Question & AnswerQ&A (Republic Act No. 10637)
The primary purpose of Republic Act No. 10637 is to grant Cotabato Light and Power Company a franchise to construct, install, establish, operate, and maintain a distribution system for the conveyance of electric power to end-users in specified areas of Cotabato City and portions of the municipalities of Datu Odin Sinsuat and Sultan Kudarat in Maguindanao.
The franchise covers the City of Cotabato and portions of the municipalities of Datu Odin Sinsuat and Sultan Kudarat, both within the Province of Maguindanao.
The Energy Regulatory Commission (ERC) regulates and must approve the retail rates and charges for the distribution of electric power to end-users.
The grantee must secure prior approval from the Department of Public Works and Highways (DPWH) or the concerned local government unit (LGU) before making excavations or laying conduits, and must repair and restore the disturbed public places in a workmanlike manner at their own expense. Failure to comply after a 10-day notice may result in the DPWH or LGU repairing the area at double the grantee's expense.
The grantee must supply electricity in the least costly manner, provide efficient and reliable services, charge reasonable and just power rates, ensure open and nondiscriminatory access to its system, and implement lifeline rates for marginalized end-users as mandated by law.
No. Any sale, lease, transfer, grant of usufruct, or assignment of the franchise or its controlling interest requires prior approval from the Congress of the Philippines. Failure to report such transactions within 60 days after completion renders the franchise ipso facto revoked.
Failure to submit the annual report to Congress results in a fine of Five hundred pesos (P500.00) per working day of noncompliance, collected by the ERC. The penalty proceeds go to the ERC's monitoring fund, and a compliance certificate is required before permit or certificate applications are accepted.
The franchise is valid for 25 years from the expiration date of the previous franchise under Commonwealth Act No. 487, unless sooner cancelled. The franchise is automatically revoked if the grantee fails to operate continuously for two years.
The grantee must offer at least 30% of its outstanding capital stock to Filipino citizens in any Philippine securities exchange within five years from the start of its operations, or alternatively implement cooperatives or other methods to encourage public participation. Noncompliance results in ipso facto revocation of the franchise.
The President of the Philippines has the special right during times of war, rebellion, public peril, calamity, emergency, disaster, or peace disturbance to temporarily take over, operate, or suspend the grantee's facilities or authorize government use, with due compensation to the grantee during such periods.