Republic of the Philippines 
House of Representatives 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
Second Regular Session 
HOUSE BILL NO.  _________ 
Introduced by REPRESENTATIVE AURELIO "DONG" D. GONZALES, JR. 
AN ACT 
GRANTING A FRANCHISE TO THE PAMPANGA RURAL ELECTRIC SERVICE 
COOPERATIVE, INC. (PRESCO) 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 MEXICO, ARAYAT, STA. ANA AND MAGALANG, PROVINCE 
OF PAMPANGA 
EXPLANATORY NOTE 
The Pampanga Rural Electric Service Cooperative, Inc. (PRESCO) was 
organized and registered with the National Electrification Administration (NEA) with a 
mandate to perform electrification in the province of Pampanga on an area coverage 
basis.  Pursuant to Section 27 of Republic Act No. 9136, otherwise known as the 
Electric Power Industry Reform Act (EPIRA), the power to grant franchises shall be 
vested exclusively in the Congress of the Philippines.  Thus, this bill seeks to grant a 
congressional franchise to PRESCO to provide an electric power distribution system to 
the member-consumer-owners of the municipalities of Mexico, Arayat, Sta. Ana, and 
Magalang. Furthermore, 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. 
The exceptional performance of PRESCO is gathered from the results produced 
since it was granted a franchise to operate electric light and power services in the 
province of Pampanga. This covers all of the four (4) municipalities and 34 barangays of 
the province which have been energized one hundred percent (100%).  
The enactment of this bill will ensure the continuous delivery of electric service 
from PRESCO to the coverage area and will continue to be in the forefront of the 
province’s economic development.  Likewise, it will be in line with the policy of the State 
as provided for in EPIRA, ensure and accelerate the total electrification of the country; 
and ensure the Cooperative’s commitment to deliver efficient, reliable and affordable 
supply of electric power with strong involvement of the member-consumer-owners 
(MCOs). 
In view of the foregoing, the approval of this bill is earnestly sought. 
REP. AURELIO “DONG” D. GONZALES, JR. 
      3rd District, Pampanga 
September 28, 2023
1:00 pm
9355


}
CONGRESS OF THE PHILIPPINES 
NINETEENTH CONGRESS 
Second Regular Session 
HOUSE BILL NO.  _________ 
Introduced by REPRESENTATIVE AURELIO "DONG" D. GONZALES, JR. 
AN ACT 
GRANTING A FRANCHISE TO THE PAMPANGA RURAL ELECTRIC SERVICE 
COOPERATIVE, INC. (PRESCO) 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 MEXICO, ARAYAT, STA. ANA AND MAGALANG, PROVINCE 
OF PAMPANGA 
Be it enacted by the Senate and the House of Representatives of the Republic 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 
Pampanga Rural Electric Service Cooperative, Inc. (PRESCO), 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 34 
baranays covered by four (4) municipalities of Mexico, Arayat, Sta. Ana, and Magalang 
in the province of Pampanga. 
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. 
SECTION 2. Manner of Operation of Facilities. – 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 
referred to as the ERC, 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. 
SECTION 3. Authority of the Energy Regulatory Commission (ERC). – The 
grantee shall secure from the ERC or any government agency having jurisdiction over 
their operations, the certificate of public convenience and necessity and any other 
9355


license, permit or authority indispensable for the construction and operation of the 
electric power distribution system. 
 
 
SECTION 4. Ingress and 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. 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 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 
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 Services. – 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 of Consumer Interests. – 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.  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 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.  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 expropriation proceedings shall have been instituted and just 
compensation paid. 
 
 
SECTION 10. Term of Franchise. – 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 fails to 
operate continuously for two (2) years. 
 
 
SECTION 11.  Acceptance and Compliance. – 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 12. 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, accounts, demands, or actions arising out of 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. Liability for Damages. – 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. 
 
 
SECTION 14. Sale, Lease, Transfer, Usufruct, or Assignment of Franchise. – 
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 any such person, firm, 
company, corporation, or entity without the prior approval of the Congress of the 
Philippines: Provided, 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: Provided further, That any such transfer, sale, 
or assignment is in accordance with the constitutional limitations: Provided furthermore, 
That failure to report to Congress such change of ownership shall render the franchise 
ipso facto revoked: Provided finally, 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. 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 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. 
 
 
SECTION 16. Fine. – The failure 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 from the reportorial penalties imposed 
by the ERC.  All proceeds from the fines or penalties shall accrue to the monitoring fund 
of the ERC in line with its supervisory and regulatory functions. 
 
 
SECTION 17. Equality Clause. – 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: Provided, however, 
That the foregoing shall neither apply to nor affect provisions concerning territory 
covered by the franchise: Provided, 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. Applicability Clause. – 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 Reform Act of 2001”. 
 
 
SECTION 19. Repeatability and Non-Exclusivity 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. 
 
 
SECTION 20. Separability Clause. – If any of the sections or provisions of this 
Act is held invalid, all other provisions not affected thereby shall remain valid. 
 
 
SECTION 21. Repealing Clause. – 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 
modified accordingly. 
 
SECTION 22. Existing Powers. - Existing mandates, powers, functions, and 
privileges granted to Electric Cooperatives under existing laws, including Section 10 of 
Republic Act No. 10531, shall remain valid and effective, unless expressly repealed by 
succeeding laws.  
 
 
SECTION 23. Effectivity Clause. – This Act shall take effect fifteen (15) days 
after its publication in at least two (2) newspaper of general circulation. 
 
 
Approved,