Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 4139

Introduced by REP. MARK LLANDRO L. MENDOZA

EXPLANATORY NOTE

The aim of this bill is to grant the Ibaan Electric and Engineering Corporation (IEEC) a
franchise to construct, operate and maintain an electric light, heat and power system in the
Municipality of ban, Province of Batangas, and for other purposes for another twenty-five
years (25) from effectivity of this act.

The Iban Electric and Engineering Corporation, otherwise known as IEEC, is a
corporation organized and existing under the laws of the Philippines with principal address at
Metro-Rei Ventures Property, Palindan, Ibaan, Batangas.

IEEC is the exclusive franchise holder issued by the congress of the Philippines to
construct, operate and maintain at all times in a superior manner of an electric, heat and power
system in the Municipality of Ibaan, Batangas. It is secure from the Energy Regulatory
Commission (ERC) and Department of Energy (DOE), or any other government agency
concerned which has jurisdiction over the operation, the necessary certificate of public
convenience and necessity and other appropriate permits and licenses for the construction and
operation of its electric distribution system.

The Corporation supply electricity to its captive market in the least costly manner and will
modify, improve or change its facilities, poles, lines systems and equipment for the purpose of
providing efficient and reliable service and reduced electricity costs, Consistent with Republic
Act No. 9136, otherwise known as ‘Electric Power industry Reform’ Act of 2001, the Corporation
have the obligation to provide open and non-discriminatory access to its distribution system and
services for any end-user within its franchise area and shall not engage in any activity that will
constitute an abuse of market power. Distribution system refers to the systems 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-user.


The Corporation may allow the use of free spaces in its poles, facilities or right-of-way by
interested parties upon reasonable compensation considering cost incurred to accommodate
and administer the use of facilities. In regards with this, the ERC shall decide in case of dispute
or disagreement between parties. It shall be lawful for the Corporation, its successors or

assigns, with prior approval of the Department of Public Works and Highways (DPWH) or local
government unit concemed for the purpose of erecting and maintaining poles, pipes and other
Supports for wires or other conductors for the purpose of laying and maintaining facilities, wires,
cables, pipes or other conductors to make excavation or lay conduits in any of the public places,
highways, streets, lanes, alleys, avenues, sidewalks or bridges of said province, cities and/or
municipalities. IEEC 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

Furthermore, the retail rates and charges for the distribution of electric power are subject
to the approval of the ERC or its legal successor. The Corporation will identify and segregate in
its electricity bill to the end-users the components of the retail rate pursuant to Republic Act No.
9136 and provide a consumer desk that will handle consumer complaints and ensure adequate
promotion of consumer interests and will offer to Filipino citizens at least thirty per centum (30%)
of its outstanding capital stock or a higher percentage that may hereafter be provided by law in
any securities exchange in the Philippines within five (5) years from the commencement of its
operations,

This serves as an overview of house bill to grant Iban Electric and Engineering
Cor Nn (IEEC) to franchise for another twenty-five (25) years effectivity of this act.



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
SIXTEENTH CONGRESS

First Regular Session

House BillNo.__ 44139

Introduced by REP. MARK LLANDRO L. MENDOZA

AN ACT
RENEWING THE FRANCHISE GRANTED TO IBAAN ELECTRIC AND ENGINEERING
CORPORATION UNDER REPUBLIC ACT NO. 7578 ENTITLED “AN ACT GRANTING IBAAN
ELECTRIC AND ENGINEERING CORPORATION A FRANCHISE TO CONSTRUCT,
OPERATE AND MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN THE
MUNICIPALITY OF IBAAN, PROVINCE OF BATANGAS AND FOR OTHER PURPOSES FOR
ANOTHER TWENTY-FIVE YEARS FROM THE EFFECTIVITY OF THIS ACT”

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 1987
Philippine Constitution and applicable laws, rules and regulations, the franchise granted to
!baan Electric and Engineering Corporation under Republic Act No, 7578 entitled “An act
granting the Ibaan Electric and Engineering Corporation a franchise to construct, operate and
maintain an electric light, heat and power system in the municipality of Ibaan, province of
Batangas, and for other purposes” is hereby renewed for another twenty-five years from the
effectivity of this Act.

‘As used in this Act, distribution system refers to the systems 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-user.

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 assigns, shall be operated and 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 DOE, or its legal successor, or any other


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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 services may render reasonable and proper.

Whenever practicable and for purposes of maintaining order, safety and aesthetics
along 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 cost 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 parties,

SEC. 3. Authority of the ERC/DOE. - The grantee shall secure from the ERC/DOE or
any other government agency which has jurisdiction over the operation of the herein grantee
the necessary certificate of public convenience and necessity and other appropriate permits
and licenses for the construction and operation of its electric distribution system.

SEC. 4. Excavation and Restoration Works. - For the purpose of erecting and
maintaining poles, pipes and other supports for said wires or other conductors for the purpose
of laying and maintaining said facilities, wires, cables, pipes or other conductors, it shall be
lawful for the grantee, its successors or assigns, with the prior approval of the Department of
Public Works and Highways (DPWH) or the local government unit concemed, as may be
appropriate, to make excavations or lay conduits in any of the public places, highways, streets,
lanes, alleys, avenues, sidewalks or bridges of said province, cities and/or municipalities:
Provided, however, That a public place, 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 and replaced in
workmanlike manner at the expense of the grantee, its successors or assigns, in accordance
with the standards set by DPWH or the local government unit concerned, Should the grantee,
its successors assigns, after the ten (10) day notice from the said authority, fail, refuse or
neglect to repair or replace any part of public place, road, highway, street, lane, alley, avenue,
sidewalk or bridge altered, changed or disturbed by the said grantee, its successors or assigns,
then the DPWH or the local government unit concerned shall have the right to have the same
repaired and placed in good order and condition at double expense to be charged against the

grantee, its successors or assigns.

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


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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 to provide open and non-discriminatory access to
its distribution system and services for any end-user within its franchise area consistent with
Republic Act No. 9136, otherwise known as ‘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,
but not limited to, unfair trade practices, monopolistic schemes and any other activities that will
hinder competitiveness of business and industries.

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 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.

SEC. 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.

SEC. 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
said stations or facilities during the period when they shall be so operated.

SEC. 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


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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. 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.

SEC. 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. Upon giving such acceptance, the grantee shall
exercise the privileges granted under this Act. Non-acceptance shall render the franchise void.

‘SEC. 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.

SEC. 13. Liability to 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 pole and wires in safe
condition.

SEC. 14. Sale, Lease, Transfer, Usufruct, Etc. - The grantee shall not sell, lease,
transfer, grant the usufruct of, or assign this franchise or the rights and privileges acquired there
under 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


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usufruct of, sale or assignment of franchise or the rights or privileges acquired within sixty (60)
days after the completion of said transaction: Provided also, That any such transfer, sale or
assignment is in accordance with the constitutional limitations: Provided further, 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.

SEC. 15. Dispersal of Ownership. — In accordance with the constitutional provision to
encourage public participation in public utilities, the grantee shall offer to Filipino citizens at
least thirty percent (30%) of its outstanding capital stock or a higher percentage that may
hereafter be provided by law in any securities exchange in the Philippines within five (5) years
from the commencement of its operations: Provided, That in cases where public offer of shares
is not applicable, establishment of cooperatives and other methods of encouraging public
participation by citizens and corporations operating public utilities must be implemented. Non-
compliance therewith shall render the franchise jpso facto revoked.

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 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 the

succeeding year.

SEC. 17. Penalty Clause. - Any grantee who fails to submit the requisite Annual
Report to Congress shall be fined Five Hundred Pesos (P500.00) per working day of non-
compliance. The fine shall be collected by the ERC from said delinquent franchise grantee
separate from the reportorial penalties imposed by ERC. All proceeds from said fines or
penalties shall accrue to the monitoring fund of the ERC in line with its supervisory and
regulatory functions, The reportorial compliance certificate issued by Congress shall be
required before any application for permit or certificate is accepted by ERC

SEC. 18. Equality Clause. - Any advantage, favor, privilege, exemption, or immunity
granted under existing franchise, 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 conceming territory covered by the franchise, the life span of the
franchise or the type of service authorized by the franchise. Provided, further, That the


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foregoing shall not apply to the sale, lease, transfer, grant of usufruct or assignment of
legislative franchises with prior congressional approval.

SEC.19. 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.

SEC. 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.

SEC. 21. Repealability 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.

SEC. 22. Publication - This Act shall be published, through the initiative of the grantee,
fifteen(15) days after this Act is signed by the President of the Philippines or has lapsed into

law,

SEC. 23 Effectivity Clause. ~ This Act shall take effect fifteen (15) days from the date of
its publication in at least two (2) newspapers of general circulation in the Philippines.

Approved,