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Republic of the Philippines 
 HOUSE OF REPRESENTATIVES 
Quezon City 
Nineteenth Congress 
First Regular Session 
HOUSE BILL NO. _________ 
__________________________________________________________________ 
Introduced by Hon. Mark O. Go 
__________________________________________________________________ 
EXPLANATORY NOTE 
The Benguet Electric Cooperative (BENECO), was organized and registered on October 5, 
1973 as a non-stock, non-profit service-oriented entity and was granted by the National 
Electrification Commission (NEA) on March 20, 1978 the sole franchise to operate an electric 
light and power service in the City of Baguio and the Province of Benguet for a period of fifty 
(50) years.  The franchise area of BENECO comprises the 13 towns of Benguet Province and
the City of Baguio.  In 2019, BENECO conducted its referendum for the conversion of the
electric cooperative to stock cooperative under the Cooperative Development Authority
(CDA). The CDA granted its Certificate of Registration on November 11, 2020.
BENECO’s vision is to be a world class and globally competitive electric cooperative that is 
self-sufficient in renewable energy and provider of quality service to empowered member-
consumer-owners. In line with its commitment to excellence, BENECO secured its 
International Standardization Organization (ISO) certification 9001:2015 in 2019. Achieving 
this feat means that an organization has achieved the highest quality standards in its 
management and quality service. BENECO has successfully passed its ISO audit from 2019 to 
2021. In 2022, BENECO was re-certified again under ISO 9001:2015.  
To further improve its services, BENECO is continuously adapting automation technologies to 
improve reliability and efficiency. Through the use of the Supervisory Control and Data 
Acquisition (SCADA) System and the Advanced Distribution Management System, the 
gathering of data from the substations and the distribution lines is done in real time  in order to 
control equipment and conditions in a more accurate and efficient manner. BENECO is one of 
the first electric cooperatives to have a Geographic Information System (GIS) to analyze and 
display geographically referenced information to easily locate and monitor the status of the 
power supply and connection of consumers. Through these technological advancements, 
BENECO is able to enhance its technical efficiency and quality service by responding promptly 
to all feedback received from consumers.  
It is worthy to note that BENECO is considered as a Mega-Large Electric Cooperative. Its sales 
ranges from 35 million to 40 million kilowatt-hour per month and it serves 216,440 accounts 
as of 2021.  
November 15, 2022
1:53 pm
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BENECO is one of the first electric cooperatives, if not the first, to have entered into a bilateral 
power supply contract with an Independent Power Producer (IPP) right after the passage of the 
Electric Power Industry Reform Act (EPIRA) in 2001 while most of the electric cooperatives 
are signing transition supply contracts with the National Power Corporation.  The foresight of 
BENECO in acknowledging the dire need to enter into a bilateral power supply contract with 
an IPP in 2003 was anchored on the goal of reducing power rates for the member-consumer-
owners of BENECO. The generation cost of BENECO over the years has been acknowledged 
as the cheapest generation cost for on-grid electric cooperatives. 
In terms of power outages or interruptions, BENECO is always within or below the allowable 
limit for System Average Interruption Frequency Index (SAIFI) of 20 customer-interruptions 
per year and 45 hours customer-interruption duration per year for the System Average 
Interruption Duration Index (SAIDI).  
BENECO is included in the list of electric cooperatives with 90-100% level of energization as 
shown in the 2019 Performance Assessment of NEA. It has been a consistent recipient of 
various awards, citations and commendations from NEA, PHILRECA and other agencies all 
over the Philippines. The most important award is in terms of rates passed on to consumers 
since this has direct effect on the lives of the consumers and the economy of the areas being 
supplied by a distribution utility.  In 2017, NEA recognized BENECO for having the lowest 
rate for on-grid electric cooperatives in the country. Similarly, the ‘Ace of Tariff’ Award was 
bestowed to BENECO by PHILRECA for years 2018, 2019, 2020 and 2021. These awards 
clearly show that BENECO’s generation rate for the on-grid electric cooperatives is very 
affordable and that doing business in Benguet is economically viable in terms of power rates. 
In the latest Overall Performance Assessment conducted by NEA in 2019, BENECO belongs 
to the 85 ECs that obtained the AAA rating. The AAA rating is the highest score given by the 
NEA to ECs that indicates the ECs’ full compliance with all parameters.  The Department of 
Energy has likewise recognized the performance of BENECO when it issued several 
certificates in view of its compliance with regulatory issuances. 
Pursuant to Section 27 of Republic Act No. 9136, otherwise known as the EPIRA law, the 
power to grant franchises for the transmission and distribution of electricity shall be vested 
exclusively in the Congress of the Philippines.  Hence, this bill seeks to grant a legislative 
franchise to BENECO. 
Granting a legislative franchise to BENECO will ensure the continuous supply and delivery of 
affordable, efficient, and safe electric power to the people of Baguio City and Benguet 
province. 
In view of the foregoing, the approval of this proposed measure is earnestly sought. 
MARK O. GO 


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
Nineteenth Congress 
First Regular Session 
House Bill No. ______ 
_____________________________________________________________________ 
Introduced by Hon. Mark O. Go 
_____________________________________________________________________ 
     AN 
ACT GRANTING A LEGISLATIVE FRANCHISE TO BENGUET ELECTRIC 
COOPERATIVE, INC. (BENECO) TO CONSTRUCT, INSTALL, ESTABLISH, 
OPERATE AND MAINTAIN A GENERATION AND DISTRIBUTION SYSTEM 
FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END USERS IN ALL 
THE MUNICIPALITIES OF THE PROVINCE OF BENGUET AND BAGUIO CITY 
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 
Constitution and applicable laws, rules and regulations, there is hereby granted to the Benguet 
Electric Cooperative (BENECO), hereunder referred to as the grantee, its successors or 
assignees, a franchise to construct, install, establish, operate and maintain for public interest, a 
generation and distribution system for the conveyance of electric power to the end users in the 
Province of Benguet and Baguio City. 
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 assignees, shall be operated and maintained at all times in the best manner, and 
it shall be the duty of the grantee, its successors or assignees, whenever required to do so by 
the Energy Regulatory Commission (ERC) or its legal successor, or the Department of Energy 
(DOE) or its legal successor, or the National Electrification Administration (NEA) 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 its poles, 
facilities, or easements by interested parties upon reasonable compensation. 
SEC. 3. Authority of the Energy Regulatory Commission (ERC) and the National 
Electrification Administration (NEA). -- The grantee shall secure from the ERC and NEA or 
any other government agency which has jurisdiction over the operation of the herein grantee, 
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the necessary certificate of public convenience and necessity and other appropriate permits and 
licenses for the construction and operation of its electric distribution system, sub-transmission 
system and generation facilities. 
 
SEC. 4. Excavation and Restoration Works. -- For the purpose of erecting and 
maintaining poles and other supports for wires or other conductors for laying and maintaining 
underground wires, cables, pipes or other conductors, the grantee, its successors or assignees, 
is authorized to make excavations or lay conduits in any of the public places, roads, highways, 
streets, lanes, alleys, avenues, sidewalks, or bridges of said province, cities and/or 
municipalities, subject to prior approval of the Department of Public Works and Highways 
(DPWH) or the local government units (LGUs) concerned: Provided, however, That any public 
place, road, 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 conduits, shall be repaired or replaced in a workmanlike manner at the 
expense of the grantee, its successors or assignees, in accordance with the standards set by the 
DPWH or the LGU concerned. Should the grantee, its successors or assignees, after the ten 
(10)-day notice from the said authority, fail, refuse or neglect to repair or replace any part of a 
public place, road, highway, street, lane, alley, avenue, sidewalk, or bridge disturbed, altered, 
or changed by the said grantee, its successors or assignees, then the DPWH or the LGU 
concerned shall have the right to have the same repaired or replaced in good order and condition 
and charge the grantee, its successors or assignees, at double the amount of the costs and 
expenses for such repair or replacement. 
 
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. 
 
The grantee shall have the obligation to provide open and nondiscriminatory access to 
its distribution system and services to 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 will constitute an abuse of market power such 
as unfair trade practices, monopolistic schemes, and any other activities that will hinder 
competitiveness of business and industry.  
 
SEC. 6. Rates for Services. -- The retail rates and charges for the distribution of electric 
power by the grantee 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 itemize in its electricity bill to the end users the 
components of the retail rate pursuant to Republic Act No. 9136. 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. Protection of Consumer Interests. -- The herein grantee shall establish a 
consumer desk that will handle consumer complaints and ensure adequate protection of 
consumer interests. The grantee shall act with dispatch on all complaints brought before it. 


 
 
 
 
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SEC. 8. Commitment to Provide and, Promote the Creation of Employment 
Opportunities. -- The grantee shall create employment opportunities and shall allow on-the-
job trainings in their franchise operation: Provided, That priority shall be accorded to the 
residents where their offices are located: Provided, further, That the grantee shall follow the 
applicable labor standards and allowance entitlement under existing labor laws, rules and 
regulations, and similar issuances: Provided, finally, That the employment opportunities or 
jobs created shall be reflected in the General Information Sheet (GIS) to be submitted to the 
Cooperative Development Authority (CDA) annually. 
 
SEC. 9. 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 distribution system 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 distribution system during the period when these shall be so operated. 
 
SEC. 10. 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. 11. Term of Franchise. -- This franchise shall be for a term of twenty-five (25) 
years that shall commence from the date of expiration of BENECO’s existing franchise, unless 
sooner cancelled. This franchise shall be deemed ipso facto revoked in the event that the grantee 
fails to operate continuously for two (2) years. 
 
SEC. 12. Acceptance of the Franchise. -- Acceptance of the terms of this franchise 
shall be in writing to the Committee on Legislative Franchises of the House of Representatives 
and the Committee on Public Services of the Philippine Senate, within sixty (60) days after 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. 13. 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, liabilities, demands, or actions arising out of accidents that cause injury to persons 
and damage to properties, during the construction, installation, operation, and maintenance of 
the distribution system of the grantee. 
 
SEC. 14. Liability to Damages. -- The grantee shall be liable for any injury to persons 
and damage to property arising from or caused by accident by reason of any defective 
construction under this franchise or of any neglect or omission to keep its poles and wires in 
safe condition. 


 
 
 
 
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SEC. 15. Sale, Lease, Transfer, Grant of Usufruct, or Assignment of 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 simultaneously or contemporaneously, to any such 
person, firm, company, corporation or entity without the prior approval of the Congress of the 
Philippines. Congress shall be informed of any sale, lease, transfer, grant of usufruct, or 
assignment of franchise or the rights and privileges acquired thereunder, or of the merger or 
transfer of the controlling interest of the grantee, within sixty (60) days after the completion of 
the said transaction. Failure to report to Congress such change of ownership shall render the 
franchise ipso facto revoked. 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. 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 of Public Services of the Philippine 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. Equality Clause. -- Except for taxes and customs duties, any advantage, 
favor, privilege, exemption, or immunity granted under existing franchises, or may hereinafter 
be granted shall, upon prior review and approval of Congress, become part of previously 
granted power distribution franchises and shall be accorded immediately and unconditionally 
to the grantees of such franchises: Provided, however, That the foregoing shall neither apply 
to nor affect provisions concerning territory covered, term, 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 franchise with prior congressional approval. 
 
SEC. 18. Applicability of Existing Laws. -- The grantee shall comply with and be 
subject to the provisions of Commonwealth Act No. 146 or the "Public Service Act", as 
amended; Republic Act No. 9136; Republic Act No. 10531 or the "National Electrification 
Administration Reform Act of 2013"; and RA 9520 or the Philippine Cooperative Code of 
2008. 
 
SEC. 19. Fine. -- Any grantee who fails to submit the annual report to Congress shall 
be penalized by a fine of Five hundred pesos (₱500.00) per working day of noncompliance. 
The fine shall be collected separately by the ERC distinct from the penalties it imposes for 
noncompliance of its own reportorial requirements. 
 
SEC. 20. Repealability 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. 
 
SEC. 21. Separability Clause. -- If any of the sections or provisions of this Act is held 
invalid, all other provisions not affected thereby shall remain valid. 
 


 
 
 
 
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SEC. 22. Effectivity. -- This Act shall take effect fifteen (15) days after its publication 
in the Official Gazette or in a newspaper of general circulation. 
 
 
Approved,