NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
•r i ' : J .
24 NOV 12 All :17
SENATE
ii'c-:.
Senate Bill No.
2876
Introduced by Senator Juan Miguel F. Zubiri
AN ACT
RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE 
GRANTED TO THE MANILA ELECTRIC COMPANY, UNDER REPUBLIC ACT NO. 
9209, ENTITLED, "AN ACT GRANTING THE MANILA ELECTRIC COMPANY A 
FRANCHISE TO CONSTRUCT, OPERATE AND MAINTAIN A DISTRIBUTION 
SYSTEM FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END-USERS IN 
THE CITIES/MUNICIPALITIES OF METRO MANILA, BULACAN, CAVITE AND 
RIZAL, AND CERTAIN CITIES/MUNICIPALITIES/BARANGAYS IN BATANGAS,
LAGUNA, QUEZON AND PAMPANGA"
EXPLANATORY NOTE
Manila Electric Company (MERALCO) is the biggest electric distribution utility 
company in the Philippines, powering households and businesses in 39 cities and 72 
municipalities in the country. It accounts for 55% of the country's electricity output 
despite having its franchise area covering only 3% of the total land area of the country.
The company has also actively contributed in ushering the growth of our nation. 
In 2023, it contributed to government revenue by remitting 10.43 billion worth of taxes, 
and spent 375 million pesos in community investments.
MERALCO has been providing electricity to thousands of homes and enterprises 
for 121 years and throughout this period, it has stayed committed to its vision of powering 
the nation and empowering Filipinos, and it intends to keep on delivering reliable and 
stable electricity to thousands of homes and businesses in the years to come.
This bill seeks to renew MERALCO's franchise, set to expire in 2028, for another 
twenty-five (25) years, ensuring the continued delivery of reliable power to thousands of 
households, industries, and institutions within its designated franchise area.
As we work towards development and continued growth of our nation, an 
uninterrupted electricity supply is essential not only to support the infrastructures and 
industries that drive progress, but also to ensure a comfortable quality of life for Filipinos.
In view of the foregoing, the swift passage of this bill is earnestly sought.
MIGUEL F. ZUBIRI


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
24 NOV 12 AH :17
SENATE
Senate Bill No. 2876
Introduced by Senator Juan Miguel F. Zubiri
AN ACT
RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE 
GRANTED TO THE MANILA ELECTRIC COMPANY, UNDER REPUBLIC ACT NO. 
9209, ENTITLED, "AN ACT GRANTING THE MANILA ELECTRIC COMPANY A 
FRANCHISE TO CONSTRUCT, OPERATE AND MAINTAIN A DISTRIBUTION 
SYSTEM FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END-USERS IN 
THE CITIES/MUNICIPALITIES OF METRO MANILA, BULACAN, CAVITE AND 
RIZAL, AND CERTAIN CITIES/MUNICIPALITIES/BARANGAYS IN BATANGAS,
LAGUNA, QUEZON AND PAMPANGA"
Be it enacted by the Senate and House of Representatives of the Phiiippines in Congress 
assembied:
1 
SECTION 1. Nature and Scope of Franchise. - Subject to the provisions
2 
of the Constitution and appiicable laws, ruies and reguiations, the franchise granted to
3 
Maniia Eiectric Company (MERALCO), hereunder referred to as the Grantee, its successors
4 
or assignees, under Republic Act No. 9209, to construct, operate and maintain in the public
5 
interest and commercial purposes, a distribution system for the conveyance of eiectric
6 
power to the end-users, in the cities of Caloocan, Las Pifias, Makati, Maiabon,
7 
Mandaiuyong, Manila, Marikina, Muntinlupa, Navotas, Parahaque, Pasay, Pasig, Quezon
8 
City, San Juan, Taguig and Vaienzueia and in the Municipality of Pateros in Metro Manila;
9 
cities of Baiiwag, Malolos, Meycauayan, and San Jose del Monte and in the
10 
municipalities of Angat, Balagtas, Bocaue, Buiakan, Bustos, Caiumpit, Doha Remedios
11 
Trinidad, Guiguinto, Hagonoy, Marilao, Norzagaray, Obando, Pandi, Paombong, Plaridel,
12 
Puiiian, San Ildefonso, San Miguei, San Rafael and Sta. Maria, Province of Bulacan; cities
13 
of Bacoor, Carmona, Cavite, Dasmarihas, Imus, Tagaytay, and Trece Martires, and
14 
in the municipaiities of Aifonso, Amadeo, General Mariano Alvarez, General Emilio
15 
Aguinaido, Generai Trias, Indang, Kawit, Magailanes, Maragondon, Mendez, Naic,
16 
Noveleta, Rosario, Silang, Tanza, Ternate, Province of Cavite; City of Antipolo and in
17 
the municipalities of Angono, Baras, Binangonan, Cainta, Cardona, Jaia-Jala, Rodriguez,
18 
Morong, Piiilia, San Mateo, Tanay, Taytay and Teresa, Province of Rizal; cities of
19 
Batangas and Sto. Tomas and in the Municipality of San Pascual, Province of Batangas;
20 
cities of Bihan, Cabuyao, Caiamba, San Pablo, San Pedro, Sta. Rosa and in the
21 
municipalities of Aiaminos, Bay, Calauan, Liiiw, Los Banos, Luisiana, Magdalena,
22 
Majayjay, Nagcarlan, Pila, Rizal, Sta. Cruz, and Victoria, Province of Laguna; cities
23 
of Lucena and Tayabas and in the municipalities of Candelaria, Dolores, Lucban,
24 
Mauban, Pagbilao, Sampaloc, San Antonio, Sariaya, and Tiaong, Province of Quezon;
25 
barangays of Balucuc and Caiantipe in Apaiit, Pampanga; Barangay Concepcion in San


1 
Simon, Pampanga; and barangays of Bahay Pare, Barangca, Dulong Hog, Magumbali,
2 
Mandili, Mapaniqui, Paligui, Pangclara, Pulong Gubat, Pulong Palazan, Salapungan, Vizal
3 
San Pablo, Vizal Santo Cristo and Vizal Sto. Nino in Candaba, Pampanga, is hereby
4 
renewed.
5 
As used in this Act, distribution system refers to the system of wires and
6 
associated facilities including sub-transmission lines belonging to a franchised
7 
distribution utility extending between the delivery point on the national transmission
8 
system or generating facility and the metering point/facility of the end-user.
9 
SEC. 2. Manner of Operation of Facilities. - All electric distribution facilities,
10 
lines, and systems for electric services owned, constructed, operated, and maintained by
11 
the Grantee, its successors, or assignees, shall be operated and maintained at all times
12 
in a superior manner, and it shall be the duty of the Grantee, its successors or assignees,
13 
whenever required to do so by the Energy Regulatory Commission (ERC) or its legal
14 
successor, or the Department of Energy or its legal successor, or any other government
15 
agency concerned, to modify, improve, and change the facilities or systems in such a
16 
manner and to such extent as the progress in science and improvements in the electric
17 
power services may render reasonable and proper.
18 
Whenever practicable and for purposes of maintaining order, safety, and aesthetics
19 
along the highways, roads, streets, alleys, or right-of-way, the Grantee may, for its own
20 
purposes, allow the use of free spaces in its poles, facilities, or right-of-way by interested
21 
parties upon reasonable compensation to the Grantee, considering the costs incurred to
22 
accommodate and administer the use of the Grantee's facilities by such parties. The ERC
23 
shall decide in case of dispute or disagreement between the parties concerned.
24 
SEC. 3. Authority of the Energy Regulatory Commission. - The Grantee
25 
shall secure from the ERC or any other government agency which has jurisdiction over the
26 
operation of the herein Grantee, the necessary certificate of public convenience and
27 
necessity and other appropriate permits and licenses for the construction and operation
28 
of its electric distribution system.
29 
SEC. 4. Excavation and Renovation Works. - For the purpose of erecting
30 
and maintaining poles and other supports for the wires or other conductors, or for the
31 
purpose of laying and maintaining of underground wires, cables, pipes, or other
32 
conductors, the Grantee, its successors or assignees, is authorized to make excavations
33 
or lay conduits in any of the public places, highways, roads, streets, lines, alleys,
34 
avenues, sidewalks, or bridges of the said province and cities and/or municipalities:
35 
Provided, however. That a public place, highway, road, street, lane, alley, avenue,
36 
sidewalk, or bridge disturbed, altered, or changed by reason of erection of poles or other
37 
supports or the underground laying of wires, other conductors or conduits, shall be
38 
repaired and replaced in workmanlike manner at the expense of the Grantee, its
39 
successors or assignees, in accordance with the standards set by the Department of
40 
Public Works and Highways (DPWH) or the relevant local government unit (LGU)
41 
concerned.
42 
Should the Grantee, its successors or assignees, after the ten (lO)-day notice
43 
from the grant of authority, fail, refuse or neglect to repair or replace any part of
44 
public place, road, highway, street, lane, alley, avenue, sidewalk, or bridge that
45 
has been disturbed, altered or changed by the said Grantee, its successors or
46 
assignees, then the DPWH or the LGU concerned shall have the right to have the
47 
same repaired and replaced in good order and condition and charge the Grantee,
48 
its successors or assignees, at double the amount of the costs and expenses for
49 
such repair or replacement.
50


1 
SEC. 5. Responsibility to the Public. - The Grantee shall supply electricity to its
2 
captive market in urban and rural portions of its franchise area in the least cost manner.
3 
In the interest of the public good and as far as feasible and whenever required by the
4 
ERC, the Grantee shall modify, improve or change its facilities, poles, lines, systems and
5 
equipment for the purpose of providing efficient and reliable service and reduced
6 
electricity costs. The Grantee shall only incur reasonable and just costs for its services
7 
to all types of consumers within its franchise area in order that business and industries
8 
shall be able to compete. The Grantee shall promote and promptly process applications
9 
for net-metering connections.
10 
The Grantee shall have the obligation to provide open and nondiscriminatory
11 
access to its distribution system and services for any end-user within its franchise area
12 
consistent with Republic Act No. 9136, as amended, otherwise known as the "Electric Power
13 
Industry Reform Act of 2001". The Grantee shall not engage in any activity that will
14 
constitute an abuse of market power such as but not limited to, unfair trade practices,
15 
monopolistic schemes and any other activities that will hinder competitiveness or
16 
businesses and industries.
17 
SEC. 6. Rates for Services. - The retail rates and charges for the distribution of
18 
electric power by the Grantee to its end-user shall be regulated by and subject to the
19 
approval of the ERC or its legal successor.
20 
The Grantee shall identify and segregate in its bill to the end-users the
21 
components of the retail rate pursuant to Republic Act No. 9136, as amended. Such
22 
rates charged by the Grantee to the end-users shall be made public and transparent.
23 
The Grantee shall implement a lifeline rate to marginalized end users for as long as it is
24 
in effect as mandated under Republic Act No. 9136, as amended.
25
26 
SEC. 7. Promotion of Consumer Interests. - The herein Grantee shall
27 
establish a platform for consumer concerns to handle consumer complaints and ensure
28 
adequate promotion of consumer interests in accordance with applicable rules and
29 
regulations of the ERC, its successor, and other relevant regulatory agencies. The
30 
Grantee shall act with dispatch on all complaints brought before it and shall ensure that
31 
such a platform can be remotely accessed through electronic or digital means.
32 
The Grantee will submit as part of its annual report its corporate social
33 
responsibility initiatives, including, but not limited to, providing electricity access to
34 
unenergized areas, remote, off-grid schools, community and health centers, and its efforts
35 
to restore power in areas affected by calamities.
36
37 
SEC. 8. Election of Independent Directors. - The Board of Directors of the
38 
Grantee shall have independent directors constituting at least twenty percent (20%)
39 
of its total membership. These directors must be elected by a majority of the outstanding
40 
shares with the right to vote.
41 
An independent director is a person who, apart from shareholding and fees
42 
received from the corporation, is independent of management and free from any
43 
business or other relationship which could or could reasonably be perceived to
44 
materially interfere with the exercise of independent judgment in carrying out the
45 
responsibilities as a director.
46 
SEC. 9. Right of the Government. - A special right is hereby reserved to the
47 
President of the Philippines in times of war, rebellion, public peril, calamity, emergency,
48 
disaster or disturbance of peace and order to temporarily take over and operate the
49 
distribution system of the Grantee or to authorize the temporary use and operation
50 
thereof by any agency/department of the government upon due compensation to the
51 
Grantee, its successors or assignees, for the use of the said distribution system during
52 
the period when this shall be operated.


1 
SEC. 10. Right of Eminent Domain. - Subject to the limitations and
2 
procedures prescribed by law, the Grantee is authorized to exercise the right of eminent
3 
domain insofar as it may be reasonably necessary for the efficient establishment,
4 
improvement, upgrading, rehabilitation, maintenance and operation of services. The
5 
Grantee is authorized to install and maintain its poles, wires and other facilities over,
6 
under and across public property, including streets, highways, forest reserves and
7 
other similar property of the Government of the Philippines, its branches or any of
8 
its instrumentalities. The Grantee may acquire such private property as is actually
9 
necessary for the realization of the purposes for which this franchise is granted: Provided,
10 
That proper expropriation proceedings shall have been Instituted and just compensation
11 
paid.
12 
SEC. 11. Term of Franchise. - This franchise shall be for a term of twenty-five
13 
(25) years from the effectivity of this Act, unless sooner revoked or canceled by Congress
14 
for any violation of the terms and/or provisions of the franchise herein granted.
15 
SEC. 12. Warranty in Favor of Nationai and Locai Governments. - The
16 
Grantee shail hold the national, provincial and municipal governments of the Philippines
17 
harmless from all claims, accounts, demands or actions arising out of accidents or
18 
injuries, whether to property or persons, caused by the construction, installation,
19 
operation and maintenance of the distribution system of the Grantee.
20 
SEC. 13. Liabiiity for Damages. - The Grantee shall be liable for any injury
21 
and damage arising from or caused by accident to persons and property by reason of any
22 
defective construction under this franchise or of any neglect or omission to keep its poles
23 
and wires in a safe condition.
24 
SEC. 14. Sale, Lease, Transfer, Grant of Usufruct, or Assignment of the
25 
Franchise-The Grantee shall not sell, lease, transfer, grant the usufruct of, nor assign
26 
this franchise or the rights and privileges acquired thereunder to any person, firm,
27 
company, corporation, or other commercial or legal entity, nor merge with any other
28 
corporation or entity, nor shall transfer the controlling interest of the Grantee
29 
simultaneously or contemporaneously, to any such person, firm, company, corporation
30 
or entity without the prior approval of the Congress of the Philippines. The Congress shall
31 
be informed of any sale, lease, transfer, grant of usufruct, or assignment of this franchise
32 
or the rights and privileges acquired thereunder, or of the merger or transfer of the
33 
controlling interest of the Grantee simultaneously or contemporaneously, to any such
34 
person, firm, company, corporation or entity without the prior approval of the Congress
35 
of the Philippines. The Congress shall be informed of any sale, lease, transfer, grant of
36 
usufruct, or assignment of this franchise or the rights and privileges acquired thereunder,
37 
or of the merger or transfer of the controlling interest of the Grantee, within sixty (60)
38 
days after the completion of the said transaction. Failure to report to Congress such
39 
change of ownership shall render the franchise ipso facto revoked. Any person or entity
40 
to which this franchise is sold, transferred or assigned, shall be subject to the same
41 
conditions, terms, restrictions and limitations of this Act.
42
43 
SEC. 15. Dispersal of Ownership. - In accordance with the constitutional
44 
provision encouraging public participation in public utilities, the Grantee shall maintain a
45 
listing and offer to Filipino citizens at least thirty percent (30%) of its outstanding capital
46 
stock or a higher percentage that may hereafter be provided by law in any securities
47 
exchange in the Philippines: Provided, That in cases where public offer of shares is
48 
not applicable, establishment of cooperatives and other methods of encouraging
49 
public participation by citizens and corporations operating public utilities must be
50 
implemented. Noncompliance therewith shall render the franchise ipso facto revoked.


1 
SEC. 16. Commitment to Provide and Promote the Creation of
2 
Empioyment Opportunities. - The Grantee shall create employment
3 
opportunities and shall allow on-the-job trainings in their franchise operations:
4 
Provided, That priority shall be accorded to the residents of the franchise area:
5 
Provided, further. That the Grantee shall follow the applicable labor standards and
6 
allowance entitlement under existing labor laws, rules and regulations and similar
7 
issuances: Provided, finaiiy. That the employment opportunities or jobs created shall be
8 
reflected in the General Information Sheet (GIS) to be submitted to the Securities
9 
and Exchange Commission (SEC) annually.
10 
SEC. 17. Reportoriai Requirement. - The Grantee shall submit an annual
11 
report of its finances and operations to the Congress of the Philippines, through the
12 
Committee on Legislative Franchises of the House of Representatives and the Committee
13 
on Pubiic Services of the Senate, on its compliance with the terms and conditions of
14 
the franchise and on its operations on or before April 30 every year after the effectivity
15 
of this Act.
16 
The annual report shall include an update on the rollout, development, operation
17 
and/or expansion of the business; audited financial statements; latest GIS officially
18 
submitted to the SEC (if available or applicable); certification from the ERC on the status
19 
of its permits and operations; and an update on the dispersal of ownership undertaking,
20 
if appiicable.
21 
The reportoriai compliance certificate issued by Congress shall be required before
22 
any application for permit or certificate is accepted by the ERC.
23 
SEC. 18. Fine. - Failure of the Grantee to submit the requisite annual report to
24 
Congress shall be penalized by a fine in the amount of One million pesos
25 
(Phpl,000,000.00) per working day of noncompliance. The fine shall be collected by the
26 
ERC from the Grantee separate from the reportoriai penalties imposed by the ERC and
27 
the same shall be remitted to the Bureau of the Treasury.
28 
SEC. 19. Equaiity Ciause. - Any advantage, favor, privilege, exemption, or
29 
immunity granted under existing franchises, or which may hereafter be granted upon
30 
prior review and approval of Congress, shall become part of this franchise and shall be
31 
accorded immediately and unconditionally to the herein Grantee: Provided, however. That
32 
the foregoing shall neither apply to nor affect provisions concerning territorial coverage,
33 
the term, or the type of service provided in this Act.
34 
SEC. 20. Appiicabiiity Ciause. - The Grantee shall comply with and be subject
35 
to the provisions of Commonwealth Act No. 146, or the "Public Service Act" as amended;
36 
Republic Act No. 9136, as amended; Republic Act No. 9513, or the "Renewable Energy
37 
Act of 2008"; Republic Act No. 11361, or the "Anti-Obstruction of Power Lines
38 
Act"; and other applicable laws.
39 
SEC. 21. Repeaiabiiity andNon-Exciusivity Ciause. - This franchise shall be
40 
subject to amendment, alteration or repeal by the Congress of the Philippines when the
41 
public interest so requires and shall not be interpreted as an exclusive grant of
42 
the privileges herein provided for.


1 
SEC. 22. Separability Clause. - If any of the sections or provisions of this Act
2 
is held invalid, all other provisions not affected thereby shall remain valid.
3 
SEC. 23. Repealing Clause. - All laws, decrees, orders, resolutions, instructions
4 
and rules and regulations or parts thereof, which are inconsistent herewith, are hereby
5 
deemed repealed or modified accordingly.
6 
SEC. 24. EfFectivity. - This Act shall take effect fifteen (15) days from the date
7 
of its publication, upon the initiative of the Grantee, in the Official Gazette or in any
8 
newspaper of general circulation in the Philippines.
Approved,