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

Si ath Congress
Fics. negular Session

4955

HOUSE BILL NO..

Introduced by Representatives Michael Angelo C, Rivera, Benhur Salimbangon, Rodel Batocabe

AN ACT CONDONING THE INTEREST CHARGES ON LOANS OF BANTAYAN ELECTRIC COOPERATIVE
INCURRED FROM THE DISALLOWED PAYMENT DISCOUNTS (PPD) CHARGED BY NATIONAL POWER
COPORATION-SMALL POWER UTILITIES GROUP (NPC-SPUG)

Explanatory Note

Bantayan Electric Cooperative, Inc. (BANELCO) is an electric cooperative duly organized and
registered with the National Electrification Administration (NEA) on September 29, 1978. Its
franchise was granted by the National Electrification Commission (NEC) on August 15, 1984,
giving it authority to operate an electric light and power service in its coverage areas, the
municipalities of Bantayan, Madridejos and Santa Fe with a total of forty-nine barangays,
including nine (9) istand-barangays. The main power provider of BANELCO before was the
Bantayan Diesel Power Plant (BOPP) under the National Power Corporation- Small Power
Utilties Grid (NPC-SPUG).

In July 1988, a Memorandum of Agreement between National Power Corporation (NPC), the
National Electrification Administration (NEA) and BANELCO was executed. The MOA allows NPC.
to sell power and electricity to BANELCO in accordance with NPC's Rules on the Sale of
electricity. NPC-SPUG served the power supply of Doong Islet thru the Doong Diesel Power
Plant (DDPP) and the Kintarcan Islet thru the Kintarcan Diesel Power Plant (KDPP), both in the
municipalities of Bantayan and Santa Fe, Cebu.

On January 1993, BANELCO was given a Certificate of Clearance for Automatic Prompt Payment
Discount by NPC for its good payment records i.e., that BANELCO have no unpaid power bills for
the past six months and was therefore granted the privilege to automatically deduct, the three
(3) percent prompt payment discount from its monthly power bill starting the billing month of


December 1992 , provided that the total monthly power bill less the discount is paid on or
before the end of the month (30 or 31") immediately following the billing month, It further
Notified BANELCO that failure on its part to pay its power bills on or before the due date shall
revoke the privilege.

In 1999, BANELCO experienced shortage of power supply in the island and informed NPC-SPUG
on the flight of BANELCO. Despite the problem, BANELCO agreed to avail of the PPD and pay its
power bills while NPC-SPUG promised to exert best efforts to normalize power situation.
BANELCO's power bill payment (net of Prompt Payment Discount) was accepted by NPC-SPUG
but PPD not considered. BANELCO failed to transmit the payments to NPC-SPUG on its
respective due dates. The culprit was the recurring poor weather condition that forced the
suspension of boat trips to Cebu City.

The accumulated disallowed prompt payment discount was P1,810,374.67 based on NPC books
and remains to be outstanding power bills payable by BANELCO and was imposed an
accumulated interest charges of Php 13,143,793.06.

As of May 31, 2014, BANELCO stands to have an account payable to NPC-SPUG due to the
disallowed payment discounts:

Alleged Unpaid power bill balance ~ Php 1,810,374.67
Interest imposed (based on Php 1,810,374,67) - 13,143,793.06
VAT Adjustments 31,151.31

VAT Adjustments 112,392.15
Other adjustments made by NPC (168,591.85)
Total Accounts Payable to NPC due to PPD Php 14,929,119.34

The failure to transmit the bill payments on time was not deliberate on BANELCO’s part as it
was caused by the suspended trips from Bantayan Island to Hagnaya, San Remigio, Cebu due to
very bad weather, making the transmission of the amount physically impossible.

As of June 2014 Monthly Financial Statistical Report of BANELCO shows that it has no
outstanding payable or loan with NPC-SPUG. However, due to NPC’s policy to apply power bill
Payments of the distribution utilities to the “onerous accounts” first, all other succeeding
monthly power bill payments were already insufficient to pay the current bills. It is only in the

book of accounts of NPC-SPUG that the Disallowed Payment Discount remains to be settled.


BANELCO is experiencing some financial difficulties and is in arrears with NEA as of March 2014

NEA’s Financial Report.

Since 2008, BANELCO has been requesting NPC for the condonation of the interest and
surcharges on the coops power bills which was not attributable to BANELCO’s fault or
negligence. Now it has ballooned and request that the total amount of Fourteen Million Nine
Hundred Twenty Nine Thousand and Hundred Nineteen and Thirty Four centavos be

condoned thru congressional action.

In view of the foregoing, the immediate passage of the bill is earnestly sought,

Michael Angelo C. Rivera
Representative, 1-CARE Party List

Benhur L. Salimbangon
Representative, 4th District of Cebu

Rodel MBatocabe
Representative, AKO Bicol Party List


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

SIXTEENTH CONGRESS
First Regular Session

4955

HOUSE BILL NO.
Introduced by Representatives Michael Angelo C. Rivera, Benhur Salimbangon, and Rodel M.
Batocabe

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

AN ACT CONDONING THE INTEREST CHARGES ON LOANS OF BANTAYAN ELECTRIC COOPERATIVE, INC
(BANELCO) INCURRED FROM THE DISALLOWED PROMPT PAYMENT DISCOUNTS (PPD) CHARGED BY
‘THE NATONAL POWER CORPORATION-SMALL POWER UTILTIES GROUP (NPC-SPUG)

Section 1. Condonation of Interest Charges. The interest charges of Fourteen Million Nine Hundred.
Twenty Nine, Hundred Nineteen and Thirty Four Centavos (PhP 14,929,119.34) incurred for the
disallowed prompt payment discounts (PPD) of BANELCO from NPC-SPUG is hereby condoned, thereby
perpetually relieving BANELCO of the payment thereof.

Section 2. Other Loans Excluded from the Condonation. Other accounts of BANELCO to the National

Electrification Administration are hereby excluded from this condonation.

Section 3. Effectivity.- This Act shall take effect fifteen (15) days after its publication in at least two (2)

national newspapers of general circulation,

Approved.

Rep. Michael Angelo C. Rivera Rep. Benhur Salimbangon
L-CARE Party List 4" District of Cebu

AKo BICOL Party List