Isabela court: NEA can’t appoint managers of power utilities

BAGUIO CITY—The National Electrification Administration (NEA) has not been granted the right to screen and appoint managers of all electric cooperatives (ECs) or downgrade their qualifications, a Regional Trial Court (RTC) in Isabela province ruled last month.

In a June 13 decision made public on Friday, Santiago City Judge Efren Cacatian of RTC Branch 35 said the NEA and its board of administrators (BOA) committed a “grave abuse of discretion amounting to lack of or excess of its jurisdiction” for issuing Memorandum Numbers 2021-055 and 2021-056.

The court struck down Memorandum No. 2021-055, which declares that the NEA Board “shall have the authority to screen, select and appoint a general manager of an electric cooperative,” which the agency used to justify its appointment of the now widely contested general manager of the Benguet Electric Cooperative (Beneco).

This policy triggered widespread protests last year from power utilities across the country, and was denounced by the Philippine Rural Electric Cooperatives Association (Philreca) for depriving cooperatives their right to choose their own leaders.

Undue interfence

“This court believes and so holds that NEA BOA has no such power under the law (Republic Act No. 10531) which amended the 1973 martial law decree creating NEA) ... On the contrary, NEA has supervisory powers only over ECs,” Cacatian said.

“In issuing [the memoranda], the NEA board has exercised not its supervisory and disciplinary powers but control over ECs,” the judge ruled, adding that it “would constitute undue interference in the business operations of a private entity by a government agency.”

The court stressed: “If NEA and its (board) are allowed, more particularly, to appoint the general managers of [their] own choice ... certainly, chaos, disorder and disharmony would occur which is prejudicial and detrimental to public interest. Imagine, the sitting or current [managers] being removed, replaced and considered resigned without due process of law,” the decision stated.

The court also junked Memorandum No. 2021-056, which removed key prerequisites for applicants seeking the general management post, such as the requirement for degrees in either electrical, mechanical, electronics and communications engineering; business administration or finance management, and behavioral science.

The lawsuit was filed last year by Philreca party list Rep. Presley de Jesus, who is also board president of the Isabela-1 Electric Cooperative.

Applies to all

“This decision applies to all electric cooperatives,” he said at a press briefing organized on Friday by Beneco, which is currently locked in a legal dispute with the NEA over the latter’s appointment of Anna Maria Paz Rafael, a former assistant secretary of the Presidential Communications Operations Office, as the power utility’s general manager.

De Jesus said the two controversial NEA memoranda might be tied to its public feud with Beneco.

Last year, multiple lawsuits were filed to nullify the NEA board’s appointment in August of Rafael as Beneco’s new manager.

Beneco employees and member-consumers claimed Rafael should not have qualified for the general manager post. They also complained that the NEA ignored Beneco’s decision to install incumbent manager Melchor Licoben.

This leadership dispute was put in the national spotlight after the regulator used armed policemen to take over the utility’s headquarters in Baguio on Oct. 18 last year. The raid, staged before daybreak, drew public condemnation and resolutions declaring Rafael and a NEA official as “persona non grata (unwelcome)” in Baguio and Benguet province. Members of the cooperative took back the facility three days later.