Electric cooperatives (ECs) that meet the financial and operational standards set by the National Electrification Administration (NEA) will be granted exemptions from local taxes, fees, and charges imposed by local government units (LGUs).
In a statement by the DOE, this policy would apply to ECs registered under both NEA and the Cooperative Development Authority (CDA).
“This local tax exemption is a significant milestone for our qualified ECs, as it directly translates to reduced financial burdens that can be reinvested into improving services and achieving 100 percent total electrification,” said Energy Secretary Raphael P.M. Lotilla.
Under the Joint Memorandum Circular signed by Lotilla and Finance Secretary Ralph G. Recto, represented by Undersecretary Bayani Agabin, electric cooperatives must obtain an annual Certificate of Compliance from the NEA, confirming that they meet the required financial and operational standards.
Electric cooperatives must achieve at least a 75% rating based on NEA’s compliance criteria to qualify for certification. These criteria cover key performance areas such as collection efficiency, positive net worth, system reliability, and system loss reduction.
Cooperatives are also required to hold regular general membership assemblies and district elections, complete electrification projects for full customer connectivity, and provide timely and accurate reports to the NEA.
Despite certain exemptions, electric cooperatives are still required to pay regulated and reasonable administrative costs to local government units (LGUs), as mandated by Joint Memorandum Circular No. 2019-01 issued by the DILG and DOF.
“By reducing these costs, we empower them to focus on expanding access to electricity, especially in unserved and underserved areas, ensuring no Filipino household is left behind,” the Secretary added.
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