The Electricity
Industry Reform Act
Bicam Report: Some comments
By Rep. Bobby
Tañada
Mr. Speaker,
my dear colleagues . . .
I rise to express
my deep concern over the reported “railroading” of the passage of
the Bicam Report on the electricity industry reform bill. Cong.
Etta Rosales, I believe has more than adequately described how the
unfortunate incident has come about.
We do not need
another controversy to mark the end of the 11th Congress, Mr. Speaker.
This bill, which has already faced many problems, starting from
the “payola scam” last year, should have been handled in the most
transparent and procedurally sound manner. Instead, because of what
has happened, we might end up with a law, which could be declared
unconstitutional by the Supreme Court based on serious technical
grounds which could have been easily avoided. Whoever heard of a
bill of national importance such as this being reported out by the
bicam conferees without the formal convening of the House and the
Senate panel and without the formal approval of the Bicam Report?
Is this the way we want the 11th Congress to be remembered?
Be that as it
may, I wish to put on record a few of the clarificatory questions
I would have raised had the bicam report on the electricity industry
reform act been submitted for ratification today, as I had expected
it, rather than the early morning of Friday, 4:30 AM to be exact
on 1 June as reported.
First, if we
go by tradition, we should have seen a summary of all the conflicting
provisions between the Senate and the House version, which the bicam
panel should have resolved. NO such summary has been shown or submitted.
Second, on Section
6 which deals with the Generation Sector, I do not understand why
sales of generated power by generation companies shall be “value
added tax zero-rated” rather than just simply VAT-exempt. Zero-rating
means input tax credits can be collected by generation companies
while at the same time not paying output VAT. Isn’t it enough to
exempt them from VAT to lower electricity rates to end-users? In
the face of the burgeoning fiscal problem that government faces,
we do not need another leak in our fiscal balances.
Third, I would
have asked the conferees why they did not subject the assumption
of some P200 billion of Napocor’s stranded financial obligations
to certain conditions. Conditions, like for instance, the assumption
of this amount only after the full implementation of NPC’s privatization,
the completion of the review of all NPC IPP contracts, the institution
of remedial measures such as but not limited to renegotiation of
flawed or onerous IPP contracts, and the conversion of the amount
that will be absorbed by the National Government into equity shares
by electricity consumers. That way, we avoid a repeat of past privatization
mistakes where gains are privatized, but losses are socialized.
Finally, on
the matter of the body that would review the IPP contracts as well
as the “power commission” tasked with oversight function, I would
have asked why the conferees did not include civil society or consumer
group representatives as members thereof.
I do recognize
the importance of restructuring the NPC so that we will have an
efficient, stable, reasonable, and competitive electricity industry
sector but I believe, a lot of it depends on the strength of the
regulatory institution that the law provides. I would have wanted
clear penalty provisions for members of the commission caught and
proven to have acted against the interest of the consumers and outside
what the law mandates it to do.
However, I still
cannot accept the unconditional absorption of some P200 billion
of Napocor’s financial obligations. It’s the same mistake we had
committed with the Marcosian debt all over again, Mr. Speaker.
While admittedly,
there is some urgency in the passage of this bill, I believe there
is still ample time to enact a more improved and responsive piece
of legislation. We are told that current capacities would last up
to 2005, and so Mr. Speaker, a three to six months delay in the
approval of this bill will not prejudice or delay the preparation
/ construction of such needed plants or facilities.
Mr. Speaker,
a little delay is better than making a big mistake on such an important
measure as this.
I therefore
wish to manifest and make of record my opposition to this so called
“bicameral conference committee report” that restructures the electricity
industry. Had I been here when this was voted upon last Friday at
4:30 in the morning, I would have voted no not only on grounds of
procedural flaws but substantive as well.
Thank you very
much.
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A respected nationalist and former senator, Bobby Tañada is the
4th district of Quezon's representative in the 11th Congress. Despite
his excellent record in both chambers of the Congress, he failed
to make it again to the Senate in the recent elections.
