TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
)
25 JIJL -8 P5 :26
SENATE 
Senate Bill No. 253
Introduced by Senator Erwin Tulfo
AN ACT
INSTITUTING A PERIODIC REVIEW OF FRANCHISES 
GRANTED TO POWER DISTRIBUTION UTILITIES AND 
ELECTRIC COOPERATIVES, PROVIDING GROUNDS FOR 
THE SUSPENSION, AMENDMENT OR REVOCATION OF 
FRANCHISES OF NON-PERFORMING ENTITIES,
AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Access to affordable, reliable, and sustainable electricity is 
indispensable to national development, economic productivity, and the 
daily lives of Filipino families. The grant of a legislative franchise to 
power distribution utilities and electric cooperatives is not merely a 
privilege, but a responsibility to provide the public with reliable, 
affordable, and efficient electricity services.
Under prevailing practice, the usual term for a franchise is 
twenty-five (25) years, subject to renewal by Congress. Consequently, 
Congress is only able to formally review the performance of a franchise 
holder during its application for renewal. The long interval leaves the 
public with limited opportunities to hold non-performing or abusive 
electric utilities accountable.
During the intervening years, these utilities may have already 
committed violations, imposed unreasonable rates, failed to provide 
reliable electricity, or neglected unserved or underserved areas.


While regulatory bodies such as the National Electrification 
Administration (NEA) and the Energy Regulatory Commission (ERC) 
conduct their own reviews and evaluations, such findings do not 
automatically impact the status of the franchise granted by Congress. 
This disconnect between regulatory review and legislative oversight 
creates a gap in accountability that leaves consumers vulnerable to poor 
service, high rates, and operational inefficiency.
This bill seeks to close that gap by instituting a periodic franchise 
review mechanism to be conducted every five (5) years, ensuring that 
all power distribution utilities and electric cooperatives are held 
accountable to the Filipino people. The review will focus on 
affordability, reliability, regulatory compliance, financial viability, and 
electrification efforts. Should a franchise holder consistently fail to 
meet these standards. Congress is empowered to suspend, amend, or 
revoke the franchise accordingly.
A non-performing utility that is the sole service provider in an 
area shall be given a reasonable opportunity to address its deficiencies 
before any suspension, amendment or revocation of franchise is 
recommended, ensuring that consumers are not left without power 
while corrective actions are implemented.
Ultimately, this measure affirms that legislative franchises are not 
permanent entitlements but conditional privileges that must be earned 
and maintained through consistent, excellent performance, and that 
such privilege may be revoked if it fails to meet the needs of the 
Filipino people.
In view of the foregoing, approval of this bill is earnestly sought.
RWIN TtJLFO


TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
25
-8
>5 :26
SENATE 
Senate Bill No. 253
Introduced by Senator Erwin Tulfo
AN ACT
INSTITUTING A PERIODIC REVIEW OF FRANCHISES 
GRANTED TO POWER DISTRIBUTION UTILITIES AND 
ELECTRIC COOPERATIVES, PROVIDING GROUNDS FOR 
THE SUSPENSION, AMENDMENT OR REVOCATION OF 
FRANCHISES OF NON-PERFORMING ENTITIES,
AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled:
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SECTION 1. Short Title. - This Act shall be known as the
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"'Power Franchise Review Act. ”
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SEC. 2. Declaration of Policy. - It is hereby declared the poliey 
of the State to ensure that the supply of electricity to the public is 
affordable, reliable, sustainable, and effieient. The privilege of 
operating a public utility, such as power distribution, must be exercised 
with the highest regard for public welfare. Aceordingly, franehises 
granted to power distribution utilities and eleetric cooperatives shall be 
subjeet to periodie performance reviews to ensure continued service to
the Filipino people.
SEC. 3. Periodic Franchise Review. - All legislative franchises 
granted to power distribution utilities and electrie eooperatives shall be


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subject to a mandatory performance review every five (5) years from 
the effectivity of this Act or from the grant or renewal of their franchise, 
whichever is later. The performance review shall assess the utility’s 
compliance with the following standards:
a. Affordability of electricity rates relative to national and regional 
benchmarks;
b. Service reliability and systems loss;
c. Customer satisfaction and complaints resolution;
d. Operational efficiency, and infrastructure development;
e. Compliance with regulatory obligations;
f Support for the integration and promotion of renewable energy; 
and
g. Financial and institutional viability.
SEC. 4. Franchise Review Committee. - The periodic review 
under this Act shall be conducted by a Franchise Review Committee 
(FRC) which shall be composed of:
a. The Chairpersons of the Committee on Energy of the Senate and 
the House of Representatives, respectively, as Co-Chairpersons;
b. Secretary of the Department of Energy (DOE);
c. Chairperson ofthe Energy Regulatory Commission (ERC);
d. Administrator of the National Electrification Administration 
(NEA); and
e. Two (2) Representatives from consumer advocacy groups.
SEC. 5. Grounds for Suspension, Amendment, or Revocation of 
Franchise. - Upon the recommendation of the FRC, Congress may 
suspend, amend or revoke the franchise of a power distribution utility 
or electric cooperative on any of the following grounds:
a. Unjustified failure to provide affordable electricity in 
comparison to the national or regional average rates;
b. Frequent power interruptions and/or consistent failure to 
provide reliable electricity services;


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c. Gross neglect or repeated violations of regulatory requirements 
imposed by the DOE, ERC, or NEA;
d. Financial mismanagement or operational inefficiency 
endangering continued operations;
e. Failure to meet electrification targets particularly in unserved 
or underserved areas; or
f. Consistently receiving the lowest performance rating from 
NEA or ERC, as applicable, for at least three (3) consecutive 
years.
SEC. 6. Procedure for Franchise Suspension, Amendment, or 
Revocation. - The findings and recommendations of the FRC shall be 
transmitted to both houses of Congress. Congress shall have the sole 
authority to suspend, amend, or revoke a franchise through legislation, 
following due process, including public hearings involving affected 
consumers, stakeholders, and the concerned utility: Provided, that in 
areas served by only one power distribution utility or electric 
cooperative, the concerned power utility or electric cooperative shall 
be afforded reasonable opportunity to remedy its deficiencies before 
Congress takes action on the FRC recommendation. In such cases, the 
FRC shall develop a remedial plan with clear timelines and deliverables 
to guide compliance.
SEC. 7. Separability Clause. - If any part or provision of this Act 
is held invalid or unconstitutional, the other parts or provisions thereof 
not so declared shall remain valid and effective.
SEC. 8. Repealing Clause. - All other laws, decrees, orders, 
issuances, rules, and regulations or parts thereof, which are inconsistent 
with this Act are hereby repealed or modified accordingly.
SEC. 9. Effectivity. - This Act shall take effect within fifteen (15) 
days following its complete publication in the Official Gazette or in two 
(2) newspapers of general circulation.
Approved,