Law Summary
Manner of Operations of Facilities
- Grantee must operate and maintain electric distribution facilities to superior standards
- Obligation to modify/improve facilities as directed by Energy Regulatory Commission (ERC) taking into account scientific progress
- May allow use of free spaces on poles or rights-of-way to third parties for reasonable compensation
- ERC settles disputes regarding use of facilities by third parties
Ingress and Egress
- Grantee allowed to make excavations and lay conduits in public places, highways, streets etc. with prior DPWH or LGU approval
- Disturbed public places must be restored immediately at grantee's expense following DPWH and LGU standards
Responsibility to the Public
- Obligation to supply electricity to captive market at least cost
- Provide efficient, reliable service with facility upgrades as required by ERC
- Charge reasonable, just, competitive rates to promote commerce
- Provide open, nondiscriminatory access to distribution system consistent with Electric Power Industry Reform Act of 2001
- Prohibited from engaging in monopoly, abuse of market power, or unfair trade practices
Rates for Services
- Retail and distribution rates subject to ERC regulation and approval
- Bill must segregate retail rate components as per law
- Rates to be transparent and publicly available
- Mandatory implementation of lifeline rates for marginalized consumers
Promotion of Consumer Interests
- Establish consumer desks to handle complaints
- Ensure prompt action on complaints to protect consumer interests
Right of the Government
- President may take over/authorize use of distribution system during war, rebellion, calamity, or emergency, with just compensation
Right of Eminent Domain
- Grantee authorized to exercise eminent domain reasonably necessary for services
- May install facilities over public property and acquire necessary private property through condemnation with just compensation
Term of Franchise
- Franchise valid for 25 years from effectivity unless revoked by Congress for violations
Acceptance and Compliance
- Written acceptance of franchise required within 60 days of effectivity
Warranty in Favor of National and Local Government
- Grantee holds government harmless from claims arising from construction, operation, or maintenance of the distribution system
Liability for Damages
- Grantee liable for injuries or damages caused by defective construction or failure to maintain safe facilities
Sale, Lease, Transfer, Usufruct, etc.
- No sale, lease, transfer, or merger of franchise or controlling interest without Congress approval except to wholly-owned subsidiary or surviving corporation
- Any transferee subject to same franchise conditions
Reportorial Requirement
- Annual financial and operational report submission to Congress mandatory
Equality Clause
- If a competitor obtains more favorable terms, same must apply to grantee, excluding franchise territory and lifespan
Applicability Clause
- Subject to Public Services Act (Commonwealth Act 146) and Electric Power Industry Reform Act of 2001
Repealability and Nonexclusivity Clause
- Franchise may be amended, altered, repealed by Congress as public interest requires
- Franchise is not exclusive
Separability Clause
- Invalidity of any provision does not affect remainder of the Act which continues to be effective
Repealing Clause
- Previous laws and regulations inconsistent with this Act are repealed or modified accordingly
Effectivity
- Takes effect 15 days after publication in two newspapers of general circulation initiated by grantee