BAGUIO CITY – Councilor Leandro Yangot, Jr. last week has requested through a proposed resolution that Benguet Electric Cooperative (BENECO) consider being converted from non-stock cooperative to a stock cooperative.
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The move, Yangot said, could be for the best as it is anchored on Republic Act 6938, also known as the Cooperative Code of the Philippines, wherein BENECO as a service cooperative should be registered with the Cooperative Development Authority (CDA) as mandated.
According to reports, CDA personnel pointed out that BENECO could be bought out by a multi-national company if ever it remains a non-stock, non-profit cooperative after June 2006.
Other reports also cite a Supreme Court ruling in 2002 that non-stock electric cooperatives are not genuine cooperatives based on RA 6938, and therefore, cannot enjoy the benefits given by the government. Tax exemption as a benefit should not be accorded to such cooperatives, Councilor Yangot’s proposed resolution stated.
The electric cooperative that presently supplies Baguio and Benguet with power, however, remains registered with the National Electrification Administration (NEA) as a non-stock non-profit institution under PD 269.
There are two options however, Yangot said, including the conversion of BENECO into a stock cooperative under RA 6938, or a stock corporation under the Corporation Code.
Yangot also said that BENECO should “consider converting to a stock cooperative to preempt possible moves by any giant profit-oriented corporation by way of a buy-out, and ensure that ownership of the cooperative’s plants, facilities, equipment and distribution system will remain in the hands of its members.” The move, Yangot ended, will guarantee the stability of electric rates as it will be “based solely on affordable service for the member-consumers,” which is based on the “principle of genuine rural electrification” and “not motivated alone by profit.”
As of January 2005, it was reported that NEA, which has full authority and responsibility over the mandated conversion, has advised all electric cooperatives concerned.