MANILA, Philippines—Government officials have begun looking for solutions to address the possible conflicts that may arise from the planned auction of the 700-megawatt Pagbilao coal-fired power plant by the local government of Pagbilao, after the facility's owners failed to remit payments for real-property taxes.
Energy Secretary Jose Rene D. Almendras said on Wednesday in a text message that the Department of Energy has begun discussions with officials from the Departments of Finance and of Interior and Local Governments on the matter.
Discussions were also underway between President Aquino and the governor of Quezon. It was for this reason that Almendras declined to cite what solutions they were considering as Malacañang would release its statement.
A disclosure made by Aboitiz Power Corp. (APC) to the Philippine Stock Exchange stated that the coal facility had been scheduled for auction on January 26 by the Office of the Municipal Treasurer of Pagbilao.
(Aboitiz is the independent power producer administrator [IPPA] of the Pagbilao facility after winning the contract in a bidding held in 2009 by the Power Sector Assets and Liabilities Management Corp. The facility itself is still owned by Team Energy. Team Energy currently operates the Pagbilao power plant and the 1,200 MW Sual coal-fired facility, under build-operate-transfer contracts, which will expire in 2024 [for Sual] and 2025 [for Pagbilao]).
According to the APC, the power plant “was subjected to a warrant of levy issued by the Office of the Municipal Treasurer of Pagbilao, Quezon, last January 10, for non-payment of real property taxes on the Pagbilao plant.”
Team Energy Corp. has only one year from the date of sale to redeem the Pagbilao plant pursuant to Section 179 of the local government code. During this one-year period, Team Energy has the right to possess the Pagbilao plant and is entitled to the income thereof until the expiration of the period for redemption.
APC explained that under the build-operate-transfer contract with the government, state-run National Power Corp. (Napocor) assumed all obligations to pay the real property taxes on the Pagbilao plant.
Napocor then claimed exemption from paying real-property taxes under Section 234 (c) of the Local Government Code, which exempts machinery and equipment that are actually, directly and exclusive used by government-owned or -controlled corporations engaged in the generation and/or transmission of electric power from payment of real-property taxes.
However, the Supreme Court, in the case of Napocor vs. Province of Quezon and Municipality of Pagbilao (G.R. No. 171 586, January 25, 2010), denied the state firm's claim and ordered Team Energy to pay the real-property taxes on the Pagbilao plant.
Energy Secretary Jose Rene D. Almendras said on Wednesday in a text message that the Department of Energy has begun discussions with officials from the Departments of Finance and of Interior and Local Governments on the matter.
Discussions were also underway between President Aquino and the governor of Quezon. It was for this reason that Almendras declined to cite what solutions they were considering as Malacañang would release its statement.
A disclosure made by Aboitiz Power Corp. (APC) to the Philippine Stock Exchange stated that the coal facility had been scheduled for auction on January 26 by the Office of the Municipal Treasurer of Pagbilao.
(Aboitiz is the independent power producer administrator [IPPA] of the Pagbilao facility after winning the contract in a bidding held in 2009 by the Power Sector Assets and Liabilities Management Corp. The facility itself is still owned by Team Energy. Team Energy currently operates the Pagbilao power plant and the 1,200 MW Sual coal-fired facility, under build-operate-transfer contracts, which will expire in 2024 [for Sual] and 2025 [for Pagbilao]).
According to the APC, the power plant “was subjected to a warrant of levy issued by the Office of the Municipal Treasurer of Pagbilao, Quezon, last January 10, for non-payment of real property taxes on the Pagbilao plant.”
Team Energy Corp. has only one year from the date of sale to redeem the Pagbilao plant pursuant to Section 179 of the local government code. During this one-year period, Team Energy has the right to possess the Pagbilao plant and is entitled to the income thereof until the expiration of the period for redemption.
APC explained that under the build-operate-transfer contract with the government, state-run National Power Corp. (Napocor) assumed all obligations to pay the real property taxes on the Pagbilao plant.
Napocor then claimed exemption from paying real-property taxes under Section 234 (c) of the Local Government Code, which exempts machinery and equipment that are actually, directly and exclusive used by government-owned or -controlled corporations engaged in the generation and/or transmission of electric power from payment of real-property taxes.
However, the Supreme Court, in the case of Napocor vs. Province of Quezon and Municipality of Pagbilao (G.R. No. 171 586, January 25, 2010), denied the state firm's claim and ordered Team Energy to pay the real-property taxes on the Pagbilao plant.
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