AN ACT GRANTING INCENTIVES TO MINI-HYDRO-ELECTRIC POWER DEVELOPERS AND FOR OTHER PURPOSES
Download as PDF
Download as Word
Collections
Create new Collection
Overview
Full Text
Details
Case
Agency Issuance Number
Published Date
AN ACT GRANTING INCENTIVES TO MINI-HYDRO-ELECTRIC POWER DEVELOPERS AND FOR OTHER PURPOSES
Republic Act No. 7156
September 12, 1991
Case Overview and Summary
Title: Mini-hydroelectric Power Incentive ActDeclaration of Policy (Section 2):
- Strengthen the development of the country's indigenous and self-reliant scientific and technological resources for energy self-sufficiency.
- Provide incentives and privileges to mini-hydroelectric power developers to promote the development of the country's hydroelectric power resources.
Objectives (Section 3):
- Encourage entrepreneurs to develop potential sites for hydroelectric power.
- Provide incentives for a reasonable rate of return on hydroelectric power development.
- Streamline the permitting process by vesting authority in one agency.
- Apportion economic benefits to the respective localities where hydroelectric power plants are established.
- Provide a contractual framework for long-term financing.
Definitions (Section 4):
- "Hydroelectric power" refers to electric power produced by utilizing the kinetic energy of falling or running water.
- "Mini-hydroelectric power plant" refers to a plant with an installed capacity of 101 kilowatts to 10,000 kilowatts, utilizing run-of-river hydro plants.
- "Mini-hydroelectric power development" refers to the construction and installation of a hydroelectric power plant with an installed capacity of 101 kilowatts to 10,000 kilowatts.
- "Mini-hydroelectric power developer" refers to an individual, cooperative, corporation, or association engaged in the construction and installation of a hydroelectric power plant with an installed capacity of 101 kilowatts to 10,000 kilowatts.
- Definitions of "domestic use", "municipal use", and "irrigation use" are provided.
Agency in Charge (Section 5):
- The Office of Energy Affairs (OEA) shall be the sole and exclusive authority responsible for the regulation, promotion, and administration of mini-hydroelectric power development.
Powers and Duties of the OEA (Section 6):
- Promulgate rules and regulations within 6 months from approval of the Act, in consultation with the National Water Resources Board (NWRB).
- Process and approve applications for mini-hydroelectric power development, subject to certain standards (citizenship, technical and financial capability, financial capability).
- Charge reasonable fees for processing applications.
- Issue permits and licenses for mini-hydroelectric power development.
- Require developers to post a bond or guarantee for faithful performance.
- Exercise all powers necessary or incidental to attain the purposes of the Act.
Sale of Power (Section 7):
- The mini-hydroelectric power developer must first offer to sell electric power to the National Power Corporation (NPC), franchised private electric utilities, or electric cooperatives at a price based on the NPC's or utility's avoided cost.
- The NPC shall allow the developer to deliver generated electricity to its customers through existing NPC lines under mutually agreed terms or terms set by the OEA.
Non-exclusive Development (Section 8):
- Development of less than 50% of the hydroelectric power potential of a site shall be non-exclusive.
- The OEA may grant the development of the site to its full power potential to any qualified developer, with first option given to the original developer.
- If the original developer forfeits the option, it shall be reimbursed by the successor-developer based on the declared value of the development for real estate tax purposes over the preceding 3 years.
Mandatory Restoration Work (Section 9):
- If the proposed development entails the closure or stoppage of existing water outlets, passageways, connections, or conduits, the developer must restore or reengineer them at its own expense to ensure existing users or appropriators are not permanently deprived of their use or appropriation.
Tax Incentives (Section 10):
- Special Privilege Tax Rate: 2% of gross receipts from the sale of electric power and related transactions, payable quarterly.
- Tax and Duty-free Importation of Machinery, Equipment, and Materials: Within 7 years from the date of award, importation of machinery, equipment, materials, and parts shall not be subject to tariff duties and value-added tax, subject to certain conditions.
- Tax Credit on Domestic Capital Equipment: A tax credit equivalent to 100% of the value-added tax and customs duties that would have been paid on imported machinery, equipment, materials, and parts shall be given to developers who purchase from domestic manufacturers, subject to certain conditions.
- Special Realty Tax Rates on Equipment and Machinery: Realty and other taxes on civil works, equipment, machinery, and other improvements shall not exceed 2.5% of their original cost.
- Value-added Tax Exemption: Exemption from the 10% value-added tax on gross receipts derived from the sale of electric power.
- Income Tax Holiday: For 7 years from the start of commercial operation, a registered mini-hydroelectric power developer shall be fully exempt from income taxes levied by the National Government.
Disposition and Allotment of Special Privilege Taxes (Section 11):
- If the development is located in a city, 60% of the special privilege taxes shall accrue to the city, and 40% to the National Government.
- If the development is located in a municipality, 30% of the special privilege taxes shall accrue to the municipality, 30% to the province, and 40% to the National Government.
Term of Contract (Section 12):
- The term of the contract shall be for 25 years, extendible for another 25 years under the same original terms and conditions, provided the awardee has complied faithfully with all terms and conditions.
Official Development Assistance (Section 13):
- The privatization of mini-hydroelectric power plants shall be eligible for foreign loans and grants without further evaluation by the NEDA Board, subject to Section 21, Article XII of the Constitution.
Reporting Requirements (Section 14):
- The OEA shall submit an annual report to the Congress of the Philippines regarding the implementation of the Act.
Repealing Clause (Section 15):
- All laws, decrees, executive orders, rules and regulations, or parts thereof, inconsistent with the Act are hereby repealed, amended, or modified accordingly.
Effectivity (Section 16):
- The Act shall take effect 15 days after its publication in at least two newspapers of general circulation.
Amends
n/a
Amended by
n/a
Tags
Statutes
Republic Acts
mini-hydroelectric power
incentives
tax exemptions
energy development
renewable energy
hydroelectric power plants
power generation
electricity
water resources
energy policy
environmental regulations
tax credits
duty-free imports
special privilege tax
value-added tax
income tax holiday
energy self-sufficiency
indigenous resources
power developers
power transmission
power distribution
power utilities
power cooperatives
National Power Corporation
avoided cost
hydroelectric potential
water use
domestic use
municipal use
irrigation use
Office of Energy Affairs
National Water Resources Board
National Economic and Development Authority
National Electrification Administration
Department of Trade and Industry
permits
licenses
bonds
guarantees
contracts
real estate tax
official development assistance
foreign loans
grants
reporting requirements
repealing clause
effectivity
Law
AN ACT GRANTING INCENTIVES TO MINI-HYDRO-ELECTRIC POWER DEVELOPERS AND FOR OTHER PURPOSES
Republic Act No. 7156
•September 12, 1991
Republic of the Philippines
Congress of the Philippines
Metro Manila
Eighth Congress
Republic Act No. 7156             September 12, 1991
AN ACT GRANTING INCENTIVES TO MINI-HYDROELECTRIC POWER DEVELOPERS AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::
Section 1. Title. – This Act shall be known as the "Mini-hydroelectric Power Incentive Act.".
Section 2. Declaration of Policy. – It is hereby declared the policy of the State to strengthen and enhance the development of the country's indigenous and self-reliant scientific and technological resources and capabilities and their adaptation to the country in order to attain energy self-sufficiency and thereby minimize dependence on outside source of energy supply. In pursuance thereof, it is further declared that mini-hydroelectric power developers shall be granted the necessary incentives and privileges to provide an environment conducive to the development of the country's hydroelectric power resources to their full potential.
Section 3. Declaration of Objectives. – The objectives of the framework being established for the...
Login to see full content
Amends
n/a
Amended by
n/a