Commonwealth Act No. 120
AN ACT CREATING THE “NATIONAL
POWER CORPORATION,” PRESCRIBING ITS POWERS AND ACTIVITIES, APPROPRIATING
THE NECESSARY FUNDS THEREFOR, AND RESERVING THE UNAPPROPRIATED PUBLIC WATERS
FOR ITS USE
SECTION 1. For the purpose
of undertaking the development of hydraulic power and the production of power
from other sources and for other purposes specified in this Act, there is hereby
created a public corporation which shall be known as the “National Power Corporation.” The words “Corporation” and “Board” appearing
in this Act shall respectively refer to the
National
Power Corporation and the
National
Power Board, hereinafter provided.
SEC. 2. The powers,
functions, rights and activities of the said
corporation shall be the following:
(a) To have continuous succession under its corporate name until
otherwise provided by law;
(b) To prescribe its by-laws;
(c) To adopt and use a seal and alter it at its pleasure;
(d) To sue and be sued in any court;
(e) To conduct investigations and surveys for the development of water
power in any part of the
(f) To take water from any public stream, river, creek, lake spring or
waterfall in the Philippines, for the purposes specified in this Act; to intercept
and divert the flow of waters from lands of riparian owners and from persons
owning or interested in waters which are or may be necessary for said purposes,
upon payment of due compensation therefor; to alter, straighten, obstruct or
increase the flow of water in streams or water channels intersecting or
connecting therewith or contiguous to its works or any part thereof;
(g) To construct, operate and maintain power plants, auxiliary plants,
dams, reservoirs, pipes, mains, transmission lines, power stations and
substations, and other works for the purpose of developing hydraulic power from
any river, creek, lake, spring and waterfall in the Philippines and supplying
such power to the inhabitants thereof; to acquire, construct, install,
maintain, operate and improve gas, oil, or steam engines, and/or other prime
movers, generators and other machinery in plants and/or auxiliary plants for
the production of electric power; to establish, develop, operate, maintain and
administer power and lighting system for the use of the Government and the
general public; to sell electric power and to fix the rates and provide for the
collection of the charges for any service rendered: Provided,
That the rates of charges shall not be subject to revision by the Public
Service Commission;
(h) 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 the purposes for which the corporation was
created;
(i) To construct works across, or otherwise, any stream, watercourse,
canal, ditch, flume, street, avenue, highway or railway of private and public
ownership, as the location of said works may require: Provided,
That said works be constructed in such a manner as not to endanger life or
property: And provided, further, That the stream, watercourse, canal, ditch,
flume, street, avenue, highway or railway so crossed or intersected be restored
as near as may be to their former state, or in a manner not to impair
unnecessarily their usefulness. Every
person or entity whose right-of-way is crossed or intersected by said works
shall not obstruct any such crossings or intersections and shall grant the
Board or its representative, the proper
authority for the execution of such work.
The
Corporation is hereby given
the right-of-way to locate, construct and maintain such works over and throughout
the lands owned by the Commonwealth of the
(j) To exercise the right of eminent domain for the purposes of this
Act in the manner provided by law for instituting condemnation proceedings by
the national, provincial, and municipal governments;
(k) When essential to the roper administration of its corporate
affairs or necessary for the proper transaction of its business or to carry out
the purposes for which it was organized, to contract indebtedness and issue
bonds subject to the approval of the President of the Philippines upon the
recommendation of the
Secretary of Finance. The bonded indebtedness of the
Corporation, of all classes, shall not at
any time exceed twenty million pesos and the issue thereof shall be subject to
the conditions set forth in section four of this Act; and
(l) To exercise such powers and do such things as may be reasonably
necessary to carry out the business and purposes for which it was organized, or
which, from time to time, may be declared by the
Board to be necessary, useful, incidental
or auxiliary to accomplish the said purposes.
SEC. 3. All corporate
powers of the
National Power Corporation
shall be vested in a board to be known as the
National Power Board, composed of five
members who shall all be appointed by the President of the
The
Board shall
immediately organized by electing a chairman from among its members and by
adopting its rules of procedure and fixing the time and place for holding
regular meetings.
The members of said
Board
who are not in the employ of the Government of the Commonwealth of the
It shall appoint its secretary and fix his salary which shall not
exceed four thousand pesos per annum.
The
Board shall render reports
to the President of the Philippines and the National Assembly as provided in
section five hundred and seventy-four to five hundred and seventy-seven,
inclusive, of act Numbered Twenty-seven hundred and eleven.
SEC. 4. Whenever the
Board may deem it necessary for the
Corporation to incur an indebtedness or
to issue bonds to carry out the purposes for which the
Corporation has been organized, it shall,
by resolution, so declare and state the purpose for which the proposed debt is
to be incurred and the conditions of the bonds.
In order that such resolution be valid, it shall be passed by the
affirmative vote of at least three members of the
Board and approved by the President of
the
The bonds shall be issued under the following conditions: (a) they 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; (b) they shall not be sold at less than
par; (c) they shall be payable thirty years after the date of issue but may be
redeemable at the pleasure of the
Board,
after ten years from the date of issue; (d) they shall bear interest at an
annual rate to be determined before their issuance by the
Secretary of Finance; (e) the interest
may be determined by the
Secretary of
Finance before the issuance of the bonds; and (f) both principal and
interest shall be payable in gold coin or its equivalent, in the discretion of
the
Secretary of Finance, in Manila,
if the bonds are sold in the Philippines or in the
United States Treasury if they are sold in
the United States.
The bonds issued under the authority of this Act shall be exempt
from the payment of all taxes by the Commonwealth of the Philippines, or by any
authority, branch, division or political subdivision thereof and subject to the
provisions of the Act of Congress, approved March 24, 1934, otherwise known as
the Tydings-McDuffie Law, which facts
shall be stated upon the face of said bonds.
Said bonds shall be receivable as security in any transaction with the
Government in which such security is required.
A sinking funds shall be created, the total whereof at each annual
due date of the bonds shall be equal to the total of an annuity of nineteen
thousand three hundred seventy-one pesos and thirty-three centavos for each one
million pesos of bonds outstanding, with interest at the rate of three and
one-half per centum per annum. The sinking funds shall be under the custody
of the
Treasurer of the Philippines,
who shall invest the same subject to the approval of the
Board and the
Secretary of Finance.
The Commonwealth of the Philippines hereby guarantees the payment
of the
National Power Corporation of both
the principal and the interest of the bonds issued by said
Corporation by virtue of this Act, and
shall pay such principal and interest in case the
National Power Corporation fails to do
so, and there are hereby appropriated, out of the general funds in the
Philippine Treasury not otherwise
appropriated, the sums necessary to make the payments guaranteed by this
Act: Provided,
That the sums so paid by the Commonwealth of the Philippines shall be refunded
by the
National Power Corporation.
SEC. 5. The affairs and
current business of the
Corporation
shall be conducted, and its rights and property shall be kept and preserved,
under the direction of the National Power Board, by the Manager, Assistant
Manager, Treasurer and such additional officers and employees as the said
Board may provide. The
Auditor
General shall be ex-officio
Auditor of the Corporation.
The duties and powers as well as the compensation of the said
officers and employees shall be such as may be defined and prescribed or fixed
by the
National Power Board: Provided,
That no additional compensation shall be given to any officer or employee of
the Commonwealth or any of its political subdivisions or of any public or
semi-public corporation, who may be designated to perform additional duties in
the
Corporation.
The Manger, Assistant Manager and Treasurer shall be appointed by
the President of the
SEC. 6. Upon
determination by the Manager that the construction of any waterpower project by
the
Corporation is advisable, he shall
submit a report 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.
The
National Power 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 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 Manager. The
decision of the
Board shall be final.
SEC. 7. All work of
construction or repair of the
Corporation
involving an estimated cost of three thousand pesos or more shall be let by the
Manager, with the approval of the
National
Power Board, to the responsible bidder who made the lowest and most
advantageous bid. Notice to bidders
shall be published in the Official
Gazette as provided by law. In case
no satisfactory bid is received, the Manager may proceed to advertise anew, or
with the approval of the Board, proceed to do the work by administration. Before award of contract is made, the 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.
SEC. 8. Any person or
persons who shall willfully or maliciously destroy, injure or interfere with
any canal, raceway, ditch, lock, pier, inlet, crib, bulkhead, dam, gate,
sluice, reservoir, aqueduct, conduit, pipe, culvert, post, abutment, conductor,
cable-wire, insulator, weir, benchmark, monument, or other work, appliance,
machinery, building or property of the
Corporation,
or who shall willfully or maliciously do any act which shall injuriously affect
the quantity 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, shall be guilty
of a felony and punished with a fine not to exceed five thousand pesos or with
imprisonment for a term not to exceed two 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. 9. Subject to all
existing rights, all unappropriated public waters which may be used and
developed for waterpower purposes shall be, and hereby are, reserved from
appropriation by any person, firm or corporation under any general or special
law relating to the appropriation of public waters, for the use of the
National Power Corporation created by
this Act: Provided, however, That the President, upon the recommendation of
the
Secretary of Public Works and
Communications, concurred in by the
National
Power Board, may, from time to time, release from this reservation any
unappropriated public waters which may not be necessary for the use of the
National Power Corporation.
SEC. 10. At any time
that the
Board certifies that the
Corporation is able to furnish electric
power for lighting and other purposes to any office, shop, or establishment
operated and/or owned or controlled by the National Government or by any city,
province, municipality or other political subdivision of the Commonwealth of the
Philippines, the National Government and the government of said city, province,
municipality or other political subdivision shall be compelled to secure from
the
Corporation as soon as practicable
such electric power as it may need for lighting and the operation of its
offices, shops or establishments or for any work undertaken by it.
The provisions of this section shall also apply to firms or
business owned or controlled by the National Government or by the government of
any city, province, municipality or other political subdivision.
SEC. 11. There is hereby
appropriated, out of any funds in the
Philippine
Treasury not otherwise appropriated, the sum of two hundred and fifty
thousand pesos, for the purpose of organizing the
Corporation and conducting the
preliminary work: Provided, That the said amount shall be reimbursed to the
Philippine Treasury upon the
certification of the
Auditor General that
the Corporation is in a financial condition to do so, and by virtue of such
certification, the
National Power Board
shall approve a resolution authorizing the Treasury of the
Corporation to make the necessary
payment.
As soon as the construction of any project is decided upon, the
Corporation may issue bonds for financing
the project in accordance with the provisions of section four of this Act.
SEC. 12. This Act shall
take effect upon its approval.
Approved,
November 3, 1936.
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