Republic of the Philippines
aBoufe  of 3kepceSctttatr'ticS
Quezon City
NINETEENTH CONGRESS
Second Regular SessiorL
`__  _.,I  LT_                 8947
House Bill No.
Introduced by
Jose "Bong" J. Teijes, Jr., TOP Pa,rty-fist Represerdcrfu]e
Prestey C. De Jes:us, PHILRECA Pcutu-fist Represeritc[fiue
Sergio C. Dagooc, APEC Party-fist Represerdcedue
ExpLANATORY NOTE
This bill seeks to grant a congressional franchise to First Catanduanes
Electric Cooperative, Inc. (FICELCO) to provide an electric power distribution
system  to  the  people  of  the  municipalities  of  Bagamanoc,  Bato,  Baras,
Caramoran,  Gigmoto,  Pandan,  Panganiban,  San Andres,  San  Miguel,  Viga
and Virac, Province of Catanduanes.   Furthermore, it establishes standards
that the  franchise grantee  must  attain  in  order to  implement an  effective
partnership  between  the  government  and  the  distribution  utility  as  its
implementing partner for total electrification.
FICELCO was established in October 28, 1971 as one of the rirst electric
cooperatives to be organized in the country. As the sole franchise holder for
electric distribution in Catanduanes, FICELCO has been providing excellent
to the eleven ( 11) municipalities of the province, achieving 100% electrification
level as mandated by Republic Act No.  9136 or the Electric Power Industry
Reform  Act  (EPIRA).  As  an  applicant,  F`ICELCO  possesses  the  technical,
financial and institutional capabilities to perform the electrification program
in the municipalities covered by their franchise area. Notably, the system loss
has  been  reduced  to  8°/o,  power  outages  were  minimized,  and  collection
efficiency maintained at high level.
Granting this franchise will ensure the continuous supply of electricity


to  the people of Catanduanes.  It will enable  FICELCO  to continue with  its
mission   of   taking   major   role   in   the   socio-economic   development   of
Catanduanes by providing an affordable,  dependable,  efficient and  reliable
electric service to its member-consumer-owners.
In view of the foregoing, the approval of this bill is earnestly sought.
REP. Jog HErfu J. TEus, JR.
Representative, TOP Party-List
REP. SERGI
C. DAcOOC
Representative, APEC Party-List


Republic of the Philippines
aBouSc  of 3Repees€«tatito£S
Quezon City
NINETEENTH CONGRESS
Secorid Regular Session
'1
House Bill No.
8947
Introduced by
Presley C. De Jes:us, PHILRECA Pcuty-fist Represeutcdiue
Sergio C. Dagoac, APEC Pcutg-Itst Represert±afiue
Jose "Bong" J. Teues, Jr. , Tap Party-fist Represeritcrfuue
AN ACT
GRANTING THE FIRST CATAHDUARES ELECTRIC COOPERATIVE, INC.
A FRANCHlsE TO cONSTRucT, INSTALL, rsTABLlsH, OpERATE, OwN,
MANAGE AND MAINTAIN DISTRIBUTION SYSTEMS FOR THE
CONVETA)rcE op ELECTRlc powER To THE END-usERs IN THE
MUNlclpjELITlrs OF BAGAMAHOc, BARAs, BATO, CARAMORAN,
GIGMOTO, PANDAN, PANGANIBAI\l, SAM ANDRES, SAM MIGUBL, VIGA
AND VIRAC, ISLAND PROVINCE OF CATANDUANES
Be it erected by the Serute and the House Of Represeutcutves Of the Republie
of the Philtppi:res in Congress assembled..
SECTION   1.  "aEtitre  artd  Soqpe  a/ fronchise.  -  Subject  to  the
provisions  of the  Constitution  and  applicable  laws,  rules  and  regulations,
there is hereby granted to the  First Catanduanes Electric Cooperative,  Inc
(F`ICELCO), hereunder refeITed to as the grantee, its successors or assigns a
franchise to construct, install, establish, operate, own, manage and maintain
in the public interest and commercial purposes, a distribution system for the
conveyance  of  electric  power  to  the  end-users  in  the  municipalities  of
Bagamanoc,  Bato,  Baras,  Caramoran,  Gigmoto,  Pandan,  Panganiban,  San
Andres, Sam Miguel, Viga and Virac, island province of 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-users.
SEorloN  2.  Jfarmer  a/  Cperutort  a/  Fqc£#ties.  -  All  electric
distribution facilities, lines and systems for electric services installed, owned,
maintained operated, managed by the grantee its successors or assigns shall
be operated or 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 refeITed to as the ERG, or
its legal successor, or the Department 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 or technology and improvements or
innovations in the electric power services may render reasonable and proper.
Whenever practicable,  and  for purposes of maintaining order,  safety
and aesthetic along the 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 the costs 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 the parties.
SBcrloN 3 . Authority Of the E:nergy Regu:latong Commission (ERC).
- The grantee shall secure from the ERG or any government agency having
jurisdiction over their operations,  the certificate of public convenience and
necessity and  any other license,  permit  or authority indispensable  for the
construction and operation of the electric power distribution system.
SECTION 4. Ingress ar.d Egress.  - For the purpose of erecting and
maintaining  the  poles  or  other  supports  for  said  facilities,  wire  or  other
conductors or for the purpose of laying and maintaining said facilities, wires,
cables or other conductors, it shall be lawful for the grantee, its successors,
or assignees, 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,  road,  streets, lines, alleys, avenues,  sidewalks, or bridges of the
province  and  city:  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
assignees,  in accordance with the standards set by the DPWH or the local
government unit concerned.  Should the grantee, its successors or assignees,
after the ten ( 10)-day notice from the grant of authority, fail, refuse or neglect
to repair or replace any part of public place, highway, road, street, lane, alley,
avenue, sidewalk, or bridge altered, changed or disturbed by the said grantee,
its  successors  or assignees,  then  the  DPWH  or the  local government  unit
concerned shall have the right to have the same repaired and replaces in good
order and condition at double expense to be charged against the grantee, its
successors or assignees.
SECTION 5. Reaponsfbility to the Hiblic. -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 ERG, the
grantee shall modify, improve, or change its facilities, poles, lines,  systems
and equipment for the purpose of providing efricient 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 area in
order that business and industries shall be able to compete.
The   grantee    shall   have    the   obligation    to    provide    open    and
nondiscriminatory access to its 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 Refomi Act of 2001".   The
grantee shall not engage in any activity that will constitute an abuse of market
power  such  as  unfalr  trade  practices,  monopolistic  schemes,  and  other
activities that will hinder competitiveness of business and industries.
SECTION 6. Rartes/or Serrdaes. -The retail rates and charges for the
distribution of electric power by the grantee to its end-users 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.
SECTION 7.  Promotion a/ Co7tsztmer Jnteriests. -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.
SECI`ION  8.   Rdyhf a/ the  Goriemmeae£  - 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 the stations or facilities during the
period when these shall be so operated.
SEC'I`ION 9.   Jttght a/Emfnertt Domndn. -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:  f}ioz„.decz, that proper expropriation proceedings shall have been
instituted and just compensation paid.
SECTION 10. Term a/Fmanch±se. -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 falls to operate continuously for two (2) years.
SECI`ION  11.    Accqp€ar&ce  and  Coqpzzartce.  -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.  Nonacceptance shall render the franchise void.
SECTION   L2.   War.iians€i  fn  Fcaior  Of  the  National  and  lrocal
Goaemri.ends.  - The grantee  shall  hold the  national,  provincial,  city,  and
municipal  governments  of the  Philippines  free  from  all  claims,  accounts,
demands, or actions arising out pf accidents or injuries, whether to property
or  to  persons,  caused  by  the  construction,  installation,  operation,  and
maintenance of the distribution system of the grantee.
SECTION  13. |ia[b€lity/or Darma[ges. -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 poles and wires in safe condition.
SECITION  14.  Sake,  Irease,  Transife'r,  usirfutct,  or Asstgrurietut Of
Fhcmchise. -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 arty such person,  firm,  company,
corporation,  or  entity  without  the  prior  approval  of  the  Congress  of  the
Philippines: ffroL".c!ec{, That Congress shall be informed of any lease, transfer,
granting the usufruct of, sale, or assignment of franchise or the rights and
privileges acquired  thereunder,  or of the  merger,  or sale of the  controlling
interest  within  sixty  (60)  days  after  the  completion  of  said  transaction:
ProL".czec!jitrfher, That any such transfer, sale, or assignment is in accordance
with the constitutional limitations: ZinoLrdec!jitrfhe7more, That failure to report
to Congress such change of ownership shall render the franchise tpso /czcto
revoked: flroz#.czedji7'itzJJ#, 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 15. Rqportor!az Regzi€remen£ -The grantee shall submit an
annual report to the Congress of the Philippines, through the Committee on
I,egislative 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 every year during
the term of the franchise.   The reportorial compliance certificate issued by
Congress shall be required before any application for permit or certificate is
accepted by the ERG.
SECTION  16. "ine. -The fallure of the grantee to submit the requisite
annual report to Congress shall be penalized by a fine in the amount of five
hundred pesos (P500.00) per working day of noncompliance.   The fine shall
be collected by the ERC from the delinquent franchise grantee separate fro,
the reportorial penalties imposed by the ERG.   All proceeds from the fines or
penalties  shall  accrue  to  the  monitoring  fund  of the  ERG  in  line  with  its
supervisory and regulatory functions.
SECTION   17.  Egiiial€ty  Cla[Iise.  -  Any  advantage,  favor,  privilege,
exemption,  or immunity,  granted  under existing franchises,  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: Thour.dec!, hott;euer, That the foregoing
shall neither apply to nor affect provisions concerning territory covered by the
franchise:  I+oiriczeci, givrther, That the  foregoing shall not apply to the  sale,
lease, transfer, grant of usufruct, or assignment of legislative franchises with
prior congressional approval.
SEorloN  18. Appzicab£Zfty CzaEzfse. -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 Reformi Act of 2001".
SECTION   19.  RepeataELEL=|  and  Non-ExchLs€:vity  Clause.  - rrhis
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.   Seprriaib€litE/  Clmtse.   -  If  any  of  the   sections  or
provisions of this Act is held invalid, all other provisions not affected thereby
shall remain valid.
SEorloN  21.  Rcpcal€ng  Clmcsc.  -All  laws,  presidential  decrees,
executive orders, letters of instruction, administrative rules and regulations
or parts thereof which is are contrary to or inconsistent with the provisions of
this Act are hereby repealed or modiried accordingly.
SECTION   22.   Elcistirtg   Poe(leas.    -    Existing   mandates,    powers,
functions, and privileges granted to Electric Cooperatives under existing laws,
including  Sect.on  JO  of  Repztbife  Act  JVo.   J053j,  shall  remain  valid  and
effective, unless expressly repealed by succeeding laws.
SECTION 23. ELffcctiutty Cla.Iise. -This Act shall take effect fifteen ( 15)
days after its publication in at least two (2) newspaper of general circulation.
Approved,