Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila \ 2

SIXTEENTH CONGRESS \?
Second Regular Session

4935

HOUSE BILL NO.

Introduced by: Reps. Salvio B. Fortuno, Deogracias B, Ramos, Jr. and Elmer
Panotes

EXPLANATORY NOTE

‘This bill seeks to grant the Bicol Light and Power Corporation, a
corporation duly organized and existing under the laws of the Republic of the
Philippines, a franchise to establish, operate, lease, own, manage and maintain
for commercial purposes and in the public interest, distribution system for the
conveyance of electric power to the end-users anywhere in the entire Bicol
Region consisting of the Provinces of Albay, Masbate, Sorsogon, Camarines
Sur, Camarines Norte and Catanduanes

Electricity is one of the greatest wonders ever invented that we cannot
even dream of living in the absence of electricity in this modern era. ‘There is no
walk of life in which it is not used these days from the time we wake up each
day up to the time we sleep and wake up again another day. Anything we need
is practically functioning with the use of electricity. The grave importance of
electricity becomes noticeable in areas where rotating brownouts
frequently, like in the entire Bicol Region where the major cause is bankruptey
of electric cooperati

The economic growth and development of the areas depend on the
stability of power supply as no investor will ever infuse the much needed
capital without steady supply of electricity. Whatever economic growth the
Bicol Region has achieved for the past years will be stunted or even pushed
back if the consumers and the business sector will not be given free choice
where to get steady and dependable source of electricity,

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The Bicol Light and Power Corporation aims to set up a modern,
dependable and efficient power distribution system that will provide the
Bicolanos with alternative source of energy supplier in the spirit of free trade
competition that will pose a challenge to existing electricity supplier to make
the services efficient for the benefit of the consumers. This will also attract the
infusion of capitals that will generate more job opportunities and will further
propel the growth and development of the Bicol Region.

‘The foregoing reasons warrant the approval of this bill.

L, Coors.
HON. SALVO B. FORTUNO
esentative

Fifth Distyict, Camarines Sur

Litt Jim

RAMOS, JR. HON. ELMER E. PANOTES
Reprfsentative Representative
Second District, Sorsogon Second District, Camarines Norte

HON.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL No, __ 4935

Introduced by Reps. Salvio B. Fortuno, Deogracias B. Ramos, Jr. and Elmer E.

Panotes

AN ACT
GRANTING THE BICOL LIGHT & POWER CORPORATION, A FRANCHISE
TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE, OWN MANAGE AND
MAINTAIN A DISTRIBUTION SYSTEM FOR THE CONVEYANCE OF
ELECTRIC POWER TO THE END-USERS IN THE ENTIRE BICOL REGION

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

SECTION 1. Nature and Scope of Franchise. - Subject to the
provisions of the 1987 Philippine Constitution and applicable laws, rules and
regulations, there is hereby granted to the Bicol Light & Power Corporation,
hereunder referred to as the grantee, its successors or assigns, a franchise to
construct, install, establish, operate and maintain for commercial purposes
and in the public interest, a distribution system for the conveyance of electric
power to the end-users in the entire Bicol Region consisting of the Provinces of
Albay, Masbate, Sorsogon, Camarines Sur, Camarines Norte and Catanduanes

As used in this Act, distribution system refers to the system of wires and
associated facilities including sub-transmission lines belonging to a franchised
distribution utility extending between the delivery point on the national
transmission system or generating facility and the metering point/facility of the
end-user.

SEC. 2. Manner of Operation of Facilities. ~ All electric distribution
facilities, lines and systems for electric services owned, maintained, operated or
managed by the 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, hereinafter referred to as the ERC, or its legal



successor, or the Department of Energy, hereinafter referred to as DOE, or its
legal successor, 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 improvements in the electric power services may
render reasonable and proper.

Whenever practicable and for purposes of maintaining order, safety and
aesthetics along highways, roads, streets, alleys or right-of-way, the grantee
may allow the use of free spaces in its poles, facilities or right-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.

SEC. 3, Authority of the ERC/DOE. ~ ‘Ihe grantee shall secure from the
ERC/DOE or any other government agency which has jurisdiction over the
operation of the herein grantee, the necessary certificate of public convenience
and necessity and other appropriate permits and licenses for the construction
and operation of its electric distribution system.

SEC. 4. Excavation and Restoration Works. - For the purpose of
erecting and maintaining poles, pipes and other supports for said wires or
other conductors for the purpose of laying and maintaining said facilities,
wires, cables, pipes or other conductors, it shall be lawful for the grantee, its
successors or assigns, with the prior approval of the Department of Public
Works and Highways (DPWH) or the local government unit concerned, as may
be appropriate, to make excavations or lay conduits in any of the public places,
highways, roads, streets, lanes, alleys, avenues, sidewalks or bridge of said
province, cities and/or municipalities: Provided, however, That a public place,
highway, road, street, lane, alley, avenue, sidewalk or bridge disturbed, altered
or changed by reason of erection of poles or other supports or the underground
laying of wires, other conductors or conduits, shall be repaired and replaced in
workmanlike manner at the expense of the grantee, its successors or assigns,
in accordance with the standards set by 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, highway, road, street, lane, alley, avenue, sidewalk or bridge disturbed,
altered or changed 0 by the said grantee, its 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.



SEC. 5. Responsibility to the Public. - The grantee shall supply
electricity to its captive market in the least costly 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, poles, lines systems and
equipment for the purpose of providing efficient and reliable service and
reduced electricity costs. The grantee shall charge reasonable and just power
rates for its services to all types of consumers within its franchised areas in
order that business and industries shall be able to compete.

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

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

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

SEC. 7. Promotion of Consumer Interests - The herein 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.

SEC. 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 stations or facilities of the grantee, to temporarily
suspend the operation of any station or facility 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 stations or facilities during the period when they
shall be so operated.



SEC. 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 efficient
maintenance and operation of services. 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 of its instrumentalities. The
grantee may acquire such private property as is actually necessary 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.

SEC. 10, Term of Franchise - This franchise shall be in effect for a
period of twenty-five (25) years from the date of effectivity of this Act, unless
sooner cancelled. This franchise shall be deemed ipso facto revoked in the event
the grantee fails to operate continuously for two (2) year

SEC. 11. Acceptance and Compliance. - Acceptance of this franchise
shall be given in writing to the Congress of the Philippines, through the
Committee on Legislative Franchises of the House of Representatives and the
Committee on Public Services of the Senate within sixty (60) days from the
effectivity of this Act. Upon giving such acceptance, the grantee shall exercise
the privileges granted under this Act. Non-acceptance shall render the
franchise void.

SEC. 12. Warranty in Favor of the National and Local
Governments. - The grantee shall hold the national, provincial, city and
municipal governments of the Philippines 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 distribution system of the grantee.

SEC, 13. Liability to Damages. - The grantee shall be liable for any
injury and damage arising from or caused by accident to persons and property
by reason of any defective construction under this franchise or of any neglect
or omission to keep its pole and wires in safe condition.

SEC. 14. Sale, Lease, Transfer, Usufruct, Etc. -'The grantee shall not
sell, lease, transfer, grant the usufruct of, or assign this franchise or the rights
and privileges acquired thereunder to any person, firm, company, corporation
or other commercial or legal entity, or merge with any other corporation or
entity, or shall transfer the controlling interest of the grantee, whether as a
whole or in parts and whether simultaneously or contemporaneously, to any
such person, firm, company, corporation or entity without the prior approval of
the Congress of the Philippines: Provided, That Congress shall be informed of
any lease, transfer granting the usufruct of, sale or assignment of franchise or



the rights or privileges acquired within sixty (60) days after the completion of
said transaction: Provided also, That any such transfer, sale or assignment is
in accordance with the constitutional limitations: 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.

SEC. 15. Dispersal of Ownership. - In accordance with the
constitutional provision to encourage public participation in public utilities, the
grantee shall offer to Filipino citizens at least thirty percentum (30%) of its
outstanding capital stock or a higher percentage that may hereafter be
provided by law in any securities exchange in the Philippines within five (5)
years from the commencement of its operations: Provided, That in cases where
public offer of shares is not applicable, establishment of cooperatives and other
methods of encouraging public participation by citizens and corporations
operating public utilities must be implemented, Non-compliance therewith
shall render the franchise ipso facto revoked.

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

SEC. 17. Penalty Clause. - Any grantee who fails to submit the
requisite Annual Report to Congress shall be fined Five Hundred Pesos
(P500.00) per working day of non-compliance. The fine shall be collected by the
ERC from said delinquent franchise grantee separate from the reportorial
penalties imposed by ERC. All proceeds from said fines or penalties 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
ERC.

SEC. 18, Equality Clause. - Any advantage, favor, privilege, exemption,
or immunity granted under existing franchise, or which may hereafter be
granted, upon prior review and approval of Congress, shall become part of this
franchise and shall be accorded immediately and unconditionally to the herein
grantee: Provided, however, That the foregoing shall neither apply to nor affect
provisions concerning territory covered by the franchise, the life span of the
franchise or the type of service authorized by the franchise. Provided, further,
‘That the foregoing shall not apply to the sale, lease, transfer, grant of usufruct
or assignment of legislative franchises with prior congressional approval.



SEC.19, 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, otherwise known
as the Electric Power Industry Reform Act of 2001

SEC. 20. Separability Clause. - If any of the sections or provisions of
this Act is held invalid, all other provisions not affected thereby shall remain
valid.

SEC. 21. Repealability and Non-exclusivity 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.

SEC. 22. Publication - This Act shall be published, through the
initiative of the grantee, fifteen(15) days alter this Act is signed by the
President of the Philippines or has lapsed into law.

SEC, 23 Effectivity Clause. ~ This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in a newspaper of general
circulation.

Approved,