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No. 59 - June 5, 2001
Congress Ratifies Power Reform Bill
Special sessions held on 28 to 31 May gave Congress
extra time to resolve conflicting provisions of the long-awaited
Electric Power Industry Reform Act of 2001. Before the special
session, both chambers of Congress reconstituted their conferees
after the recent leadership transition and political turmoil
between contesting parties in the recent elections.
The reconstituted Senate bicameral committee
conferees included Senators John Osmeña, Francisco
Tatad, Juan Ponce Enrile, Teresa Aquino-Oreta, Renato Cayetano,
Sergio Osmeña III, and Ramon Revilla.
The House bicameral panel members were Reps.
Melvyn Eballe, Florencio Abad, Eleandro Madrona, Eduardo Gullas,
Aniceto Saludo, Jr., Nur Jaafar, Ronald Cosalan, Jacinto Paras,
Prospero Pichay, Jr., Loretta Ann Rosales, Narciso Monfort,
Arnulfo Fuentebella, Julio Ledesma IV, Amadeo Perez, Jr.,
Harry Angping, Luwalhati Antonino, and Eduardo Veloso. On
the first day of the special session, Rep. Salacnib Baterina
replaced Rep. Sergio Apostol while on the next day Reps. Enrique
Garcia, Jr. and Antonio Diaz were added to the roster.
On 31 May, the House ratified the bicameral
report with 131 in favor and 14 negative votes. Voting against
the measure were Reps. Bellaflor Angara-Castillo, Agapito
Aquino, Joker Arroyo, Alipio Badelles, Mario Cruz, Francis
Escudero, Daisy Fuentes, Enrique Garcia, Manuel Garcia, Magtanggol
Gunigundo, Jr., Constantino Jaraula, Celso Lobregat, Ruy Elias
Lopez, and Juan Miguel Zubiri.
The Senate ratified the same report on 4 June. Voting for
the ratification were Senators Tessie Aquino-Oreta, Robert
Barbers, Anna Dominique Coseteng, Renato Cayetano, Franklin
Drilon, John Osmeña, Sergio Osmeña III, Ramon
Revilla, Juan Flavier, Ramon Magsaysay Jr., Blas Ople, Francisco
Tatad and Aquilino Pimentel, Jr.
The vote was 13-1-1 in favor of the measure.
Only Sen. Enrile voted no. In explaining his vote, he said
that this (bill) would "bring unimaginable hardship to
our people, electric power consumers and the nation at large."
He added that the bill is "deceptive" and gives
false hope to our people. He also asked the bill's sponsor,
John Osmeña, why the government will allot P200 billion
in assuming part of Napocor's debt which only amounts to P61.2
billion. He wanted to know where the figure came after expressing
reservations on the foreign consultancy firm (Credit Suisse
First Boston) that the government hired to study Napocor's
privatization.
Nevertheless, Energy Secretary Jose Isidro Camacho
claims that the measure will ensure transparency and competition.
He says industrial and commercial sectors would have lower
power rates by at least 27% and have the opportunity to choose
an electricity provider while residential consumers will have
a direct gain of P0.30/kWh rate reduction. Lifeline rates
are also set for the marginalized consumers.
With the bill's approval, Secretary Camacho
says electrification of rural areas will continue and employment
possibilities will also improve. Here are the highlights of
the new electric industry reform bill:
- Increases NEA's authorized capital
to P15 billion.
- Limits to 25% a stockholder's share
in a distribution company (unless the utility is listed
in the stock exchange).
- Defines a small distribution company
as one whose peak demand is 10 megawatts or less.
- Allows all electricity end-users with
a monthly average peak demand of at least one megawatt for
the preceding 12 months to choose its electricity supplier.
- Prescribes the national government
to directly assume a portion of the financial obligation
of Napocor not exceeding P200 billion.
- Prescribes that any amount to be included
for stranded cost recovery will be collected as a separate
item in the consumer billing statement.
- Allows distribution utilities to collect
stranded contract costs, provided that it is fair and reasonable
in relation to the average prices of the IPP contracted
by Napocor. In case of over-recovery, ERC will ensure that
any excess amount shall be used to reduce electricity rates
of the end users.
- Prohibits a company or related group
to own and operate more than 30% of the installed generating
capacity of a grid and/or 25% of the national installed
capacity.
- Prohibits a distribution utility to
source from bilateral power supply contracts up to 50% of
its total demand from an associated firm in generation.
- Prohibits a distribution utility to
source more than 90% of its total demand from bilateral
power supply contracts for the first five years from the
establishment of the wholesale electricity spot market.
- Prescribes that all generation assets
of NPC and IPP contracts shall be sold in an open and transparent
manner through public bidding.
- Prescribes that Napocor may generate
and sell electricity only from the undisposed generating
assets and IPP contracts of PSALM Corp. and shall not incur
any new obligations to purchase power through bilateral
contracts with generation companies or other suppliers.
Any unsold capacity may be privatized not later than eight
years.
- Prescribes that all outstanding obligations
of Napocor arising from loans, issuances of bonds, securities
and other instruments of indebtedness shall be transferred
and assumed by PSALM Corp. within 180 days.
- Empowers the PSALM Corp. to take title
to and possession of the NPC IPP contracts and to appoint
qualified independent entities to act as IPP administrators.
- Creates an inter-agency committee (chaired
by the Secretary of Finance, with the Secretary of Justice
and Director General of National Economic Development Authority)
to undertake a thorough review of all IPP contracts. In
case of contracts found grossly disadvantageous to government,
the committee will cause the appropriate government agency
to file an action under the arbitration clauses.
- Allows Congress (through a joint resolution)
to authorize the establishment of additional generating
capacity in case of electricity supply shortage.
- Exempts the "lifeline rate"
from cross-subsidy phaseout for 10 years, unless extended
by law.
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Congress
Approves Supplemental Budget
The House of Representatives acted on the P10.9
billion supplemental 2001 national budget (HB 12931) during
the special session called by President Gloria Macapagal Arroyo.
Of the P10.9 billion, congressmen approved P3.8 billion and
P1.45 billion, respectively, which will enable government
employees and the police to receive salary increases starting
July 2001. Congress also allocated P500 million for the long
overdue P500 a month hike in pensions of war veterans and
their spouses.
The House also added P1 billion to the Foreign
Assisted Projects Support Fund as government counterpart to
ongoing projects and those that are programmed for implementation
this year. Another P4.15 billion is set aside to cover for
deficiencies in salaries of 5,000 teachers, health insurance
premiums for government employees, and retirement benefits
of police and government personnel. The Committee on Appropriations
chaired by Rep. Florencio Abad reported the measure to the
floor on 30 May. It was approved on third reading the next
day, with 149 voting in-favor, none against and no abstentions.
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Two
Measures Vetoed
President Arroyo returned to Congress HB
10621 and SB 2232 (Elevating the rank of the Court of Tax
Appeals to the level of a collegiate court with special jurisdiction)
without her signature. She cited that the Supreme Court has
"affirmed the exclusive appellate jurisdiction of the
Court of Appeals over all final judgements, decision, resolutions,
orders or awards of the Court of Tax Appeals by virtue of
Section 9 of BP 129."
Likewise under Section 30, Article VI of the
Constitution, "any law increasing the appellate jurisdiction
of the Supreme Court may be passed only with advice and concurrence
of the Supreme Court." Hence, without the required advice
and concurrence of the Supreme Court regarding the measure,
the President vetoed the bill.
The President also vetoed HB 8136 and SB 2208
(Providing for optimum performance in revenue collection through
lateral attrition and granting of special incentives and rewards
for exemplary service in revenue-generating agencies of the
government) because of its failure to comply with due process.
She said, "dismissal and/or transfer
of attritable employee by the Revenue Performance Evaluation
Board without the necessary hearing violates the basic, constitutional
right of an individual enshrined in the Constitution's Bill
of Rights."
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More:
Congress Ratifies Power Reform Bill
Congress Approves
Supplemental Budget
Two Measures Vetoed
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