Question & AnswerQ&A (Republic Act No. 9284)
The franchise grants CEPALCO the right to construct, operate, and maintain an electric power distribution system in the City of Cagayan de Oro and the municipalities of Tagoloan, Villanueva, and Jasaan in Misamis Oriental, excluding certain barangays specified in the law.
It refers to a system of wires and associated facilities, including sub-transmission lines owned by a franchised distribution utility, extending between the delivery point on the national transmission system or generating facility and the metering point/facility of the end-user.
CEPALCO must operate and maintain its electric facilities in a superior manner and modify or improve them as required by the Energy Regulatory Commission (ERC), Department of Energy (DOE), or other government agencies based on advances in science and electric power service improvements.
CEPALCO may allow interested parties to use free spaces in its poles and facilities upon reasonable compensation, considering costs incurred. Disputes regarding compensation are to be decided by the ERC.
CEPALCO must secure from the ERC, DOE, or any other competent government agency the necessary certificate of public convenience and necessity and other appropriate permits and licenses.
CEPALCO, with prior approval from the Department of Public Works and Highways (DPWH) or local government units (LGUs), may make excavations or lay conduits in public places like streets or sidewalks, provided disturbed areas are immediately repaired at its expense according to DPWH and LGU standards.
CEPALCO must supply electricity in a least cost manner, charge reasonable and just power rates, provide open and non-discriminatory access to its distribution system, and implement lifeline rates for marginalized end-users as mandated by law.
The Energy Regulatory Commission (ERC) regulates the retail rates, and CEPALCO must identify and segregate the rate components on bills and make the rates public and transparent.
The President of the Philippines may take over and operate CEPALCO’s distribution system, or authorize government agency operation of the system with due compensation to CEPALCO during war, rebellion, public peril, calamity, emergency, disaster, or disturbances of peace and order.
No. CEPALCO may not lease, transfer, grant usufruct, sell its franchise or merge without prior approval from Congress, except to a wholly-owned subsidiary or if it is the surviving corporation, and any transferees are bound by the same conditions of the franchise.
The franchise is ipso facto revoked if CEPALCO fails to operate continuously for two years.
CEPALCO must establish a consumer desk to handle complaints and promote consumer interests, acting promptly on all complaints received.
CEPALCO is subject to all applicable taxes, fees, and charges under the National Internal Revenue Code, the Local Government Code, and other laws, but existing tax exemptions or incentives granted by law continue to apply.
The invalidity of any section or provision does not affect the other provisions which shall remain in full force and effect (Separability Clause).
The franchise is extended for twenty-five (25) years commencing on the date of expiration of the prior franchise under Republic Act No. 3247, as amended.