Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
1* Regular Session

House BiLL No.3 7.44

Introduced by Hon. Eleandro Jesus F. Madrona

EXPLANATORY NOTE

Republic Act No. 9136 otherwise entitled the Electric Power Industry Reform Act (EPIRA),
among others, declared the policy of the State, (a) To ensure and accelerate the total
electrification of the country; and (b) To ensure the quality, reliability, security and affordability
of the supply of electric power.

This bill seeks to provide an electric power distribution system to the people of the
municipalities of Banton, Concuera and Concepcion, all within the Province of Rombion.
Furthermore, 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 for the provided facility.

On June 14, 1989, Romblon Electric Cooperative, Inc. (ROMELCO) was organized and
registered with the National Electrification Administration (NEA) with a mandate to perform
rural electrification in the province of Romblon on an area coverage basis. Thereafter, on July
11, 1991 and November 14, 1994, ROMELCO was granted franchise to operate electric light and
power services in the island of Romblon and Sibuyan Island respectively covering four (4)
municipalities out of the seventeen (17) municipalities distributed in seven (7) islands
composing the Province of Romblon. Since its organization, ROMELCO has been very successful
in its electrification program, energizing 100% of the four (4) municipalities, 100% of the sixty
six (66) barangays, 98% of the sitios and 100% of the household connections out of the 27,871
households within its franchise area. Upon the request of the LGU of the Island municipalities
of Banton, Corcuera and Concepcion, ROMELCO’s electrification service has been extended to
the said municipalities through the sitio electrification program with the aim of achieving the
total electrification envisioned by this government, with the electric consumers in the said
island becoming member-consumer-owners of ROMELCO.

To ensure the continuous delivery of electric service of ROMELCO to the said island
municipalities, ROMELCO seeks to fully integrate them with the franchise area of ROMELCO and
for the member consumer-owners to be represented in the management, particularly, the
Board of Directors of ROMELCO. ROMELCO as applicant posessess the technical, financial and
instititutional capabilities to perform the electrification program in the said municipalities in a
sustainable manner mindful of the regulatory and environmental requirements of the EPIRA
and other applicable laws.

aan
ELEANDRO JESUS F. MADRONA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
1 Regular Session

“8 3744

HOUSE BILLNO._~

Introduced by Hon. Eleandro Jesus F. Madrona

AN ACT GRANTING THE ROMBLON ELECTRIC COOPERATIVE INC. A FRANCHISE TO CONSTRUCT,
INSTALL, ESTABLISH, OPERATE, OWN, MANAGE AND MAINTAIN DISTRIBUTION SYSTEMS FOR
‘THE CONVEYANCE OF ELECTRIC POWER TO THE END-USERS IN THE MUNICIPALITIES OF
BANTON, CORCUERA AND CONCEPCION, PROVINCE OF ROMBLON, AND FOR OTHER
PURPOSES

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

SECTION 1. Nature and Scope of Franchise. Subject to the provisions of the Constitution
and applicable laws, rules and regulations, there is hereby granted to the Romblon Electric
Cooperative Inc., hereunder referred to as the grantee, its successors or assigns, a franchise to
construct, install, establish, operate, lease, own, manage and maintain for commercial purposes
and in the public interest, distribution systems for the conveyance of electric power to the end-
users in the municipalities of Banton, Corcuera and Concepcion, Province of Romblon.

SECTION 2. Manner of Operation of Facilities. All distribution facilities, lines and
systems for electric services installed, established, operated, leased, owned 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 Departmernt of Energy, hereinafter referred to as the DOE, or its legal
successor, or any other government agency concerned, to modify, improve and change such
facilities or systems in such manner and to such extent as the progress in science and
technology, and improvements in the electric power distribution services may render
reasonable and proper.

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 spaces in
its poles, facilities or rights-of-way by interested parties upon reasonable compensation to the
grantee considering cost incurred to accomodate and administer the use of the grantee’s
facilities by such parties. The ERC shall 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 onvenience 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 the purpose of 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 by the Department of Public Works and
Highways (DPWH) or by the local government unit (LGU) concerned, as may be appropriate, to
make excavations or lay conduits in any of the public places, highways, streets, lanes, alleys,
avenues, sidewalks or bridges of said province, cities and/or municipalities; Provided, however,
that a public place, highway, 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 conducits, shall be repaired and replaced in workmanlike manner by said
grantee, its successors or assigns, in accordance with the standards set by the DPWH or the LGU
concerned.

SECTION 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 electric
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
electric power distribution system and services for any end-user within its franchise area
consistent with Republic Act No. 9136, otherwise known as the “Electric 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 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.

SECTION 7. Promotion of Consumer interests. The grantee shall establish a consumer
desk that would 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 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.

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 efficient maintenance and operation of services, the
grantee is authorized to install and maintain poles, wires and other facilities over and across
public property, including streets, highway, forest reserves and other similar property of the


Government, its branches or any of its instrumentalities. The grantee may acquire such private
property as is actually necessary for the realization of 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 National and Local Governments. The grantee shall
hold the national, provincial 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 electric
power distribution system of the grantee.

SECTION Il. 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.

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 such 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) 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. Any advantage, favor, privilege, exemption, or immunity
granted under existing franchises, or may be granted shall, upon prior review and approval by
Congress, become part of previuosly granted electric power distribution franchises: Provided,
however, that the foregoing shall neither apply to not affect provisions concerning territory
covered by the franchise: Provided, further, that the foregoing shall not apply to the sale, lease,
transfer, grant of usufruct or assignment of legislative franchises as provided above

SECTION 14. Term of Franchise. The franchise shall be for a term of twenty-five (25)
years from the date of effecti of this Act. This franchise shall be deemed ipso facto revoked
in the event that the grantee fails to operate continuously for two (2) years.

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 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.

SECTION 17. Penalty Clause. Any grantee who fails to submit the annual report to
Congress would be fined five hundred (Php500.00) per working day of non-compliance. The fine
would be collected by the ERC from the said delinquent franchise grantee separate from the
reportorial penalities 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
invalid, all other provisions not affected thereby shall remain valid.

SECTION 19. Repeatability 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 privileges herein provided for.

SECTION 20. Publication. This Act shall be published, through the initiave 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.