The Central Negros Electric Cooperative has a total payable of P166 million in franchise taxes owed to the Bacolod City government as of February 24, 2006.

Bacolod City Treasurer Florentino Guanco has written Ceneco officer-in-charge Noriel Bermudez requesting the firm to settle the amount in order to avoid further penalties imposable under the revenue code of the city.

The total amount due is computed as follows - current real property taxes - P4,748.339.13; Mayor's permit, regulatory fees and community tax (corporation) covering 1997 to 2004 - P129,525,188.35; taxes and regulatory fees for 2005 to 2006 - P 31,856,213.65 less payment of regulatory fees for 2005 to 2006 amounting to P34,122.

City Legal Officer Allan Zamora said the Supreme Court has ruled that electric cooperatives are not exempted from paying franchise taxes to the local government units and the decision has become final and executory. The case was filed by the Philippine Rural Electric Cooperative Association which questioned the provision of the Local Government Code that gave local government units the authority to collect franchise taxes from electric cooperatives.

Unfortunately, until now, Ceneco has not manifested its intention to pay although it said it would, if ever it loses the case, Zamora said. He said that, based on the record of the City Treasurer's Office, the amount due from Ceneco to the city is P166 million in franchise taxes, against the P70 million account of the city to Ceneco for electric bills.

Ceneco president Eddie Guillem yesterday said that, because of the decision of the Supreme Court, there is a negotiation or settlement between the city and Ceneco on how both parties could offset the amount, since the city has unpaid electric bills with them. He said if Ceneco will be required to pay franchise taxes to the city, the bottomline is that the rate of electricity in Bacolod will increase because the franchise taxes will be imposed on the consumers.

Guillem said Ceneco's own assessment of total franchise taxes due varies from the P166 million computation of the city.

Zamora said they have set meetings in order to reconcile their records but these have been postponed several times. He said it is the Mayor who will decide if the city will pay its electric bills with Ceneco.

Zamora said an injunction case was filed during the Valdez administration, which is still pending in court, to prevent Ceneco from cutting off the city's electric power.*CGS

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