Law Summary

1. Grant of Franchise

• Legal Principle: Surigao Electric Company, Incorporated is granted a franchise to install, operate, and maintain an electric light, heat, and power system in Bislig, Surigao for 50 years.
• Key Definitions:
  • Grantee: Surigao Electric Company, Incorporated.
  • Electric Light, Heat, and Power System: Infrastructure for generating and distributing electricity.
• Requirements/Procedures:
  • Must obtain a certificate of public necessity from the Public Service Commission (PSC).
  • The franchise becomes void if the application for the certificate is not filed within six months from the Act's approval.
• Timeframes:
  • Franchise effective for 50 years from the date of approval.

2. Installation and Operation Standards

• Legal Principle: The grantee must adhere to safety and aesthetic standards for electricity distribution.
• Key Definitions:
  • Public Thoroughfares: Streets and public places for utility installation.
• Requirements/Procedures:
  • Poles must be at least 20 feet above ground.
  • Equipment must be modern and comply with safety regulations.
  • Must supply electricity within 15 days of an application.
• Timeframes:
  • Capacity must be increased if demand exceeds current supply.
• Penalties:
  • Failure to maintain safety may lead to liability for accidents or property damage.

3. Maintenance and Restoration Obligations

• Legal Principle: The grantee is responsible for restoring public areas disturbed during installation.
• Requirements/Procedures:
  • Restore sidewalks and streets to their original condition post-installation.
  • Change pole locations as directed by municipal authorities at the grantee's expense.
• Consequences:
  • Failure to comply leads to additional obligations for restoration.

4. Cost Responsibilities

• Legal Principle: Cost-sharing for removal of poles/wires during construction.
• Requirements/Procedures:
  • If poles obstruct municipal work, the requesting entity pays half the removal costs.
• Penalties:
  • If the grantee fails to comply with removal notices, the municipality may enforce the action at the grantee's expense.

5. Financial Obligations

• Legal Principle: The grantee must pay a percentage of gross earnings to the municipality.
• Key Definitions:
  • Gross Earnings: Revenue from electricity sales.
• Requirements/Procedures:
  • Quarterly payments of 1.5% of gross earnings to the municipal treasury.
• Consequences:
  • Exemption from other taxes related to the franchise.

6. Acceptance and Deposit Requirements

• Legal Principle: Acceptance of the franchise requires a deposit as a guarantee of good faith.
• Requirements:
  • Deposit of ₱1,000 in cash or bonds with the National Treasury.
• Timeframes:
  • Acceptance within 180 days of obtaining the PSC certificate.
  • Commencement of operations within six months, completion within eighteen months.
• Consequences:
  • Failure to comply leads to forfeiture of the deposit and nullification of the franchise.

7. Rights and Restrictions

• Legal Principle: The municipality can use poles for police purposes without compensation.
• Key Definitions:
  • Usufruct: The right to use and enjoy the benefits of property owned by another.
• Requirements/Procedures:
  • The municipality must ensure no interference with electric service.
• Penalties:
  • Unauthorized transfer of the franchise requires Congressional approval.

8. Forfeiture and Compliance

• Legal Principle: The PSC can declare the franchise forfeited for non-compliance.
• Requirements/Procedures:
  • The grantee may contest forfeiture.
• Consequences:
  • Non-compliance due to external forces may exempt the grantee from penalties.

9. Purchase Option

• Legal Principle: After 40 years, the government may purchase the grantee's assets.
• Requirements/Procedures:
  • Valuation based on net earnings and depreciation.
• Penalties:
  • Final decision by the PSC with no recourse.

10. Rate Regulations

• Legal Principle: Grantee rates are subject to oversight.
• Key Definitions:
  • Rate: Charges for electricity supplied.
• Requirements/Procedures:
  • Rates not to exceed ₱0.40 per kilowatt hour.
• Consequences:
  • Only certain subscribers qualify for meter service.

Key Takeaways

• Surigao Electric Company, Incorporated is granted a 50-year franchise to operate an electric service in Bislig, with stringent requirements for operation, maintenance, and financial contributions to the municipality.
• The franchise includes safety, aesthetic, and financial obligations, with specific procedures for compliance and penalties for failure to meet the conditions outlined.
• The municipality retains rights regarding the use of the electric poles, and the grantee is subject to Congressional oversight concerning any transfer or amendment of the franchise.