Law Summary
Manner of Operations of Facilities
- Electric distribution facilities must be operated and maintained in superior condition
- Obligation to modify, improve, or change facilities as required by ERC, DOE, or other agencies
- May allow use of free spaces in poles or right-of-way by interested parties for reasonable compensation
- ERC resolves disputes related to access to facilities
Authority of the Energy Regulatory Commission and Department of Energy
- Grantee must secure certificate of public convenience and necessity from ERC/DOE
- Other necessary permits and licenses for electric distribution system construction and operation must also be obtained
Ingress and Egress
- Grantee authorized to enter public places for erecting and maintaining poles, wires, and related facilities
- Prior approval required from Department of Public Works and Highways (DPWH) or local government units (LGUs)
- Disturbed public property must be restored immediately and properly at grantee's expense
Responsibility to the Public
- Duty to supply electricity in the least cost manner to captive market
- Facilities must be modified for efficient and reliable service and cost reduction as required by ERC
- Charge reasonable and just rates to allow business competitiveness
- Provide non-discriminatory access to the distribution system consistent with RA 9136
- Prohibition against abuse of market power and unfair trade practices
Rates for Services
- Rates and charges regulated and approved by ERC/DOE
- Bill components must be identified and segregated per RA 9136
- Rates must be transparent and publicly disclosed
- Mandated implementation of lifeline rates for marginalized consumers
Promotion of Consumer Interests
- Grantee shall establish consumer desk to handle complaints
- Prompt action required on consumer complaints
Right of the Government
- President can take over distribution system during war, rebellion, emergencies, or calamities
- Temporary government operation authorized with due compensation to grantee
Tax Provisions
- Grantee subject to all applicable taxes under National Internal Revenue Code and Local Government Code
- Existing tax exemptions or privileges remain unaffected
- Grantee must file returns and pay taxes where facilities are located
Right of Eminent Domain
- Grantee authorized to exercise eminent domain for efficient service maintenance and operation
- May install facilities on government property and acquire necessary private property with lawful proceedings and just compensation
Acceptance and Compliance
- Written acceptance of franchise required within 60 days from effectivity of Act
Warranty in Favor of National and Local Government
- Grantee indemnifies government from claims arising from injuries or accidents related to distribution system
Liability for Damages
- Grantee liable for injuries or damages due to defective construction or negligence in maintaining safe facilities
Sale, Lease, Transfer, Usufruct, and Similar Actions
- Franchise shall not be leased, transferred, sold, or merged without prior Congressional approval
- Exceptions: transfer to wholly-owned subsidiary or surviving corporation
- Transferee subject to same terms and conditions
Equality Clause
- Terms granted to competitors more favorable than those in this franchise shall apply equally to grantee
- Terms unique to this franchise shall also apply to future grantees
- Exceptions for territory and franchise lifespan provisions
Separability Clause
- Invalidity of any section does not affect the validity of other provisions
Applicability Clause
- Grantee subject to Public Services Act (Commonwealth Act No. 146) and Electric Power Industry Reform Act of 2001 (RA 9136)
Repealability and Nonexclusivity Clause
- Franchise may be amended, altered, or repealed by Congress in public interest
- Franchise is not exclusive
Reportorial Requirement
- Grantee must submit annual report on finances and operations to Congress
Extension and Renewal of Franchise
- Franchise extended for 25 years from expiration of previous franchise
- Automatic revocation if grantee fails to operate continuously for 2 years
Effectivity Clause
- Act takes effect 15 days after publication in at least two newspapers of general circulation