What Really Happened in BATELEC II ?

By :  Reynaldo G. Panaligan, Tita L. Matulin, Jose Rizal L. Remo, Cesario S. Gutierrez, Cipriano P. Roxas, Celso A. Landicho, Eduardo L. Tagle

Batangas II Electric Cooperative, Inc. (Batelec II) is one of the 119 electric cooperatives registered with the National Electrification Administration (NEA) under Presidential Decree No. 269.  Its franchise covers two cities and 15 municipalities in Batangas.  Its main office is in Lipa City, with area offices in Tanauan City, Rosario, and San Jose, and unit offices in 12 towns.

In 1990, two laws were passed – RA 6938 and RA 6939 – that created the Cooperative Development Authority (CDA).  The laws mandate that all cooperatives (including electric cooperatives) shall register with the CDA to enable them to avail themselves of all benefits, particularly exemption from taxes.  On the part of the cooperative members, they, themselves, under the CDA laws, would own the cooperative.

In 1993, NEA itself registered provisionally with CDA almost all of the 119 electric cooperatives to comply with the laws.  Thereafter, NEA has been resisting the conversion of the provisional registration of all electric cooperatives into permanent registration to forestall its (NEA)abolition.

We (Reynaldo Panaligan, Cesario Gutierrez, Tita Matulin, Divinia Dimayuga, Ireneo Montecer, Cipriano Roxas, Jose Rizal Remo, Celso Landicho, Eduardo Tagle and Isagani Casalme)  assumed position as directors Batelec II in 2003, and became the majority block which toppled the former leadership led by Dir. Gerardo Hernandez. We also terminated the services of the General Manager Evangel A. Manundo for mismanagement and other just causes under the laws. The termination was upheld by the NEA.
When we assumed office, Batelec II had so many problems – salaries and overtime pay of employees were delayed by as much as two months, suppliers were not paid on time, there were seldom biddings for procurement of raw materials, NAPOCOR payments were delayed, consumers were angry because of poor service – such that the cooperative was rated as a “C,” the lowest categorization per NEA guidelines. The Management Audit made by Carlos J. Valdez and Associates, reported that the Cooperative was “bleeding to death”

We found that Batelec II was not viable those past years before our term of office because many electric meters of consumers who have been using electricity have not been registered, many elective local and public officials have not been paying their bills, and that pilferage has been perpetrated with impunity – all these had pushed the cooperative’s finances down.

It was during our term that NEA allowed the setting up of the Office of the President for more powers to speed up the improvement of Batelec II.  In effect, then President Reynaldo G. Panaligan was acting as the Chief Executive Officer of Batelec II in the two years that he was president.

We started implementing all the resolutions and policies adopted by the Board in line with NEA guidelines.

Specifically, we trimmed down on unnecessary expenses, started re-engineering our operations, and instituted discipline among employees and member-consumers.                  
We implemented strictly the cooperative’s disconnection policy.  We started disconnecting the electric service of local elective and public officials, favored business establishments and member-consumers with unpaid bills.

We disconnected the service and imposed fines on those engaged in pilferage. As a result, we incurred the ire of several elective and public officials, businessmen, and residents within the 15 towns and two cities covered by Batelec II.

Two prominent Auditing firms, Carlos J. Valdez and Associates and Punongbayan & Araullo both declined our request for external auditing services for one reason, the balances of the books of BATELEC II do not match and should be reconciled first. This is one of the reasons why computerization of the whole system really became imperative. Several years of transactions need to be traced back and reconciled to establish the correct balances. 

We had to computerize (
Board Resolution # 04-067, dated April 6, 2004; unanimously approved by the Board of Directors: Reynaldo Panaligan, Cesario Gutierrez, Tita Matulin, Divinia Dimayuga, Ireneo Montecer, Franklin Castillo, Ruben Calinisan, Celso Landicho, Isagani Casalme, Jose Rizal Remo, Cipriano Roxas, Eduardo Tagle)  to make operations efficient without incurring additional debts or sacrificing our financial viability. When presented to NEA during the 2006 anniversary celebration, our computerization project was praised “as a successful endeavor.” When we were forced to leave BATELEC II in December 2006, the integrator has delivered about P 86 Million worth of computer hardware, peripherals and working software applications as compliance to the requirements of the computerization project which was unanimously approved by the Board of Directors and ratified by the General Assembly.

We had to buy boom trucks to service our consumers promptly and efficiently
(Board Resolution #04-111 dated June 26, 2004; unanimously approved by the Board of Directors: Reynaldo Panaligan, Cesario Gutierrez, Tita Matulin, Divinia Dimayuga, Ireneo Montecer, Ruben Calinisan, Isagani Casalme, Franklin Castillo, Gerardo Hernandez, Celso Landicho, Tirso Ramos, Jr., Jose Rizal Remo, Cipriano Roxas, Eduardo Tagle)
. Since their purchase, the boom trucks have been in use to service consumers. The budgets for both the computerization and the purchase of boom trucks were approved by NEA.

After one and a half years into our term of office, Batelec II was re-classified and was given a rating of “A,” the second highest rating given by the NEA.  Salaries and overtime pay of employees were paid on time, debts to suppliers were settled, the more than one month delay in the monthly bills of the National Power Corporation (NPC) from where we get the supply of electricity was reduced to barely 20 days, biddings were held regularly and slowly we were able to improve services and get positive feedbacks from consumers.

It was also during our term of office that Batelec II posted modest profits from operations (about P52 million) – profits were passed on to consumers in terms of reduced rates, more areas electrified, and improved service.

As we continued the strict implementation of our policies, particularly on disconnection for non payment of bills and pilferage, some former directors of BATELEC II, several local elective and public officials were angry.  They and the consumers they instigated filed administrative charges against us using baseless issues involving the computerization and the boom trucks projects.

In September 2006, we moved – through a unanimous resolution of all the 14 directors present -- to make permanent our registration with the CDA. (Board Resolution # 06-151 dated September 23, 2006)

Why register with CDA?  We want to transfer the ownership of  Batelec II, now a more than P3- billion cooperative, to the member-consumers themselves so they can derive benefits from its operation; unlike when the cooperative continues to be under NEA registration.  We want to be exempted from real property and franchise taxes, payment of which would be passed on to consumers in terms of upward adjustments in electric bills.

Our unanimous board resolution for a permanent registration with CDA (Batelec II had been provisionally registered with CDA to comply with the 1990 laws) infuriated NEA officials and several local government officials whose city or municipality would be deprived of real property and franchise taxes.  Lipa City alone is collecting about P100 million in taxes from Batelec II.

Batelec II is now permanently registered with CDA.  At least four electric cooperatives have also converted their provisional registration into a permanent registration after we have accomplished ours.  To date, there are 16 electric cooperatives registered permanently with CDA.

To get back at us, NEA resolved immediately one of the administrative cases filed against us (14 members of the Board of Directors) the six (Gerardo Hernandez, Franklin Castillo, Tirso Ramos, Ruben Calinisan, Divinia Dimayuga, Ireneo Montecer)
who are no longer members of the Board of Directors of BATELEC II are DISQUALIFIED to run for the same position in any future district election of the Cooperative,
and ordered our dismissal (Reynaldo G. Panaligan, Tita L. Matulin, Jose Rizal L. Remo, Cesario S. Gutierrez, Cipriano P. Roxas, Celso A. Landicho, Eduardo L. Tagle) as members of the board on Oct. 5, 2006.  On Oct. 9, 2006, NEA ordered the remaining seven minority directors to reorganize and elect the officers from among themselves.

On Dec. 29, 2006, the Supreme Court (SC) issued a status quo ante order that barred NEA from implementing its Oct. 5, 2006 and Oct. 9, 2006 orders.
The SC status quo ante order, despite its reiteration on Jan. 16, 2007, June 12, 2007, and July 31, 2007, has not been complied with because NEA (through the Project Supervisor and Assistant Project Supervisor it assigned in BATELEC II in November 2006)  -- in cahoots with the remaining seven directors, employees, and several local government officials -- has been thwarting its implementation.  We filed with the SC a petition for indirect contempt.  These cases are still pending with the SC.

The issue is not the computerization or the boom trucks projects.  The issue is the quarrel between NEA and CDA over full control and supervision over all electric cooperatives in the country.  NEA has been, for almost two decades now, in constant tug-of-war with CDA when it comes to the registration of electric cooperatives.  Specifically, NEA has been adverse to Batelec II’s registration with CDA because, surely, other electric cooperatives would follow, as what has happened, and definitely, NEA would be abolished.  Sa away ng NEA and CDA, nadamay kami.

In the meantime, NEA and the remaining seven directors filed syndicated estafa and falsification cases against us
(Reynaldo G. Panaligan, Tita L. Matulin, Jose Rizal L. Remo, Cesario S. Gutierrez, Cipriano P. Roxas, Celso A. Landicho, Eduardo L. Tagle) in Lipa City and Tanauan City courts, respectively.

The illigitimate Board of Directors and Management of BATELEC II, led by Ruperto Manalo and Marilyn Caguimbal has maligned our persons through the media by giving out distorted and inaccurate versions of BATELEC II’s computerization program, the purchase of boom trucks and BATELEC II’s  registration with the Cooperative Development Authority.

It’s time we speak out for BATELEC II and its member consumers. It’s never too late for the truth to be heard.

Batangas Electric Cooperative II,
Oct 13, 2008, 2:11 AM
Batangas Electric Cooperative II,
Oct 13, 2008, 2:13 AM
Batangas Electric Cooperative II,
Oct 13, 2008, 2:09 AM