QuestionsQuestions (Republic Act No. 9284)
RA 9284 grants CEPALCO, its successors or assigns, a franchise to construct, operate, and maintain in the public interest and for commercial purposes an electric power distribution system for conveying electric power to end-users in specified areas: the City of Cagayan de Oro and the municipalities of Tagoloan, Villanueva, and Jasaan, Misamis Oriental, with enumerated exclusions of certain barangays/areas.
It defines distribution system as the system of wires and associated facilities, including sub-transmission lines, belonging to 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.
The grantee must operate and maintain its facilities in a superior manner at all times, and whenever required by the ERC/DOE or other concerned government agency, it must modify, improve, or change facilities to the extent reasonable and proper based on science and service improvements.
Yes, whenever practicable and for order, safety, and aesthetics along highways/roads/right-of-way, the grantee may allow use of free spaces on its poles/facilities/right-of-way by interested parties upon reasonable compensation. The ERC resolves disputes.
Under Section 3, the grantee must secure from the ERC/DOE (or other agency with jurisdiction) the necessary certificate of public convenience and necessity and other appropriate permits and licenses for construction and operation.
It allows excavations or laying conduits in public places/highways/roads/etc. for installing and maintaining facilities, but only with prior approval of DPWH or the concerned LGU as appropriate. Any disturbed area must be immediately repaired and properly restored at the grantee’s expense per DPWH and LGU standards.
The grantee must supply electricity to its captive market in the least-cost manner; modify/improve facilities for efficient and reliable service and reduced electricity costs as required by the ERC; charge reasonable and just power rates to consumers; provide open and non-discriminatory access to its distribution system and services consistent with RA 9136; and avoid abuse of market power/unfair trade practices/monopolistic schemes that hinder competitiveness.
Retail rates to the captive market and charges for distribution are regulated by and subject to the approval of the ERC/DOE. The grantee must identify and segregate components of the retail rate in the billing pursuant to RA 9136 (unless amended). Rates must be public and transparent, and lifeline rates must be implemented for marginalized end-users.
It must establish a consumer desk to handle complaints and ensure adequate promotion of consumer interests, acting with dispatch on complaints brought before it.
During war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, the President may take over and operate the grantee’s distribution system or authorize temporary use/operation by a government agency, upon due compensation to the grantee for the use during the period of operation.
The grantee is subject to payment of applicable taxes, duties, fees, and other impositions for private electric utilities under the NIRC, the Local Government Code, and other applicable laws, without repealing specific tax exemptions or incentives granted under relevant laws. Rights/privileges/exemptions in franchise of existing/future private electric utilities are extended to the grantee.
Yes. Subject to limitations and procedures prescribed by law, the grantee may exercise eminent domain insofar as it is reasonably necessary for efficient maintenance and operation. It may install facilities over and across public property and acquire private property actually necessary for franchise purposes, but proper condemnation proceedings must be instituted and just compensation paid.
Acceptance must be given in writing within sixty (60) days after the effectivity of the Act.
The grantee cannot lease, transfer, grant usufruct of, or sell the franchise or rights/privileges, nor merge with another corporation/entity, nor transfer controlling interest, without prior approval of Congress, except to a wholly-owned subsidiary or where the grantee is the surviving corporation. Any transfer/assignment must comply with constitutional limitations and subject assignees to the same conditions of the Act.
If another franchise grants more favorable terms that place the grantee at a disadvantage, those terms are deemed part of RA 9284 and operate equally in favor of the grantee. Future grantees may also enjoy terms not contained in later franchises. However, it does not apply to territory and the life span of the franchise.
The term granted under RA 3247, as amended, is extended/renewed for twenty-five (25) years commencing on the date of expiration of RA 3247, as amended.
The franchise is deemed ipso facto revoked if the grantee fails to operate continuously for two (2) years.
It takes effect fifteen (15) days from the date of its publication upon the initiative of the grantee in at least two (2) newspapers of general circulation in the Philippines.