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Republic of the Philippines 2 AUG
HOUSE OF REPRESENTATIVES are! “agp

Quezon City

EIGHTEENTH CONGRESS
First Regular Session

3962

Introduced by Reps. Genaro M. Alvarez, Jr., Manuel T. Sagarbarria and
Gerardo P. Valmayor, Jr.

AN ACT GRANTING GAMBOA HERMANOS FARMWORKERS MULTIPURPOSE
COOPERATIVE A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH,
OPERATE, OWN, MANAGE AND MAINTAIN DISTRIBUTION SYSTEMS FOR THE
CONVERYANCE OF ELECTRIC POWER TO THE END-USERS IN THE ISLAND

OF NEGROS, AND FOR OTHER PURPOS!

EXPLANATORY NOTE

The enactment of Republic Act No. 9136, otherwise known as the “Electric Power
Industry Reform Act” set out the promise of affordable basic electricity for the
Filipino people as the law allowed open access, attracting key players from both the
public and private sector to enter the electric distribution market.

In the island of Negros, there currently are five main power distribution utilities
which service areas of the island - CENECO, NONECO, NOCECO, NORECO | and
NORECO I. The is composed of 2 provinces (Negros Occidental and Negros
Oriental), 1 highly urbanized city (Bacolod City), 18 component cities, 38
municipalities, and 1219 barangays. According to a 2015 census, the total
population of the entire island is 2,205,058, comprised of approximately 821,000
households. Unfortunately, of the 821,000 households, a total of 88,892 or 10.8%
of the households are still unenergized or do not receive any formal electricity.
Moreover, despite the progress and development throughout the island, households
in Negros are still constrained to paying expensive electricity and still experience
recurring blackouts, due primarily to poor infrastructures, outdated systems, and
operational inefficiencies. All existing distribution utilities, although some attain a
AAA mark at times, still are among the bottom echelon of the existing distribution
utilities in the country notwithstanding the high and growing demand of electricity
in the Island.



This bill seeks to provide such a dependable and efficient electric power
distribution system for the island of Negros by granting the franchise to operate to
Gamboa Hermanos Farmworkers Multipurpose Cooperative in the Provinces of
Negros Occidental and Oriental. It seeks to address the issue of high electricity
prices and recurring blackouts through a regime of efficient and quality service
delivery to end-users. Finally, it seeks to require standards that the grantee must
attain in order to secure an effective partnership between the Government and the
grantee, as well as maintain a high benchmark of the promised provided facility.

In view of the foregoing, the immediate passage of this bill is earnestly sought.



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No, 3962

Introduced by Reps. Genaro M. Alvarez, Jr., Manuel T. Sagarbarria and
Gerardo P. Valmayor, Jr.

AN ACT GRANTING GAMBOA HERMANOS FARMWORKERS MULTIPURPOSE
COOPERATIVE A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH,
OPERATE, OWN, MANAGE AND MAINTAIN DISTRIBUTION SYSTEMS FOR THE
CONVERYANCE OF ELECTRIC POWER TO THE END-USERS IN THE ISLAND
OF NEGROS, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

Section 1. Nature and Scope of the Franchise - Subject to the provisions of the
Constitution and applicable laws, rules and regulations, there is hereby granted to
Gamboa Hermanos Farmworkers Multipurpose Cooperative, hereunder referred to
as the grantee, its successors or assigns, a franchise to construct, install,
establish, operate, own, manage and maintain, in the public interest and for
commercial purposes, Distribution Systems for the conveyance of electric power to
end-users in the Island of Negros, composed of the Provinces of Negros Occidental
and Oriental.

Section 2. Manner of Operation of Facilities - All electric distribution facilities,
lines and systems for electric services installed, established, operated, leased,
owned, or managed by grantee, its successors or assigns, shall be operated and
maintained at all times in a superior manner, and it shall be the duty of the
grantee, its successors or assigns, whenever required to do so by the Energy
Regulatory Commission (ERC), or the Department of Energy (DOE), or any other
government agency concerned, to modify, improve and change such facilities or
systems in such a manner and to such extent as the progress in science and
technology, and improvements in electric power distribution services may render
reasonable and proper.


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Whenever practicable and for purposes of maintaining order, safety and aesthetics
along highways, roads streets, alleys or rights-of-way, the grantee may allow the
use of free space in its poles, facilities or rights-of-way by interested parties upon
reasonable compensation to the grantee considering cost incurred to accommodate
and administer the use of the grantee’s facilities by such parties. The ERC shall
decide in case of dispute or disagreement between parties.

Section 3. Authority of the Energy Regulatory Commission (ERC) - The
grantee shall secure from the ERC, or any other government agency which has
jurisdiction over the operation of the herein grantee, the necessary certificates of
public convenience and necessity and other appropriate permits and licenses for
the construction and operation of its electric power distribution system. The ERC,
or any government agency having jurisdiction over the grantee’s operation, may
allow the grantee to expand to surrounding areas, not covered by its franchise area,
whenever public interest so requires.

Section 4. Ingress and Egress - For purposes of constructing, installing, erecting
and maintaining poles or other supports for said wires or other power conductors
for the purpose of laying and maintaining underground wires, cables or other
conductors, it shall be lawful for the grantee, its successors or assigns, with the
prior approval of the Department of Works and Highways (DPWH) or the local
government unit (LGU) concerned as may be appropriate, to make excavations of
lay conduits in any of the public places, highways, streets, lanes, alleys, avenues,
sidewalks or bridges of the said provinces, cities and/or municipalities; Provided,
however, that a public place, highway, street, land, alley, avenue, sidewalk or
bridge disturbed, altered or changed by reason of erection of poles or other support
or the underground laying of wires, other conductors or conduits, shall be repaired,
replaced or properly restored at the expense of the grantee, its successors or
assigns, in accordance with the standards set by the DPWH or the LGU concerned.
Should the grantee, its successors or assigns, after the ten (10) day notice from the
said authority, fail, refuse, or neglect to repair or replace any part of public place,
road, highway, street, land, alley, avenue, sidewalk, or bridge altered, changed or
distributed by the said grantee, it successors or assigns, then the DPWH or the
LGU concerned shall have the right to have the same repaired and placed in good
order and condition at double expense to be charged against the grantee, its

successors or assigns.


Section 5. Responsibility to the Public - The grantee shall supply electricity in
the least cost manner. In the interest of the public good and as far as feasible and
whenever required by the ERC, the grantee shall modify, improve or change its
facilities and equipment for the purpose of providing efficient and reliable service
and reducing electricity cost. The grantee shall charge reasonable and just power
rates for its services to all types of consumers in order that businesses and
industries shall be able to compete.

The grantee shall have the obligation to provide open and nondiscriminatory access
to its electric power distribution system and services for any end-user within its
franchise area consistent with Republic Act No. 9136, otherwise known as the
“Blectric Power Industry Reform Act of 2001”. The grantee shall not engage in any
activity that would constitute an abuse of market power such as, but not limited to,
unfair trade practices, monopolistic schemes, and any other activities that would
hinder competitiveness of business and industries.

Section 6. Rates for Services - The retail rates to its captive market and charges
for the distribution of electric power by the grantee to its end-user shall be
regulated by and subject to the approval by the ERC or its legal successor.

The grantee shall identify and segregate in its bill to end-users the components of
the retail rate pursuant to Republic Act No. 9136, unless otherwise amended. Such
rates charged by the grantee to end-users shall be made public and transparent.
The grantee shall implement lifeline rates to marginalized end-users as mandated
under Republic Act No. 9136.

Section 7. Promotion of Consumer Interests - The grantee shall establish a
consumer desk that will handle consumer complaints and ensure adequate
promotion of consumer interests. The grantee shall act with dispatch on all
complaints brought before it.

Section 8. Right of the Government - A special right is hereby reserved to the
President of the Philippines, in times of war, rebellion, public peril, calamity,
emergency, disaster or disturbance of peace and order, to temporarily take over
and operate the facilities of the grantee in the interest of public safety, security and
public welfare, or to authorize the temporary use and operation thereof by any


agency of the government, upon due compensation to the grantee for the use of
said facilities during the period when they shall be so operated.

Section 9. Right of Eminent Domain - Subject to the limitations and procedures
prescribed by law, the grantee is authorized to exercise the right of eminent domain
insofar as it may be reasonably necessary for the construction, installation,
establishment, and efficient operation and maintenance of Distribution Systems.
‘The grantee is authorized to install and maintain its poles, wires and other facilities
over and across public property, including streets, highways, forest reserves and
other similar property of the Government of the Philippines, its branches or any
instrumentalities. The grantee may acquire such private property as is needed for
the realization of the purposes for which this franchise is granted; Provided, that
proper condemnation proceedings shall have been instituted and just
compensation paid.

Section 10. Warranty in Favor of the National and Local Governments - The
grantee shall hold the national, provincial, city and municipal governments of the
Philippine free from all claims, accounts, demands or actions arising out of
accidents or injuries, whether to property or to persons, caused by the
construction, installation, operation and maintenance of the power distribution
system of the grantee.

Section 11. Liability to Damages - The grantee shall be liable to any injury and
damage arising from or caused to persons or property by reason of any defective
construction under the franchise or of any neglect or omission to keep its poles and
wires in safe condition.

Section 12. Sale, Lease, Transfer, Usufruct, etc. - The grantee shall not lease,
transfer, grant the usufruct of, sell nor assign this franchise or the rights and
privileges acquired hereunder to any person, firm, company, corporation or other
commercial or legal entity, nor merge with any other corporation or entity, nor shall
the controlling interest of the grantee be transferred, whether as a whole or in parts
and whether simultaneously or contemporaneously, to any person, firm, company,
corporation or entity without the prior approval by the Congress of the Philippines;
Provided, that Congress shall be informed of any lease, transfer, grant of usufruct
sale or assignment of franchise or the rights or privileges acquired within sixty (60)


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days after the completion of said transaction; Provided, further, that failure to
report to Congress such change of ownership shall render the franchise ipso facto
revoked; Provided, finally, that any person or entity to which this franchise is sold,
transferred or assigned, shall be subject to the same conditions, terms, restrictions
and limitations of this Act.

Section 13. Equality Clause - In the event that any competing individual,
partnership or corporation shall receive a similar permit or franchise with terms
and/or provisions more favorable than those herein granted or which tend to place
the herein grantee at any disadvantage, such terms and/or provisions shall be
deemed part hereof and shall operate equally in favor of the herein grantee:
Provided, that any term and/or provision herein granted which are not contained
in other franchises that may hereafter be granted shall likewise be enjoyed by the
future grantees.

Section 14. Term of Franchise - The franchise shall be for a term of twenty-five
(25) years from the date of the effectivity of this Act.

Section 15. Applicability Clause - The grantee shall comply with and be subject
to the provisions of Commonwealth Act No. 146, as amended, otherwise known as
the “Public Service Act” and Republic Act No. 9136.

Section 16. Reportorial Requirements - The grantee shall submit an annual
report to the Congress of the Philippines, through the Committee on Legislative
Franchises and Energy of the House of Representatives and the Committee on
Public Services of the Senate, on its compliance with the terms and conditions of
this franchise and on its operations on or before April 30 of the succeeding year.

Section. 17. Fine - Failure of the grantee to submit the requisite annual report to
Congress shall be penalized by a fine of Five thousand Pesos (P5,000.00) per
working day on non-compliance. The fine shall be collected by the ERC from the
delinquent franchisee grantee separate from the reportorial penalties imposed by
the ERC. The collected funds shall accrue to the monitoring fund of the ERC in line
with its supervisory and regulatory functions. The reportorial compliance certificate
issued by Congress shall be required before any application for permit or certificate
is accepted by the ERC.


Section 18. Separability Clause - If any of the sections or provisions of this Act is
held unconstitutional or invalid, the other parts or provisions hereof which are not
affected thereby shall continue to be in full force and effect.

Section 19. Repeatability and Nonexclusivity Clause - This franchise shall be
subject to amendment, alteration or repeal by the Congress of the Philippines when
the public interest so requires and shall not be interpreted as an exclusive grant of
the privileges herein provided for.

Section 20. Publication - This Act shall be published, through the initiative of the
grantee, fifteen (15) days after this Act is signed by the President of the Philippines
or has lapsed into law.

Section 21. Effectivity Clause - This Act shall take effect fifteen (15) days from
the date of its publication in at least two (2) newspapers of general circulation in

the Philippines.

Approved.