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SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B.No.~03 
Introduced by Senator FRANCIS G. ESCUDERO., 
EXPLANATORY NOTE 
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JUL -8 P 1 :22 
This bill seeks legislative relief for the Camarines Norte Electric Cooperative, Inc. 
(CANORECO) by way of condonation of its penalties that are charged by the National 
Power Corporation (NAPOCOR) covering the period from October 1995 to {\.ugust 1997. 
i 
CANORECO is a non-stock, non-profit electric cooperative Qreated and 
incorporated under Presidential Decree No. 269, as amended by Presidential Decree No. 
1645. It provides public service to the people of Camarines Norte by supplying 
affordable electricity to the province. 
The NAPOCOR penalized CANORECO for exceeding 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 
stipulated in the power contract between the two parties. 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 a total of 
nine million one hundred eighteen thousand thirty three pesos and sixty-one centavos 
(P9,118,033.61) - 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 charges including interest charges accruing from 
the over consumption and under consumption of (CANORECO's) contracted demand 
and energy". Among the re~sons cited by the NAPOCOR Board for the condonation of 
CANORECO's penalties include the following: 
1. The said penalties including the forfeiture 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 
Ii 


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 concurrence of the 
Commission on Audit (COA), which gave its concurrence upon the recommendation of 
the Regional Auditor, NAPOCOR Southern Luzon and the Director of COA Region IV 
Office in Quezon City. However, COA's concurrence on the condonation is then 
premised on the passage of a special legislation by Congress. 
It is the policy of Congress to alleviate poverty and improve the plight of the 
very poor. The author strongly believe that the condonation will be beneficial to the 
electricity consumers from the province of Camarines Norte, most of which live below 
the poverty line. The condonation of the penalty charges will allow CANORECO to 
allocate resources, which would otherwise go to the payment of the penalty charges, to 
improve the cooperative's services and facilities. 
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 
FRANCIS G. ESCUDERO 


SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S. B.No. Boa 
Introduced by Senator FRANCIS G. ESCUDERO 
AN ACT 
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JUL -8 P 1 :22 
CONDONING 
THE 
PENALTIES 
OF 
CAMARINES 
NORTE 
,ELECTRIC 
COOPERATIVE, INC. (CANORECO) ON OVEDUE 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 
(P7,739,845.79) 
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: 
1 
Section 1. 
The amount of seven million seven hundred thirty-nine thousand 
2 
eight hundred forty-five pesos and seventy-nine centavos (P 7,739,845.79) representing 
3 
the penalties charged by the National Power Corporation (NAPOCOR) to the 
4 
Camarines Norte Electric Cooperative, Inc. (CANORECO) for exceeding the contracted 
5 
energy demand consumption, shall be condoned thereby relieving CANORECO from 
6 
payment thereof. 
7 
Section 2. 
This Act shall take effect after its complete publication in the 
8 
Official Gazette or at least two (2) newspapers of general circulation. 
9 
Approved, 
1