Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 407

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

EXPLANATORY NOTE

With the onset of the technological revolution, electricity has become a necessity for
communities to grow and thrive. The modern society is driven by speed and
permanence, not stagnancy and inactivity—it is driven through efficacy and
sensibility. No longer should power outages be a bane to society. As such, it is
imperative that the service we provide to the people meet such demands and
present them with choices accorded to the consumers’ own terms.

The enactment of laws such as the Republic Act No. 9136, also known as the
“Electric Power Industry Reform Act of 2001”, allowed the government to deliver on
its promise of affordable basic services to its people and protect the public interest
With R.A. 9136 enacted, open access was permitted leading to retail competition
and a thrust for developments, allowing key players in the industry the opportunity to
provide a level of service worthy of the demands that the State necessitates. As a
step onwards a more transparent and fair energy sector, the law afforded both the
public and private sector a chance in the playing field; As a step further in fulfilling
the mandate of ensuring sustainable supply of electricity for the people, the presence
of fresh reliable electricity facilities is essential.

This bill seeks to provide such a dependable electric power distribution system to the
people of the Province of Camarines Sur by granting the franchise to operate the
Bicol Light and Power Corporation in the towns of Baao, Balatan, Bato, Buhi, Bula,


Nabua, And The City of Iriga. It seeks to address the issue of price control through
realizing a regime of free and fair competition in the energy sector. Finally, it seeks to
require standards that the grantee must attain in order to secure an effective
partnership between the Government and the grantee, as well as maintain a high
benchmark of the promised provided facility.

In view of the foregoing, the immediate passage of this bill is eamnestly sought.

/ 2

Luis MU! 'LRAY” F. VILLAFUERTE, JR.

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Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

407
HOUSE BILL NO.

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT GRANTING THE BICOL LIGHT AND POWER CORPORATION A.
FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE, OWN,
MANAGE AND MAINTAIN DISTRIBUTION SYSTEMS FOR THE CONVEYANCE
OF ELECTRIC POWER TO THE END-USERS IN THE TOWNS OF BAAO,
BALATAN, BATO, BUHI, BULA, NABUA, AND THE CITY OF IRIGA, PROVINCE
OF CAMARINES SUR, AND FOR OTHER PURPOSES

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
the Bicol Light and Power Corporation, hereunder referred to as the grantee, its
successors or assigns, a franchise to construct, install, establish, operate, lease,
own, manage and maintain for commercial purposes and in the public interest,
distribution systems for the conveyance of electric power to the end-users in the
towns of Baao, Balatan, Bato, Buhi, Bula, Nabua, And The City Of Iriga, Province Of
Camarines Sur.

SECTION 2. Manner of Operation of Facilities. All electric distribution facilities,
lines and systems for electric services installed, established, operated, leased,
owned, 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 the DOE, or its legal success, or
any other government agency concemed, to modify, improve and change such
facilities or systems in such a manner and to such extent as the progress in science
and technology, and improvements in the electric power distribution services may

render reasonable and proper.

Whenever practicable and for purposes of maintaining order, safety and aesthetics
along highways, roads, streets, alleys or rights-of-way, the grantee may allow the
use of free spaces in its poles, facilities or rights-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.

SECTION 3. Authority of the Energy Regulatory Commission (ERC). The
grantee shall secure from the ERC, or any other government agency which has
jurisdiction over the operation of the herein grantee, the necessary certificates of
Public convenience and necessity and other appropriate permits and licenses for the
construction and operation of its electric power distribution system. The ERC, or any
government agency having jurisdiction over the grantee’s operation, may allow the
grantee to expand to surrounding areas, not covered by its franchise area, whenever

public interest so requires.

SECTION 4. Ingress and Egress. For the purpose of erecting and maintaining
poles or other supports for said wires or other power conductors for the purpose of
laying and maintaining underground wires, cables or other conductors, it shall be
lawful for the grantee, its successors or assigns, with the prior approval by the
Department of Public Works and Highways (DPWH) or by the local government unit
(LGU) concemed, as may be appropriate, to make excavations of 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
by said grantee, its successors or assigns, in accordance with the standards set by
the DPWH or the LGU concerned. Should the grantee, its successors or 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 LGU 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.

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 electric 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 nondiscriminatory access
to its electric power 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 would constitute an abuse of market power such as, but not limited to,
unfair trade practices, monopolistic schemes, and any other activities that would
hinder competitiveness of business and industries.

SECTION 6. Rates for Services. The retail rates to its captive market and charges
for the distribution of electric power by the grantee to its end-user shall be regulated
by and subject to the approval by 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 grantee shall establish a
consumer desk that would 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 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.

SECTION 9. Right of Eminent Domain. Subject to the limitations and procedures
prescribed by the 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, highway, 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.

SECTION 10. Warranty in Favor of 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 electric power distribution system of

the grantee.


SECTION 11. 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 poles and wires in safe condition.

SECTION 12. Sale, Lease, Transfer, Usufruct, etc. The grantee shall not lease,
transfer, grant the usufruct of, sell nor assign this franchise or the rights and
privileges acquired hereunder to any person, fim, company, corporation or other
commercial or legal entity, nor merge with any other corporation or entity, nor shall
the controlling interest of the grantee be transferred, 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 by the Congress of the
Philippines: Provided, that Congress shall be informed of any lease, transfer, grant of
usufruct sale or assignment of franchise or the rights or privileges acquired within
sixty (60) days after the completion of said transaction: 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.

SECTION 13. Equality Clause. Any advantage, favor, privilege, exemption, or
immunity granted under existing franchises, or may hereafter be granted shall, upon
prior review and approval by Congress, become part of previously granted electric
power distribution franchises: Provided, however, that the foregoing shall neither
apply to nor affect provisions concerning territory covered by the franchise, the life
span of the franchise, or the type of service authorized by the franchise: Provided,
further, that the foregoing shalll not apply to the sale, lease, transfer, grant of usufruct
or assignment of legislative franchises as provided above.

SECTION 14. Term of Franchise. The franchise shall be for a term of twenty-five
(25) years from the date of effectivity of this Act. This franchise shall be deemed ipso
facto revoked in the event that the grantee fails to operate continuously for two (2)

years.


SECTION 15. 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.

SECTION 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.

SECTION 17. Penalty Clause. Any grantee who fails to submit the annual report to
Congress would be fined five hundred pesos (Php500.00) per working day of
noncompliance. The fine would be collected by the ERC from the said delinquent
franchise grantee separate from the reportorial penalties imposed by the ERC. The
collected funds 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 the ERC.

SECTION 18. 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 19. Repeatability and Nonexclusivity 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. 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.


SECTION 18. 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,