Republic of the Philippines HOUSE OF REPRESENTATIVES TWELFTH CONGRESS Third Regular Session
HOUSE BILL No. 6697 _____________________________________________________________________________________ Introduced by Reps. SATUR C. OCAMPO, JOEL G. VIRADOR and SIEGFRED D. DEDURO _____________________________________________________________________________________
Explanatory Note
This bill, entitled “Fair Public Services Act of 2004,” essentially seeks to extend much needed protection to consumers from arbitrary increases in the rates of essential services and utilities. It prohibits providers of electric light, heat and power, and water supply from charging customers with expenses other than the amount corresponding to the reasonable value of the public service rendered. It particularly prohibits the imposition of service charges that should in fact be borne by the utility providers themselves but which are usually passed off to consumers to ensure greater profits for private utility firms and owners. The rates for electric light, heat and power, and water supply shall be reasonably fixed so that the owner, operator or grantee thereof obtains profit of not more than six per centum (6%) per annum of the rate base as defined herein without any other charges being imposed or collected from the customers. The net profit obtained by the grantee shall not be used for any purpose other than the improvement and expansion of the system. “Rate base” means their money honestly and prudently invested in the used and useful property and equipment less accrued depreciation plus one-twelfth of the annual cash operating expenses as working capital. Through this bill, the welfare and rights of the consumers are provided additional safeguards. Public utility enterprises that have been allowed to operate under the protective mantle of a congressional franchise must realize that the grant of such franchise is not a right but a privilege that carries with it the responsibility to serve the public interest and which demands the highest standards of fairness and accountability. In view of the foregoing, immediate approval of this measure is sought.
SATUR C. OCAMPO SIEGFRED D. DEDURO Bayan Muna–Party-List
JOEL G. VIRADOR Bayan Muna–Party-List Muna–Party-List
Bayan
Republic of the Philippines HOUSE OF REPRESENTATIVES TWELFTH CONGRESS Third Regular Session
HOUSE BILL No. _________________ _____________________________________________________________________________________ Introduced by Reps. SATUR C. OCAMPO, JOEL G. VIRADOR and SIEGFRED D. DEDURO _____________________________________________________________________________________
AN ACT PROHIBITING PROVIDERS OF ELECTRIC LIGHT, HEAT AND POW ER, AND W ATER SUPPLY FROM CHARGING CUSTOMERS W ITH EXPENSES OTHER THAN THE AMOUNT CORRESPONDING TO THE REASONABLE VALUE OF THE PUBLIC SERVICE RENDERED SECTION 1. Title. – This Act shall be known as “Fair Public Services Act of 2004.” SECTION 2. Coverage. – This Act covers all persons that now or hereafter may own, operate, manage or control for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any electric light, heat and power, water supply. PROVIDED, that the word “person” includes every individual, co-partnership, joint-stock company or corporation, whether domestic or foreign, their lessees, trustees, or receivers, as well as any municipality, province, city, government-owned or controlled corporation, or agency of the Government of the Philippines, and whatever other persons or entities that may own or possess or operate any electric light, heat and power, water supply. SECTION 3. Rates for electric light, heat and power, and water supply. – The rates for electric light, heat and power, and water supply shall be fixed so that the owner, operator or grantee thereof obtains profit of not more than six per centum (6%) per annum of the rate base as defined herein without any other charges being imposed or collected from the customers thereof. The net profit obtained by the grantee shall not be used for any purpose other than the improvement and expansion of the system. “Rate base” means their money honestly and prudently invested in the used and useful property and equipment less accrued depreciation plus one-twelfth of the annual cash operating expenses as working capital. Among the charges that cannot be imposed under any circumstance include – 1. Taxes of any kind;
2. Transmission and Sub-transmission Charges which pertains to the amount charged for providing access to transmission lines to transmit power to any party as well as the charge for the use of sub-transmission facilities for power delivery service, howsoever these are denominated. 3. Ancillary Services Charges which shall refer to the rates to be charged for the ancillary services including the costs of services necessary to support the transmission of capacity and energy from resources to loads while maintaining reliable operation of the Transmission Provider's Transmission System in accordance with Good Utility Practice as well as rates for load following and frequency regulation, spinning reserve, and back-up power. 4. Customer Charge which means the specific charge intended for the facilities that are dedicated to a particular customer such as but not limited to the metering equipment and related
accessories for a customer with multiple points of delivery as well as costs related to billing, meter reading, customer information, collection, and similar services. 5. System Loss which shall refer to the cost equivalent to the energy lost in the electric system in the process of delivering electricity to consumers or end-users. 6. Wire Charges which signify the costs of owning, operating and maintaining the lines and wires, substations, and associated equipment and facilities of electric utilities. 7. Non-Power Cost which means the costs incurred by the electric cooperative associated with the operation and maintenance of the distribution business, including taxes paid by such electric cooperative that are attributed to the cost of distribution. SECTION 4. Repeal and Separability. – All existing laws, rules, regulations or orders or any part thereof inconsistent with this Act are repealed, amended or modified accordingly, and if any part or provision of this Act is declared unconstitutional or illegal, the other parts or provisions which are not affected thereby shall remain in full force and effect. SECTION 5. Effectivity. – This Act shall take effect twenty (20) days after publication in a newspaper of general circulation. Approved,