Republic of the Philippines
aBoqst of R¢pce*cotrth€S
Quezoncity
NINETEENTTI CONGRESS
First Regular Session
House Bill.No.    6484
Introduced by
4th District Of Laguna Rapreseritative Maria Jamina Katherine 8. Agarao-Oloroso
PHILRECA Party-List Representative Presley C. De Jesus
APEC Party-List Representative Sergio C. Dagooc
EXPLANATORY NOTE
The  First  Laguna  Electric  Cooperative,  Inc.  (FLECO)  was  incorporated  and
registeredwiththeNationalElectrificationAdministration(NEA)onApril3,1973,under
Presidential Decree 269, with a mandate to perform electrification in the province of
Laguna on an area coverage basis.  Pursuant to  Section 27 of Republic Act No.  9136,
otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001, 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 FLECO to continuously provide an
electric  power  distribution  system  to  the  people  of the  municipalities  of  Cavinti,
Pagsanjan,  Lumban,  Kalayaan,  Paete,  Pakil,  Pangil,  Siniloan,  Famy,  Mabitac,  and
Sta.Maria all in the 4th District of Laguna. 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 FLECO  is  gathered  from  the  results
produced since  it was  granted a franchise to operate electric  light and power
services  in  the   11   municipalities  of  Laguna.   FLECO  has  attained  the   100%
energization of the 11 municipalities,164 barangays, and 76,339 household connections
within its coverage area.  As of December 2021, FLECO has an average System Loss and
Collection Efficiency of 9.19% and 99.30%, respectively.   It has been classified by the
NEA as green EC and achieved the AAA categorization for six (6) consecutive years with
99% overall performance rating.


The enactment of this Bill will ensure the continuous delivery of electric
service from FLECO to the mentioned municipalities and will ereate the path
towards progress in Laguna. Likewise, it will be in line with the policy of the
State as provided for in EPIRA, to ensure and accelerate the total electrification
of the country; and to ensure the quality, reliability, security, and affordability of
the supply of electric  power.
In view of the foregoing, the approval of this bill is earnestly sought.
-JA
PHIL
8. AGARAO-OLOROSO
a Representative
#,H
SERGIO C. DAGO0C
APEC Party-List Representative


Republic of the Philippines
apoust of aertyredentut8€S
Quezoncity
NINETEENTH CONGRESS
First Regular Session
HouseBi||-No.     6484
Introduced by
4th District Of lidguna Represertlative Maria Jamina Katherine 8. Agarao-Oloroso
PHILRECA Party-List Representative Presley C. De Jesus
APEC Party-List Representative Sergio C. Dagooc
AN  ACT  GRANTING  A  FRANCHISE  TO  THE  FIRST  LACUNA
ELECTRIC   COOPERATIVE,   INC.   (FLECO)   TO   CONSTRUCT,
INSTALL,     ESTABLISH,     OPERATE,     OWN,     MANAGE     AND
MAINTAIN  DISTRIBUTION  SYSTEMS FOR THE  CONVEYANCE
oF    ELECTRIc    powER    TO    ITs    ENrmsERs    IN    THE
MUNlclpALITIEs     oF     CAvll`rm,     pAGSAN]AV,     LUMBAN,
KALAYAAN,    PAETE,    PAKIL,    PANGIL,    SINILOAN,    FAMY,
MABITAC, AND STA.MARIA, PROVINCE 0F LACUNA
Be it enelcted by the Senate and the House Of Representatives Of the Republic
Of the Philippines .in Congress assembled.
SECTION  1. Ivafwre a#d Scope a/ Fro#chJ.sc. -Subject to the
provisions of the Constitution and applicable laws, rules, and regulations,
there is hereby granted to the First Laguna Electric Cooperative, Inc. (FLECO),
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
Cavinti,  Pagsanjan,  Lumbar, Kalayaan, Paete, Pakil, Pangil,  Siniloan, Famy,
Mabitac, and Sta.Maria, Province of Laguna.
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.


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SEC"OIN  2.  Manner  Of Operations  Of Facilities  -  AIl  ctechic
distribution   facilities,   lines   and   systems for electric   services   installed,
owned, maintain,  operated,  managed  or  maintained  by  the  grantee,  its
successors   or assigns hall  be operated  or maintained  at  all tines  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 refemed 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 pulposes of maintaining order, safety
and aesthetics along the highways, roads, streets, alleys or right-of-way, the
grantee may   allow the   use   offree 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.
SE;a:TI!OiN  3.  Authortry  Of  the  Energy  Regulatory  Commission
+EJ[CJ.  -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   license,   permit  or  authority
indispensable    for the construction  and  operation  of the  electric  power
distribution  system.
SECTION  4.   JHgress ¢#d Egress  -For the purpose of erecting  and
maintaining the poles or other supports for said facilities, wires or  other
conductor 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 (DPWII) or the local government unit concerned,
as may   be appropriate, to make excavations or lay conduits in any of the
public  places, highways, roads, 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  by  the  Grantee,   its
successors or assignees,  in accordance with the standards set by the  DPWII
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 the public place, highway,
road,  street,  lane,  alley,  avenue,  sidewalk, or bridge altered,  changed,  or
disturbed by the  said grantee, its successors or assignees, thenthe DPWII
or  the  local government unit concerned  shall have the  right  to have the
same  repaired  and  replaced  in  good  order and  condition  and  charge  the
grantee,  its  successors  or  assignees,  double  the  amount  of the  cost  and
expenses for such repair or replacement.
SECTION  5.  Responsibility to  the Public  -The gran:tee 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 to provide efficient and reliable service


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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 so  that businesses 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  the  competitiveness  of businesses  and
industries.
SECTION 6. jRa/es/or ServJ.ccs -  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  a  lifeline rate for marginalized  end-users  as mandated under
Republic Act No. 9136.
SECTIOIN 7. PTomotion 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. Rc.gfef a/ ffee Gover#me#f - 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. IRz.gAf a/EmJ.»c»f Dom¢z.n -Subject to the limitations
and procedures prescribed by law, the grantee is authorized to exercise the
rightof 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
the 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: Provz.decJ,   that proper expropriate proceedings shall have been
instituted and just compensation paid.
SECTION  10.  Term   a/  Fr¢#cfoI.se  -The franchise shall be  in
effect for a period of twenty-five (25) years  from the year of expiration of its
existing franchise.   This  franchise   shall be deemed jz.so/czc/a revoked in the
event the grantee fails to operate continuously for two (2) years.
SECTION  11. ,4ccepf¢#ce ¢#d Coiilp/I.¢"ce -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 such acceptance, the grantee shall exercise the
privileges granted under this Act. Non-acceptance shall render the franchise
void.
SiEC:I:I!OiN 12. Waranty 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, o
actions arising out of accidents or injuries, whether to property or persons,
caused by the construction, installation, operation, and maintenance of the
distribution system of the grantee.
SECTION 13. £J.¢bz./z-fy/or Z}¢m¢ges -  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 a safe  condition.
SIEC"OIN  14.  Income  Tax  and  Minimum  Corporate  Income  Ten
/"CTP - The grantee shall be permanently exempt from the payment of
income tax and Minimum Corporate Income Tax or MCIT.
S;ECTroiN   15.   Sale,    Lease,    Transfer,    Usufruct,    or
Ass..g"me#f   a/  Fra"cfr..sc  -     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. Provz.dec7,  that
Congress shall be informed  of any  lease, transfer, granting the usufroct  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.   Provz.c7ec7rfurffeeJ`,  that
any   such   transfer,   sale,   or   assignment   is   in   accordance   with   the
constitutional  limitations.  Provided /z4r/feermore,  that failure to report to
Congress such change of ownership  shall render the franchise zZ7so /czcfo
revoked.  Provided, ¢72cz//};,  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 16. IRepo77o7iz.a/ IRcgz«.re7„e7ff -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 duringthe temi  of the      franchise.   The   reportorial   compliance
certificate issued  by Congress shall be required before any application for a
permit or certiflcate is accepted by the ERC.
SECTION  17.  Fi.#e  -  The  failure  of the  grantee  to  submit  the
requisite annual  report  to  Congress  shall  be penalized  by  a  fine  of five
hundred pesos (P500.00) per working day of non-compliance which shall be
collected  by  the  ERC.  The  fine  shall   be  collected  separately  from the


reportorial penalties imposed by the ERG and shall be remitted to the Bureau
of the Treasny-
SECTION  18. Eg#¢/try C/¢wsc  -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,  faowever, 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,ystrffeer, that the foregoing shall not apply to the
sale, lease, transfer, grant  ofusufruct,    or    assignment    of    legislative
franchises   with prior congressional approval.
SECTION 19. -4fap/..cob../try CJa#se - The grantee shall comply with
and be subject to the provisions of commonwealth Act No. 146, as amended,
otherwise known  asthe  "Public  Service Act"  and      Republic   Act   No.
9136, otherwise known as the "Electric Power Industry Reform Act of 2001 ".
SECTI0IN 20.  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 arid shall
not be interpreted as an exclusive grant of the privileges herein provided for.
SECTION 21. Sep¢r¢bl.Jtry C7awsc - If any of the sections or provisions
of this Act is held invalid, all other provisions not affected thereby   shall
remain valid.
SECTION   22.   jRepcoJI.#g CJausc  - All  laws, presidential   decrees,
executive   orders,   letters   of   instruction,   administrative   rules   and
regulations,  or parts thereof which are contrary to or inconsistent with the
provisions of this Act are hereby repealed or modified  accordingly.
SECTION 23 . E]cl.s/I."g Powers -Existing mandates, powers, functions,
and   privileges   granted  to   Electric   Cooperatives   under   existing   laws,
including  Section  JO  of Repctb/z.c .4cf IVo.  J053J,  shall  remain  valid  and
effective unless expressly repealed by succeeding laws.
SECTION 24. EJLorec/I.tJi.fy CJ¢wsc -  This Act shall take effect fifteen
(15)  days  after  its  publication  in  at  least  two  (2)  newspapers  of general
circulation.
Approved.