding or hearing, by its order in writing, cause
the deposition of witnesses residing within or without the Philippines
to be taken in the manner prescribed by the Rules of Court. Where
witnesses reside in places distant from Manila and it would be
inconvenient and expensive for them to appear personally before the
NEA, the NEA may, by proper order, commission any clerk of the Court of
First Instance, municipal judge or justice of the peace of the
Philippines to take the deposition of witnesses in any case pending
before the NEA. It shall be the duty of the official so commissioned to
designate promptly a date or dates for the taking of such deposition,
giving timely notice to the parties, and on said date to proceed to
take the deposition, reducing it to writing. After the depositions have
been taken, the official so commissioned shall certify to the
depositions taken and forward them as soon as possible to the NEA. It
shall be the duty of the respective parties to furnish stenographers
for taking and transcribing the testimony taken. In case there are no
stenographers available, the testimony shall be taken in long hand by
such person as the clerk of court, the municipal judge or justice or
the peace may designate. The NEA may also commission a notary public to
take the depositions in the same manner herein provided. chanroblesvirtualawlibrary
The Board may also, by proper order, authorize any of the attorneys of
the legal division or division chiefs of the NEA to hear and
investigate any case filed with the NEA or any matter within the
jurisdiction of the NEA and in connection therewith to receive such
evidence as maybe material thereto. At the conclusion of the hearing or
investigation, the attorney or division chief so authorized shall
submit the evidence received by him for the Board of Administrators to
enable the latter to render its decision.
Section 57. Service. — Every order made by the NEA
shall be served upon the person or public service entity affected
thereby within ten (10) days from the time said order is filed, by
personal delivery or by ordinary mail, upon the attorney of record or,
in case there be no attorney of record, upon the party interested; and
in case a certified copy is sent by registered mail, the registry mail
receipt shall be prima facie evidence of the receipt of such order by
the public service entity in due course of mail.
Section 58. Reconsideration. — Any interested party
may request the reconsideration of any order, ruling, or decision of
the NEA by means of a petition filed not later than fifteen (15) days
after the date of the notice of the order, ruling, of decision in
question. The grounds on which the request for reconsideration is based
shall be clearly and specifically stated in the petition. Copies of
said petition shall be served on all parties interested in the matter.
It shall be the duty of the NEA to decide the same within thirty (30)
days, either denying the petition or revoking or modifying the order,
ruling, or decision under consideration. If no petition for
reconsideration is filed, no review by the Supreme Court as hereinafter
provided shall be allowed.
Section 59. Court Review. — The Supreme Court is
hereby given jurisdiction to review any order, ruling, or decision of
the NEA and to modify or set aside such order, ruling, or decision when
it clearly appears that there was no evidence before the NEA to support
reasonably such order, ruling, or decision, or that the same is
contrary to law, or that it was without the jurisdiction of the NEA.
The evidence presented to the NEA, together with the record of the
proceedings before the NEA, shall be certified by the NEA to the
Supreme Court. Any order, ruling, or decision of the NEA may likewise
be reviewed by the Supreme Court upon a writ of certiorari in proper
cases. The procedure for review, except as herein provided, shall be
prescribed by rules of the Supreme Court. Any order, ruling, or
decision of the NEA may be reviewed on the application of any person or
public service entity aggrieved thereby and who was a party in the
subject proceeding, by certiorari in appropriate cases or by a petition
for review, which shall be filed within thirty (30) days from the
notification of the NEA order, decision, or ruling or reconsideration.
Said petition shall be placed on file in the office of the Clerk of the
Supreme Court who shall furnish copies thereof to the NEA and other
interested parties.
Section 60. No Stay. — The institution of a writ of
certiorari or other special remedies in the Supreme Court shall in no
case supersede or stay any order, ruling, or decision of the NEA unless
the Court shall so direct, and the appellant may be required by the
Court to give bond in such form and of such amount as may be deemed
proper.
Section 61. NEA Council. — The chief of the legal
division or any other attorney of the NEA shall represent the same in
all judicial proceedings. It shall be the duty of the Solicitor General
to represent the NEA in any judicial proceeding if, for special
reasons, the administrators shall request his intervention.
CHAPTER V
Transitory Provisions
Section 62. Existing NEA Continued. — (a) The
existing Board of Administrators of the NEA and the Administrator
thereof shall be the Board of Administrators and Administrator provided
for under this Decree, and their respective terms shall be and continue
as already established.
(b) Any preference to the NEA in any existing law or
in any executive order or proclamation of the President shall, with
respect to any duty or function assumed by the NEA pursuant to said
Decree, be deemed hereafter to have reference to the NEA established
under this Decree;chanroblesvirtualawlibrary
(c) The properties, assets, rights, chooses in
action, obligations, liabilities, records and contracts of the NEA are
hereby transferred to and are vested in, and assumed by the NEA
established under this Decree;chanroblesvirtualawlibrary
(d) All personnel of the NEA shall be absorbed and
transferred to the NEA established under this Decree without demotion
in rank nor reduction in salary; and
(e) All on-going projects and/or approved loans of
the NEA established under Republic Act No. 6038 shall be reviewed by
the NEA established under this Decree and, insofar as found to be
economically feasible in accordance with sound management, engineering
and technological standards, shall be continued and completed on a
priority basis.
Section 63. Separability of Provisions. — If any
provision of this Decree, or the application of such provision to any
person or circumstance, is declared invalid, the remainder of the
Decree or the application of such provision to other persons or
circumstances shall not be affected by such declaration. chanroblesvirtualawlibrary
Section 64. Effect on Other Acts. — All acts or parts
of Acts inconsistent herewith are repealed or modified accordingly.
Section 65. Effectivity. — This Decree shall take
effect immediately.
Done in the City of Manila,
this 6th day of August in the year of Our Lord, nineteen hundred and
seventy-three.
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