Law Summary
Manner of Operation of Facilities
- Distribution facilities must be operated and maintained in a superior manner
- FBPC must comply with directives from the Energy Regulatory Commission (ERC), Department of Energy (DOE), or other authorities to upgrade or modify facilities as needed
- FBPC may allow use of free space on its poles or right-of-way by third parties for reasonable compensation
- ERC resolves disputes relating to the use of facilities
Authority of ERC/DOE
- FBPC is required to secure necessary permits, including a certificate of public convenience and necessity from ERC/DOE or other regulating bodies prior to construction and operation
Excavation and Restoration Works
- FBPC may perform excavations or lay conduits in public places or streets with prior approval of the Department of Public Works and Highways (DPWH) or local government units (LGUs)
- Any disturbed public property must be restored to original or better condition at FBPC’s expense
- Failure to repair within ten days allows DPWH or LGU to do the repairs at double cost charged to FBPC
Responsibility to the Public
- FBPC must supply electricity at the least cost while ensuring efficient and reliable service
- Power rates must be reasonable and just, fostering competitiveness among businesses and industries
- FBPC must provide open, non-discriminatory access to its distribution system consistent with the Electric Power Industry Reform Act (RA 9136)
- Any abuse of market power (e.g., monopolistic practices) is prohibited
Rates for Services
- Retail electric power rates are subject to ERC regulation and approval
- Billing must clearly identify rate components per RA 9136
- Rates shall be public and transparent
- Lifeline rates for marginalized consumers are mandated
Promotion of Consumer Interests
- FBPC must establish a consumer desk to handle complaints promptly
- Consumer interests must be adequately promoted and protected
Right of Government
- The President can temporarily take over operation or suspend stations/facilities in emergencies such as war, rebellion, calamity, or public peril
- Just compensation must be provided to FBPC during such government operation
Right of Eminent Domain
- FBPC is authorized to exercise eminent domain for efficient service operation subject to legal limitations and just compensation
- Rights to install facilities on public property and acquire necessary private property through condemnation proceedings are granted
Term of Franchise
- Franchise validity is 25 years from enactment unless cancelled earlier
- Franchise is revoked if FBPC ceases operation for two consecutive years
Acceptance and Compliance
- FBPC must provide written acceptance of the franchise within 60 days of effectivity to Congress committees
- Failure to accept renders the franchise void
Warranty in Favor of National and Local Governments
- FBPC holds the government free from claims arising from accidents or injuries related to its distribution system operations
Liability to Damages
- FBPC is liable for damages or injuries caused by defective construction or failure to maintain safe conditions of its facilities
Sale, Lease, Transfer, Usufruct, etc.
- FBPC cannot sell, lease, transfer or assign the franchise or controlling interest without prior Congressional approval
- Failure to report such transactions to Congress within 60 days results in franchise revocation
- Transferees are subject to the same franchise conditions
Dispersal of Ownership
- FBPC must offer at least 30% of its capital stock to Filipino citizens via public offering or cooperative formation within 5 years of operations
- Failure to comply leads to ipso facto revocation
Reportorial Requirement
- Annual reports on compliance and operations must be submitted to Congress committees by April 30 each year
Penalty Clause
- Failure to submit annual reports incurs a fine of ₱500 per working day collected by the ERC
- Collected fines go to ERC’s monitoring fund
- Compliance certification required before permit applications
Equality Clause
- Any advantages or privileges granted to other franchise holders will apply to FBPC immediately and unconditionally
- Exceptions include franchise territory, duration, and service type, and transfer restrictions
Applicability Clause
- FBPC and the franchise are subject to the Public Service Act and the Electric Power Industry Reform Act of 2001
Separability Clause
- If any provision is declared invalid, other provisions remain unaffected and valid
Repealability and Nonexclusivity Clause
- Congress can amend or repeal the franchise when public interest requires
- The franchise is not an exclusive grant
Publication and Effectivity
- The Act must be published by FBPC within 15 days after the President’s signature or lapse into law
- Effectivity is 15 days after publication in two newspapers of general circulation