QuestionsQuestions (Republic Act No. 10890)
It grants MECO (and its successors/assignees) a franchise to construct, install, establish, operate, and maintain for commercial purposes and in the public interest an electric power distribution system for end users in the City of Lapu-Lapu and the Municipality of Cordova, Province of Cebu.
It refers to wires and associated facilities, including sub-transmission lines belonging to a franchised distribution utility, extending between the delivery point on the national transmission system/generating facility and the metering point/facility of the end user.
MECO must operate and maintain its facilities “in a superior manner.” It must also, whenever required by the ERC/DOE or other concerned agency, modify, improve, or change facilities as science and improvements in electric power services render reasonable and proper.
Yes, whenever practicable and for maintaining order, safety, and aesthetics, MECO may allow use of free spaces upon reasonable compensation considering its costs to accommodate and administer the use. The ERC decides disputes.
It must secure from the ERC/DOE (or other agency with jurisdiction) the necessary certificate of public convenience and necessity and other appropriate permits/licenses.
MECO may make excavations or lay conduits in public places/highways/streets/alleys/sidewalks/bridges with prior approval of DPWH or the concerned local government unit. Disturbed areas must be repaired/replaced in workmanlike manner at MECO’s expense per DPWH/LGU standards; if MECO fails after a 10-day notice, authorities may repair at double expense chargeable to MECO.
MECO must supply electricity to its captive market in the least costly manner, modify/improve facilities as needed for public interest and reduced costs (as feasible and whenever required by the ERC), and charge reasonable and just power rates to all types of consumers within its franchise area.
Yes. MECO must provide open and non-discriminatory access to its distribution system and services for any end user within its franchise area consistent with RA 9136 (Electric Power Industry Reform Act of 2001).
MECO shall not engage in activities constituting abuse of market power such as unfair trade practices, monopolistic schemes, and other activities that hinder competitiveness of business and industries.
Retail distribution rates/charges are regulated and subject to ERC approval. MECO must identify and segregate in the electricity bill the components of the retail rate pursuant to RA 9136 (unless amended), and the rates must be public and transparent.
MECO must establish a consumer desk to handle consumer complaints and ensure promotion of consumer interests, and must act with dispatch on all complaints brought before it.
The President may, in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, temporarily take over/operate MECO facilities, temporarily suspend operations for public safety/security/welfare, or authorize temporary government use/operation upon due compensation.
It may be exercised insofar as reasonably necessary for efficient maintenance and operation of services. MECO may install/maintain poles/wires/facilities over government public property, and may acquire private property actually necessary for franchise purposes, but proper expropriation proceedings must be instituted and just compensation paid.
The term is 25 years from the date of effectivity unless sooner cancelled. The franchise is deemed ipso facto revoked if the grantee fails to operate continuously for two (2) years.
It must give written acceptance to Congress through the House Committee on Legislative Franchises and the Senate Committee on Public Services within 60 days from effectivity. Nonacceptance renders the franchise void.
MECO cannot sell/lease/transfer/grant usufruct/assign the franchise or transfer controlling interest, whether as whole or in parts, without prior approval of Congress. Congress must be informed within 60 days after completion. Failure to report renders the franchise ipso facto revoked, and any transferee must be subject to the same conditions.
MECO must offer Filipino citizens at least 30% of its outstanding capital stock (or higher if later required by law) within five years from commencement of operations. If public offer is not applicable, it must use cooperatives/other methods to encourage public participation. Noncompliance renders the franchise ipso facto revoked.
MECO must submit an annual compliance/operations report to Congress on or before April 30 every year during the franchise term, and a reportorial compliance certificate issued by Congress is required before any ERC permit/certificate application is accepted. Failure to submit results in a fine of P500 per working day of noncompliance collected by the ERC.
Any advantage/favor/privilege/exemption/immunity granted under existing franchises (or future franchises after prior review and Congress approval) becomes part of MECO’s franchise and must be accorded immediately and unconditionally. It does not apply to provisions concerning territory covered, franchise lifespan, or type of service authorized; it also does not apply to sale/lease/transfer/grant of usufruct/assignment of legislative franchises with prior congressional approval.