House Ways and Means Committee OKs MinPOW sub bill ;Celso, one of authors PDF Print E-mail
Monday, 28 September 2015 11:41

by Jubels Santos

The House Committee on Ways and Means approved the substitute bill on measures seeking to create the Mindanao Power Corporation (MinPOW) on its hearing last September 22, 2015. Said substitute bill consolidates House Bills 676, 2621 and 4883, authored by Representatives Edgardo Masongsong, Celso Lobregat, Rufus and Maximo Rodriguez, respectively. There were 39 co-authors of the said bill.

Lobregat’s MinPOW bill seeks the non-privatization of the Agus-Pulangui hydropower complexes, located in Lanao del Sur and Bukidnon provinces, which are considered the crown jewels of Mindanao power industry. To ensure long-term adequate power to support Mindanao’s economic development, this bill seeks the creation of the Mindanao Power Corporation (MinPOW), a stand-alone government-owned and controlled corporation (GOCC), which shall be empowered to acquire the Agus-Pulangui hydropower complexes from NPC/PSALM and raise sufficient funds for operating, maintaining, and improving such assets efficiently.

One of the issues concerning the MinPOW bill was the issue on Lake Lanao. The proposed Bangsamoro Basic Law (BBL) provides exclusive powers over inland waters. “With the grant of exclusive powers over inland waters (Lake Lanao) as proposed in the BBL, and since utilization of these waters shall primary be for the benefit of the people in the Bangsamoro, in terms of electricity and power, the entire Mindanao will be in the mercy of the Bangsamoro,” Lobregat stressed.

Historically, Mindanao has been enjoying lower power rates in comparison to Luzon and Visayas because more than 50% of its electricity comes from hydroelectric power plants, which provide a cheaper source of energy.

The proposed bills on MinPOW were initially deliberated last March 4, 2015 by the Committee on Government Enterprises and Privatization chaired by Rep. Jesus Sacdalan and Committee on Energy chaired by Rep. Reynaldo Umali. Later on, the two committees were joined by the Committee on Mindanao Affairs, chaired by Rep. Arnulfo Go, since the measure concerns Mindanao. The Joint Committees then decided to refer the bills to the Technical Working Committee (TWC) which was chaired by Rep. Masongsong. The TWC came up with the substitute bill. The Joint Committees on Government Enterprises and Privatization, Energy and Mindanao Affairs, approved the said substitute bill on May 19, 2015. The substitute bill was referred to the Committees on Appropriations and Ways and Means for the consideration of the funding and tax provisions.

Vice-Chairman Raneo Abu presided over the House Committee on Ways and Means meeting in the absence of its Chairman Romero Quimbo. On the part of the Ways and Means Committee, it considered the tax provision found in Section 18 of the bill.

As per Rep.  Masongsong, given the non-profit character of the Corporation, it will be tax-exempt but still need to remit dividends to the National Government. The bill also seeks the non-privatization of the Agus-Pulangui hydropower complexes. Department of Finance (DOF) Undersecretary Jeremias Paul Jr. said since MinPOW is a GOCC, it should also be taxed just like the other corporations.

The Committee recommended an amendment to said Section. The amended Section 18 reads as follows:

Section 18. Non-profit Character of the Corporation; Exemption from all Taxes, Duties, Fees, Imposts, and other Charges by Government and Governmental Instrumentalities. – The Corporation shall be non-profit and shall devote all its returns from its capital investment, as well as excess revenues from its operation, for operating, maintaining, expanding and improving the hydropower complexes and its other assets. It shall be subject to audit by the Commission on Audit.

To enable the Corporation to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section 1 of this Act, the Corporation MAY AVAIL OF THE TAX SUBSIDY ADMINISTERED BY THE FISCAL INCENTIVES REVIEW BOARD FOR GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS, SUBJECT TO THE PROVISIONS OF THE EXECUTIVE ORDER NO. 93 AND THE ANNUAL GENERAL APPROPRIATIONS ACT (GAA).

Said amendment was acceptable to the DOF and to the body. The Committee then approved the substitute bill as amended. The bill will still be considered by the House Committee on Appropriations for the funding provisions before it will be submitted to Plenary. — Jubels Santos