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FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Firs t Regular Session 
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SENATE 
S.B. No. 2118 
Introduced by Senator FRANCIS G. ESCUDERO 
EXPLANATORY NOTE 
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 August 1997. 
CANORECO is a non-stock, non-profit electric cooperative created 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 (109,118,033.61) - 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 reasons cited by the N APOCOR 
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 
N10C 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. 
NAI'OCOR'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. 
o~ 
FRANCIS G. ESCUDERO 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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) 
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SENATE 
S.B. No . .2118 
Introduced by Senator FRANCIS G. ESCUDERO 
AN ACT 
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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 CENT AVOS 
(P7,739,845.79) COVERING THE PERIOD OCTOBER 1995 TO AUGUST 1997 
Be it enflcied 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 
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thousand eight hundred forty-five pesos and seventy-nine centavos (P 
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7,739,845.79) representing the penalties charged by the National Power 
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Corporation (NAPOCOI{) to the Camarines Norte Electric Cooperative, Inc. 
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(CANORECO) for exceeding the contracted energy demand consumption, shall 
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be condoned thereby relieving CANORECO from payment thereof. 
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Section 2. 
This Act shall take effect after its complete publication in the 
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Official Gazette or at least two (2) newspapers of general circulation. 
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Approved,