Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

16'" CONGRESS
First Regular Session

2185

House Bill No.
Sponsored by:

REP. RANEO E. ABU REP. MARK LLANDRO L.MENDOZA REP. NELSON P. COLLANTES
2" District, Batangas 4" District, Batangas 3" District, Batangas,

EXPLANATORY NOTE

‘
Under the 1987 Philippine Constitution, the grant of franchise to a public utllily *
company emanates from Congress

Republic Act 7160, otherwise known as the 1991 Local Government Code, under
Section 17 thereof provides that local government units (LGUs) shall exercise powers and
discharge functions and responsibilities as are necessary , appropriate or incidental to
efficient and effective delivery of basic services and facilities to the constituents. Providing
better and reliable electric power system that will cater to the demand of people in the
municipality is the current endeavor of the Municipality of Bauan in the Province of
Batangas.

In line of the foregoing, the Sangguniang Bayan (SB), on July 20, 2012, passed a
Resolution endorsing the application of First Bay Power (FBPC) Corp. to construct, operate
and maintain a distribution system for the conveyance of electric power to the constituents of
the Municipality of Bauan. Copy of which is attached as Annex "A"

This bill has already been filed by Representative Hermilando |, Mandanas during the
15" Congress as House Bill No. 6724, It has passed the Third Reading and was transmitted
to the Senate of the Philippines. However due to lack of material time, in view of the
adjournment of session to pave way for the 2013 Elections, the said bill was not acted upon
accordingly. .

In views thereof, approval of this bill this 16" Congress is eam

IDRO L.MENDOZA

NL. Olt

REP.NELSON P. COLLANTES


Republic of the Philippines
Province of Batangas,
‘Municipality of Bauan

OFFICE OF THE SANGGUNIANG BAYAN.

w

EXCERPTS FROM THE MINUTES OF THE REGULAR SESSION OF
‘THE SANGGUNIANG BAYAN HELD AT THE KNIGHTS OF
‘COLUMBUS HALL ON JULY 20, 2012 AT 10:00 A.M.

PRESENT:
HON. NEIL P. VALDEZ

HON. KELVIN REX D. GIMENO
HON JEROME ALVIN B. MONILLA,
HON. PRESNEDY N. BACAL

HON. HEEMINIOM. DOLOR

HON. WILLIAM G ABRATIAN

HON. JULIAN C.CASAPAO

HON. YANILLE A DALANGIN
HON. REYNALDO M. ABRAHAM

‘ABSENT:

HON. JUAN M. MAGHOO, LL.B.
HON. VENICE ROSE A’BRUAL

‘SB Member
sand Acting SB Presiding Officer
SB Member

‘Municipal Vice Mayor
‘SB Member, Presider
‘SK Federation

Abeabaa, duly seconded by Hon. Julian C.

©
Casapao, Hon. Presnedy N. Bucal and Hoa. Kelvin Itex D. Gimeno, dhe following
relation the

Member and Acting SB Presiding

RESOLUTION
NO. 12-07-0541

APPROVING THE REQUEST OF THE HONORABLE MUNICIPAL
MAYOR RYANH M. DOLOK AND INTERPOSED NO OBJECTION TO THE
ENDORSEMENT OF FIRST BAY POWER CORPORATION IN CONNECTION
‘WITH ITS FRANCHISE APPLICATION “TO CONSTRUCT, OPERATE AND
‘MAINTAIN A DISTRIBUTION SYSTEM FOR THE CONVEYANCE OF
ELECTRIC POWER TO THE END-USERS IN THE

MUNICIPALITY OF BAUAN,

-ROVINCE OF BATANGAS” _

‘SPONSORS: HON. JULIAN C. CASAPAO,
HON. WILLIAM C, ABRAHAN and HON. NEIL P. VALDEZ

WHEREAS, First Bay Power Corporation has roquosted for an endorsement
ofits application for the imuance of a Prandhise to construct, operate and maintain
distribution system for the conveyance af electric power to the endagers in the

Municipality of Bauan, Province of Batangas

WHEREAS, the Hon. Ryunh M. Dolor, Municipal Mayor of Bauan, Batangas,
thas favorably endorsed such application of Fir Bay Power Corporal;

WHEREAS, the members of the Sangguniang Rayan acknowledged the
forts of First Bay Power Corporatio i the rehabilitation of the electric distribution
services in the Municipality of auan which effectively reduced systems los, ensuring
Orlerly and dveiphined billing and collection of electric consumption payments,
Improve power quality and reliability, aad ensuring fair and just rates to its electric


HON. JUAN M, MAGBOO, LL,
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WHEREAS, the mombers of the Sangguniang Bayan also acknowledged the
‘importance of First Bay Power Corporation's continuanoe of its electric distribution
service thereby rebounding to the economic and social benefite of the electric
‘onatumers of the Municipality of Bauan;

WHEREAS, Section 17() of the Local Government Code mandates the LGU
to exercise power and diacharge auch other functions and responsibilities ae are
necessary, appropriata or incidental to effiient and effective governance sich as
‘providing the constituents the basi gorvicoa and facilities;

WHEREAS, itis tho dosire of the Municipality of Bauan to respond to this by
endorsing eatalytic entity that hae proven itelf to provide stable and steadfast
ower noods vo the people of Bauan in general,

NOW, THEREFORE, BE I? RESOLVED AS I? 1S HEREBY RESOLVED
‘hat the Snngiguniang Bayan horeby approved the request of the Honorable Municipal
Mayor Ryanh M. Dolor and interposed no objection to the endorsoment of Firat Bay
Power Corporation in connection with ite Franchise Application “To. Construct,
Operate And Maintain A Distribution System For The Conveyance Of Eloctre Power
'To'The Bind-Users In The Municipality OF Bawan, Province Of Batangas

Approved ~ July 20, 2012,

TIELCATLON

‘This in to cory thut the foregoing Resolution Numbered 12:07-0541/had boon
uly approved by the members ofthe Sangguniang Bayan on July-20, 2012 ding the
rogula wession at the Knights of Columb Hall

Caf

Newi-P-VaLDu
‘Municipal Councilor and
‘Acting $B Presiding Officor

ATES



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

16" CONGRESS

First Regular Session

House BillNo,__ 2185

Introduced by:

REP. RANEO E. ABU REP. MARK LLANDRO L. MENDOZA REP. NELSON P, COLLANTES
2™ District, Batangas 4" District, Batangas 3" District, Batangas

AN ACT.
GRANTING THE FIRST BAY POWER (F&CP) CORP, A FRANCHISE TO CONSTRUCT,
INSTALL, ESTABLISH, OPERATE AND MAINTAIN A DISTRIBUTION SYSTEM FOR THE
CONVEYANCE OF ELECTRIC POWER TO THE END-USERS IN THE MUNICIPALITY OF
BAUAN, PROVINCE OF BATANGAS.

Bo it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1, Nature and Scope of Franchise. - Subject to the provisions of the 1987
Philippine Constitution and applicable laws, rules and regulations, there is hereby granted to
First Bay Power Corporation, hereunder referred to as the grantee, its successors or assigns, a
franchise to construct, install, establish, operate and maintain for commercial purposes and in
the public interest, a distribution system for the conveyance of electric power to the end-users
in the Municipality of Bauan, Province of Batangas

As used in this Act, distribution system refers to the systems 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-user.

SEC. 2. Manner of Operation of Facilities. - All electric distribution facilities, lines and
systems for electric services owned, maintained, operated 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 DOE, or its legal successor, or any other
government agency concerned, to modify, improve and change such facilities or systems in


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such a manner and to such extent as the progress in science and improvements 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 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 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.

SEC. 3. Authority of the ERC/DOE. ~ The grantee shall secure from the ERC/DOE or
any other government agency which has jurisdiction over the operation of the herein grantee,
the necessary certificate of public convenience and necessity and other appropriate permits
and licenses for the construction and operation of its electric distribution system.

SEC. 4. Excavation and Restoration Works. - For the purpose of erecting and
maintaining poles, pipes and other supports for said wires or other conductors for the purpose
of laying and maintaining said facilities, wires, cables, pipes or other conductors, it shall be
lawful for the grantee, its successors or assigns, with the prior approval of the Department of
Public Works and Highways (DPWH) or the local government unit concemed, as may be
appropriate, to make excavations or 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 at the expense of the grantee, its successors or assigns, in accordance
with the standards set by DPWH or the local government unit concemed, Should the grantee,
its successors 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 local government unit concemed 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.

SEC. 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,


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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 compete.

The grantee shall have the obligation to provide open and non-discriminatory access to
its distribution system and services for any end-user within its franchise area consistent with
Republic Act No. 9136, otherwise known as ‘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,
but not limited to, unfair trade practices, monopolistic schemes and any other activities that will
hinder competitiveness of business and industries

SEC 6. Rates for Services - The retail rates and charges for the distribution of electric
power by the grantee to its end-user 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 lifeline rate to marginalized end-users as mandated under Republic Act
No. 9136.

SEC. 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.

SEC. 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 facllities 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

SEC. 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


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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: Provided, That proper condemnation proceedings shall have
been instituted and just compensation paid.

SEC. 10. Term of Franchise ~ 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 jpso facto revoked in the event the grantee fails to operate continuously for two (2)
years.

SEC. 11. Acceptance and Compliance. - 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 giving such acceptance, the grantee shall
exercise the privileges granted under this Act, Non-acceptance shall render the franchise void.

SEC. 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 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,

SEC. 13. 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 pole and wires in safe
condition.

SEC. 14. Sale, Lease, Transfer, Usufruct, Etc. - 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, 10
‘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 or privileges acquired


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within sixty (60) days after the completion of said transaction: Provided also, That any such
transfer, sale or assignment is in accordance with the constitutional limitations: 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.

SEC. 15, Dispersal of Ownership, ~ in accordance with the constitutional provision to
encourage public participation in public utilities, the grantee shall offer to Filipino citizens at
least thirty percentum (30%) of its outstanding capital stock or a higher percentage that may
hereafter be provided by law in any securities exchange in the Philippines within five (5) years
from the commencement of its operations: Provided, That in cases where public offer of shares
is not applicable, establishment of cooperatives and other methods of encouraging public
participation by citizens and corporations operating public utilities must be implemented, Non-
compliance therewith shall render the franchise jpso facto revoked

SEC. 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.

SEC. 17. Penalty Clause. - Any grantee who fails to submit the requisite Annual
Report to Congress shall be fined Five Hundred Pesos (P500.00) per working day of non-
compliance. The fine shall be collected by the ERC from said delinquent franchise grantee
separate from the reportorial penalties imposed by ERC. All proceeds from said fines or
penalties 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 ERC.

SEC. 18. Equality Clause. - Any advantage, favor, privilege, exemption, or immunity
granted under existing franchise, or which may hereafter be granted, upon prior review and
approval of Congress, shall become part of this franchises 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


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foregoing shall not apply to the sale, lease, transfer , grant of usufruct or assignment of
legislative franchises with prior congressional approval

SEC.19. 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, otherwise known as the ‘Electric Power Industry Reform Act of
2001,

SEC, 20. Separability Clause. — If any of the sections or provisions of this Act is held
invalid, all other provisions not affected thereby shalll remain valid

SEC. 21, Repealability 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 and shall not be interpreted as an exclusive grant of the privileges herein provided for.

SEC. 22. 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.

SEC. 23 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,