Law Summary

SECTION 1: Grant of Franchise

• Explanation: This section grants Messrs. Demetrio P. Correa and Guillermo Confesor a franchise to operate an electric light, heat, and power system in the Municipality of Cabatuan, Iloilo.
• Key Definitions:
  • Franchise: The right, privilege, and authority to construct, maintain, and operate an electric system.
• Requirements/Procedures:
  • The franchise is granted for a period of twenty-five years from the approval date of the Act.
• Cross-References:
  • The grant is subject to terms established in Act No. 3636 and modified by Commonwealth Act No. 132.
• Important Details:
  • The franchise allows for the generation and distribution of electric light, heat, and/or power for sale within the designated municipality.

SECTION 2: Purchase and Rate Negotiation with National Power Corporation

• Explanation: If the grantees procure electric heat and power from the National Power Corporation (NPC), this section authorizes NPC to negotiate rates on behalf of public consumers.
• Key Definitions:
  • Public Consumers: Individuals or entities that will benefit from the electric services provided under the franchise.
• Important Requirements:
  • The NPC is tasked with negotiating rates beneficial to consumers.

SECTION 3: Government's Right to Operate the System

• Explanation: This section establishes the conditions under which the government may take over the franchise.
• Key Definitions:
  • Grantees: Messrs. Demetrio P. Correa and Guillermo Confesor.
• Requirements/Procedures:
  • Should the government decide to operate the system, the grantees must surrender their franchise and transfer all serviceable equipment to the government.
  • Transfer of equipment must occur at cost, minus reasonable depreciation.
• Consequences:
  • The grantees must comply with the surrender of the franchise and equipment if directed by the government.

SECTION 4: Effectivity

• Explanation: This section specifies the effectivity of the Act.
• Important Details:
  • The Act takes effect immediately upon approval, which occurred on June 14, 1956.

Key Takeaways

• Republic Act No. 1440 grants a twenty-five-year franchise to operate an electric system in Cabatuan, Iloilo, to Demetrio P. Correa and Guillermo Confesor.
• The National Power Corporation can negotiate utility rates for public consumers if the grantees procure power from them.
• The government reserves the right to take over the system, requiring the grantees to surrender their franchise and equipment at cost.
• The Act became effective upon its approval on June 14, 1956.