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PIA Press Release
2008/02/15

Coop, Negros Oriental officials discuss power issues

by Rachelle M. Nessia

Dumaguete City (15 February) -- The Negros Oriental 1 Electric Cooperative (NORECO I) will meet with the congressional representatives and local government officials in its coverage areas on Feb. 15, 2008 to discuss the critical issues currently faced by the electric cooperative.

Expected to participate in what has been called a "power summit" are Gov. Emilio C. Macias, Rep. George P. Arnaiz and Rep. Jocelyn Limkaichong together with key local government officials in areas covered by NORECO I.

Also invited in the dialogue are representatives from National Transmission Corporation (TRANSCO) who are expected to shed light on the Sub Transmission Charges amounting to P2.2 M that TRANSCO has started collecting from NORECO I effective January this year.

NORECO I General Manager Angelito Carriaga, in a Kapihan forum conducted by the Philippine Information, disclosed that the said dialogue with local government officials aims to explore the administrative remedies available for NORECO power consumers to lessen their burden in the face of a possible upsurge on their electricity bills.

The upcoming dialogue will tackle, aside from the additional charges from TRANSCO, the directive from the Department of Finance to impose taxes on electric cooperatives and the need to simplify the requirement for electric permits, said Carriaga.


Sub-transmission charge

TRANSCO filed an application with the Energy Regulatory Commission (ERC) on Jan. 22, 2007 to collect from NORECO I its connection and sub-transmission charges for calendar year 2007.

NORECO I, together with other electric cooperatives thru the Philippine Rural Electric Cooperatives Association (PHILRECA), opposed the said application due to what it called as adverse effects on member-consumers specially those of small cooperatives like NORECO I.

But ERC on Dec. 7, 2007 approved TRANSCO's application and issued a decision authorizing and directing TRANSCO to implement the approved additional charges for 2007 starting January 2008.

On Jan. 29 this year, the NORECO I management issued a statement saying that it will pass on to its electric consumers the charges from TRANSCO effective the billing month of January 2008 pursuant to ERC Case No. 2007-007.

The electric cooperative collected 0.78 centavos per kilowatt-hour from its member consumers, as reflected under the Transmission Revenues Sub-Transmission Charge in the January power bill.


Real property tax

According to Carriaga, the Department of Finance has issued a circular dated June 28, 2007 prescribing the guidelines for local government units to impose taxes, fees and other charges on electric cooperatives.

"Puwede nang buhisan ug real property taxes ang mga electrical poles sa electric cooperatives sama sa NORECO I under the local government code," Carriaga said.

Based on local Finance Circular No. 1-07, provinces, cities and municipalities may impose real property taxes on all electric cooperatives' real properties such as electrical posts.

This is in line with DOF's efforts to help the LGUs improve its capacity to plan and buget as well as deliver better services for the general welfare of the constituent communities.

Carriaga said that the additional cost incurred by the taxes will be passed on to NORECO I's consumers as well. "Dugang na pud ni siya nga balayran sa mga consumidor sa NORECO I," he said.


Remedies needed

Carriaga stressed that the local governments should intervene and come up with administrative remedies to mitigate the backlash of higher power bills on NORECO I consumers.

One possible remedy, said Carriaga, is for the provincial government to subsidize part of the additional charges on the power bill to be taken from the province's royalty tax fund, similar to the subsidy program implemented by the municipality of Valencia.

Valencia is the host town of the Palinpinon geothermal plant.

Carriaga is hopeful that the dialogue with local government officials will yield positive results.

NORECO I, being the smallest electric cooperative in Negros Island, only has an income of P3M per kilowatt-hour or roughly P16M every month.

It covers the northern municipalities of Mabinay, Manjuyod, Bindoy, Ayungon, Tayasan, Jimalalud, La Libertad and Guihulngan as well as the cities of Bais, Canlaon and Guihulngan.

It has a total of 285 barangays, all of which have been energized as of Dec. 31, 2007. (PIA) [top]

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