Section 4Sec./Art. 4

Return on Rate Base. - Further pursuant to the above-declared policy, the President is hereby authorized, whenever it is necessary for the national welfare and in the public interest, to fix the rate of return on rate base of the National Power Corporation (NAPOCOR) to not more than twelvepercentum(12%) of the rate base as defined in Section 4 of Republic Act No. 6395, as amended.

Any increase in power rates shall take effect only upon approval of the Energy Regulatory Board (ERB), after due notice and hearing:Provided, That any increase in power rates by the NAPOCOR to its customers within the year 1993 shall not exceed an average of eighteen centavos (P0.18) per kilowatt-hour:Provided, further,That any increase in power rates shall not be passed on to households consuming not more than one hundred (100) kilowatt-hours per month for five (5) years following the effectivity of this Act:Provided, furthermore,That the existing subsidy enjoyed by households consuming less than three hundred (300) kilowatt-hours per month shall continue to be in effect:Provided, finally, That no power rate increase whatsoever shall be imposed by the NAPOCOR in provinces producing geothermal power of not less than one hundred megawatts (100 MW) of actual capacity for one (1) year following the effectivity of this Act.

When the petition appears to be sufficient in form and in substance, the ERB, during the pendency of the case, may issue a provisional authority to increase the power rates, in whole or in part, which increase shall last for a period of sixty (60) days, and may be extended for another sixty (60) days:Provided,That the ERB can issue such provisional authority only during the effectivity of this Act.