NAPOCOR FACING CRIMINAL SANCTIONS AND PENALTIES

Manila, July 11, 2003 By Donnabelle L. Gatdula (Star) The National Power Corp. (Napocor) is facing penalties and criminal sanctions after its failure to comply with the Energy Regulatory Commission (ERC) order implementing the new rates for its generation rate adjustment mechanism (GRAM).

"Napocor is hereby directed to submit, within 15 days from receipt hereof, its explanation under oath why no administrative penalty should be imposed upon it, and/or criminal action instituted against it for aforesaid violation. It is further directed to immediately comply with the directive in the foresaid order by issuing a revised billing to its customers using the approved new generation charge under ERC Case No. 2003-156," the ERC said yesterday

Under the law, Napocor may be asked to pay from P50,000 to P50 million aside from the criminal charges that the ERC may slap against the power firm.

Based on the May 14 order of ERC, Napocor should charge its customers with the approved new generation charge per kilowatthour effective immediately as follows: Luzon (P2.1258); Visayas (P2.2412) and Mindanao (P1.0262). These rates are lower that what the Napocor is asking the ERC which are P3.0075/kwh in Luzon; P2.3465/kwh in Visayas and P1.4546/kwh in Mindanao.

ERC noted that the June billing of Napocor to its clients still used the old generation charge.

"This is a clear violation of the law. They may face monetary and criminal charges for not following an order. We have repeatedly informed them that they should implement but up to now, we have not received any response from them," ERC chairman Manuel Sanchez said.

The non-compliance of Napocor to the ERC order, Sanchez said, aggravated the situation in the Visayas wherein a Visayan-based power firm has been threatening to close shop if Napocor will not change its rates.

"Any increase in the generation charge would result in the increase in the rate of Cebu Private Power Corp. to be slapped on Visayas Electric Co. (VECO). This will somewhat alleviate CPPC’s financial burden," he said.

Napocor general counsel Rainier Butalid, in an earlier interview said the power firm is ready to implement the ERC order in the July billing of its customers.

But Sanchez insisted this should not be the case because the power firm should have carried out the order in its June billing.

"Then, they should still be liable for the one month that they refused to implement the order," he said.

Butalid said they are willing to abide with the ERC and if necessary make the rates "retroactive".

Napocor has a pending motion for reconsideration with the ERC for the GRAM rate. The state-owned power firm argued that the ERC order came after they have made the billing for May-June.

Sanchez said the firm should implement the order while waiting for the decision of the ERC on its motion for reconsideration.


Reported by: Sol Jose Vanzi

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