An Act Granting The National Grid Corporation of the Philippines a Franchise to Engage in the Business of Conveying or Transmitting Electricity Through High Voltage Back-Bone System of Interconnected Transmission Lines, Substations and Related Facilities and for other purposes

Actions

Download as PDF Download as Word

Collections

Create a New Collection

PDF

Word

Notes ^New

Overview Full Text

Details

Case Agency Issuance Number Published Date

An Act Granting The National Grid Corporation of the Philippines a Franchise to Engage in the Business of Conveying or Transmitting Electricity Through High Voltage Back-Bone System of Interconnected Transmission Lines, Substations and Related Facilities and for other purposes

Republic Act No. 9511

December 1, 2008

Case Overview and Summary

Summary of Republic Act No. 9511

Nature and Scope of Franchise (Section 1):
- Grants the National Grid Corporation of the Philippines (Grantee) a franchise to operate, manage, and maintain the nationwide high-voltage transmission system, substations, and related facilities.
- Authorizes the Grantee to construct, install, finance, manage, improve, expand, operate, maintain, rehabilitate, repair, and refurbish the transmission system.
- The scope of the franchise is nationwide, subject to the Transmission Development Plan and amendments approved by the Department of Energy.

Terms and Conditions of Franchise (Section 2):
- The franchise is valid for 50 years from the effectivity date of the Act.
- At least 60% of the Grantee's capital must be owned by Filipino citizens.
- The Grantee must comply with laws on foreign ownership and management of public utilities.

Manner of Operation (Section 3):
- The transmission system and facilities must be operated and maintained according to industry standards.
- The Grantee must modify, improve, and change the system as required by the Energy Regulatory Commission (ERC) or its successor.

Right of Eminent Domain (Section 4):
- The Grantee is authorized to exercise the right of eminent domain as reasonably necessary for the construction, expansion, and efficient maintenance and operation of the transmission system and grid.
- The Grantee must follow the applicable law on eminent domain, including the prerequisites of taking possession and determining and paying just compensation.

Right of the Government (Section 5):
- The President of the Philippines has the right to temporarily take over and operate the transmission system during times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, in the interest of public safety, security, and welfare.
- The government may temporarily suspend the operation of any portion of the system or authorize its temporary use by any government agency, with due compensation to the Grantee.

Sale, Lease, Transfer, Usufruct, etc. (Section 6):
- The Grantee cannot lease, transfer, grant usufruct, or sell the franchise or rights acquired under it without prior approval from Congress, with some exceptions.
- Exceptions include transfers related to the Grantee's dispersal of ownership, issuance of shares to investors, transfers at the level of corporate stockholders, and assignment or transfer of related business operations.

Cross-Ownership; Market Power Abuse and Anti-Competitive Behavior (Section 7):
- The Grantee and its stockholders, directors, officers, and their relatives within the fourth civil degree of consanguinity and their respective spouses cannot hold shares in any Power Industry Player, and vice versa, with some exceptions.
- Exceptions include ownership of up to 1% shares in a listed Power Industry Player or a listed company that owns shares in the Grantee.
- Losing bidders in the bid to operate TRANSCO's facilities, their principals, subsidiaries, affiliates, stockholders, directors, and officers cannot directly or indirectly acquire or receive any pecuniary interest in the Grantee's operations for 10 years.
- The Grantee cannot engage in anti-competitive behavior, including cross-subsidization, price or market manipulation, or other unfair trade practices.

Dispersal of Ownership (Section 8):
- The Grantee must list and make a public offering of at least 20% of its outstanding capital stock or a higher percentage required by law within 10 years from the commencement of operations.
- Listing a company that directly or indirectly owns or controls at least 30% of the Grantee's outstanding shares is considered full compliance.
- The ERC may allow an extension of the listing period if market conditions are not suitable.

Tax Provisions (Section 9):
- The Grantee must pay a franchise tax equivalent to 3% of all gross receipts derived from its operations under the franchise, in lieu of income tax and other taxes, duties, fees, and charges.
- The Grantee is liable to pay taxes on its real estate, buildings, and personal property, exclusive of the franchise.
- Payment of concession fees to PSALM is not subject to income tax and value-added tax (VAT).

Acceptance and Compliance (Section 10):
- The Grantee must accept the franchise in writing within 60 days after the effectivity of the Act.

Warranty in Favor of National and Local Government (Section 11):
- The Grantee must hold the national, provincial, and other local 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 transmission system and grid.

Ingress and Egress (Section 12):
- The Grantee has the right to make excavations or lay conduits in public places, highways, streets, lanes, alleys, avenues, sidewalks, or bridges for constructing and maintaining transmission and subtransmission assets and related support facilities, with approval from relevant government agencies and posting of bonds.
- The Grantee must immediately repair and properly restore any public place, highway, street, lane, alley, avenue, sidewalk, or bridge disturbed, altered, or changed due to construction and maintenance, at its own expense and in accordance with standards set by relevant government agencies.

Transfer of Personnel (Section 13):
- Current employees of TRANSCO shall be given preference within 165 days from the commencement date over new job applicants in hiring by the Grantee, subject to qualification requirements and the continued existence of their positions and functions.
- TRANSCO employees are entitled to receive benefits provided under Section 63 of Republic Act No. 9136 and additional benefits determined by TRANSCO's Board of Directors.

Applicability Clause (Section 14):
- The Grantee must comply with and be subject to the provisions of Commonwealth Act No. 146, as amended, otherwise known as the "Public Services Act", which have not been modified or repealed by Republic Act No. 9136.

Reportorial Requirement (Section 15):
- The Grantee must submit an annual report of finances and operations to the Congress of the Philippines.

Separability Clause (Section 16):
- If any section or provision of the Act is declared unconstitutional or invalid, the other parts or provisions not affected shall continue to be in full force and effect.

Effectivity Clause (Section 17):
- The Act shall take effect 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.

Amends

n/a

Amended by

n/a

Law

An Act Granting The National Grid Corporation of the Philippines a Franchise to Engage in the Business of Conveying or Transmitting Electricity Through High Voltage Back-Bone System of Interconnected Transmission Lines, Substations and Related Facilities and for other purposes

Republic Act No. 9511

•

December 1, 2008

Republic of the Philippines Congress of the Philippines Metro Manila Fourteenth CongressSecond Regular Session Begun and held in Metro Manila, on Monday, the twenty-eight day of July, two thousand eight. Republic Act No. 9511 &nbsp &nbsp &nbsp &nbsp &nbsp &nbsp December 1, 2008 AN ACT GRANTING THE NATIONAL GRID CORPORATION OF THE PHILIPPINES A FRANCHISE TO ENGAGE IN THE BUSINESS OF CONVEYING OR TRANSMITTING ELECTRICITY THROUGH HIGH VOLTAGE BACK-BONE SYSTEM OF INTERCONNECTED TRANSMISSION LINES, SUBSTATIONS AND RELATED FACILITIES, AND FOR OTHER PURPOSES Be 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 Constitution and applicable laws, rules and regulations, and subject to the terms and conditions of the concession agreement and other documents executed with the National Transmission Corporation (TRANSCO) and the Power Sector Assets & Liabilities Management Corporation (PSALM) pursuant to Section 21 of Republic Act No. 9136, which are not inconsistent herewith, there is hereby granted to the National Grid Corporation of the...

An Act Granting The National Grid Corporation of the Philippines a Franchise to Engage in the Business of Conveying or Transmitting Electricity Through High Voltage Back-Bone System of Interconnected Transmission Lines, Substations and Related Facilities and for other purposes

Amends

n/a

Amended by

n/a

An Act Granting The National Grid Corporation of the Philippines a Franchise to Engage in the Business of Conveying or Transmitting Electricity Through High Voltage Back-Bone System of Interconnected Transmission Lines, Substations and Related Facilities and for other purposes

An Act Granting The National Grid Corporation of the Philippines a Franchise to Engage in the Business of Conveying or Transmitting Electricity Through High Voltage Back-Bone System of Interconnected Transmission Lines, Substations and Related Facilities and for other purposes

Republic Act No. 9511

December 1, 2008

Case Overview and Summary

Amends

Amended by

Tags

Statutes

Republic Acts

National Grid Corporation of the Philippines

Franchise

Transmission system

Substations

Related facilities

Operate

Manage

Maintain

Construct

Install

Finance

Improve

Expand

Rehabilitate

Repair

Refurbish

Nationwide

Transmission Development Plan

Department of Energy

Terms and conditions

50 years

Filipino ownership

Foreign ownership

Public utilities

Industry standards

Energy Regulatory Commission

Eminent domain

Just compensation

President of the Philippines

War

Rebellion

Public peril

Calamity

Emergency

Disaster

Disturbance of peace and order

Public safety

Security

Welfare

Government agency

Compensation

Sale

Lease

Transfer

Usufruct

Congress approval

Dispersal of ownership

Issuance of shares

Corporate stockholders

Related business operations

Cross-ownership

Market power abuse

Anti-competitive behavior

Cross-subsidization

Price manipulation

Market manipulation

Unfair trade practices

Power Industry Player

Stockholders

Directors

Officers

Relatives

Fourth civil degree of consanguinity

Spouses

Listed company

Philippine Stock Exchange

Losing bidders

Principals

Subsidiaries

Affiliates