Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Seventeenth Congress
‘Third Regular Session

8371

HOUSE BILL NO..

Introduced by
Representative Carlos Roman L. Uybarreta

EXPLANATORY NOTE

Lanao del Sur Rural Electric Cooperative, Inc. (LASURECO) is a duly
organized cooperative with a franchise to distribute electric light, and power to
37 municipalities except Bumbaran and Wao towns, plus the three
municipalities of Pantar, Balo-i and Pantao Ragat of Lanao del Norte, and the
southern half of Lanao del Sur with a 2,322 distribution line in circuit-
kilometers. It is the fifth of National Power Corporation’s biggest clients in
Mindanao in terms of increase in energy sales. It serves 59,379 household-
consumers.

As of July 9, 2018, the total amount of LASURECO’s outstanding account
with the Power Sector Assets and Liabilities Management Corporation (PSALM)
is NINE BILLION ONE HUNDRED SIXTY SIX MILLION NINE HUNDRED ELEVEN
THOUSAND ONE HUNDRED NINE PESOS AND 74/100 (P 9,166,911,109.74),
to wit:

B Amount

Power Bill VAT Interest & VAT- Total
Interest

P5,191,292,482.73 | 153,220,406.24 | 3,822,398,220.77 | P 9,166,911,109.74

LASURECO’s power obligation to PSALM has blown out of proportion that
it has become virtually impossible for LASURECO to focus on the improvement
of their electricity-distribution services. At present, the said cooperative can no
longer make new investments and acquire additional assets that would provide
better, cheaper, and more efficient means of harnessing and distributing reliable
power throughout the area covered, primarily because the funds intended for
these uses are solely being directed towards the payment of its monetary
obligations. Another main reason for its poor collection performance and high
system losses is the bloody tragedy that befell Marawi City, where residents were
forced to be displaced in evacuation centers and nearby cities due to the five
month-long unlawful siege carried out by rebel groups in Marawi.

It is for this reason that we take measures in order to apply leniency to
non-stock, non-profit electric cooperatives like LASURECO by condoning all its
unpaid power obligations to PSALM, including all interests, surcharges and other
penalties from the commencement of the liability. This way, LASURECO will be
able to return to its former condition of competent, successful and debt-free


operation. Condoning its unpaid obligations to PSALM allows the cooperative to
remain financially viable for local as well as foreign investors.

In consideration of the foregoing, the immediate passage of this bill is
earnestly requested.

ee eeerer


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Seventeenth Congress
Third Regular Session

8971
HOUSE BILL NO.

Introduced by
Representative Carlos Roman L. Uybarreta

AN ACT CONDONING THE OBLIGATION OF LANAO DEL SUR RURAL
ELECTRIC COOPERATIVE, INC. (LASURECO) PAYABLE TO THE POWER
SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION
(PSALM)

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

Section 1. Title. — This Act shall be known as the Condonation of the Obligation
of Lanao del Sur Rural Electric Cooperative, Inc. (LASURECO) Act.

Section 2. Declaration of Policy. — It is hereby declared the policy of the State
to ensure and accelerate the total electrification of the country; ensure the
quality, reliability, security and affordability of the supply of electric power in the
country; and enable the electric cooperatives to cope with the changes brought
about in the industry by emerging technologies.

Section 3. Condonation of Obligation. - The principal obligation of LASURECO
payable to PSALM as well as the interest and other surcharges as there may be
are hereby condoned.

Section 4. Effectivity Clause. - This Act shall take effect fifteen (15) days after
its publication in at least two (2) newspapers of general circulation.

Approved.