Section 18February 17, 2009, Sec./Art. 18

A new Chapter on Electric Cooperatives shall be inserted and shall read, as follows:

CHAPTER XVII

ELECTRIC COOPERATIVE

"ART. 126. Coverage. The provisions of this Code shall apply to all electric cooperatives registered with the Authority. This shall also cover new distribution utilities that will register with the Authority.

"Electric cooperatives may undertake power generation utilizing renewable energy sources, including hybrid systems, acquisition and operation of subtransmission or distribution as its primary purposes.

"ART. 127. Registration of Electric Cooperatives. The registration of an electric cooperative with the Authority under this Code shall be submitted for approval to the members through a referendum, called for the purpose as provided for under Articles 183 and 129 of this Code.

"ART. 128. Voting Requirement for Registration. In compliance with the referendum as a voting procedure, the required number of votes for registration with the Authority shall be twenty percent (20%) of all members in good standing.

"ART. 129. Documents to be Submitted for Registration with the Authority. For purposes of registration, electric cooperatives shall submit the following documents:

"(a) Copy of the board resolution certifying to the result of the vote approved through a referendum approving the registration of the cooperative with the Authority in compliance with Article 128;

"(b) Certified copy of the articles of incorporation/cooperation and bylaws as required by the Authority;

"(c) Duly audited financial statements for the past two (2) years;

"(d) List of names of incumbent board of directors and their addresses certified by the board secretary and attested by the chairperson;

"(e) Within six (6) months from the registration, the treasurer shall submit a sworn statement of the authorized share capital, the subscribed share capital of members and the amount of paid-up share capital received by the treasurer; and

"(f) Bonds of accountable officers.

"ART. 130. Registration Options of Electric Cooperatives. Electric Cooperatives registered with the National Electrification Administration (NEA) under Presidential Decree No. 269, as amended which opt not to register with the Authority are allowed to retain the word cooperative in their registered names: Provided, That they shall not be entitled to the benefits and privileges under this Code.

"ART. 131. Role of the Energy Regulatory Commission. All rates and tariffs of electric cooperatives registered under the Authority shall be subject to the rules on application and approval of and by the Energy Regulatory Commission for distribution utilities.

"ART. 132. Effects of Registration with the Authority. (1) Upon the effectivity of this Code, electric cooperatives that are duly registered with the Authority, and issued a certificate of registration, shall no longer be covered by Presidential Decree No. 269, as amended by Presidential Decree No. 1645: Provided, That electric cooperatives registered with the Authority shall now be covered by the provisions of this Code as well as future rules and issuances of the Authority: Provided, however, That the security of tenure and the collective bargaining agreement between the cooperative management and the employees shall be respected, with no diminution of their existing salaries, emoluments, ranks and other benefits;

"(2) The electric cooperatives registered with the Authority with existing loans obtained from NEA after June 26, 2001 shall continue to observe the terms of such loans until full payment or settlement thereof;

"(3) Except as provided in the immediately preceding paragraph, the NEA shall no longer exercise regulatory or supervisory powers on electric cooperatives duly registered with the Authority;

"(4) Electric cooperatives registered with the Authority are entitled to congressional allocations, grants, subsidiaries and other financial assistance for rural electrification which can be coursed through the Department of Energy, the Authority and/or local government units. The electric cooperatives registered under this Code can avail of the financial services and technical assistance provided by the government financial institutions and technical development agencies on terms respecting their independence as autonomous cooperatives;

"(5) All condoned loans, subsidies, grants and other assistance shall form part of the donated capital and funds of the electric cooperatives and as such, it shall not be sold, traded nor be divided into shareholdings at any time; these donated capital/fund shall be valuated for the sole purpose of determining the equity participation of the members: Provided, That in the case of dissolution of the cooperative, said donated capital shall be subject to escheat; and

"(6) Electric cooperatives registered and confirmed with the Authority under Republic Act No. 6938 and Republic Act No. 6939 are hereby deemed registered under this Code.

"ART. 133. Share Capital in the Electric Cooperatives. The electric cooperative shall issue and distribute share certificates under the name of their members, taking into consideration their previous equity contributions, the amortization component through the payments made, capital build-up and other capital contributions.

"ART. 134. Cancellation of Registration with the Authority. The cancellation of the registration of an electric cooperative shall be granted by the Authority as provided under Articles 64 to 70 of this Code.

"The Authority, in consultation with the concerned cooperative sector, shall issue appropriate rules and regulations pertaining to the provisions of this Chapter."