NEA issues rules for tax exemption of electric co-ops

By Lenie Lectura – January 14, 2025
from Business Mirror

THE National Electrification Administration (NEA) has laid down the criteria and parameters for electric cooperatives (ECs) who want to avail exemptions from local taxes, fees and charges in their respective local government units (LGUs).

Under NEA Memorandum 2025-02 dated January 9 and released last Tuesday, a perfect score of 25 points will be awarded to an EC if it obtains a 97-percent collection efficiency rating. Non-efficient ECs graded 89 percent and below will only be awarded five points. Meanwhile, a 10-point bonus will be granted to ECs that will maintain “positive” result of financial operation, inclusive of reinvestment fund for sustainable capital expenditures.

On the technical side, NEA said the cooperatives will be scored based on the frequency and duration of power outages to gauge network system reliability.

At an institutional level, NEA said ECs must hold annual general membership assemblies and district elections to earn a perfect score of 10 points, respectively. The ECs must also achieve 90 percent to 100 percent energization rates to gain 15 points. Energization rates at 59 percent and below are awarded 11 points.

Organizations that are deemed compliant with respect to their submissions of reportorial requirements, including their corporate operating budget, will be granted 10 points.

The ECs need to achieve a 75-percent score using the performance assessment criteria to receive a certificate of compliance.

Earlier, the Department of Energy and the Department of Finance signed a joint circular mandating ECs to secure an annual certificate of compliance from NEA.

“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,” Energy Secretary Raphael P.M. Lotilla said earlier.