Republic Act No. 6395

The Charter of the National Power Corporation is hereby revised, and shall henceforth read as follows:

"Sec. 1. Declaration of Policy. Congress hereby declares that (1) the comprehensive development, utilization and conservation of Philippine water resources for all beneficial uses, including power generation, and (2) the total electrification of the Philippines through the development of power from all sources to meet the needs of industrial development and dispersal and the needs of rural electrification are primary objectives of the nation which shall be pursued coordinately and supported by all instrumentalities and agencies of the government, including its financial institutions.

"Sec. 2. The National Power Corporation; Its Corporate Life; "Corporation" and "Board" Defined. To carry out the above-stated policy, specifically to undertake the development of hydroelectric generation of power and the production of electricity from nuclear, geothermal and other sources, as well as the transmission of electric power on a nationwide basis, the public corporation created under Commonwealth Act Numbered One hundred twenty and know as the "National Power Corporation" shall continue to exist for fifty years from and after the expiration of its present corporate existence.

"In the pursuit of its objectives, the Corporation shall, as far as feasible, spread the benefits of its projects and operations to the greatest number of the population possible, and the Corporation shall prosecute faithfully such projects as will promote the total electrification of Luzon Islands, Visayan Islands and the Mindanao Islands.

"The words "Corporation" and "Board" appearing in this Act shall respectively refer to the National Power Corporation and the National Power Board.

"Sec. 3. Powers and General Functions of the Corporation. The powers, functions, rights and activities of the Corporation shall be the following:

"Sec. 4. Fixing of Rates by the Board and Review by the Public Service Commission. The Board shall fix the rates and fees to be charged by the Corporation so that the Corporation's rate of return shall be not more than ten per centum (10%) on a rate base composed of the sum of its net assets in operation as revalued from time to time plus two months' operating capital: Provided, That in determining the rate of return, interest on loans, bonds and other debts shall not be included as expenses. Such rates and fees shall be effective and enforceable fifteen (15) days after publication in a newspaper of general circulation. The Public Service Commission shall have exclusive original jurisdiction over all cases contesting said rates or fees. Any complaint against such rates or fees shall be filed with the Public Service Commission within thirty (30) days after the effectivity of such rates or fees, but the filing of such complaint or action shall not stay the effectivity of said rates or fees. The Public Service Commission shall verify the rate base, and the rate of return computed therefrom, in accordance with the standards herein outlined. The Public Service Commission shall finish, within sixty (60) calendar days, any and all proceedings necessary and/or incidental to the case, and shall render its findings or decisions thereon within thirty (30) calendar days after said case is submitted for decision.

"In cases where the decision is against the fixed rates or fees, excess payments shall be reimbursed and/or credited to future payments, in the discretion of the Commission.

"The decision of the Public Service Commission shall be appealable to the Supreme Court in accordance with the provisions of the Rules of Court.

"The Corporation shall charge in any interconnected system a uniform schedule of rates for all its customers that fall within the same classification.

"The rates to be charged in any interconnected system in Luzon, Visayas, and Mindanao, respectively, shall be determined independently from each other, and expenses or fixed investments in any one region shall not be utilized for purposes of fixing the rates to be charged in another region, but shall be determined in the light of conditions and circumstances obtaining in each region.

"Sec. 5. Capital Stock of the Corporation. The authorized capital stock of the Corporation is three hundred million pesos divided into three million shares having a par value of one hundred pesos each, which shares are not to be transferred, negotiated, pledged, mortgaged, or otherwise given as security for the payment of any obligation. The said capital stock has been subscribed and paid wholly by the Government of the Philippines in accordance with the provisions of Republic Act Numbered Four thousand eight hundred ninety-seven.

"Sec. 6. The National Power Board; Its Composition; Compensation of Members; Qualifications; Powers and Duties. The corporate powers of the Corporation shall be vested in and exercised by the Board composed of seven members consisting of a chairman, vice-chairman and five directors who, with the exception of the vice-chairman, shall be appointed by the President of the Philippines, with the consent of the Commission on Appointments.

"In the appointment of said members, the President of the Philippines shall appoint one to represent Luzon, one to represent the Visayas, one to represent Mindanao, one to represent labor, and one to represent the business sector. The labor representative shall be chosen from at least five recommendees of the employees' recognized bargaining units in the Corporation.

"The General Manager shall be the ex-officio Vice-Chairman of the Board.

"The said members of the Board shall serve for terms of three years, except that any person appointed to fill a vacancy shall serve only for the unexpired term of the member whom he succeeds.

"Every member of the Board shall possess any one or a combination of the following qualifications: A duly licensed professional of recognized competence in engineering, in business management and finance, or in law, particularly in the field of corporate practice, with at least ten years actual and distinguished experience in their respective fields of expertise, or a recognized labor leader with sufficient training, particularly in labor-management relations, and of good moral character. The regional representatives appointed by the President of the Philippines shall be residents of the regions they represent.

"The members of said Board shall receive a per diem of not to exceed three hundred pesos for each regular meeting of the Board and one hundred pesos for each special meeting actually attended by them: Provided, That such per diems shall not exceed one thousand five hundred pesos during any month for each member: And, provided, further, That no other allowances or any form of compensation shall be paid them, except actual expenses in traveling to and from their residences to attend Board meetings.

"A majority of the members of the Board shall constitute a quorum for the transaction of the business of the Board.

"The Board shall, moreover, have the following specific powers and duties:

"Sec. 7. The General Manager; His Powers and Duties; Regional Managers and Other Officers and Employees of the Corporation. The management of the Corporation shall be vested in the General Manager, assisted by the Assistant General Manager and three regional managers respectively for operations in Luzon, Visayas and Mindanao, a department chief for finance, a department chief for engineering and construction, a department chief for administration, and such additional officers and employees as the said Board may provide. For this purpose, the General Manager shall have the following powers and duties:

In the case of absence or disability of the General Manager, the Assistant General Manager shall act in his place. "Under the supervision and control of the General Manager, the regional managers shall take charge of the operations of the Corporation as well as its power development program within their respective regions, and, subject to such conditions as the Board may prescribe upon recommendation of the General Manager, shall have as much autonomy as shall ensure the efficient conduct of the Corporation's affairs.

"The Auditor General shall be ex-officio Auditor of the Corporation. The provisions of Section five hundred eighty-four of the Revised Administrative Code, as amended by Section one of Republic Act Numbered Twenty-two hundred sixty-six, shall apply to the office of the representative of the Auditor General in the Corporation.

"Sec. 8. Authority to Incur Indebtedness and Issue Bonds; Their Conditions, Privileges and Exemptions; Sinking Funds; Guarantee.

"Sec. 9. Construction of Power Projects Recommended by the General Manager. Upon determination by the General Manager, on his own initiative or as recommended by the regional manager concerned, that the construction of any project by the Corporation is advisable, a report to the Board, on the engineering and economic feasibility of the project together with preliminary plans and estimates of the cost of the proposed development and the estimated income to be derived therefrom shall be submitted by the General Manager.

"The Board may thereupon, at its discretion, designate a consulting board composed of two competent and impartial engineers and one competent economist to pass upon the different aspects of the project and comment on the report of the General Manager. The Board shall, with the said report and comment in view, decide whether or not the project shall be constructed, and what changes, if any, shall be made in the scheme proposed by the General Manager.

"Sec. 10. Construction or Repair Work Awarded upon Public Bidding; Exceptions. All work of construction or repair of the Corporation involving an estimated cost of seventy-five thousand pesos or more shall be let by the General Manager, with the approval of the Board, to the responsible bidder who made the lowest or most advantageous bid. Notice to bidders shall be published as provided by law. In case no satisfactory bid is received, the General Manager may proceed to advertise anew, or with the approval of the Board, do the work by administration. Before award of contract is made, the General Manager shall require the contractor to give an adequate bond to secure the proper accomplishment of the work under contract and to satisfy all obligations for materials used and labor employed upon the same: Provided, That any repair, reconstruction or other work of an emergency nature may be authorized by the Board to be undertaken by administration or by contract: And, provided, further, That any single work of construction or repair involving an estimated total cost of less than seventy-five thousand pesos may, at the option of the General Manager, be authorized by him to be undertaken by administration or by "pacquiao" contract after a canvass of the market to determine the lowest or most advantageous price.

"Sec. 11. Penalty for Destroying, Injuring or Interfering with any project of the Corporation, or maliciously Interfering with any Person in the Discharge of his Duties Connected therewith. Any person or persons who shall maliciously destroy, injure, or interfere with any canal, raceway, ditch, lock, pier, inlet, crib, bulkhead, dam, gate, sluice, reservoir, aqueduct, conduit, pipes, culvert, post, abutment, conductor, cable-wire, insulator, weir, benchmark, monument, or other works, appliance, machinery, building or property of the Corporation, or who shall maliciously do any act which shall injuriously affect the quantity or quality of the water or electrical energy of the Corporation or the supply, transmission, measurement, or regulation thereof, or who shall maliciously interfere with any person engaged in the discharge of duties connected therewith, or who shall maliciously prevent, obstruct and interfere with the survey, works and the construction of access road and transmission lines or any related works of the Corporation, shall be guilty of felony and punished with a fine ranging from one to five thousand pesos or with imprisonment ranging from one to five years, or both such fine and imprisonment, at the discretion of the Court, and any injured party shall have the right to recover all damages suffered and cost of suit in a separate civil action in any court of competent jurisdiction.

"Sec. 12. Appropriation of Public Waters. Subject to existing rights, all unappropriated public waters which may be used and developed for hydraulic power purposes shall be granted to the Corporation by the Secretary of Public Works and Communications: Provided, That in case of conflict with the needs for domestic water supply, the latter shall prevail.

"Sec. 13. 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 expansion. To enable the Corporation to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section one of this Act, the Corporation is hereby declared exempt:

"Sec. 14. Contract with Franchise Holders, Conditions of. The Corporation shall, in any contract for the supply of electric power to a franchise holder, require as a condition that the franchise holder, if it receives at least sixty per cent of its electric power and energy from the Corporation, shall not realize a rate of return of more than twelve per cent annually on a rate base composed of the sum of its net assets in operation revalued from time to time, plus two-month operating capital, subject to the non-impairment-of-obligations-of-contracts provision of the Constitution: Provided, That in determining the rate of return, interest on loans, bonds and other debts shall not be included as expenses. It shall likewise be a condition in the contract that the Corporation shall cancel or revoke the contract upon judgment of the Public Service Commission after due hearing and upon a showing by customers of the franchise holder that household electrical appliances, have been damaged resulting from deliberate overloading by, or power deficiency of, the franchise holder. The Corporation shall renew all existing contracts with franchise holders for the supply of electric power and energy in order to give effect to the provisions hereof.

"Sec. 15. Laws Governing Relations of Corporation with Electric Cooperatives. Nothing in this Act, shall, directly or indirectly, alter, modify, or repeal the provisions of Republic Act Numbered Six thousand thirty-eight, particularly in respect of the rights of electric cooperatives registered under the same Act. In its contracts and relations with such cooperatives, the Corporation shall be governed by the provisions of the said Act and the specific legislative franchise of such cooperatives.

"Sec. 16. Non-impairment of Collective Bargaining Agreements and Rights of Labor Unions. Nothing in this Act shall be construed to impair existing collective bargaining agreements with the labor unions in the Corporation or the right of employees to organize and bargain collectively or diminish the rights of labor in the Corporation under the Industrial Peace Act or other labor laws."

"Sec. 17. Separability Clause. The provisions of this Act are hereby declared to be separable, and in the event any one or more of such provisions are held unconstitutional, they shall not affect the validity of other provisions.

"Sec. 18. Repealing Clause. All laws, executive and administrative orders, or parts thereof, inconsistent with any provision of this Act are hereby repealed or modified accordingly.

This Act shall take effect upon its approval.