By Lenie Lectura -November 27, 2019
from Business Mirror
Luzon Hydro Corp. (LHC), a wholly owned subsidiary of Aboitiz Power Corp., moves to protect its hydropower facility by filing a petition to enjoin the Municipality of Alilem from auctioning the real properties located in Alilem, Ilocos Sur.
“LHC advised AboitizPower that it filed a petition for prohibition and mandamus, with prayer for a temporary restraining order [TRO] and preliminary injunction, to enjoin the Municipality of Alilem from auctioning the real properties located in Alilem, Ilocos Sur,” AboitizPower disclosed.
LHC received a notice of real-property tax delinquency from the Office of the Municipal Treasurer of Alilem, Ilocos Sur, seeking to collect a total of P446,029,609.46 in unpaid RPT and accrued penalties covering the period from 2002 to August 2019.
The municipal treasurer then issued a notice of publication and auction sale covering the real properties of LHC, consisting of industrial machineries and buildings.
LHC owns, operates and manages the 70-megawatt Bakun AC run-of-river hydropower plant located in Amilongan, Alilem, Ilocos Sur. The plant was constructed and operated under the government’s build-operate-transfer (BOT) scheme.
LHC is contesting this. Prior to its receipt of Alilem’s notice of RPT delinquency, LHC has a standing offer to the Provincial Government of Ilocos Sur, that it is willing to pay RPT computed in accordance with the provisions of Executive Order 60, Series of 2018. The tender of payment, however, was rejected.
EO 60 allows the reduction and condonation of real-property taxes and penalties assessed on power-generation facilities of IPPs (independent power producers) under BOT contracts. The reduction and condonation cover all liabilities for RPT, including any special levies accruing to the Special Education Fund for 2017, and prior years.
LHC’s petition seeks to challenge the correctness of the amount assessed by the local government.
“The action will seek the enforcement of the executive orders issued by the Office of the President directing the reduction of RPT on property, machinery and equipment actually and directly used by IPPs under BOT contracts, and condoning related RPT interest and penalties,” the company said.
Also, the Power Sector Assets and Liabilities Management Corp. issued a letter to the Municipality of Alilem, urging it to reconsider the auction of the levied assets, in consideration of the ownership rights and interest of the government over the levied assets.
Moreover, Malacañang issued EO 88 last August reiterating the terms under EO 60 and confirming the reduction of the RPT obligations of IPPs for all years up to 2018.
AboitizPower recorded P13.5 billion in net income in January to September, 19 percent lower than the P16.7 billion recorded in the same period a year ago.
The power firm posted nonrecurring losses of P220 million versus last year’s losses of P1.7 billion. Without these one-off losses, the company’s core net income was P13.7 billion, 26 percent lower than the P18.4 billion recorded in the same period last year.
This was primarily due to the higher volume and cost of purchased power, lower spot market revenues, and lower plant availability, it reported.