Sorsogon I Electric Cooperative, Inc. (Soreco I)

Senate Office of the saen carp TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES MAR 16 P4:14 First Regular Session SENATE RECEIVED BY S. No. 1967 Introduced by Senator Francis G. Escudero AN ACT GRANTING THE SORSOGON I ELECTRIC COOPERATIVE, INC. (SORECO I) A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE, OWN, MANAGE AND MAINTAIN DISTRIBUTION SYSTEMS FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END-USERS IN THE MUNICIPALITIES OF BULAN, BULUSAN, CASIGURAN, IROSIN, JUBAN, MAGALLANES, MATNOG, AND STA. MAGDALENA, PROVINCE OF SORSOGON EXPLANATORY NOTE This bill, as a counterpart measure to House Bill Nos. 1274 and 2873, seeks to grant a legislative franchise to Sorsogon I Electric Cooperative, Inc. (SORECO I) for the continued operation and maintenance of an electric power distribution system in the Municipalities of Bulan, Bulusan, Casiguran, Irosin, Juban, Magallanes, Matnog, and Sta. Magdalena, all in the Province of Sorsogon. Additionally, the proposed measure establishes regulatory standards and obligations that the electric cooperative must observe to ensure the efficient, reliable, and responsive delivery of electric power services. It also institutionalizes a robust and accountable public-private partnership founded on service efficiency, technical competence, and public welfare. The grant of a legislative franchise in favor of SORECO I would be vital in strengthening the electric distribution infrastructure in the province and ensuring the continued access of Sorsoganons to electricity. Ultimately, this bill would be important in supporting local industries, encouraging investment, and fostering socio-economic development in the Province of Sorsogon. In view of the foregoing, the approval of this bill is earnestly sought. FRANCIS G. ESCUDERO

Senato Office of the & eretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES 26 MAR 16 P4:14 First Regular Session SENATE RECEIVED BY: S. No. 1967 Introduced by Senator Francis G. Escudero AN ACT GRANTING THE SORSOGON I ELECTRIC COOPERATIVE, INC. (SORECO I) A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE, OWN, MANAGE AND MAINTAIN DISTRIBUTION SYSTEMS FOR THE CONVEYANCE OF ELECTRIC POWER TO THE END-USERS IN THE MUNICIPALITIES OF BULAN, BULUSAN, CASIGURAN, IROSIN, JUBAN, MAGALLANES, MATNOG, AND STA. MAGDALENA, PROVINCE OF SORSOGON 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

2 Constitution and applicable laws, rules and regulations, there is hereby granted to the 3 Sorsogon I Electric Cooperative, Inc., (SORECO I) hereunder referred to as the 4 Grantee, its successors or assignees, a franchise to construct, install, establish, 5 operate, own, manage and maintain in the public interest and commercial purposes, 6 a distribution system for the conveyance of electric power to the end-users in the Municipalities of Bulan, Bulusan, Casiguran, Irosin, Juban, Magallanes, Matnog, and Sta. Magdalena, Province of Sorsogon. 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.

Sec. 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, its successors or assigns shall be operated or 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 (ERC), or its legal successor, or the Department of Energy (DOE), or its legal successor, or any other government agency concerned to modify, improve and change such facilities 6 or systems in such manner and to such extent as the progress in science or technology 7 and improvements or innovations in the electric power services may render reasonable 8 and proper. Whenever practicable, and for purposes of maintaining order, safety and 10 aesthetics along the highways, roads, streets, alleys or right-of-way, the Grantee may 11 allow the use of free spaces in its poles, facilities, or right-of-way by interested parties 12 upon reasonable compensation to the Grantee considering the costs incurred to 13 accommodate and administer the use of the Grantee's facilities by such parties. The 14 ERC shall decide in case of dispute or disagreement between the parties.

Sec. 3. Authority of the Energy Regulatory Commission. - The Grantee shall

secure from the ERC or any government agency having jurisdiction over their 17 operations, the Certificate of Public Convenience and Necessity and any other license, 18 permit or authority indispensable for the construction and operation of the electric 19 power distribution system.

Sec. 4. Excavation and Restoration Works. - For the purpose of erecting and

maintaining the poles or other supports for said facilities, wires or other conductors or 22 for the purpose of laying and maintaining said facilities, wires, cables or other conductors, it shall be lawful for the Grantee, its successors, or assignees, with the prior approval of the Department of Public Works and Highways (DPWH) or the local government unit concerned, as may be appropriate, to make excavations or lay 26 conduits in any of the public places, highways, roads, streets, lanes, alleys, avenues, sidewalks, or bridges of the province, cities or municipalities: Provided, however, That a public place, highway, road, street, lane, alley, avenue, sidewalk, or bridge disturbed, altered, or changed by reason of erection of poles or other supports or the 30 underground laying of wires, other conductors or conduits, shall be repaired and

1 replaced in workmanlike manner by the Grantee, its successors or assignees, in accordance with the standards set by the DPWH or the local government unit 3 concerned. Should the Grantee, its successors or assignees, after the ten- (10-) day notice from the grant of authority, fail, refuse or neglect to repair or replace any part 5 of public place, highway, road, street, lane, alley, avenue, sidewalk, or bridge altered, 6 changed, or disturbed by the said Grantee, its successors or assignees, then the DPWH 7 or the local government unit concerned shall have the right to have the same repaired 8 and replaced in good order and condition and charge the Grantee, its successors or 9 assignees, double the amount of the cost and expenses for such repair or replacement.

Sec. 5. Responsibility to the Public. - The Grantee shall supply electricity to its

11 captive market in the least costly manner. In the interest of the public good and as 12 far as feasible and whenever required by the ERC, the Grantee shall modify, improve, 13 or change its facilities, poles, lines, systems and equipment for the purpose of 14 providing efficient and reliable service and reduced electricity costs. The Grantee shall 15 charge reasonable and just power rates for its services to all types of consumers within 16 its franchised areas in order that business and industries shall be able to compete. 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 19 consistent with Republic Act (RA) No. 9136, otherwise known as the "Electric Power 20 Industry Reform Act of 2001". The Grantee shall not engage in any activity that will 21 constitute an abuse of market power such as unfair trade practices, monopolistic schemes, and 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-users shall be regulated by and subject to the 26 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 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.

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. Commitment to Provide and Promote the Creation of Employment

Opportunities. - The Grantee shall create employment opportunities and shall allow 9 on-the-job training in their franchise operation: Provided, That priority shall be 10 accorded to the residents where their principal office is located: Provided, further, That the Grantee shall comply with the applicable labor standards and allowance 12 entitlement under existing labor laws, rules and regulations, and similar issuances.

Sec. 9. Right of the Government. - A special right is hereby reserved to the

14 President of the Philippines, in times of war, rebellion, public peril, calamity, 15 emergency, disaster or disturbance of peace and order: to temporarily take over and 16 operate the stations or facilities of the Grantee; to temporarily suspend the operation 17 of any station or facility in the interest of public safety, security and public welfare; or 18 to authorize the temporary use and operation thereof by any agency of the 19 government, upon due compensation to the Grantee, for the use of the stations or 20 facilities during the period when these shall be so operated.

Sec. 10. 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: Provided, That proper expropriation proceedings shall have been instituted and just compensation paid.

Sec. 11. 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.

Sec. 12. Acceptance and Compliance. - Acceptance of this franchise shall be

6 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 10 franchise void.

Sec. 13. Warranty in Favor of the National and Local Governments. - The

12 Grantee shall hold the national, provincial, city, and municipal governments of the 13 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

Sec. 14. Liability for Damages. - The Grantee shall be liable for any injury to

17 persons and damage to properties arising from accidents by reason of any defective 18 construction under this franchise or of any neglect or omission to keep its poles and 19 wires in safe condition.

Sec. 15. Sale, Lease, Transfer, Usufruct, or Assignment of Franchise. - The

21 Grantee shall not sell, lease, transfer, grant the usufruct of, or assign this franchise or 22 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, 26 firm, company, corporation, or entity without the prior approval of the Congress: 27 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, 29 or of the merger, or sale of the controlling interest within sixty (60) days after the 30 completion of said transaction: Provided, further, That any such transfer, sale, or

1 assignment is in accordance with the constitutional limitations: Provided, furthermore, 2 That failure to report to Congress such change of ownership shall render the franchise 3 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. 16. Reportorial Requirement. - The Grantee shall submit an annual report

7 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 reportorial compliance certificate issued by Congress shall be required before any application for permit or 12 certificate is accepted by the ERC.

Sec. 17. 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.

Sec. 18. 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 territorial coverage, the term, or the type of service authorized by the franchise: Provided, further, That the foregoing shall not apply to sale, lease, transfer, grant of usufruct, or assignment of legislative franchises with prior congressional approval.

Sec. 19. Applicability of Existing Laws. - The Grantee shall comply with and be

subject to the relevant provisions of Commonwealth Act No. 146, as amended, otherwise known as the "Public Services Act", RA No. 9136, and Republic Act No. 10531 or the "National Electrification Administration Reform Act of 2013".

Sec. 20. 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.

Sec. 21. 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.

Sec. 22. Separability Clause. - If any of the sections or provisions of this Act

is held invalid, all other provisions not affected thereby shall remain valid.

Sec. 23. Repealing Clause. - All laws, presidential decrees, executive orders,

letters of instructions, proclamations, and administrative regulations that are inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.

Sec. 24. Effectivity. - This Act shall take effect immediately following the

completion of its publication in the Official Gazette or in a newspaper of general circulation. Approved,