QuestionsQuestions (EXECUTIVE ORDER NO. 186)
RA 9968 amends RA 3118 to grant Cabanatuan Electric Corporation (formerly Samahang Magsasaka, Incorporada) a franchise to construct, operate, and maintain an electric distribution system for the conveyance of electric power to end-users in the City of Cabanatuan, Province of Nueva Ecija.
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 all distribution facilities, lines, and systems in a superior manner, and must modify, improve, or change facilities when required by the ERC/DOE or other concerned agencies to keep pace with science and improvements in electric service.
It may do so lawfully with prior approval of the DPWH or the concerned LGU, as appropriate, and must immediately repair and restore disturbed areas at the grantee’s expense, following DPWH and LGU standards.
The grantee must secure from the ERC (or other agency with jurisdiction) the necessary certificate of public convenience and necessity and other appropriate permits and licenses for the construction and operation of its electric distribution system.
The grantee must deliver electricity to its captive customers using the least-cost approach, consistent with the mandate to provide efficient and reliable service and reduce electricity costs, as far as feasible and subject to ERC requirements.
No. The grantee has an obligation to provide open and non-discriminatory access to its distribution system and services to any end-user within its franchise area, consistent with RA 9136.
It prohibits engaging in any activity constituting an abuse of market power, including but not limited to unfair trade practices, monopolistic schemes, and activities that hinder business and industry competitiveness.
Retail rates to the captive market and charges for distribution are regulated by and subject to ERC approval (or its legal successor). The grantee must also identify and segregate components in the electric bill per RA 9136, make such rates public and transparent, and implement lifeline rates for marginalized end-users.
The grantee must establish a consumer desk to handle consumer complaints and must act with dispatch on all complaints brought before it.
In times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, the President may take over and operate the distribution system, or authorize a government agency to temporarily use and operate it upon due compensation to the grantee.
The franchise tax is equivalent to 50% of 1% of all revenues derived from the grantee’s distribution wheeling services and captive market supply, excluding generation charge, transmission charge, and system loss charge.
It shall be liable to pay real property taxes only on its real estate and buildings, exclusive of this franchise, as other corporations are required by law to pay.
Subject to legal limitations and procedures, the grantee may exercise eminent domain insofar as reasonably necessary for efficient maintenance and operation. It may also install and maintain facilities over and across public property and may acquire private property actually necessary for the franchise’s purposes, with proper condemnation proceedings and just compensation.
The grantee cannot lease, transfer, grant usufruct, sell, merge, or transfer controlling interest (in whole or in part, whether simultaneously or contemporaneously) without prior approval of Congress. Any transferee/assignee is subject to the same conditions, terms, restrictions, and limitations.
The franchise is for 25 years from the date of effectivity of the Act. It is deemed ipso facto revoked if the grantee fails to operate continuously for two (2) years.
Acceptance must be given in writing within 60 days from the date of effectivity of RA 9968.
Separability: invalid/unconstitutional parts do not affect the rest. Repealability/nonexclusivity: Congress may amend/alter/repeal when public interest requires; the grant is not exclusive. Effectivity: the Act takes effect 15 days after publication in at least two newspapers of general circulation.