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HIMTREBrmH ooHGREss
Second Regular Session
House Bill No.
9339
Introduced by
Pnesley C. De Jesus, PHILRECA Pcrty-Lisk Represe"±afiue
Sergio C. Dagooc, APEC Party-hist Represeritatwe
E=mA«ATORT NOTE
The Pampanga Rural Electric Service Cooperative, Inc. (PRESCO) was
organized  and  registered  with  the  National  Electrification  Administration
(NEA) with a mandate to perform electrifiication 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 covering 34 barangays. F`urthermore, 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 perfomiance 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  FRESCO  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.
p. pRrsLET c. DE oEs
Representative, PHILRECA Parts
REP.SBRG1%.DA-C
Representative, APEC Party-List


3Republit ot toe ff)bilipptncs
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NINETEENTH CONGRESS
SecorLd Regular Session
House Bill No.
9339
Introduced by
ltesley C. De Jesus, PHILRECA Pcutg-fist Representative
Sergio C. Dagooc, APBC Party-hisl Represeutc[itije
AN   ACT   GRANTING   THE   PAMPANGA   RURAL   ELECTRIC   SERVICE
CoopERATrvE,    INc.    A    FRANCHlsE    To    coNSTRucT,    INSTALL,
ESTABLlsH,  OpERATE,  Owil,  mAmAGE AHD RIAIRTAIN DlsTRIBUTIOIT
sysTEMs FOR TED cOHVEyANCE OF BLECTRIc pOwER ro THE END-
usERs IN THE unNlclpAIITIEs OF MEIHcO, ARAyAT, STA. AHA, AND
RAGALAVG
Be it enacted dy the Sera:te and the House Of RepreseITto±iues Of the Repwhlie
Of the Ptdippin;es in Congress assembl;ed:
SECTION   1.  Jvatt4re  and  Scope  a/ Franch!se.  -  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 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.
SEorloN   2.   Jurunner  a/  OpenfltzorL  a/  Ffzedzzties.   -  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 ERG, 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 incuITed 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.
SBCITION 3. Authority Of i:he Energg Regwldeong Oomirdsston (ERC).
- 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.
SECI`ION 4. Jngness and Fgriess. - F`or 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 facihities, 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, fall, refuse or neglect
to repair or replace any part of pubnc 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 graritee, its
successors or assignees.
SECTION 5. ReaponsibiHtEr tio the ftibfic. -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 ERG, 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.
SEcrloN 6. JtaEtes/or Serndaes. -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 ERG 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.  Jhomotion a/ Cons(.mer Jmtenests. -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.   J[lght a/ the Goziemment.  - 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
.Jf        --


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.   RIg7tt a/Eminent J}omaim -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: Proun.ded, that proper expropriation proceedings shall have been
instituted and just compensation paid.
SECTION 10. re-a/Fhachise. -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 falls to operate continuously for two (2) years.
SECTION  11.    Acoeptdriee  and  aontpzzance.  -Acceptance  of this
franchise shall be given in writing to the Congress of the Philippines, through
the Committee on I,egislative 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.
SECITION   L2.   W:arrand=|  tn  Boa.or  Of  the   Niadi®nal  and  lrocal
Gouernments.  - 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.
SECITION  13. LiablfflE//®r Damqgcs. -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.
SBC:rT.CIN  L4.  Sa:ke,  Irease,  Tr\ansifer,  Usu.±frobct,  or Assig"nerit  Of
Fttlnchise. -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: ProzH.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:
ProL".dedjitrfher, That any such transfer, sale, or assignment is in accordance
with the constitutional limitations: ProLtt.deczjit7thet`more, That failure to report
to Congress such change of ownership shall render the franchise I.pso /tzcto
revoked: frozH.dedJirlclzzg, 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. Repordorial Eeq..£riemen£ -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 terlns 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 ERG.
SECI`ION  16. Hne. -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 ERG from the delinquent franchise grantee separate from
the reportorial penalties imposed by the ERG.  All proceeds from the fines or
penalties  shall  accrue  to  the  monitoring  fund  of the  ERG  in  line  with  its
supervisory and regulatory functions.
SECITION   17.  Equ.azttg/  Czmzse.  -  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 grandee: frorided, houretJer, That the foregoing
shall neither apply to nor affect provisions concerning territory covered by the
franchise:  froL".bed, rfurfher, That the foregoing shall not apply to  the sale,
lease, transfer, grant of usufruct, or assignment of legislative franchises with
prior congressional approval.


SEorloN 18. 4ppltcahiEqi ctcaise. -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".
SECI`ION   19.  RqpectdhiHfty  and  JVon-Ea[cZustzlffty  CZ-e.  - 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.
SEorloN  20.   Sepambiltty  Clrmise.  -  If  any  of  the  sections  or
provisions of this Act is held invalid, all other provisions not affected thereby
shall remain valid.
SECTION  21.  Rqpealtng  Clmise.  -All  laws,  presidential  decrees,
executive orders, letters of instniction, 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.   "sding   founers.   -   Existing   mandates,   powers,
functions, and privileges granted to Electric Cooperatives under existing laws,
including  Sectl.on  JO  of  R€pubzzc  Act  IVo.   J053J,  shall  remain  valid  and
effective, unless expressly repealed by succeeding laws.
SEcrloN 23 . ELffgct±ut{g/ C±. -This Act shall take effect fifteen ( 15)
days after its publication in at least two (2) newspaper of general circulation.
Approued.,