Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
Nineteenth Congress 
Third Regular Session 
HOUSE BILL NO. 10702
Introduced by : Rep. Manuel T. Sagarbarria 
EXPLANATORY NOTE 
The Negros Oriental I Electric Cooperative, Inc. (NORECO I) was organized by the Provincial 
Electric Cooperative Team and the National Electrification Administration (NEA) in 1972. In the 
same year, NORECO I was incorporated under Certificate of Registration No. 28 issued by NEA, 
which will expire on December 19, 2029. 
For over fifty-two (52) years, NORECO I has been providing electricity to the various cities and 
municipalities in the Province of Negros Oriental, namely the Cities of Bais, Guihulngan and 
Canlaon and Municipalities of Mabinay, Manjuyod, Bindoy, Ayungon, Tayasan, Jimalalud, La 
Libertad,  and Vallehermoso. 
Pursuant to Section 27 of Republic Act No. 9136, otherwise known as the Electric Power Industry 
Reform Act (EPIRA), the power to grant franchises to persons engaged in the transmission and 
distribution of electricity shall be vested exclusively in the Congress of the Philippines. 
Thus, this bill seeks to grant congressional franchise to NORECO I to provide an electric power 
distribution system to the constituents of the above-mentioned cities and municipalities. This bill 
also sets the highest standards that NORECO I must adhere to promote efficient and effective 
operations and maintenance of their electric distribution facilities, lines and systems in service of 
our people. 
Through time, NORECO I has expanded its coverage in the province, taking pride in lighting 
homes located in far-flung and mountainous areas. In fact, all barangays in their coverage are 
already energized. It has remained true to its mandate in providing prompt, efficient, and reliable 
quality service at reasonable price. 
August 1, 2024
10:06 am


The enactment of this bill will guarantee the continuity of the delivery of electric service of 
NORECO I to the Province of Negros Oriental, in particular, and ensure total electrification in the 
province, in general 
In view of the foregoing, the approval of this bill is earnestly sought. 
MANUEL “CHIQUITING” T. SAGARBARRIA 
Representative, 2nd District, Negros Oriental 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
Nineteenth Congress 
Third Regular Session 
HOUSE BILL NO. 10702 
Introduced by : Rep. Manuel T. Sagarbarria 
AN ACT 
GRANTING A FRANCHISE TO THE NEGROS ORIENTAL I ELECTRIC 
COOPERATIVE INC. (NORECO I)   TO CONSTRUCT, INSTALL, ESTABLISH, 
OPERATE, OWN, MANAGE AND MAINTAIN DISTRIBUTION SYSTEMS FOR THE    
CONVEYANCE OF ELECTRIC POWER TO THE END-USERS IN THE CITY OF BAIS 
CITY, CANLAON CITY AND GUIHULNGAN CITY AND MUNICIPALITIES OF 
MABINAY, MANJUYOD, BINDOY, AYUNGON, TAYASAN, JIMALALUD, LA 
LIBERTAD AND VALLEHERMSO PROVINCE OF NEGROS ORIENTAL
Be it enacted by the Senate and 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 NEGROS ORIENTAL I 
ELECTRIC COOPERATIVE, INC. (NORECO I), 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 Cities of Bais, Guihulngan and Canlaon and Municipalities of 
Mabinay, Manjuyod, Bindoy, Ayungon, Tayasan, Jimalalud, La Libertad and Vallehermoso, 
Province of Negros Oriental.  
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.   
SECTION 2. Manner of Operations of Facilities. - All electric distribution facilities, lines and 
systems for electric services installed, owned, operated, managed or maintained by the Grantee 


shall be operated or maintained at all times in a best manner. It shall be the duty of the Grantee, its 
successors or assignees, to continuously improve its facilities and employ the latest technology 
and innovations that promote efficiency, and which is beneficial to the consumers. It shall comply 
with the standards set by the Energy Regulatory Commission (ERC) such as those found in the 
Philippine Distribution Code, its resolutions, and other issuances. The Grantee shall also 
implement measures required by the ERC, the Department of Energy (DOE), or its legal successor, 
or the National Electrification Administration (NEA) or its legal successor, or any other 
government agency concerned to modify, improve, upgrade and change such facilities or systems 
in such manner and to such extent as the progress in science or technology and improvements or 
innovation 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 easements, the Grantee may allow the use of its poles, facilities, or 
easements by interested parties upon reasonable compensation to the Grantee, considering costs 
incurred to accommodate and administer the use of the Grantee’s facilities by such parties. The 
ERC shall resolve cases of dispute or disagreement between parties. 
SECTION 3. Authority of the Energy Regulatory Commission - The Grantee shall secure from 
the ERC or any other government agency which has jurisdiction over the operation of the herein 
Grantee, the necessary certificate of public convenience and necessity (CPCN) and other 
appropriate permits and licenses for the construction and operation of its electric distribution 
system. 
SECTION 4. Excavation and Restoration Works. – For the purpose of erecting, maintaining 
poles and other supports for wires or other conductors for the laying and maintaining of 
underground wires, cable, pipes or other conductors, the Grantee, its successors or assignees, is 
authorized to make excavations or lay conduits in any of the public places, roads, highways, streets, 
lanes, alleys, avenues, sidewalks, or bridges of said province, cities and/or municipalities, subject 
to prior approval of the Department of Public Works and Highways (DPWH) or the relevant local 
government unit (LGU) concerned. Provided, however, that any pubic place, road, highway, street, 
lane, alley, avenue, sidewalk, or bridge disturbed, altered, or changed by reason of the erection of 
poles or other supports or the underground laying of wires, other conductors or conduits, shall be 
repaired or assignees, in accordance with the standards set by the DPWH or the relevant LGU 
concerned. Should the Grantee, its successors or assignees, after the ten-(10) day notice from the 
said authority, fail, refuse, or neglect to repair or replace any part of a public place, road, highway, 
street, lane, alley, avenue, sidewalk, or bridge that has been disturbed, altered, or changed by the 
said Grantee, its successors or assignees, at double the amount of the costs and expenses incurred 
for such repair or replacement.  
SECTION 5. Responsibility to the Public. - The Grantee shall supply electricity to its captive 
market in the urban and rural portions of its franchise area 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 power rates for its services to all types of consumers within its franchised areas 
in order that business and industries shall be able to complete. 
The Grantee is required to source and procure its power requirements in accordance with the 
applicable rules and resolutions of the ERC. Provided, that, the Grantee, immediately after the 
enactment of this Act, may be allowed to avail of the negotiated procurement of emergency power 
supply under the applicable circulars, rules, or regulations issued by the DOE or the ERC, or their 
legal successors, allowing emergency procurement: Provided further, That, such emergency 
contracts, shall only be for a period of one (1) year and the rates must not be higher than the latest 
ERC-approved generation tariff for the same or similar technologies in the area. 
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 (RA) 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.  
SECTION 6. Rates for Services. - 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 itemize the components of its retail rate pursuant to RA 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 RA No. 9136.  
SECTION 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. 
The Grantee shall reduce the duration and frequency of interruptions in its network and in that 
regard shall observe the System Average Interruption Frequency Index (SAIFI) and System 
Average Interruption Duration Index (SAIDI) imposed by the ERC. 
SECTION 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 the stations or 
facilities during the period when these shall be so operated.  
SECTION 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 
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, including but not limited to poles, wires, cables, 
transformers, switching equipment and stations, buildings, infrastructure, machineries and 
equipment previously, currently or actually used, or intended to be used, or have been abandoned, 
unused or underutilized, or which obstruct its facilities, for the operation of a distribution system 
for the conveyance of electric power to end users in its franchise area: Provided, That proper 
expropriation proceedings shall have been instituted and just compensation paid. 
SECTION 10. Term of Franchise. - Unless sooner cancelled, the franchise shall be in effect for 
a period of twenty-five (25) years from the effectivity of this Act. This franchise shall be deemed 
ipso facto revoked in the event the Grantee fails to operate continuously for two (2) years upon 
issuance of the CPCN by ERC. 
SECTION 11. Acceptance and Compliance. - Acceptance of this franchise shall be given in 
writing to Congress, 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. Nonacceptance shall render the franchise void.  
SECTION 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 from accidents causing injury to persons or damage 
to properties, during the construction, installation, operation, and maintenance of the distribution 
system of the Grantee.  
SECTION 13.  Liability for Damages. - The Grantee shall be liable for any injury to persons and 
damage to properties arising from accidents 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 14. Sale, Lease, Transfer, Usufruct, or Assignment of Franchise. - 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: Provided, 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: Provided further, That any such transfer, sale, or assignment is in 
accordance with the constitutional limitations: Provided furthermore, 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 15. Reportorial Requirement. - The Grantee shall submit an annual report to 
Congress, 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 every year during the term of the 
franchise.  
The annual report shall include an update on the rollout, development, operation and/or expansion 
of the business; audited financial statements; latest GIS officially submitted to the SEC (if 
available or applicable), certification from the ERC on the status of its permits and operations; and 
an update on the dispersal  
The reportorial compliance certificate issued by Congress shall be required before any application 
for permit or certificate is accepted by the NEA and ERC. 
 
SECTION 16. Fine. - The failure of the Grantee to submit the requisite annual report to Congress 
shall be penalized with a fine in the amount of Five hundred pesos (P500.00) per working day of 
noncompliance which shall be collected by the ERC. The fine shall be collected separately from 
the reportorial penalties imposed by the ERC and shall be remitted to the Bureau of the Treasury. 
 
SECTION 17. Equality Clause. - 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, 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 shall not 
apply to the sale, lease, transfer, grant of usufruct, or assignment of legislative franchises with 
prior congressional approval.  
 
SECTION 18.  Applicability of Existing Laws. - The grantee shall comply with and be subject 
to the provisions of Commonwealth Act No. 146 or the "Public Service Act", as amended; 
Republic Act No. 9136; “and shall be under the regulatory and supervisory authority of the 
National Electrification Administration under Republic Act No. 10531 or the National 
Electrification Administration Reform Act of 2013.” 
 
SECTION 19. Repealability and Non-Exclusivity Clause. - This  franchise shall be subject to 
amendment, alteration, or repeal by Congress when the public interest so requires and shall not be 
interpreted as an exclusive grant of the privileges herein provided for. 
 


SECTION 20. Existing Powers. - Existing mandates, powers, functions, and privileges granted 
to electric cooperatives under existing laws, including Section 10 of RA No. 10531, otherwise 
known as the “National Electrification Administration Reform Act of 2013”, shall remain valid 
and effective, unless expressly repealed by succeeding laws.  
 
 
SECTION 21.  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 22. Repealing Clause. - 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.  Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation. 
Approved,