Republic of the Philippines
Congress of the Philippines
Metro ManilaThirteenth Congress
First Regular SessionBegun and held in Metro Manila, on Monday, the twenty-fourth day of July, two thousand and six.
Republic Act No. 9385
AN ACT FURTHER AMENDING THE FRANCHISE OF LA UNION ELECTRIC COMPANY, INC. UNDER REPUBLIC ACT NO. 1225, AS AMENDED, TO CONSTRUCT, OPERATE AND MAINTAIN A DISTRIBUTION SYSTEM FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END-USERS IN THE CITIES OF SAN FERNANDO AND THE MINICIPALITIES OF BAUANG AND SAN JUAN, PROVINCE OF LA UNION, AND RENEWING/EXTENDING THE TERM OF THE FRANCHISE TO ANOTHER TWENTY-FIVE (25) YEARS FROM THE DATE OF APPROVAL OF THIS ACT
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION 1. The franchise granted to La Union Electric Company, Inc., under Republic Act No. 1225, as amended, is hereby further amended to read as follows:
"SECTION 1. "Nature and Scope of Franchise. – Subject to the provisions of the constitution and applicable laws, rules and regulations,...
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Republic Acts
AN ACT FURTHER AMENDING THE FRANCHISE OF LA UNION ELECTRIC COMPANY
Republic Act No. 9385
Summary of Republic Act No. 9385
Nature and Scope of Franchise (Section 1):
- Grants La Union Electric Company, Inc. (the grantee) a franchise to construct, operate and maintain a distribution system for electric power to end-users in San Fernando City, Bauang and San Juan municipalities in La Union Province.
- Defines "distribution system" as the system of wires and facilities extending between the delivery point on the national transmission system/generating facility and the end-user's metering point.
Manner of Operations of Facilities (Section 2):
- The grantee shall operate and maintain its facilities in a superior manner.
- The grantee shall modify, improve or change its facilities as required by the Energy Regulatory Commission (ERC), Department of Energy (DOE), or any other concerned government agency.
- The grantee may allow the use of its poles, facilities or right-of-way by interested parties upon reasonable compensation, with the ERC deciding in case of dispute.
Authority of the Energy Regulatory Commission (Section 3):
- The grantee shall secure from the ERC the necessary certificate of public convenience and necessity and other permits for the construction and operation of its electric distribution system.
Ingress and Egress (Section 4):
- The grantee may, with prior approval from the Department of Public Works and Highways (DPWH) or local government units (LGUs), make excavations or lay conduits in public places for erecting and maintaining its facilities.
- The grantee shall immediately repair and restore any public place disturbed by its activities, in accordance with DPWH and LGU standards.
Responsibility to the Public (Section 5):
- The grantee shall supply electricity to its captive market in the least cost manner.
- The grantee shall modify, improve or change its facilities as required by the ERC for efficient and reliable service and reduced electricity costs.
- The grantee shall charge reasonable and just power rates to all consumers within its franchise area.
- The grantee shall 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.
- The grantee shall not engage in activities that constitute an abuse of market power or hinder competitiveness.
Rates for Services (Section 6):
- The retail rates to the grantee's captive market and charges for distribution of electric power shall be regulated by and subject to the approval of the ERC.
- The grantee shall identify and segregate the components of the retail rate in its electric bill to end-users, pursuant to Republic Act No. 9136.
- The grantee shall implement a lifeline rate to marginalized end-users as mandated under Republic Act No. 9136.
Promotion of Consumer Interests (Section 7):
- The grantee shall establish a consumer desk to handle consumer complaints and ensure adequate promotion of consumer interests.
- The grantee shall act with dispatch on all complaints brought before it.
Right of the Government (Section 8):
- The President of the Philippines has a special right, in times of war, rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order, to take over and operate the grantee's distribution system or authorize its temporary use by any government agency/department, upon due compensation to the grantee.
Tax Provisions (Section 9):
- The grantee shall be subject to the payment of all taxes, duties, fees or charges and other impositions applicable to private electric utilities under the National Internal Revenue Code (NIRC) of 1997, as amended, the Local Government Code and other applicable laws.
- The grantee shall file its tax returns with the city where its principal place of business is located and pay taxes to the Commissioner of Internal Revenue or authorized representative, in accordance with the NIRC.
- The grantee shall enjoy all rights, privileges, benefits and exemptions accorded to existing and future private electric utilities by their respective franchises.
Right of Eminent Domain (Section 10):
- The grantee is authorized to exercise the right of eminent domain insofar as 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 Philippine government.
- The grantee may acquire private property necessary for the realization of the purposes of the franchise, provided that proper condemnation proceedings are instituted and just compensation is paid.
Warranty in Favor of National and Local Governments (Section 11):
- The grantee shall hold the national, provincial and municipal governments harmless from all claims, accounts, demands or actions arising out of accidents or injuries caused by the construction, installation, operation and maintenance of the grantee's distribution system.
Liability for Damages (Section 12):
- The grantee shall be liable for any injury and damage arising from or caused by accident to persons and property due to any defective construction under the franchise or any neglect or omission to keep its poles and wires in a safe condition.
Nontransferability of Franchise (Section 13):
- The grantee shall not lease, transfer, grant the usufruct of, sell the franchise or the rights and privileges acquired thereunder, or merge with any other corporation or entity, nor shall the controlling interest of the grantee be transferred, whether in whole or in part, and whether simultaneously or contemporaneously, to any person, firm, company, corporation or entity without the prior approval of the Congress of the Philippines.
- Any transfer of franchise in violation of this section shall render the franchise ipso facto revoked.
Equality Clause (Section 14):
- If any competing individual, partnership or corporation receives a similar permit or franchise with more favorable terms and/or provisions that tend to place the grantee at any disadvantage, such terms and/or provisions shall be deemed part of the grantee's franchise and shall operate equally in favor of the grantee.
- Any term and/or provision granted to the grantee which are not contained in other franchises shall likewise be enjoyed by future grantees.
- The foregoing shall not apply to nor affect the provisions concerning territory covered by the franchise and the life span of the franchise.
Separability Clause (Section 15):
- If any section or provision of the Act is declared unconstitutional or invalid, the other parts or provisions which are not affected shall continue to be in full force and effect.
Applicability Clause (Section 16):
- The grantee shall comply with and be subject to the provisions of Commonwealth Act No. 146, as amended, otherwise known as the "Public Services Act" and Republic Act No. 9136, otherwise known as the "Electric Power Industry Reform Act of 2001".
Repealability and Nonexclusivity Clause (Section 17):
- The franchise shall be subject to amendment, alteration or repeal by the Congress of the Philippines when the public interest so requires.
- The franchise shall not be interpreted as an exclusive grant of the privileges provided for.
Reportorial Requirement (Section 18):
- The grantee shall submit an annual report of finances and operations to the Congress of the Philippines.
Renewal/Extension of the Term of Franchise (Section 2):
- The franchise shall be for a term of twenty-five (25) years from the date of effectivity of the Act.
- The franchise shall be deemed ipso facto revoked if the grantee fails to operate continuously for two years.
Acceptance and Compliance (Section 3):
- Acceptance of the amendment and extension/renewal of the franchise shall be given in writing within sixty (60) days from the date of effectivity of the Act.
Repealing Clause (Section 4):
- All laws, decrees, orders, resolutions, instructions and rules and regulations or parts thereof, which are inconsistent with the Act, are hereby deemed repealed or modified accordingly.
Effectivity Clause (Section 5):
- The Act shall take effect fifteen (15) days from the date of its publication, upon the initiative of the grantee, in at least two newspapers of general circulation in the Philippines.
Nature and Scope of Franchise (Section 1):
- Grants La Union Electric Company, Inc. (the grantee) a franchise to construct, operate and maintain a distribution system for electric power to end-users in San Fernando City, Bauang and San Juan municipalities in La Union Province.
- Defines "distribution system" as the system of wires and facilities extending between the delivery point on the national transmission system/generating facility and the end-user's metering point.
Manner of Operations of Facilities (Section 2):
- The grantee shall operate and maintain its facilities in a superior manner.
- The grantee shall modify, improve or change its facilities as required by the Energy Regulatory Commission (ERC), Department of Energy (DOE), or any other concerned government agency.
- The grantee may allow the use of its poles, facilities or right-of-way by interested parties upon reasonable compensation, with the ERC deciding in case of dispute.
Authority of the Energy Regulatory Commission (Section 3):
- The grantee shall secure from the ERC the necessary certificate of public convenience and necessity and other permits for the construction and operation of its electric distribution system.
Ingress and Egress (Section 4):
- The grantee may, with prior approval from the Department of Public Works and Highways (DPWH) or local government units (LGUs), make excavations or lay conduits in public places for erecting and maintaining its facilities.
- The grantee shall immediately repair and restore any public place disturbed by its activities, in accordance with DPWH and LGU standards.
Responsibility to the Public (Section 5):
- The grantee shall supply electricity to its captive market in the least cost manner.
- The grantee shall modify, improve or change its facilities as required by the ERC for efficient and reliable service and reduced electricity costs.
- The grantee shall charge reasonable and just power rates to all consumers within its franchise area.
- The grantee shall 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.
- The grantee shall not engage in activities that constitute an abuse of market power or hinder competitiveness.
Rates for Services (Section 6):
- The retail rates to the grantee's captive market and charges for distribution of electric power shall be regulated by and subject to the approval of the ERC.
- The grantee shall identify and segregate the components of the retail rate in its electric bill to end-users, pursuant to Republic Act No. 9136.
- The grantee shall implement a lifeline rate to marginalized end-users as mandated under Republic Act No. 9136.
Promotion of Consumer Interests (Section 7):
- The grantee shall establish a consumer desk to handle consumer complaints and ensure adequate promotion of consumer interests.
- The grantee shall act with dispatch on all complaints brought before it.
Right of the Government (Section 8):
- The President of the Philippines has a special right, in times of war, rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order, to take over and operate the grantee's distribution system or authorize its temporary use by any government agency/department, upon due compensation to the grantee.
Tax Provisions (Section 9):
- The grantee shall be subject to the payment of all taxes, duties, fees or charges and other impositions applicable to private electric utilities under the National Internal Revenue Code (NIRC) of 1997, as amended, the Local Government Code and other applicable laws.
- The grantee shall file its tax returns with the city where its principal place of business is located and pay taxes to the Commissioner of Internal Revenue or authorized representative, in accordance with the NIRC.
- The grantee shall enjoy all rights, privileges, benefits and exemptions accorded to existing and future private electric utilities by their respective franchises.
Right of Eminent Domain (Section 10):
- The grantee is authorized to exercise the right of eminent domain insofar as 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 Philippine government.
- The grantee may acquire private property necessary for the realization of the purposes of the franchise, provided that proper condemnation proceedings are instituted and just compensation is paid.
Warranty in Favor of National and Local Governments (Section 11):
- The grantee shall hold the national, provincial and municipal governments harmless from all claims, accounts, demands or actions arising out of accidents or injuries caused by the construction, installation, operation and maintenance of the grantee's distribution system.
Liability for Damages (Section 12):
- The grantee shall be liable for any injury and damage arising from or caused by accident to persons and property due to any defective construction under the franchise or any neglect or omission to keep its poles and wires in a safe condition.
Nontransferability of Franchise (Section 13):
- The grantee shall not lease, transfer, grant the usufruct of, sell the franchise or the rights and privileges acquired thereunder, or merge with any other corporation or entity, nor shall the controlling interest of the grantee be transferred, whether in whole or in part, and whether simultaneously or contemporaneously, to any person, firm, company, corporation or entity without the prior approval of the Congress of the Philippines.
- Any transfer of franchise in violation of this section shall render the franchise ipso facto revoked.
Equality Clause (Section 14):
- If any competing individual, partnership or corporation receives a similar permit or franchise with more favorable terms and/or provisions that tend to place the grantee at any disadvantage, such terms and/or provisions shall be deemed part of the grantee's franchise and shall operate equally in favor of the grantee.
- Any term and/or provision granted to the grantee which are not contained in other franchises shall likewise be enjoyed by future grantees.
- The foregoing shall not apply to nor affect the provisions concerning territory covered by the franchise and the life span of the franchise.
Separability Clause (Section 15):
- If any section or provision of the Act is declared unconstitutional or invalid, the other parts or provisions which are not affected shall continue to be in full force and effect.
Applicability Clause (Section 16):
- The grantee shall comply with and be subject to the provisions of Commonwealth Act No. 146, as amended, otherwise known as the "Public Services Act" and Republic Act No. 9136, otherwise known as the "Electric Power Industry Reform Act of 2001".
Repealability and Nonexclusivity Clause (Section 17):
- The franchise shall be subject to amendment, alteration or repeal by the Congress of the Philippines when the public interest so requires.
- The franchise shall not be interpreted as an exclusive grant of the privileges provided for.
Reportorial Requirement (Section 18):
- The grantee shall submit an annual report of finances and operations to the Congress of the Philippines.
Renewal/Extension of the Term of Franchise (Section 2):
- The franchise shall be for a term of twenty-five (25) years from the date of effectivity of the Act.
- The franchise shall be deemed ipso facto revoked if the grantee fails to operate continuously for two years.
Acceptance and Compliance (Section 3):
- Acceptance of the amendment and extension/renewal of the franchise shall be given in writing within sixty (60) days from the date of effectivity of the Act.
Repealing Clause (Section 4):
- All laws, decrees, orders, resolutions, instructions and rules and regulations or parts thereof, which are inconsistent with the Act, are hereby deemed repealed or modified accordingly.
Effectivity Clause (Section 5):
- The Act shall take effect fifteen (15) days from the date of its publication, upon the initiative of the grantee, in at least two newspapers of general circulation in the Philippines.