President Ferdinand R. Marcos Jr. has signed the Republic Act (RA) 12017, granting the Leyte II Electric Cooperative (LEYECO II) a 25-year franchise for operating its power facilities in parts of Leyte.
RA 12017, inked by Marcos on Aug. 9, authorizes LEYECO II to “construct, install, establish, operate, own, manage and maintain in the public interest and for commercial purposes” a distribution system for the conveyance of electric power to the end-users in the city of Tacloban and the municipalities of Babatngon and Palo in Leyte province.
All electric distribution facilities, lines, and systems for power services must be operated or maintained by LEYECO II “at all times,” according to the new law.
LEYECO II is directed to secure the certificate of public convenience and necessity, as well as other license of permits for the construction and operation of the electric power distribution system, from the Energy Regulatory Commission (ERC), the National Electrification Administration (NEA) or any government agency having jurisdiction over its operations.
Under RA 12017, LEYECO II is mandated to supply electricity to its captive market at the lowest cost.
“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, systems, and equipment to provide efficient and reliable service and reduced electricity costs,” the law read.
“The Grantee shall charge reasonable and just power rates for its services to all types of consumers within its franchised areas so that businesses and industries shall be able to compete,” it said.
LEYECO is required to provide “open and non-discriminatory access” to its distribution system and services for any end-user within its franchise area, consistent with RA 9136, the Electric Power Industry Reform Act of 2001.
The retail rates and charges for LEYECO's distribution of electric power to its consumers will be regulated by and subject to the approval of the ERC.
Such rates charged by the LEYECO to the end-users must be made public and transparent.
In times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, the President has the “special right” to temporarily take over and operate the stations or facilities of LEYECO II, based on RA 12017.
LEYECO is prohibited from selling, leasing, transferring, granting the usufruct of, or assigning the franchise or the rights and privileges acquired under the law to any person, firm, company, corporation, or other commercial or legal entity without the prior approval of Congress.
It is also not allowed to merge with any other corporation or entity or transfer the controlling interest of LEYECO II, whether as a whole or in part, and whether simultaneously or contemporaneously, to any person, firm, company, corporation, or entity without Congress’ prior approval.
In 2022, the NEA recognized LEYECO II as one of the most outstanding electric cooperatives in the country. The award was attributed to the “AAA” rating the cooperative received in the 2021 overall performance assessment and the successful implementation of its mandate on the rural electrification program.
The cooperative is also one of the power groups offering the lowest power rates in the region.
RA 12017, made public on Wednesday, takes effect 15 days after its publication in the Official Gazette or a newspaper of general circulation. (PNA)
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