Republic of the Philippines
HOUSE OF REPRESENTATIVES EN
Quezon City iis x
; { 3.0 JUL 2013,"
Sixteenth Congress OD. I
First Regular Session

HOUSE BILL NO.2010

Introduced by HONORABLE CATHERINE BARCELONA-REYES, M.D.

EXPLANATORY NOTE

This bill aims to seek legislative assistance for the Camarines Norte Electric
Cooperative, Inc. (CANORECO) by way of condoning of its penalties that are
charged by the National Power Corporation (NAPOCOR) covering the period from
October 1995 to August 1977.

CANORECO is a non-profit, non-stock electric cooperative built under
Presidential Decree No. 269, as amended by Presidential Decree No. 1645. It provides
public service to the people of Camarines Norte by supplying inexpensive and
affordable electricity to the province.

The NAPOCOR penalized CANORECO for going beyond the contracted
energy and demand consumption covering the period between May to September
1995 and for failing to meet its minimum demand and energy contract in November
1995 as stated in the power contract between the two parties concerned, The penalties
amounted to seven million seven hundred thirty-nine thousand eight hundred forty-
five pesos and seventy-nine centavos (P7,739,845.79). Furthermore, CANORECO.
had already paid interest charges on the penalties from October 1995 to June 2003
amounting to total of nine million one hundred eighteen thousand thirty three pesos
and sixty-one centavos (P 9,118,033.61) — an amount that already exceeded the total
penalties charged by NAPOCOR.

The NAPOCOR Board, in Resolution No. 98-41 dated February 23, 1998,
approved the waiving of “all penalty chargers including interest charges accruing from
the over consumption and under consumption of (CANORECO’s) contracted demand
and energy.” Among the reasons cited by the NAPOCOR Board for condoning
CANORECO’s penalties include the following:


1. The said penalties including the forteiture of Prompt Payment Discount
came at the time when CANORECO was experiencing serious internal
problems;

2. At the time the penalties and other punitive charges were imposed on
CANORECO in 1995 and 1996, stable power situation existed thereby
negating any loss to the Corporation as a result of the abnormal power
consumption by CANORECO;

3, Memorandum of Understanding (MOU) has been secured between NPC and
CANORECO stipulating that NPC shall waive the penalties-provided
CANORECO shall enter into a long term power supply contract wherein the
non-imposition of penalty for excess demand and energy among others is
contained.

NAPOCOR’s approval of the condonation was subject to the agreement of the
Commission on Audit (COA) , which gave its concurrence upon the recommendation
of the Regional Auditor, NAPOCOR Souther Luzon and the Director of COA Region
IV Offfice in Quezon City. Although, COA’s concurrence on the condonation is then
premised on the passage of a special legislation by Congress.

It is the duty of the Congress to lessen poverty and alleviate the plight of the
every poor. The condonation would definitely benefit the electricity consumers of
those in Camarines Norte, most of which that live below the poverty line. The
condonation of the penalty charges will allow CANORECO to distribute resources,
which would otherwise go to the payment of the penalty charges, in order to benefit
and improve the cooperative’s facilities and services.

The penalties, if not condoned, will result in pass-on charges as the small
cooperative cannot afford to pay for it without sacrificing the quality of service that it
provides to its 49,289 residential consumers and 3,106 commercial consumers.

Thus, it is for the foregoing reasons that I urgently seek the passage of this bill.

CATHERINE 'ELONA REYES, M.D.

Representative
1" District, Camarines Norte


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Sixteenth Congress
First Regular Session

HOUSE BILL NO.2010

Introduced by HONORABLE CATHERINE BARCELONA-REYES, M.D.

AN ACT

CONDONING THE PENALTIES OF CAMARINES NORTE ELECTRIC
COOPERATIVE, INC. (CANORECO) ON OVERDUE ACCOUNTS
CHARGED BY THE NATIONAL POWER CORPORATION IN THE
AMOUNT OF SEVEN MILLION SEVEN HUNDRED THIRTY-NINE
THOUSAND EIGHT HUNDRED FORTY FIVE PESOS AND SEVENTY NINE
CENTAVOS (P 7,739,845.79) COVERING THE PERIOD OCTOBER 1995 TO
AUGUST 1997

Be it enacted by the Senate and the House of Representatives of the Philippines
in Congress assembled:

Section 1. The amount of seven million seven hundred thirty-nine thousand
eight hundred forty-five pesos and seventy-nine centavos (P_ 7,739,845.79)
representing the penalties charged by the National Power Corporation (NAPOCOR) to
the Camarines Norte Electric Cooperative, Inc. (CANORECO) for exceeding the
contracted energy demand consumption, shall be condoned thereby relieving
CANORECO from payment thereof.

Section 2. This Act shall take effect after its complete publication in the

Official Gazette or at least two (2) newspapers of general circulation.

Approved,