Law Summary
Manner of Operations of Facilities
- Grantee must maintain distribution facilities in a superior manner.
- Must comply with ERC orders to upgrade facilities for technological progress.
- May allow use of free spaces on poles and facilities by third parties for reasonable compensation, with ERC resolving disputes.
Ingress and Egress
- Grantee authorized to make excavations and lay conduits on public places/roads with prior approval of DPWH or local government.
- Any disturbance to public property must be immediately repaired and restored by grantee at their expense according to standards.
Responsibility to the Public
- Obligation to supply electricity at least cost and with efficient, reliable service.
- Must provide open, nondiscriminatory access consistent with Electric Power Industry Reform Act.
- Prohibited from abusing market power or engaging in unfair trade monopolistic practices.
- Must charge reasonable, just and competitive rates to aid business competitiveness.
Rates for Services
- Distribution and retail rates regulated and subject to ERC approval.
- Grantee must identify and disclose retail rate components transparently in bills.
- Lifeline rates must be implemented for marginalized end-users as per law.
Promotion of Consumer Interests
- Grantee shall establish consumer desks for complaint handling and promotion of consumer interests.
- Must act promptly on consumer complaints.
Right of the Government
- President may take over or authorize government operation of the distribution system during war, rebellion, emergencies, calamities, or disturbances.
- Compensation must be paid to grantee during such government operation.
Right of Eminent Domain
- Grantee authorized to exercise eminent domain for efficient service delivery.
- May install facilities over public property, and acquire private property with just compensation via condemnation proceedings.
Term of Franchise
- Franchise valid for 25 years from effectivity date, subject to earlier revocation or cancellation by Congress for violation.
Acceptance and Compliance
- Grantee must accept franchise in writing within 60 days from effectivity.
Warranty in Favor of Government
- Grantee shall hold national and local governments harmless from claims arising from accidents or injuries caused by their operations.
Liability for Damages
- Grantee liable for injuries and damages caused by defective construction or neglect in maintaining safe conditions of facilities.
Sale, Lease, Transfer, Usufruct, Etc.
- Franchise and rights cannot be leased, sold, transferred, or merged without prior Congressional approval, except transfers to wholly-owned subsidiaries.
- Transferees subject to the same terms and conditions.
Reportorial Requirement
- Grantee must submit annual financial and operational reports to Congress.
Equality Clause
- If competitors receive more favorable franchise terms, such terms apply equally to grantee.
- Does not affect territorial coverage or franchise lifespan.
Applicability Clause
- Franchise subject to Public Services Act and Electric Power Industry Reform Act provisions.
Repealability and Nonexclusivity Clause
- Franchise may be amended, altered or repealed by Congress as public interest requires.
- Does not grant exclusive rights.
Separability Clause
- If any provision is declared invalid, the remainder continues to be effective.
Repealing Clause
- Repeals or modifies inconsistent laws, decrees and regulations.
Effectivity
- Act takes effect 15 days after publication in at least two newspapers, initiated by grantee.