Creation and Powers of National Power Corp

Powers of the National Power Corporation

Section 2 grants the Corporation continuous succession under its corporate name until otherwise provided by law.
Section 2 empowers the Corporation to prescribe its by-laws, adopt and use a seal and alter it at its pleasure, and to sue and be sued in any court.
Section 2 authorizes the Corporation to conduct investigations and surveys for the development of water power in any part of the Philippines.
Section 2 authorizes the Corporation to take water from any public stream, river, creek, lake, spring or waterfall in the Philippines for purposes specified in this Act.
Section 2 authorizes the Corporation to intercept and divert water from lands of riparian owners and from persons owning or interested in waters necessary for its purposes, upon payment of due compensation.
Section 2 authorizes the Corporation to alter, straighten, obstruct, or increase the flow of water in streams or water channels intersecting or connecting therewith or contiguous to its works.
Section 2 authorizes the Corporation to construct, operate and maintain power plants, auxiliary plants, dams, reservoirs, pipes, mains, transmission lines, power stations, substations, and other works for developing hydraulic power and supplying power to the inhabitants.
Section 2 authorizes the Corporation to acquire, construct, install, maintain, operate and improve gas, oil, or steam engines, prime movers, generators, and machinery for producing electric power.
Section 2 authorizes the Corporation to establish, develop, operate, maintain and administer power and lighting systems for use of the Government and the general public, and to sell electric power, including the fixing of rates and collection of charges for services.
Section 2 provides that rates of charges are not subject to revision by the Public Service Commission.
Section 2 authorizes the Corporation to acquire, promote, hold, transfer, sell, lease, rent, mortgage, encumber, and otherwise dispose of anything incident to or necessary, convenient, or proper to carry out its purposes.
Section 2 authorizes the Corporation to construct works across or through streams and various channels and transportation corridors of private and public ownership required by the location of its works, subject to:
- construction in a manner that does not endanger life or property;
- restoration of the crossed or intersected stream, watercourse, canal, ditch, flume, street, avenue, highway, or railway as near as may be to its former state or in a manner that does not impair unnecessarily its usefulness; and
- a duty on every person or entity whose right-of-way is crossed or intersected not to obstruct crossings or intersections and to grant the Board or its representative proper authority for execution of the work.
Section 2 grants the Corporation the right-of-way to locate, construct and maintain works over and throughout lands owned by the Commonwealth of the Philippines or any branches and political subdivisions.
Section 2 authorizes the Corporation or its representative to enter private property in lawful performance or prosecution of its business and purposes, subject to indemnification of the owner for actual damage caused.
Section 2 authorizes the Corporation to exercise the right of eminent domain for the purposes of this Act in the manner provided by law for instituting condemnation proceedings by national, provincial, and municipal governments.
Section 2 authorizes the Corporation to contract indebtedness and issue bonds, subject to President of the Philippines approval upon recommendation of the Secretary of Finance, and imposes a bonded indebtedness cap of PHP 20,000,000 at any time, subject to the conditions in Section 4.
Section 2 authorizes the Corporation to do what is reasonably necessary to carry out its business and purposes, or what the Board declares necessary, useful, incidental, or auxiliary to accomplish those purposes.

Governance and appointment structure

Section 3 vests all corporate powers of the Corporation in a board called the National Power Board.
Section 3 establishes the Board as composed of five members, all appointed by the President of the Philippines with the consent of the Commission on Appointments.
Section 3 fixes the term of Board members at three years.
Section 3 requires the Board to immediately organize by electing a chairman from among its members and adopting rules of procedure and fixing the time and place for regular meetings.
Section 3 provides a per diem for Board members not in government employment, not to exceed PHP 25 per day of meeting actually attended.
Section 3 requires the Board to appoint its secretary and fix salary not to exceed PHP 4,000 per annum.
Section 3 requires the Board to render reports to the President of the Philippines and the National Assembly as provided in Section 574 to 577, inclusive, of Act No. 2711.
Section 3 identifies that the Board functions as the directing authority for corporate affairs through its managerial framework.

Board-approved borrowing and bond rules

Section 4 requires the Board, by resolution, to declare the purpose for incurring indebtedness or issuing bonds and the conditions of the bonds whenever the Board deems it necessary for the Corporation to do so.
Section 4 provides that the resolution must be passed by the affirmative vote of approval of at least three Board members.
Section 4 requires Presidential approval of the resolution, upon recommendation of the Secretary of Finance, for the resolution to be valid.
Section 4 mandates that bonds shall be in registered form and transferable at the office of the Treasurer of the Philippines in Manila or at the Registry Office of the Department of the Treasury of the United States at Washington, District of Columbia.
Section 4 requires bonds not be sold at less than par.
Section 4 sets a standard maturity of thirty years after the date of issue, with optional redemption at the Board’s pleasure after ten years from the date of issue.
Section 4 requires bonds to bear interest at an annual rate to be determined before issuance by the Secretary of Finance.
Section 4 allows interest to be payable quarterly, semi-annually, or annually, as the Secretary of Finance determines before issuance.
Section 4 requires principal and interest to be payable in gold coin or its equivalent, in the discretion of the Secretary of Finance, either:
- in Manila if sold in the Philippines; or
- in the United States Treasury if sold in the United States.
Section 4 exempts bonds from payment of all taxes by the Commonwealth of the Philippines and any authority, branch, division, or political subdivision, subject to the Act of Congress approved March 24, 1934, known as the Tydings-McDuffie Law; these facts must be stated on the face of the bonds.
Section 4 provides that bonds are receivable as security in any transaction with the Government where such security is required.
Section 4 requires creation of a sinking fund whose total at each annual due date equals an annuity of PHP 19,371.33 per PHP 1,000,000 of bonds outstanding, with interest at 3.5% per annum.
Section 4 places custody of sinking funds under the Treasurer of the Philippines, with investments subject to approval of the Board and the Secretary of Finance.
Section 4 guarantees payment of principal and interest by the Commonwealth of the Philippines, and provides an appropriation from the general funds in the Philippine Treasury to make the guaranteed payments if the Corporation fails, with refund by the Corporation of sums paid.

Management officers and feasibility decisions

Section 5 requires the Corporation’s affairs and current business to be conducted, and its rights and property kept and preserved, under the direction of the Board through a Manager, Assistant Manager, treasurer, and other officers and employees the Board provides.
Section 5 designates the Auditor General as ex-officio Auditor of the Corporation.
Section 5 authorizes the Board to define and prescribe duties and powers and fix compensation of officers and employees, subject to a limitation that no additional compensation is given to any officer or employee of the Commonwealth, its political subdivisions, or any public or semi-public corporation designated to perform additional duties.
Section 5 requires that the Manager, Assistant Manager, and treasurer be appointed by the President of the Philippines with the consent of the Commission on Appointments.
Section 6 requires the Manager, upon determining that construction of a waterpower project is advisable, to submit a report on engineering and economic feasibility, with preliminary plans and an estimated cost and estimated income derived.
Section 6 empowers the Board, at its discretion, to designate a consulting board composed of two competent and impartial engineers and one competent economist to pass upon aspects of the project and the Manager’s report.
Section 6 requires the Board to decide, based on the report and comments, whether the project shall be constructed and what changes, if any, shall be made; the Board’s decision is final.

Procurement, construction contracting, and emergencies

Section 7 requires that all work of construction or repair involving an estimated cost of PHP 3,000 or more must be let by the Manager, with approval of the Board, to the responsible bidder who made the lowest and most advantageous bid.
Section 7 requires notice to bidders to be published in the Official Gazette as provided by law.
Section 7 allows the Manager, if no satisfactory bid is received, to proceed to advertise anew, or to do the work by administration with approval of the Board.
Section 7 requires that before award of contract, the Manager require the contractor to give an adequate bond securing proper accomplishment of the work and satisfying obligations for materials used and labor employed.
Section 7 allows emergency repair, reconstruction, or other emergency work to be undertaken by administration or contract as authorized by the Board.

Criminal offense for interference with facilities

Section 8 makes it a felony to willfully or maliciously destroy, injure, or interfere with specified Corporation facilities and appurtenances, including canals, raceways, ditches, dams, gates, sluices, reservoirs, aqueducts, conduits, pipes, culverts, abutments, conductors, cables, wires, insulators, weirs, bench-marks, monuments, and other Corporation works, appliances, machinery, buildings, or property.
Section 8 makes it a felony to willfully or maliciously do any act injuriously affecting the quantity or quality of water or electrical energy of the Corporation or the supply, transmission, measurement, or regulation thereof.
Section 8 makes it a felony to maliciously interfere with any person engaged in duties connected with the Corporation.
Section 8 prescribes punishment of a fine not to exceed PHP 5,000, or imprisonment for a term not to exceed two years, or both, at the discretion of the court.
Section 8 grants any injured party a right to recover all damages suffered and cost of suit in a separate civil action in any court of competent jurisdiction.

Reserved public waters for water-power use

Section 9 reserves from appropriation any unappropriated public waters that may be used and developed for water-power purposes for the use of the National Power Corporation, overriding general or special law relating to appropriation of public waters.
Section 9 authorizes the President, upon recommendation of the Secretary of Public Works and Communications, concurred in by the National Power Board, to release from the reservation unappropriated public waters that may not be necessary for the Corporation’s use.

Government priority electric power obligation

Section 10 requires the National Government and local government units to secure electric power from the Corporation whenever the Board certifies the Corporation can furnish electric power for lighting and other purposes to any office, shop, or establishment operated and/or owned or controlled by the government.
Section 10 compels the National Government and the relevant city, province, municipality, or other political subdivision to secure the needed electric power as soon as practicable.
Section 10 extends the same obligation to firms or businesses owned or controlled by the National Government or by any city, province, municipality, or other political subdivision.

Appropriations and start-up funding

Section 11 appropriates PHP 250,000 out of Philippine Treasury funds not otherwise appropriated for organizing the Corporation and conducting preliminary work.
Section 11 provides that the PHP 250,000 shall be reimbursed to the Philippine Treasury upon certification by the Auditor General that the Corporation is in a financial condition to do so.
Section 11 requires the National Power Board to approve a resolution authorizing the Treasurer of the Corporation to make the necessary payment upon such certification.
Section 11 authorizes the Corporation, once construction of a project is decided upon, to issue bonds for financing the project in accordance with Section 4.

Effectivity

Section 12 provides that the Act takes effect upon its approval.
Approval date is November 3, 1936.