Republic Act No. 2321

Legal Principle: This section grants the Municipality of Villaba the authority to construct, maintain, and operate an electric light, heat, and power system for 25 years.
Key Definitions:
- Grantee: Refers to the Municipality of Villaba.
Requirements:
- Operation is subject to the terms of Act No. 3636 and Commonwealth Act No. 132.
Timeframe: Effective for 25 years from approval date, June 19, 1959.

Legal Principle: The grantee must fix electricity rates to ensure profits do not exceed 6% per annum of the defined rate base.
Key Definitions:
- Rate Base: Money invested in useful property and equipment minus accrued depreciation.
Requirements:
- Original rates must be approved by the Public Service Commission before operations commence.
- If profits exceed 6%, the grantee must reduce rates proportionally and retroactively.
Penalties:
- Violations may lead to dismissal, imprisonment (1-5 years), and civil liability for overcharges.

Legal Principle: The grantee is required to maintain detailed records of financial activities.
Key Requirements:
- Complete records of assets, liabilities, revenues, and expenses must be maintained.
- Accounting system must conform to standards set by the Public Service Commission and Auditor General.

Legal Principle: The grantee must record depreciation of properties monthly.
Requirements:
- Use the straight-line method for depreciation calculation.
- Submit estimated service lives and rates for approval by the Public Service Commission.

Legal Principle: Specific terms used in the act are clearly defined.
Key Definitions:
- Cost: The actual cash value of properties or services at the time of transaction.
- Units of Property: Items accounted for by crediting their book cost when retired.
- Straight-Line Method: Depreciation spread equally over service life.

Legal Principle: The grantee must adhere to limits on operating expenses and quality standards set by the Public Service Commission.
Requirements:
- Compliance with safety rules and service quality expectations.

Legal Principle: The grantee is permitted to borrow from financial institutions for project financing.
Key Details:
- This borrowing can exceed normal limits defined by other laws.

Legal Principle: Franchise administration must be conducted on a non-partisan basis.
Key Requirements:
- Appointments must be based on merit and efficiency without political considerations.

Legal Principle: The National Government can acquire the grantee's property.
Requirements:
- Must compensate the grantee for original investments and assume obligations.

Legal Principle: Specific penalties are established for misuse of profits or failure to report violations.
Penalties:
- Fines up to ₱5,000 or imprisonment (up to 2 years) for misuse.
- Dismissal and imprisonment (1-5 years) for failure to report violations.

Legal Principle: Existing laws inconsistent with this act are repealed or modified.

Legal Principle: If any provision is invalidated, the remaining provisions remain effective.

The Municipality of Villaba is authorized to operate an electric system for 25 years, with strict regulations on profit and rate-setting.
Detailed record-keeping and adherence to standards set by the Public Service Commission are mandatory.
Non-compliance with various provisions can lead to severe penalties, including imprisonment and financial liability.
The act underscores the importance of non-partisan management and allows for potential government acquisition of the grantee's assets.