Conditions for Franchise Effectivity
- The franchise only takes effect upon written acceptance by the grantee agreeing not to engage in or support propaganda against U.S. government policy and Filipino aspirations as expressed in specified 1913 messages.
- This condition binds the grantee and its administrators, agents, successors, and assigns.
Technical and Operational Requirements
- Poles must maintain wires at least 20 feet above ground and not disfigure streets.
- Installation plans must be approved by municipal authorities.
- The grantee must supply electricity within 15 days to applicants, prioritizing by date of application, up to plant capacity.
- Plant capacity must be increased upon demand with municipal council authorization.
- Electricity supply point must be within 80 meters of wires.
Equipment and Infrastructure Standards
- All apparatus must be modern and first-class.
- Wires must be insulated to prevent grounding and not interfere with street use.
- If so directed by Philippine Legislature, wires must be placed underground at the grantee's expense.
Restoration and Public Safety Obligations
- Sidewalks or streets disturbed during pole erection must be restored promptly and cleaned.
- Upon 48 hours’ notice by municipal council, the grantee must remove or raise wires to facilitate building removal or municipal works.
- Failure to comply allows municipal president to order removal at grantee’s expense, subject to appeal to the provincial board.
Liability
- The grantee is liable for injuries or damages caused by its construction or negligence in maintaining poles and wires.
Acceptance, Commencement, and Operations
- Franchise acceptance must be filed within 120 days.
- Work must commence within 6 months and system completed within 18 months from acceptance, barring fortuitous causes.
- Grantee must maintain first-class service.
- Payment to Dumaguete treasury: 1% of gross earnings for first 20 years, 2% for next 30 years.
Deposit and Forfeiture Provisions
- A 1,000 peso deposit (cash or approved securities) must be made as a good-faith guarantee.
- Interest on cash deposits is paid to the grantee.
- Failure to commence work or be ready for operation as required results in forfeiture of deposit to the municipality.
- Deposit is returned if operations start within prescribed time, allowing extensions for force majeure.
Municipality’s Use of Poles
- Dumaguete may use the grantee’s poles for telephone or fire/police alarm systems without compensation.
- Such wires must not interfere with electric service wires.
Legislative and Ownership Conditions
- Franchise is subject to amendment, alteration, or repeal by U.S. Congress or Philippine Legislature.
- Lands and rights revert to appropriate government entities upon franchise termination.
- Property used in franchise operations becomes Insular Government property upon termination.
Restrictions on Securities Issuance
- Grantee may only issue stocks or bonds for actual cash or property at fair valuation, subject to Public Utility Commission approval.
- Stock or bond dividends are prohibited.
Reporting and Taxation
- Books must be open to provincial treasurer inspection.
- Quarterly reports on gross/net receipts and business condition must be submitted.
- Grantee pays taxes on real estate, buildings, plant, machinery, and personal property as provided by law.
Transfer and Assignment
- Franchise and property may be sold, leased, or assigned with Public Utility Commission approval.
- The assignee must comply with all existing terms and conditions.
- Written agreement must be filed with Secretary of Commerce and Communications.
Forfeiture of Franchise
- Municipal council, with Governor-General approval, may declare forfeiture for failure to comply with franchise terms.
- Failures due to acts of God, public enemy, or force majeure exempt from forfeiture.
- Grantee may seek judicial relief within 60 days post-decision.
Purchase Option by Government
- After 20 years, the Philippine Government or political subdivisions may purchase all franchise properties at a valuation based on net earnings.
- Valuation to be determined by the Supreme Court sitting as arbitrators, whose decision is final.
Definition of Grantee
- "Grantee" includes La Electrica, its representatives, successors, and assigns.
Effectivity
- The Act takes effect upon approval.