Republic of the Philippines

HOUSE OF REPRESENTATIVES g »
Quezon City RECEIVED Z
SEVENTEENTH CONGRESS 2 a
Third Regular Session

HOUSE BILL NO. _ 8132

Introduced by HON. GUS S. TAMBUNTING

EXPLANATORY NOTE

This bill seeks to grant MORE MINERALS CORPORATION a franchise to 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 of the City of Iloilo.

The electrical distribution in the City of Iloilo is presently handled by the Panay Electric
Company, Inc. (PECO). And PECO has enjoyed this privilege for more than ninety six (96)
years, since 1921 when it was first granted its legislative franchise under Republic Act No.
2983. The PECO franchise was last extended for twenty five (25) years on 19 January 1994,
and will therefore expire on 18 January 2019. There is a pending bill for the extension of the
PECO franchise, but there is much resistance against such extension from the consumers and
government officials of Iloilo City.

The quality of service of PECO has been wanting. Among the complaints against PECO are:
overbilling/overcharging, arrogant personnel/poor customer relations, distributor-related
power outages, inadequately-maintained lines, inadequate investment in distribution facilities,
and inordinate delay in the restoration of power services, among others.

The City of Iloilo is one of the most progressive cities in the Philippines. It is recognized as
being par with Manila and Cebu in terms of economic progress. The National Competitive
Council lists Iloilo City as part of the top ten most competitive cities from 2014 to 2016. The
Western Visayas Region, with Iloilo City as its spearhead, has achieved remarkable economic
growth in recent years. With its 8.7% growth rate in 2017, the Western Visayas has in fact
outpaced the entire country’s 6.7% growth rate.

However, unless the City of Iloilo’s steadily increasing power demand is fully addressed by a
reliable, fair and efficient power distributor, such gains are in danger of being stymied. PECO’s
historical abuse and inefficiency, moreover, pose as obstructions not only to the City of Iloilo’s
economic growth but to its people’s welfare, health and well-being as well.

To prevent a power crisis from occurring in the City of Iloilo, there is an imperative need to
grant MORE Minerals Corporation a franchise to establish, operate, and maintain, for
commercial purposes and in the public interest, a distribution system for the conveyance of
electric power to end users in the City of Iloilo.

MORE Minerals Corporation, through its parent company Monte Oro Resources & Energy, Inc.,
and its listed parent company Apex Mining Company Inc., explores and mines gold and other


minerals. It also owns 30% participating interest in Service Contract 72, the Recto Bank Block,
which is a claim over a natural gas field in the West Philippine Sea. Monte Oro has the track
record for big business and is backed up by the impressive financial resources of its
stockholders group. MORE is managed by reputable, experienced and competent executives
and officers who will apply their expertise and devotion towards giving the people of the City
of Iloilo the electrical distribution company that they need and deserve.

Considering that MORE Minerals Corporation possesses the required capability, it is apt for the
Congress to grant MORE Minerals Corporation franchise to establish, operate, and maintain a
distribution system for the conveyance of electric power to end users in the City of Iloilo.

The Support of the Members of Congress for the prompt and timely lesogls of this measure
is earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

HOUSE BILL No. 8132

Introduced by HON. GUS S. TAMBUNTING

AN ACT
GRANTING MORE MINERALS CORPORATION A FRANCHISE TO ESTABLISH,
OPERATE, AND MAINTAIN, FOR COMMERCIAL PURPOSES AND IN THE
PUBLIC INTEREST, A DISTRIBUTION SYSTEM FOR THE CONVEYANCE OF
ELECTRIC POWER TO END USERS IN THE CITY OF ILOILO, IN THE
PROVINCE OF ILOILO

Be it enacted by the Senate and 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
MORE Minerals Corporation, hereinafter referred to as the Grantee, its successors or
assigns, a franchise to establish, operate, and maintain, for commercial purposes and
in the public interest, a distribution system for the conveyance of electric power to
end users in the City of Iloilo.

As used in this Act, Distribution system refers to the system of wires and associated
facilities including sub-transmission lines belonging to or used by 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.

SECTION 2. Manner of Operation of Facilities. —The electric distribution system,
including distribution facilities, lines and systems for electric services owned,
maintained, or operated by the Grantee shall be operated and maintained at all times
in a superior manner. It shall be the duty of the Grantee, whenever required to do so
by the Energy Regulatory Commission (ERC) or its legal successor, Department of
Energy 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 service industry
may render reasonable and proper.

Whenever practicable and for purposes of maintaining order, safety, and aesthetics
along highways, roads, streets, alleys, or easements, the Grantee may allow the use
of free spaces in its poles, facilities, or easements by interested parties upon
reasonable compensation. The ERC shall resolve disputes or disagreements between
parties concerned.


SECTION 3. Certificate of Public Conveyance and Necessity. — The Grantee
shall secure from the ERC, or any other government agency which has jurisdiction
over the operations of the Grantee, the necessary certificate of public conveyance and
necessity and other appropriate permits, licenses for the construction and operation
of its electric distribution system.

SECTION 4. Excavation and Restoration Works. — For the purpose of erecting,
maintaining or replacing poles and other support for wires or other conductors, the
Grantee is authorized to enter and make excavations or lay conduits in any of the
public places, roads, highways, streets, lanes, alleys, avenues, sidewalks, or bridges
in its franchise area, subject to prior approval of the Department of Public Works and
Highways (DPWH) or the City Government of Iloilo. Provided, however, That any
public place, road, highway, street, lane, alley, avenue, sidewalk, or bridge distributed,
altered, or changed by the reason of the erection of poles or other supports or the
underground laying of wires, other conductors or conduits, shall be repaired or
replaced in workmanlike manner at the expense of the Grantee in accordance with
the standard set by the DPWH or the City Government of Iloilo. Should the Grantee
after the 10-day notice from the DPWH or the City Government of Iloilo, fail to repair
or replace any part of public place, road, highway, street, lane, alley, avenue, sidewalk,
or bridge disturbed, altered, or changed, the DPWH or City Government of Iloilo shall
have the right to have the same repaired or replaced in good order and condition and
charge the Grantee for such repair or replacement.

SECTION 5. Power of Eminent Domain. — Subject to the limitations and
procedures prescribed by law, the Grantee is authorized to exercise the power of
eminent domain insofar as it may be reasonably necessary for the efficient
establishment, improvement, upgrading, rehabilitation, maintenance and operation of
its services, the Grantee is authorized to install and maintain its poles, wires, and
other facilities over, under and across public property, including, streets, highways,
parks 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, including but not limited to poles, wires, cables, transformers, switching
equipment and stations, buildings, infrastructures, machineries and equipment
previously used, or actually used without legal authority or franchise, or intended to
be used, or have been abandoned, unused or underutilized, or which obstructs its
facilities, for the operation of a distribution system for the conveyance of electric power
to end users in its franchise area;

Provided, that proper expropriation proceedings shall have been instituted and just
compensation paid.

Provided further, that upon the filing of the petition for expropriation or at any time
thereafter and after due notice to the owner of the property to be expropriated and
the deposit in a bank located in the franchise area subject to the order of the court of
an amount equivalent to the assessed value of the property for purposes of taxation,
the Grantee shall be entitled to immediate possession, operation, control, use and


disposition of the properties sought to be expropriated, including the power of
demolition, if necessary, notwithstanding the pendency of the issues before the court.
This is without prejudice to the authority of the court to determine the amount of just
compensation of the property expropriated after due notice and hearing.

SECTION 6. Responsibility to the Public. — The Grantee shall supply electricity in
its franchise area 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 end users within
its franchise area.

The Grantee shall provide open and non-discriminatory access to its distribution
system and services to any end user within its franchise area consistent with Republic
Act (RA) No. 9136, otherwise known as the 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 unfair trade practices, monopolistic schemes, and any other
activities that will hinder competitiveness in its industry.

SECTION 7. Service Rates. — The retail rates and charges for the distribution of
electric power by the Grantee to end users shall be regulated by and subject to the
approval of the ERC or its legal successor.

The Grantee shall identify and itemize in the electricity bills it issues to end users the
components of its retail rate pursuant to RA No. 9136. The rates charged by the
Grantee to end users shall be made public and transparent. The Grantee shall
implement the lifeline rate to marginalized end users, as mandated by RA No. 9136.

SECTION 8. Customer Complaints. — The Grantee shall establish and maintain a
customer desk that will handle complaints from end users and ensure adequate
protection of their interests. The Grantee shall act with dispatch on all such complaints
brought before it.

SECTION 9. Right of the Government During Emergencies. — A special right is
hereby reserved to the President of the Philippines, in times of war, rebellion, public
peril, disturbance of peace and order, calamity, disaster, or emergency to temporarily
take over and operate the distribution system of the Grantee, to temporarily suspend
its operations, or authorize the temporary use and operation thereof by any agency
of the government, with the payment of due compensation for the use of the said
distribution system during the period when it shall be so used.

SECTION 10. Term of the Franchise. — This franchise shall be for a term of twenty
five (25) years from the effectivity of this Act, unless sooner revoked or cancelled by
Congress for any violation of the terms and/or provisions of this franchise.

SECTION 11. Sale, Lease, Transfer, Grant of Usufruct, or Assignment of the
Franchise. — The Grantee shall not sell, lease, transfer, grant the usufruct of, nor


assign this franchise or the rights and privileges acquired thereunder to any person,
firm, company, corporation, or other commercial or legal entity, nor merge with any
other corporation or entity, nor 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. 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 franchise. The sale, lease, transfer, grant of the usufruct, or
assignment of this franchise or the merger of the Grantee with another entity or the
transfer of its controlling interest without the prior approval of the Congress shall
render the transaction null and void and shall be a ground for the revocation of this
franchise.

SECTION 12. Warranty in Favor of the National Government and Local
Governments. — The Grantee shall hold the national, provincial, city, municipal, and
barangay governments of the Philippines free from all claims, liabilities, demands, or
actions arising out of the accidents that cause injury to persons and damage properties
during the construction, installation, operation, and maintenance of its distribution
system.

SECTION 13. Liability for Damages. — The Grantee shall be liable for any injury
to persons and damage to property arising from or caused by reason of any defective
construction under this franchise or of any neglect or omission to keep its poles and
wires in safe condition.

SECTION 14. Annual Report to the Congress. — 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 the thirtieth of April of every year. Such report shall include
an update of the development or expansion of the Grantee’s business, the Grantee's
audited financial statements, as certified by the Securities and Exchange Commission,
and the Grantee’s latest general information sheet.

SECTION 15. Compliance with Existing Laws. — The Grantee shall comply with
and be subject to the relevant provisions of Commonwealth Act No. 146, otherwise
known as the Public Service Act, as amended, and RA No. 9136.

SECTION 16. Repealability and Non-Exclusivity. — This franchise shall be subject
to the 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 provided herein.

SECTION 17. Separability Clause. — If for any reason, any of the sections or
provisions of this Act is declared unconstitutional or invalid, the other parts or
provisions hereof which are not affected thereby shall continue to be in full force and
effect.


SECTION 18. Repealing Clause - A\l laws, decrees, executive orders and
issuances, rules and regulations, and other issuances, or parts thereof, that are
inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.

SECTION 19. Effectivity Clause. — This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or is a newspaper of general circulation.

Approved,