Is the Bohol Light Company Inc. the legit power distributor in its franchise area? Is it just a mere legal question of dates? We recall that the EPIRA (Electric Power Industry Reform Act) was a vital cog in addressing a shocking 21st century reality then that a country (like the Philippines), that used to be 2nd to Japan in modernity once, was suffering some "powerless days." Remember the Cory and Ramos years?

It is a good reform act as any - and there is no debate as to its soundness. But it also gave the House of Representatives the authority to approve the franchises needed for the transmission and distribution of electricity in the country.

But records show that the Bohol Light Company was granted a certificate of franchise by the NEC on July 10, 2003, a date much later than the total effectivity date of the EPIRA which is June 26, 2001.

The legal battleground, therefore, would be whether the NEC ruling (granting the Bohol Light franchise) can supersede the power of Congress under the EPIRA, just because it came at a later date.

We do not know if the Jala Bill - seeking the revocation of the NEC-granted franchise is the right legal remedy if there really was a violation of the EPIRA Law? Why should a bill be needed to correct an apparent violation of an existing law?

This apparently is an administration-backed move considering that the three congressmen are singing with blended notes? Nothing political here, we hope? Just asking.

What happens if Congress and/or the courts decide with finality that the NEC had transgressed Congress' constitutional authority to grant such franchises? Are the acts of collecting fees and benefiting from the franchise therefore illegal and should be reimbursed to the consuming public? Under what terms and interest rate?

It is a very crucial pre-judicial question of franchise validity because it will impact the one other petition of Bohol Light Company Inc. to pass the P36.5 million in franchise fees (paid to government) to the electric-power using public? Invalidating the NEC grant would erase Bohol Light's legal personality to even seek the imposition of the Franchise Fee in the first place.

If the NEC approval is upheld, then the ERC (Energy Regulatory Commission) power to allow full recovery cost (including Franchise Fees) could gain legal footings.

Legally, City Mayor Dan Lim, had countered that there is nothing in the National Internal Revenue Code (NIRC) and the Local Government Code (LGC) that mandates such recovery to be burdened by consumers rather than the Franchise Operator. It's for the legal gurus to determine whether there are acts of ERC that are sanctioned by a separate, distinct law.

The accounting treatment is altogether a different matter. If the "pass-on-to-consumers" view is legally sanctioned, it stands to reason that the collection should be over a certain period of time rather than expensed outright in a single year.

The latter's effects are dual, true. One - it somewhat violates the accounting principal stating that assets vital to continued business operations such as machines, buildings are depreciated (expensed) over a period of time rather than a single year. The similarity with Franchised Fees is not far-fetched. Not doing so, in the second place, over bloats the expense side and therefore reduces the net taxable income of the operator. Technically, that deprives government of tax revenues on the very short term.

The economists will also bring in another issue of "time value of money" which we will not add anymore to the confusion of the present issues.

Just about the only thing clear about this whole imbroglio is that the ERC had the welfare of consumers in mind when it directed through ERC Resolution No. 8 series of 2008 to return all deposits advanced by users for electric meters plus interest thereof.

To our minds, the electric meters are necessary adjuncts to the operation of electric transmission and distribution. That cost should be borne by the capitalists - or the operators - as part of their fixed investments in making the business a going concern. Not the end-users.

That aside, we still need to resolve that great legal over-hang as to the legitimacy of the Bohol Light franchise, the resolution of which could erase the resulting legal and operational cobwebs attached to the light distribution business.

The paying public for electric power awaits.

For Comments: email to bingo_dejaresco@boholchronicle.com Or editor@boholchronicle.com