ARTICLE
1
GENERAL
PROVISIONS
Section 1. Republic Act No. 3247, as amended, is hereby further amended
to read as follows:
"Sec.
1. Nature and Scope of Franchise. – Subject to the provisions of the
Constitution and applicable laws, rules and regulations, there is
hereby granted to Cagayan Electric Power and Light Co., Inc. (CEPALCO),
hereunder referred to as the grantee, its successors or assigns, a
franchise to construct, operate and maintain in the public interest and
commercial purposes, a distribution system for the conveyance of
electric power to the end-users in the City of Cagayan de Oro and the
municipalities of Tagoloan, Villanueva and Jasaan, all in the Province
of Misamis Oriental, except the barangays of Baikingon, San Simon,
Pagatpat, Tagpangi, Pagalungan, Taglimao, Tuburan, Pigsag-an, Tumpagon,
Bayanga, Mabuaya, Dansolihon, Tignapoloan, Besigan and a portion of
Canitoan, all located in the City of Cagayan de Oro.
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-user.
Sec. 2. Manner of Operations 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, hereafter referred to as ERC, or the
Department of Energy, hereinafter referred to as the DOE, or its legal
successor or any other government agency concerned, to modify, improve
and change such facilities or systems in such 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 the
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 costs 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 the parties.
Sec. 3. Authority of the Energy
Regulatory Commission/Department of Energy. – 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. Ingress and Egress. –
For the purpose of erecting and maintaining poles and pipes and other
supports for said facilities, wires or other conductors or for the
purpose of laying and maintaining said facilities, wires, cables, pipes
or other conductors, it shall be lawful for the grantee, its successors
and assigns, with the prior approval of the Department of Public Works
and Highways (DPWH) or the local government units (LGUs) concerned, 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 provinces: Provided, however, That any public place,
highway, street, lane, alley, avenue, sidewalk or bridge disturbed,
altered or changed by reason of the erection of poles or other
supports, or the laying of wires, pipes, other conductors or conduits,
shall be immediately repaired and properly restored at the expense of
the grantee, its successors and assigns, in accordance with the
standards set by the DPWH and concerned LGUs.
Sec. 5. Responsibility to the
Public. – The grantees shall supply electricity to its captive market
in the lest cost 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, lines, pipes, 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
franchise 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. 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
businesses and industries.
Sec. 6. Rates for Services. –
The retail rates to its captive market 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/DOE.
The grantee shall identify and
segregate in its 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 take over and
operate the distribution system of the grantee or to authorize the
temporary use and operation thereof by any agency/department of the
government upon due compensation to the grantee for the use of the said
distribution system during the period when they shall be operated.
Sec. 9. Tax Provisions. – The
grantee, its successors or assigns, 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: Provided, That nothing herein shall be construed as
repealing any specific tax exemptions, incentives, or privileges
granted under any relevant law: Provided, further, That all rights,
privileges, benefits and exemptions accorded to existing and future
private electric utilities by their respective franchises shall
likewise be extended to the grantee.
The grantee shall file the
return with the city or province where its facility is located and pay
the taxes due thereon to the Commissioner of Internal Revenue or his
duly authorized representative in accordance with the NIRC and the
return shall be subject to audit by the Bureau of Internal Revenue.
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 condemnation
proceedings shall have been instituted and just compensation paid.
Sec. 11. Acceptance and
Compliance. – Acceptance of this franchise shall be given in writing
within sixty (60) days after the effectivity of this Act.
Sec. 12. Warranty in Favor of
National and Local Government. – The grantee shall hold the national,
provincial and municipal governments of the Philippines harmless from
all claims, accounts, demands or actions arising out of accidents or
injuries, whether to property or persons, caused by the construction,
installation, operation and maintenance of the distribution system of
the grantee.
Sec. 13. Liability for 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 poles and wires and pipes in a safe condition.
Sec. 14. Sale, Lease, Transfer,
Usufruct, etc. – The grantee shall not lease, transfer, grant the
usufruct of or sell this 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 shall the controlling interest of the grantee be
transferred whether in whole or in part, and whether simultaneously or
contemporaneously, to any such person, firm, company, corporation or
entity without the prior approval of the Congress of the Philippines,
except to a wholly-owned subsidiary of the grantee where the grantee is
the surviving corporation: Provided, That any such transfer, sale or
assignment is in accordance with the constitutional limitations. 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. Equality Clause. – In
the event that any competing individual, partnership or corporation
shall receive a similar permit or franchise with terms and/or
provisions more favorable than those herein granted or which tend to
place the herein grantee at any disadvantage, such terms and/or
provisions herein granted which are not contained in other franchise
that may hereafter be granted shall likewise be enjoyed by the future
grantees: Provided, however, That the foregoing shall neither apply to
nor affect the provisions concerning territory covered by the franchise
and the life span of the franchise.
Sec. 16. Separability Clause. –
If, for any reason, any of the section or provisions of this Act is
declared unconstitutional or invalid, the other parts or provisions
hereof which are not affected thereby shall continue to be in full
force and effect.
Sec. 17. 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. 18. Repealability and
Nonexclusivity 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. 19. Reportorial
Requirement. – The grantee shall submit an annual report of finances
and operations to the Congress of the Philippines."
Sec. 2. Extension/Renewal of Franchise. – The term of the franchise
granted under Republic Act No. 3247, as amended, is hereby
extended/renewed for a period of twenty-five (25) years commencing on
the date of expiration of Republic Act NO. 3247, as amended. This
Franchise shall be deemed ipso facto revoked in the event that the
grantee fails to operated continuously for two (2) years.
Sec. 3. Effectivity Clause. This Act shall take effect fifteen (15)
days from the date of its publication, upon the initiative of the
grantee, in at least two (2) newspapers of general circulation in the
Philippines.
Approved: March 31 2004
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