Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
Second Regular Session
HoUSEBILLNo.   9820
-5`      RECEIV ED
Introduced by
SPEAKER FERDINAND MARTIN G. ROMUALDEZ,
HON. YEDDA MARIE K. ROMUALDEZ,
HON. JUDE A. ACIDRE,
HON. SERGIO C. DAGOOC,
HON. PRESLEY C. DE JESUS,
HON. CARL NICOLAS C. CARl, and
HON. LOLITA T. JAVIER
AN   ACT  GRANTING  A   FRANCHISE  TO  THE   DON   ORESTES   ROMUALDEZ
ELECTRIC  COOPERATIVE  (DORELCO)  /  LEYTE  I  ELECTRIC  COOPERATIVE
INC.  (LEYECO  I)  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
TANAUAN,   TOLOSA,   TABONTABON,   DULAG,   JULITA,   LAPAZ,   BURAUEN,
DAGAMl,   MAYORGA,   MACARTHUR,   JAVIER,   ABUYOG,   AND   MAHAPLAG,
PROVINCE OF LEYTE
EXPLANATORY NOTE
Don  Orestes  Romualdez  Electric  Cooperative,  lnc.  (DORELCO),  located  at
Brgy.  San  Roque,  Tolosa,  Leyte,  was  established  in  June  21,1971,  through  the
declaration  of Presidential  Decree  No.  269,  s.  1973,  as  Leyte  Electric Cooperative,
Inc.  (LECI).
At the start, it operated as a power generation company, with ten generators as
source of power, supplying electricity to the towns of Burauen, Dagami, Dulag, Julita,


Lapaz, Mayorga, Sta Fe, Pastrana, Tabontabon and Tolosa.
ln  1974,  the  name  LEcl  was  changed  to  Leyte  Electric  Cooperative,   lnc.
(LEYECO  I),  and  expanded  its  franchise  coverage  area  to  the  municipalities  of
Abuyog, MacArthur, Mahaplag and Tanauan, while giving up the municipalities of Sta.
Fe and Pastrana to Leyte Ill  Electric Cooperative,  lnc. (LEYECO Ill).
In 1976, in honor of the late Don Orestes Romualdez, owner of the land where
the electric cooperative's headquarters is situated, the name DORELCO was created
and used.
With the commissioning of two PIELSTICK generator set in  1977,  DORELCO
supplied  power to  Leyte  11  Electric Cooperative,  lnc.  (LEYECO  11),  LEYECO  Ill,  and
Southern  Leyte  Electric  Cooperative  (SOLECO).   In   1981,  another  one  unit  MAN
generator with the capacity of 2.2MW was again commissioned.
In    1982,   the   National    Power   Corporation   commissioned   the    112.5MW
Tongonan Geothermal power,  providing power requirements of DORELCO for lower
rates, while eliminating generation cost and eventually giving a power cost reduction
to the end consumers, forcing DORELCO's business to convert from power generation
to power distribution.
In line with the policy of the State as provided for in the Electric Power Industry
Reform Act (EPIRA) to ensure and accelerate the total electrification of the country;
and to ensure the quality, reliability, security, continuity, and affordability of the supply
of electric power, this bill seeks to grant a franchise to DORELCO to be an electric
power djstrjbution system to the end-users in the  municipalities of Tanauan, Tolosa,
Tabontabon,  Dulag,  Julita,  Lapaz,  Barauen,  Dagami,  Mayorga,  MacArthur,  Javier,
Abuyog, and Mahaplag, all located in Leyte.
Further,  it seeks to require standards that the grantee must attain in order to
secure an effective partnership between the State and the grantee, as well as to set
high standards for the provided facility.


In view of the foregoing, approval of this bill is
epresentative, PHILRECA
sought.
MARIE K. ROMUALDEZ
live, Tingog Sinirangan
--=!
Rep. SERGIO C. DAGOOC
Representative, APEC
G--I-         -,`
Rep. CARL NICOLAS C. CARI
Representative, 5th District of Leyte
Representative, 2nd District of Leyte


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
Second Regular Session
HOUSE BILL NO.
9820
Introduced by
SPEAKER FERDINAND MARTIN G. ROMUALDEZ,
HON. YEDDA MARIE K. ROMUALDEZ,
HON. JUDE A. ACIDRE,
HON. SERGIO C. DAGOOC,
HON. PRESLEY C. DE JESUS,
HON. CARL NICOLAS C. CARl, and
HON. LOLITA T. JAVIER
AN  ACT  GRANTING  A  FRANCHISE  TO  THE   DON   ORESTES   ROMUALDEZ
ELECTRIC  COOPERATIVE  (DORELCO)  /  LEYTE  I  ELECTRIC  COOPERATIVE
INC.  (LEYECO  I)  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
TANAUAN,   TOLOSA,   TABONTABON,   DULAG,   JULITA,   LAPAZ,   BURAUEN,
DAGAMI,   MAYORGA,   MACARTHUR,   JAVIER,   ABUYOG,   AND   MAHAPLAG,
PROVINCE OF LEYTE
Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:
SECTION 1. Wafure and Scope of FranchJ.se. - Subject to the provisions of
the Constitution and applicable laws, rules and regulations, there is hereby granted to
the  Don  Orestes  Romualdez  Electric  Cooperative  (DORELCO)  /  Leyte  I  Electric
Cooperative, Inc. (LEYECO I), hereunder referred 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  Tanauan,
Tolosa,  Tabontabon,  Dulag,  Julita,  Lapaz,  Burauen,  Dagami,  Mayorga,  Macarthur,


Javier, Abuyog, and Mahaplag, Province of Leyte.
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 poinvfacility of the end-users.
SECTION 2.  Mauner of Operafi.ons  of Faci./i.ti'es.  - All  electric  distribution
facilities, lines and systems for electric services installed, owned, operated, managed
or  maintained   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 (ERG), or its legal successor, or the Department of  Energy   (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
aesthetics along the highways,  roads, streets, alleys or right-of-way, the Grantee 21
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
ERG shall decide in case of dispute or disagreement between the parties.
SECTloN 3. Author7`fy of the ERG. -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.  /ngress  and  Egress.  -  For  the   purpose  of  erecting  and
maintaining    the    poles    or   other   supports    for   said    facilities,    wires,  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,  roads,  streets,  lanes,  alleys,
avenues,  sidewalks,  or  bridges  of  the  province,  cities  or  municipalities:  Provt.ded,
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  by  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
replaced  in  good  order  and  condition  and  charge  the  Grantee,  its  successors  or
assignees,   double   the   amount   of  the   cost   and   expenses   for   such   repair   or
replacement.
SECTION  5.  Respons/.b/.//.fy  fo  the  Pub//.c.  -  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 toprovide  open  and  nondiscriminatory
access to its distribution system and services for 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  other  activities  that  will   hinder  competitiveness  of  business  and
industries.
SECTION  6.  Rates  for  Serw.cos.  -  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   R.A.   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 underto R.A.   No.   9136.
SECTION 7. Promofi.on of Consumer /nterests. - 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.
SECTION 8. Ri-gAf of fAe 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 the stations or
facilities during the period when these shall be so operated.
SECTION  9,  A/-gAf  of Em/.nenf  Doma/-n.  -  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 instmumentalities. The Grantee may acquire such
private property as is actually necessary for the realization of the purposes for which
this franchise is granted: Provt.ded, That proper expropriation  proceedings shall  have
been instituted and  just compensation paid.
SECTION  10.  Term of Franchi.se. -Unless sooner cancelled, the franchise
shall  be in effect for a period of twenty-five (25) years from the effectivity of this Act.
This franchise shall  be deemed  ipso facto revoked  in the event the Grantee fails to
operate continuously for two (2) years.
SECTloN  11. Acceptance and Camp//.ance. - Acceptance of this franchise
shall be given in writing to Congress, 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  such  acceptance,  the
Grantee  shall  exercise the  privileges  granted  under this Act.  Nonacceptance  shall
render the franchise void.
SECTION       72.       Wa„anfy      in         Favorof        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 from accidents causing injury to persons or damage to properties,
during  the  construction,  installation,  operation,  and  maintenance  of the  distribution
system of the Grantee.
SECTION  13.  i/.ab/.//-fy fo/ Damages. -The Grantee shall  be liable for any
injury to persons and damage to properties arising from accidents 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.     Sale,   Lease,   Transfer,   usufruct,   or  Assignment  of
FrancAi.se. -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 sha][ 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: Provt.ded, 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: Prow/.ded fuwher, That any such transfer, sale,
or  assignment  is  in  accordance     with     the     constitutional     limitations:  Provt.ded
furthermore, That failure  to  report  to  Congress  such  change  of  ownership  shall
render  the franchise ipso facto revoked: Provi.ded r/.na//y, 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.  Raporforl`a/  Requi.remenf.  -The  Grantee  shall  submit  an
annual  report to Congress, 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 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 ERC.
SECTloN 16. Fi.ne. -The failure of the Grantee to submit the requisite annual
report to Congress shall be penalized with a fine in the amount of Five hundred pesos
(P500.00) per working day of noncompliance which shall be collected by the ERG. The
fine shall  be collected separately from the reportorial  penalties imposed  by the ERC
and shall be remitted to the Bureau of the Treasury.
SECTION 17. Equa//.fy C/ause. -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:  Prov7.ded,
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: Provt.ded, further, That the foregoing shall not apply to the


sale, lease, transfer, grant of usufruct,  or  assignment  of  legislative  franchises  with
prior  congressional approval.
SECTION  18. App//.cab/.//.fy C/ause. -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 R.A. No. 9136.
SECTION 19.  Repealability and Non-Exclusivity clause. - Th'is franch.lee
shall  be  subject to  amendment,  alteration,  or repeal  by  Congress when  the  public
interest so requires and shall not be interpreted as an exclusive grant of the privileges
herein provided for.
SECTION 20. Exi.sfi.ng Powers. - Existing mandates, powers, functions, and
privileges granted to electric cooperatives under existing laws, including Section  10 of
to   Republic   Act   No.    10531,   otherwise   known   as   the   ``National   Electrjfication
Administration Reform Act of 2013," shall remain valid and effective, unless expressly
repealed by succeeding laws.
SECTION 21. Separab/./J.fy C/ause. - lf any of the sections or provisions of this
Act is held invalid, all other provisions not affected thereby shall remain valid.
SECTION  22.  Repea//.ng C/ause. -All laws, presidential decrees, executive
orders, letters of instruction, administrative rules and regulations or parts thereof which
are contrary to or inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.
SECTION 23.  Effecfi.y/.fy C/ause. -This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in a newspaper of general circulation.
Approved,