Republic of the Philippines
House of Representatives
Quezon City
NINETEENTH CONGRESS
Second Regular Session
House Bill No. m5oZ
Introduced by
Arthur F. Celeste, 1st District, Pcmgasinan
Presleg C. De Jesus, Phi:lRECA Pcuty-I,isl
Sengio C. Dagooc, APEC Party-List
EXPLANATORY NOTE
The National Electrification Commission,  by virtue of the Presidential
Decree No. 269 dated, issued Certificate of Franchise No. 024 to Pangasinan
I  Electric  Cooperative  (PANELCO  I)  to  operate  an  electric  light  and  power
service  for  a  period  of  fifty  (50)  years  beginning  January  8,   1979.  The
franchise  area  covered  the  municipalities  of  Agno,  Anda,  Bani,  Burgos,
Bolinao, Dasol, Alaminos, Infanta and Mabini.
On  June  8,  2001,  Republic  Act  No.  9136,  otherwise  known  as  the
"Electric  Power  Industry  Reform  Act  of  2001",  was  approved.  Section  57
Chapter VII of the Act provided Electric Cooperatives the  option to  convert
into  either  stock cooperatives under the  Cooperatives  Development Act or
Stock    Corporation    under    the    Corporation    Code.    PANELCO    I    was
permanently  registered with  the  Cooperative  Development Authority  (CDA)
on July 19, 2006.
PANELCO  I's  vision  is  to  be  a  leading  electric  distribution  utility  of
service excellence in Pangasinan under a competitive business by 2027.   Its
mission is to lead in providing efficient, reliable and safe electric services at
the  least  cost  in  pursuant  for  total  electrification,  industrialization  and
consumers'  satisfaction.  True  to  its  mission  and  vision,  PANELCO  I  was


among the top five (5) electric cooperatives that offered the lowest residential
rates  on-grid  for  March  2024,  January  2024   and   December  2023   as
reported by the Philippine Rural Electric Cooperatives Association.
PANELCO  I  is  recognized  by  NEA  as  category  AAA  cooperative,  the
highest performance rating granted to EC's for complying all the  standard
parameters. It is also classified as Mega Iarge cooperative and a consistent
recipient   of   awards   from   various   regulatory   agencies.   The   status   of
energization   is    100°/o   for   barangay   level   and   96.98°/o   for   consumer
connection. The number of consumers billed as of December 2023 is 90,132
and  total sales in kilowatt hour of 165 million.
PANELCO I regularly conducts assessment of its distribution  system
together  with  the  determination  of feasible  and  optimal  solutions  for  its
member consumers. The cooperative's roadmap includes its plans to apply
for   ISO   Certification,   implement   information   system   integration   and
Supervisory Control and Data Acquisition (SCAD.A), and secure license as a
Retail Electricity Supplier.
PANELCO  I  is  a  direct  member  of  the  Wholesale  Electricity  Spot
Market  (WESM),  with  existing  Contract  for  the  Supply  of Electric  Energy
with   the   Power  Sector  Assets   and   Liabilities   Management   Corporation
(PSALM).  It  is  currently  undertaking  Competitive  Selection  Process  for  its
base  load  requirement and  negotiation  process  for its  Renewable  Portfolio
Standard requirement.
To ensure continuous delivery of service to the member-consumers of
PANELCO I in the City of Alaminos and Municipalities of Agno, Anda, Bani,
Bolinao,   Burgos,   Dasol,   Infanta   and   Mabini,   all   in   the   Province   of
Pangasinan,  this  bill  seeks  to  grant  PANELCO  I  a  legislative  franchise  to
continue operating its distribution system for another 25 years.
REP. sERG#C.
APEC Pcuty -I,ist
DAGOOC


Republic of the Philippines
House of Representatives
Quezon City
NINETEENTH CONGRESS
Second Regular Sessj,on
House Bill No.
'+
10502
Introduced by
ATthur F. Celeste,  1st DistTie±, Pcmgasinan
Presley C. De Jes:us, Phi,RECA Party-I,ist
Sergio C. Dagooc, APEC Party-Iist
Am ACT
GRANTING THE PANGASINAN I ELECTRIC COOPERATIVE, INC.
(PAIELCO I) A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH,
OPERATE, OWN, MANAGE AND MAINTAIN DISTRIBUTION SYSTEMS
FOR THE CoMrvEVANCE oF ELECTRIc POWER To THE END-uSERs IN
THE CITY 0P ALAMINOS AND MUNICIPALITIES OF AGNO, ANDA, BANE,
BOLINAO, BURcOS, DASOL, INFANTA, AND MABINI, PROVINCE OF
pA"GAsl"irm
Be it ervacted by the Senate arid t:he House Of Represeritatives Of the Republie
Of the Philippines i.n Congress assembled:
I                SECTION   1.  Natrne  and  Scope  o/ Fncmchisc.  -  Subject  to  the
2     provisions  of the  Constitution  and  applicable  laws,  rules  and  regulations,
3      there is hereby granted to the Pangasinan I Electric Cooperative (PANELCO
4     I),   hereunder  referred  to  as  the  Grantee,   its   successors  or  assigns  a
5     franchise   to   construct,   install,   establish,   operate,   own,   manage   and
6     maintain  in  the  public  interest  and  commercial  purposes,  a  distribution


1      system for the conveyarice of electric power to the end-users in the City of
2     Alaminos  and Municipalities  of Agno,  Anda,  Bani,  Bolinao,  Burgos,  Dasol,
3     Infanta, and Mabini, Province of pangasinan.
4                As used in this Act, distribution system refers to the system of wires
5     and  associated  facilities  including  sub-transmission  lines  belonging  to  a
6     franchised  distribution utility extending between  the  delivery point on  the
7     national   transmission   system   or   generating   facility   and   the   metering
8     point/facility of the end-users.
9                SEC. 2. JITaririer o/ Operation a/ Etzctzzties. -AIL electric distribution
1o     facilities, lines and systems for electric services installed, owned, maintained,
11      operated,   managed  by  the  Grantee,   its  successors  or  assigns  shall  be
12     operated or maintained at all times in a superior manner, and it shall be the
13     duty of the Grantee, its successors or assigns, whenever required to do so by
14     the  Energy  Regulatory  Commission  (ERC),  or  its  legal  successor,  or  the
15      Department of Energy (DOE), or its legal successor, or any other government
16     agency concerned to modify, improve and change such facilities or systems
17     in such manner and to such extent as the progress in science or technology
18     and improvements or innovations in the electric power services may render
19      reasonable and proper.
2o                Whenever practicable,  and  for purposes of maintaining order,  safety
21      and aesthetics along the highways, roads, streets, alleys or right-of-way, the
22     Grantee may allow the use of free spaces in its poles, facilities, or right-of-
23     way  by  interested  parties  upon  reasonable  compensation  to  the  Grantee
24     considering the costs incuITed to accommodate and administer the use  of
25     the  Grantee's  facilities  by  such  parties.    The  ERC  shall decide  in  case  of
26     dispute or disagreement between the parties.
27                SEC.  3. AHtJ.oritgr o/ the ERG. -The Grantee shall secure from the
28     ERC or any government agency having jurisdiction over their operations, the
29     certiricate of public convenience and necessity and any other license, permit
3o     or authority indispensable for the construction and operation of the electric
31      power distribution system.
32                SEC.  4.  Jngr'iess  and  qgness.  -  For  the  purpose  of  erecting  and
33     maintaining  the  poles  or  other  supports  for  said  facilities,  wires  or  other
34     conductors or for the purpose of laying and maintaining said facilities, wires,
35     cables or other conductors, it shall be lawful for the Grantee, its successors,
36     or  assignees,  in  coordination  with  the  Department  of  Public  Works  and
37     Highways  (DPWH)  or  the  local  government  unit  concerned,  as  may  be
38     appropriate, to make excavations or lay conduits in any of the public places,
39     highways, road,  streets, lanes, alleys, avenues, sidewalks, or bridges of the


1      province,  cities  or  municipalities:  I+OZH.decz,  houneLJer,  That  a  public  place,
2     highway,  road,  street,  lane,  alley,  avenue,  sidewalk,  or  bridge  disturbed,
3      altered,  or changed by reason of erection of poles or other supports or the
4     underground laying of wires, other conductors or conduits, shall be repaired
5     and  replaced  in  workmanlike  manner  by  the  Grantee,  its  successors  or
6     assignees,  in accordance with the standards set by the DPWH or the local
7     government   unit   concerned.      Should   the   Grantee,   its   successors   or
8     assignees,  after  the  ten  (10)-day  notice  from  the  grant  of authority,  fail,
9     refuse or neglect to repair or replace any part of public place, highway, road,
1o     street, lane, alley, avenue, sidewalk, or bridge altered, changed or disturbed
11      by the said Grantee, its successors or assignees, then the DPWH or the local
12     government unit concerned shall have the right to have the  same repaired
13     and  replaced  in  good  order  and  condition  and  charge  the  Grantee,  its
14     successors  or assignees,  double  the  amount of the  cost and  expenses  for
15      such repair or replacement.
16                 SEC.  5.  Responsibzz!t=/  to  the Jtrbzzc.  - The  Grantee  shall  supply
17     electricity to its captive market in the least costly manner.   In the interest of
18     the public good and as far as feasible and whenever required by the ERC,
19      the  Grantee  shall  modify,  improve,  or  change  its  facilities,  poles,  lines,
2o     systems  and  equipment for the  purpose  of providing efficient and  reliable
21      service and reduced electricity costs.   The Grantee shall charge reasonable
22     and just  power  rates  for  its  services  to  all  types  of consumers  within  its
23     franchised  area  in  order  that  business  and  industries  shall  be  able  to
24      compete.
25                The    Grantee    shall   have    the    obligation   to    provide    open    and
26     nondiscriminatory  access  to  its  distribution  system  and  services  for  any
27     end-user  within  its  franchise  area  consistent  with  Republic  Act  (RA)  No.
28     9136, otherwise known as the "Electric power Industry Reform Act of 2001".
29     The Grantee shall not engage in any activity that will constitute an abuse of
3o     market  power  such  as  unfair trade  practices,  monopolistic  schemes,  and
31      other activities that will hinder competitiveness of business and industries.
32                SEC.  6.  Rates /or Serulces.  - The  retail rates and  charges  for the
33     distribution  of  electric  power  by  the  Grantee  to  its  end-users  shall  be
34     regulated by and subject to the approval of the ERC or its legal successor.
35                The  Grantee  shall  identify and  segregate  in its  electricity bill  to  the
36     end-users  the  components  of  the  retail  rate  pursuant  to  RA  No.  9136,
37     unless otherwise amended.   Such rates charged by the Grantee to the end-
38     users shall be made public and transparent.   The Grantee shall implement
39     lifeline rate to marginalized end-users as mandated under Republic Act No.
40       9136.


1                SEC.  7.    Prorrtotfo7t  a/ Corlst(mer Jriterests.  - The  herein  Grantee
2     shall establish a consumer desk that will handle consumer complaints and
3     ensure  adequate  promotion  of consumer interests.   The  Grantee  shall  act
4     with dispatch on all complaints brought before it.
5                SEC.  8.    Right  a/ the  Gocemment.  -  A  special  right  is  hereby
6     reserved to the president of the philippines, in times of war, rebellion, public
7     peril,  calamity,  emergency,  disaster or disturbance  of peace  and  order:  to
8     temporarily take over and operate the stations or facilities of the Grantee; to
9     temporarily suspend the operation of any station or facility in the interest of
lo     public safety, security and public welfare; or to authorize the temporary use
11     and   operation   thereof  by   any   agency   of   the   government,   upon   due
12     compensation to the Grantee, for the use of the stations or facilities during
13      the period when these shall be so operated.
14               SEC. 9.   Right a/Eminent Domain -Subject to the limitations and
15     procedures prescribed by law, the Grantee is authorized to exercise the right
16     of eminent domain insofar as it may be reasonably necessary for the efficient
17     maintenance and operation of services.  The Grantee is authorized to install
18     and  maintain  its  poles,  wires,  and  other  facilities  over  and  across  public
19     property,  including  streets,  highways,  forest  reserves,  and  other  similar
2o     property of the  Government of the  Philippines,  its  branches,  or any of its
21      instrumentalities.    The  Grantee  may  acquire  such  private  property  as  is
22     actually  necessary  for  the   realization   of  the   purposes   for  which   this
23      franchise is granted:  j}iot/idecz, That proper expropriation proceedings  shall
24     have been instituted and just compensation paid.
25                SEC.    10.   Term   o/  Frtlnchise.   -  Unless   sooner   cancelled,   the
26     franchise shall be in effect for a period of twenty-five (25) years from the date
27     of effectivity of this Act.  This franchise shall be deemed I.pso/czcto revoked in
28     the event the Grantee falls to operate continuously for two (2) years.
29                SEC.   11.      Acceptance   and   Co»pzfar.ce.   -Acceptance   of  this
3o     franchise shall be given in writing to Congress, through the Committee on
31      Legislative  Franchises  of the  House  of Representatives and  the  Committee
32     on Fulblic Services of the Senate within sixty (60) days from the effectivity of
33     this Act.    Upon  such acceptance,  the  Grantee  shall exercise  the privileges
34     granted under this Act. Nonacceptance shall render the franchise void.
35               SEC.   ±2.   Wattanky   in   Fa:.ior   Of   the   National   and   I®cal
36     couemwuerits.  - The  Grantee  shall hold the  national,  provincial,  city,  and
37     municipal  governments  of the  Philippines  free  from  all  claims,  accounts,
38     demands,  or  actions  arising  from  accidents  causing  injury  to  persons  or
39     damage to properties,  during the construction,  installation,  operation,  and


I      maintenance of the distribution system of the Grantee.
2                SEC.13. LiabilitE/Jor Damqges. -The Grantee shall be liable for any
3     injury to persons and damage to properties arising from accidents by reason
4     of  any  defective  construction  under  this  franchise  or  of  any  neglect  or
5      omission to keep its poles and wires in safe condition.
6               SBC.   +4.   Sake,   Irease,   Ira:nsifer,   Usufruct,   or  Asstg"mertt  Of
7     Franchise. -The Grantee shall not sell, lease, transfer, grant the usufruct
8     of, or assign this franchise or the rights and privileges acquired thereunder
9     to  any  person,  firm,  company,  corporation,  or  other  commercial  or  legal
1o     entity, nor merge with any other corporation, or entity, nor shall transfer the
11      controlling  interest  of the  Grantee,  whether  as  a  whole  or  in  parts,  and
12     whether  simultaneously  or contemporaneously,  to  any  such  person,  firm,
13     company, coaporation, or entity without the prior approval of the Congress:
14      Proz/I.c!ecz,  That  Congress  shall  be  informed  of  any  sale,   lease,  transfer,
15     granting the usufruct of,  sale, or assignment of franchise or the rights and
16     privileges acquired  thereunder,  or of the  merger,  or  sale  of the  controlling
17     interest  within  sixty  (60)  days  after  the  completion  of  said  transaction:
18     ProzH.czed,  jitrfher,   That   any   such   transfer,   sale,   or   assignment   is   in
19      accordance  with  the  constitutional  limitations:  ProL„.c!ec!, jitrfhermore,  That
2o     failure  to  report  to  Congress  such  change  of ownership  shall  render  the
21      franchise  I.pso /cicto revoked:  ProLrded, Jiriczzzg, That any person or entity to
22     which this franchise is sold, transferred, or assigned, shall be subject to the
23      same conditions, terms, restrictions, and limitations of this Act.
24                SEC.15.  Reportoriaz Requirement.  -The Grantee  shall submit an
25     annual report to congress, through the committee on I,egislative F`ranchises
26     of the House of Representatives and the committee on public services of the
27     Senate,  on  its  compliance  with  the  terms  and  conditions  of the  franchise
28     and on its operations on or before April 30 of every year during the term of
29     the  franchise.    The  reportorial  compliance  certificate  issued  by  Congress
3o     shall be required before any application for permit or certificate is accepted
31       bytheERC.
32                 SEC.  16.  Ffme.  - The  fallure  of the  Grantee  to  submit  the  requisite
33     annual report to Congress shall be penalized by a fine in the amount of Five
34     hundred pesos (P500.00) per working day of noncompliance which shall be
35      collected   by  the   ERC.   The   fine   shall  be   collected   separately  from  the
36     reportorial  penalties  imposed  by  the  ERC  and  shall  be  remitted  to  the
37      Bureau of Treasury.
38                 SEC.    17.   Egttazity   Chatise.   -   Any   advantage,   favor,   privilege,
39     exemption,  or immunity  granted  under  existing  franchises,  or which  may


1      hereafter  be  granted,  upon  prior  review  and  approval  of Congress,  shall
2     become  part  of  this  franchise  and  shall  be  accorded  immediately  and
3      unconditionally to the herein Grantee: ProzH.decz, hotuez/er, That the foregoing
4     shall neither apply to nor affect provisions concerning territory covered  by
5     the franchise, the life span of the franchise or the type of service authorized
6     by the franchise: Prour.c!ed, jitrfher, That the foregoing shall not apply to the
7     sale,   lease,   transfer,   grant   of   usufruct,   or   assignment   of   legislative
8     franchises with prior congressional approval.
9                  SEC.18. Appl€cab£[itE/ Chalise. -The Grantee shall comply with and
lo     be  subject  to  the  provisions  of Commonwealth Act  No.  146,  as  amended,
11      otherwise known as the "Public service Act" and RA No. 9136.
12                 SEC.  19.  Eic€sting Poliiers.  - Existing mandates,  powers,  functions,
13      and privileges granted to electric cooperatives under existing laws, including
14      Section  10  of Republic  Act  No.   10531,  otherwise  known  as  the  "National
15      Electrification Administration  Refomi Act of 2013",  shall  remain valid  and
16      effective, unless expressly repealed by succeeding laws.
17                SEC.   20.   Repealabtlity   and   I\fon-Eiccl;ustvit€i   Ctouse.   -   rrhis
18     franchise shall be subject to amendment, alteration, or repeal by Congress
19     when  the  public  interest  so  requires  and  shall  not  be  interpreted  as  an
2o      exclusive grant of the privileges herein provided for.
21                 SEC. 21. Sepannb£[€ty cdrttse. -If any of the sections or provisions of
22     this Act is held invalid, all other provisions not affected thereby shall remain
23       valid.
24                SEC.   22.   Repealing   Cza"se.   -   All   laws,   presidential   decrees,
25     executive orders, letters of instruction, administrative rules and regulations
26     or parts thereof which is are contrary to or inconsistent with the provisions
27     of this Act are hereby repealed or modified accordingly.
28                 SEC.  23.  E/Tectitrft±/ Czat.se.  -This Act shall take  effect fifteen  (15)
29      days after its publication in the OJ7jJier.CZZ Gczzette or in a newspaper of general
30      circulation.
3 \                 Approued,