The National Electrification Administration (NEA) has laid down the specific financial and operational parameters that electric cooperatives (ECs) must comply with in order to avail exemptions from local taxes, fees and charges in their respective local government units (LGUs).
In its Memorandum No. 2025-02 dated 09 January 2025, the state-owned corporation established guidelines that would enable both stock and non-stock ECs to fully avail of the preferential rights granted under the Local Government Code relative to the provisions of NEA Reform Act of 2013.
The NEA Memorandum was released in furtherance of its responsibilities under Joint Memorandum Circular 2024-12-001 of the Department of Energy (DOE) and the Department of Finance (DOF).
To ensure operational and financial compliance, all ECs will be subjected to set performance standards.
ECs need to achieve a 75% score using the performance assessment criteria stated in the memo to receive a ‘Certificate of Compliance’, which is a pre-requisite to their availment of preferential rights from LGUs in accordance with related laws.
These determine their delivery of reliable and efficient power distribution services to their member-consumer-owners.
Key financial parameters include collection efficiency, in which power cooperatives must achieve at least 90%. A perfect score (25 points) is awarded for those that will obtain 97% or higher. Non-efficient ECs graded 89% and below will only be awarded five (5) points.
Meanwhile, a 10-point bonus will be granted to ECs that will maintain “positive” result of financial operation, inclusive of Reinvestment Fund for Sustainable CapEx (capital expenditures).
On the technical front, ECs will be scored based on the frequency and duration of power outages to gauge network system reliability.
At an institutional level, Annual General Membership Assemblies and District Elections must also be conducted as scheduled to earn perfect scores (10 points each). The ECs must also achieve 90% to 100% energization rates to gain 15 points. Energization rates at 59% and below are awarded 11 points.
Organizations that are deemed ‘compliant’ with respect to their submissions of reportorial requirements, including their corporate operating budget, will be granted 10 points.
The ECs need to achieve a 75% score using the performance assessment criteria stated in the memo to receive a ‘Certificate of Compliance’, which is a pre-requisite to their availment of preferential rights from LGUs in accordance with related laws.
This compliance framework highlights the essential aspects of operational excellence, ensuring power utilities remain efficient, transparent, and committed to delivering uninterrupted electricity services to their consumers.
