Psalm, NPC, SRPC sued

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Thursday, July 3, 2014


LA TRINIDAD, Benguet -- Governor Nestor Fongwan has sued energy stakeholders in the province for violations of the Electric Power Industry Reform Act (Epira).

Fongwan, representing the province, has filed a case at the Energy Regulatory Board (ERC) against the Power Sector Assets and Liabilities Management (Psalm), San Roque Power Corporation (SRPC) and the National Power Corporation (NPC).

The legal team of the province has alleged there has been a breech in Epira implementation for the province over reduced shares in National Wealth Tax since 2011, breeching the mandate of power generation companies to remit shares to the local government units.

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Bakun town, from which the water sources of the power companies emanate was paid in 2011 to 2013 by the companies as computed by Psalm a total of P4 million only, in stark contrast to the whopping P14.180 million paid solely in 2010.

The province is asking for compliance of the Epira by the remittance of taxes to the province as well as a revocation of the certificate of compliance for the operation of the 345-megawatt SRPC and the imposition of fines and penalties against the Psalm, NPC and the SRPC.

The drastic decrease in taxes was explained by the Psalm to independent purchases of power from the other sources, the case upholds the provisions of Epira's Rule 29 stipulating benefits of the local host communities.

The case cites "Beginning the year 2011, the share in National Wealth Tax was drastically reduced without justification and explanation and despite the fact that there were no significant changes in the generation output of the SRPC."

Non-payment of the local governments share in the national wealth is contrary to the Epira provisions where the share from the national wealth tax is divided between the province and the host municipality and barangay.

Fongwan is running after the companies in a bid to collect millions in tax due which have power generation facilities operating in the province.

Published in the Sun.Star Baguio newspaper on July 04, 2014.

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