Question & AnswerQ&A (Republic Act No. 9209)
The main purpose of RA No. 9209 is to grant the Manila Electric Company (MERALCO) a franchise to construct, operate, and maintain a distribution system for the conveyance of electric power to end-users in specified areas in Metro Manila and nearby provinces.
The franchise covers cities and municipalities in Metro Manila including Caloocan, Las Pinas, Makati, and others; Bulacan; Cavite; Rizal; Laguna; Quezon; and certain barangays in Pampanga as specifically enumerated in the law.
The distribution system refers to 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.
MERALCO must operate and maintain its electric distribution facilities in a superior manner and improve or modify them as required by the ERC or technological progress to provide efficient and reliable service.
MERALCO may allow the use of free space in its poles and facilities to interested parties upon reasonable compensation, with disputes decided by the Energy Regulatory Commission (ERC).
MERALCO must obtain prior approval from the Department of Public Works and Highways (DPWH) or concerned local government units (LGUs), perform repairs immediately, and restore public places to their original condition at its own expense following set standards.
MERALCO is obliged to supply electricity at least cost, charge reasonable and just rates, provide open and non-discriminatory access, avoid abuse of market power, and ensure the public interest is protected.
The Energy Regulatory Commission (ERC) regulates and approves retail rates and charges for electric distribution and requires transparency and public disclosure of said rates.
The franchise shall be for a term of twenty-five (25) years from the date of effectivity of the Act, unless sooner revoked or canceled by Congress for violations.
The President may take over and operate the distribution system or authorize government agencies to do so temporarily during war, rebellion, public peril, calamity, emergency, disaster, or disturbances of peace and order, with due compensation to MERALCO.
No, MERALCO may not lease, transfer, sell, grant usufruct, merge, or transfer controlling interest of the franchise without prior approval from Congress, except to a wholly-owned subsidiary or surviving corporation under constitutional limitations.
MERALCO is liable for any injury or damage caused by defective construction or neglect in keeping its facilities safe, and must hold government entities harmless for claims arising from its operations.
MERALCO must provide written acceptance of the franchise within sixty (60) days after the effectivity of the Act.
MERALCO must submit an annual report of its finances and operations to the Congress of the Philippines.
No, the franchise is non-exclusive and is subject to amendment, alteration, or repeal by Congress when public interest requires.