December 26, 2020
REPUBLIC ACT NO. 11515
AN ACT EXTENDING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE GRANTED TO THE DAVAO LIGHT AND POWER COMPANY, INC., UNDER REPUBLIC ACT NO. 8960, ENTITLED "AN ACT FURTHER EXTENDING THE TERM OF THE FRANCHISE GRANTED TO DAVAO LIGHT AND POWER COMPANY, INC. TO CONSTRUCT, OPERATE AND MAINTAIN AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM IN DAVAO CITY AND THE MUNICIPALITIES OF CARMEN, PANABO, DUJALI, AND SANTO TOMAS, PROVINCE OF DAVAO DEL NORTE, FOR A PERIOD OF TWENTY-FIVE (25) YEARS AND FOR OTHER PURPOSES"
SECTION 1.Nature and Scope of Franchise. — Subject to the provisions of the Constitution and applicable laws, rules and regulations, the franchise granted to the Davao Light and Power Company, Inc., hereunder referred to as the grantee, its successors or assignees, under Republic Act No. 8960, to construct, install, establish, operate, and maintain for commercial purposes and in the public interest, an electric, light, heat and power system for the conveyance, distribution and sale of electric...
Summary of Republic Act No. 11515:
Nature and Scope of Franchise (Section 1):
- Extends the franchise granted to Davao Light and Power Company, Inc. (the grantee) under Republic Act No. 8960 for another 25 years to construct, operate, and maintain an electric light, heat, and power system for distribution and sale of electric power in Davao City, Panabo City, and the Municipalities of Carmen, Dujali, and Santo Tomas in Davao del Norte.
- Defines "distribution system" as the system of wires, facilities, and subtransmission lines belonging to or used by a franchised distribution utility.
Manner of Operation of Facilities (Section 2):
- The grantee shall operate and maintain its facilities in the best manner and modify or improve them 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 easements by interested parties upon reasonable compensation, with the ERC resolving disputes.
Authority of the Energy Regulatory Commission (Section 3):
- The grantee shall secure the necessary certificate of public convenience and necessity and other appropriate permits and licenses from the ERC or any other agency with jurisdiction over its operation.
Excavation and Restoration Works (Section 4):
- The grantee is authorized to make excavations or lay conduits in public places, subject to prior approval from the Department of Public Works and Highways (DPWH) or local government units (LGUs).
- The grantee shall repair or replace any public place disturbed by its works, in accordance with DPWH or LGU standards, or face double charges for repair or replacement by the concerned authority.
Responsibility to the Public (Section 5):
- The grantee shall supply electricity to its captive market in the least cost manner and modify its facilities as required by the ERC for efficient, reliable service, and reduced costs.
- The grantee shall charge power rates in a least cost manner and provide open and non-discriminatory access to its distribution system, consistent with the Electric Power Industry Reform Act of 2001.
- The grantee shall not engage in activities that constitute abuse of market power or hinder competitiveness.
- The exercise of the rights granted shall not result in stranded assets, stranded contract costs, or unreasonable increases in costs to consumers.
Rates for Services (Section 6):
- The retail rates and charges for the distribution of electric power by the grantee shall be regulated and approved by the ERC.
- The grantee shall identify and itemize the components of the retail rate in the statement of account issued to end users, pursuant to the Electric Power Industry Reform Act of 2001.
- The grantee shall implement a lifeline rate to marginalized end users as mandated under the Electric Power Industry Reform Act of 2001, as amended.
Protection of Consumer Interests (Section 7):
- The grantee shall establish a consumer desk to handle consumer complaints and ensure adequate protection of consumer interests, acting with dispatch on all complaints.
Right of the Government (Section 8):
- The President of the Philippines has the special right, in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, to temporarily take over and operate the grantee's distribution system, suspend the operation of any station or facility in the interest of public safety, security, and welfare, or authorize the temporary use and operation thereof by any government agency, upon due compensation to the grantee.
Right of Eminent Domain (Section 9):
- The grantee is authorized to exercise the right of eminent domain as reasonably necessary for the efficient maintenance and operation of services, subject to limitations and procedures prescribed by law.
- The grantee may install and maintain its poles, wires, and other facilities over and across public property, including streets, highways, forest reserves, and other similar government property.
- The grantee may acquire private property necessary for the realization of the purposes of the franchise, subject to proper condemnation proceedings and just compensation.
Term of Franchise (Section 10):
- The franchise shall be for a term of 25 years from the expiration date of the term granted under Republic Act No. 8960, unless sooner cancelled or revoked.
- The franchise shall be deemed ipso facto revoked if the grantee fails to operate continuously for 2 years.
Warranty in Favor of the National and Local Governments (Section 11):
- The grantee shall hold the national, provincial, city, and municipal governments free from all claims, liabilities, demands, or actions arising out of accidents that cause injury to persons or damage to properties during the construction, installation, operation, and maintenance of the grantee's distribution system.
Liability to Damages (Section 12):
- The grantee shall be liable for any injury to persons or damage to property arising from or caused by any accident due to defective construction of any infrastructure built pursuant to its business operation under the franchise, or any neglect or failure to keep its poles and wires in safe condition.
Commitment to Provide and Promote the Creation of Employment Opportunities (Section 13):
- The grantee shall create employment opportunities and allow on-the-job trainings in its franchise operation, with priority accorded to residents of the place where its principal office is located.
- The grantee shall follow applicable labor standards and allowance entitlement under existing labor laws, rules, and regulations.
- The employment opportunities or jobs created shall be reflected in the General Information Sheet (GIS) submitted to the Securities and Exchange Commission (SEC) annually.
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise (Section 14):
- The grantee shall not sell, lease, transfer, grant the usufruct of, nor assign the franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation, or other commercial or legal entity, nor merge with any other corporation or entity, nor transfer the controlling interest of the grantee, without the prior approval of the Congress of the Philippines.
- Congress shall be informed of any such transaction within 60 days after its completion, or the franchise shall be ipso facto revoked.
- Any person or entity to which the franchise is sold, transferred, or assigned shall be subject to the same conditions, terms, restrictions, and limitations of the Act.
Dispersal of Ownership (Section 15):
- In accordance with the constitutional provision to encourage public participation in public utilities, the grantee shall offer at least 30% or a higher percentage as may be provided by law of its outstanding capital stock in any securities exchange in the Philippines within 5 years from the commencement of its operations.
- If public offer of shares is not applicable, the grantee shall apply other methods of encouraging public participation by citizens and corporations operating public utilities as allowed by law.
- Noncompliance shall render the franchise ipso facto revoked.
Renewal, Extension, or Revocation of Franchise (Section 16):
- The grantee shall apply for the renewal or extension of its franchise before its expiration date, which shall be reckoned 15 days after the publication of the franchise in the Official Gazette or in a newspaper of general circulation.
- Upon reasonable notice and hearing, the franchise may be revoked by Congress when the public interest so requires or when the grantee fails to reasonably comply with regulatory standards.
Equality Clause (Section 17):
- Any advantage, favor, privilege, exemption, or immunity granted under existing franchises or which may hereinafter be granted to power distribution franchises, upon prior review and approval of Congress, shall become part of this franchise and shall be accorded immediately and unconditionally to the grantee, except for provisions concerning territorial coverage, term, or type of service authorized by the franchise.
Reportorial Requirement (Section 18):
- 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 of 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.
- The annual report shall include an update on the roll-out, development, operation and/or expansion of business; audited financial statements; latest GIS; certification of the ERC on the status of its permits and operations; and an update on the dispersal of ownership undertaking, if applicable.
- A reportorial compliance certificate issued by Congress shall be required before any application for permit or certificate is accepted by the ERC.
Fine (Section 19):
- 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 noncompliance, to be collected by the ERC from the delinquent franchise grantee and remitted to the Bureau of the Treasury.
Applicability of Existing Laws (Section 20):
- The grantee shall comply with and be subject to the provisions of Commonwealth Act No. 146 (Public Service Act), Republic Act No. 9136 (Electric Power Industry Reform Act of 2001), Republic Act No. 9513 (Renewable Energy Act of 2008), Republic Act No. 11361 (Anti-Obstruction of Power Lines Act), and other applicable laws.
Repealability and Nonexclusivity Clause (Section 21):
- The 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 provided for.
Separability Clause (Section 22):
- If any of the sections or provisions of the Act is held invalid, all other provisions not affected thereby shall remain valid.
Repealing Clause (Section 23):
- All laws, decrees, orders, resolutions, instructions, rules and regulations or parts thereof, which are inconsistent with the Act, are hereby deemed repealed or modified accordingly.
Effectivity (Section 24):
- The Act shall take effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation.
Nature and Scope of Franchise (Section 1):
- Extends the franchise granted to Davao Light and Power Company, Inc. (the grantee) under Republic Act No. 8960 for another 25 years to construct, operate, and maintain an electric light, heat, and power system for distribution and sale of electric power in Davao City, Panabo City, and the Municipalities of Carmen, Dujali, and Santo Tomas in Davao del Norte.
- Defines "distribution system" as the system of wires, facilities, and subtransmission lines belonging to or used by a franchised distribution utility.
Manner of Operation of Facilities (Section 2):
- The grantee shall operate and maintain its facilities in the best manner and modify or improve them 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 easements by interested parties upon reasonable compensation, with the ERC resolving disputes.
Authority of the Energy Regulatory Commission (Section 3):
- The grantee shall secure the necessary certificate of public convenience and necessity and other appropriate permits and licenses from the ERC or any other agency with jurisdiction over its operation.
Excavation and Restoration Works (Section 4):
- The grantee is authorized to make excavations or lay conduits in public places, subject to prior approval from the Department of Public Works and Highways (DPWH) or local government units (LGUs).
- The grantee shall repair or replace any public place disturbed by its works, in accordance with DPWH or LGU standards, or face double charges for repair or replacement by the concerned authority.
Responsibility to the Public (Section 5):
- The grantee shall supply electricity to its captive market in the least cost manner and modify its facilities as required by the ERC for efficient, reliable service, and reduced costs.
- The grantee shall charge power rates in a least cost manner and provide open and non-discriminatory access to its distribution system, consistent with the Electric Power Industry Reform Act of 2001.
- The grantee shall not engage in activities that constitute abuse of market power or hinder competitiveness.
- The exercise of the rights granted shall not result in stranded assets, stranded contract costs, or unreasonable increases in costs to consumers.
Rates for Services (Section 6):
- The retail rates and charges for the distribution of electric power by the grantee shall be regulated and approved by the ERC.
- The grantee shall identify and itemize the components of the retail rate in the statement of account issued to end users, pursuant to the Electric Power Industry Reform Act of 2001.
- The grantee shall implement a lifeline rate to marginalized end users as mandated under the Electric Power Industry Reform Act of 2001, as amended.
Protection of Consumer Interests (Section 7):
- The grantee shall establish a consumer desk to handle consumer complaints and ensure adequate protection of consumer interests, acting with dispatch on all complaints.
Right of the Government (Section 8):
- The President of the Philippines has the special right, in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, to temporarily take over and operate the grantee's distribution system, suspend the operation of any station or facility in the interest of public safety, security, and welfare, or authorize the temporary use and operation thereof by any government agency, upon due compensation to the grantee.
Right of Eminent Domain (Section 9):
- The grantee is authorized to exercise the right of eminent domain as reasonably necessary for the efficient maintenance and operation of services, subject to limitations and procedures prescribed by law.
- The grantee may install and maintain its poles, wires, and other facilities over and across public property, including streets, highways, forest reserves, and other similar government property.
- The grantee may acquire private property necessary for the realization of the purposes of the franchise, subject to proper condemnation proceedings and just compensation.
Term of Franchise (Section 10):
- The franchise shall be for a term of 25 years from the expiration date of the term granted under Republic Act No. 8960, unless sooner cancelled or revoked.
- The franchise shall be deemed ipso facto revoked if the grantee fails to operate continuously for 2 years.
Warranty in Favor of the National and Local Governments (Section 11):
- The grantee shall hold the national, provincial, city, and municipal governments free from all claims, liabilities, demands, or actions arising out of accidents that cause injury to persons or damage to properties during the construction, installation, operation, and maintenance of the grantee's distribution system.
Liability to Damages (Section 12):
- The grantee shall be liable for any injury to persons or damage to property arising from or caused by any accident due to defective construction of any infrastructure built pursuant to its business operation under the franchise, or any neglect or failure to keep its poles and wires in safe condition.
Commitment to Provide and Promote the Creation of Employment Opportunities (Section 13):
- The grantee shall create employment opportunities and allow on-the-job trainings in its franchise operation, with priority accorded to residents of the place where its principal office is located.
- The grantee shall follow applicable labor standards and allowance entitlement under existing labor laws, rules, and regulations.
- The employment opportunities or jobs created shall be reflected in the General Information Sheet (GIS) submitted to the Securities and Exchange Commission (SEC) annually.
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise (Section 14):
- The grantee shall not sell, lease, transfer, grant the usufruct of, nor assign the franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation, or other commercial or legal entity, nor merge with any other corporation or entity, nor transfer the controlling interest of the grantee, without the prior approval of the Congress of the Philippines.
- Congress shall be informed of any such transaction within 60 days after its completion, or the franchise shall be ipso facto revoked.
- Any person or entity to which the franchise is sold, transferred, or assigned shall be subject to the same conditions, terms, restrictions, and limitations of the Act.
Dispersal of Ownership (Section 15):
- In accordance with the constitutional provision to encourage public participation in public utilities, the grantee shall offer at least 30% or a higher percentage as may be provided by law of its outstanding capital stock in any securities exchange in the Philippines within 5 years from the commencement of its operations.
- If public offer of shares is not applicable, the grantee shall apply other methods of encouraging public participation by citizens and corporations operating public utilities as allowed by law.
- Noncompliance shall render the franchise ipso facto revoked.
Renewal, Extension, or Revocation of Franchise (Section 16):
- The grantee shall apply for the renewal or extension of its franchise before its expiration date, which shall be reckoned 15 days after the publication of the franchise in the Official Gazette or in a newspaper of general circulation.
- Upon reasonable notice and hearing, the franchise may be revoked by Congress when the public interest so requires or when the grantee fails to reasonably comply with regulatory standards.
Equality Clause (Section 17):
- Any advantage, favor, privilege, exemption, or immunity granted under existing franchises or which may hereinafter be granted to power distribution franchises, upon prior review and approval of Congress, shall become part of this franchise and shall be accorded immediately and unconditionally to the grantee, except for provisions concerning territorial coverage, term, or type of service authorized by the franchise.
Reportorial Requirement (Section 18):
- 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 of 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.
- The annual report shall include an update on the roll-out, development, operation and/or expansion of business; audited financial statements; latest GIS; certification of the ERC on the status of its permits and operations; and an update on the dispersal of ownership undertaking, if applicable.
- A reportorial compliance certificate issued by Congress shall be required before any application for permit or certificate is accepted by the ERC.
Fine (Section 19):
- 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 noncompliance, to be collected by the ERC from the delinquent franchise grantee and remitted to the Bureau of the Treasury.
Applicability of Existing Laws (Section 20):
- The grantee shall comply with and be subject to the provisions of Commonwealth Act No. 146 (Public Service Act), Republic Act No. 9136 (Electric Power Industry Reform Act of 2001), Republic Act No. 9513 (Renewable Energy Act of 2008), Republic Act No. 11361 (Anti-Obstruction of Power Lines Act), and other applicable laws.
Repealability and Nonexclusivity Clause (Section 21):
- The 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 provided for.
Separability Clause (Section 22):
- If any of the sections or provisions of the Act is held invalid, all other provisions not affected thereby shall remain valid.
Repealing Clause (Section 23):
- All laws, decrees, orders, resolutions, instructions, rules and regulations or parts thereof, which are inconsistent with the Act, are hereby deemed repealed or modified accordingly.
Effectivity (Section 24):
- The Act shall take effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation.