PHILIPPINE LAWS, STATUTES, CODES & ISSUANCES
PHILIPPINE LAWS, STATUTES AND CODES
REPUBLIC ACTS
REPUBLIC ACT NO. 2305 - AN ACT
GRANTING THE MUNICIPALITY OF CALUBIAN, PROVINCE OF LEYTE, A FRANCHISE
FOR AN ELECTRIC LIGHT, HEAT AND POWER SYSTEM |
Section 1.
Subject to the terms and conditions established in
Act Numbered Thirty-six hundred thirty-six, as amended by Commonwealth
Act Numbered One hundred thirty-two, and to the provisions of the
Constitution, there is granted to the Municipality of Calubian,
Province of Leyte, hereinafter referred to as the grantee, for a period
of twenty-five years from the approval of this Act, the right,
privilege and authority to construct, maintain and operate and electric
light, heat and power system, for the purpose of generating and
distributing electric light, heat and/or power therein.
Sec. 2. Rates for electricity � Limit of net
profit. � The rates for electricity shall be fixed so that the grantee
obtains profit of not more than six per centum per annum of the rate
base as defined herein: Provided, That the grantee shall not start
operation unless the original rate shall have been previously approved
by the Public Service Commission: Provided, further, That if the
grantee shall have reported profits in excess of six per centum per
annum for the first year of its operation, it shall effect immediate
reduction in its existing rates by a percentage which the reported
profits in excess of six per centum per annum bear to the reported
revenue in that year: Provided, further, That during each succeeding
year, the grantee reporting profits still in excess of six per centum
per annum, notwithstanding the rate reduction of the immediately
preceding year, shall effect reduction in rates by a percentage which
the reported profits in excess of six per centum per annum during the
preceding year bear to the reported revenue of the same year, such
reduction to be made not later than April first of each year
retroactive to January first of the same year: Provided, further, That
where the applicable reduction to customers will mean less than one per
centum reduction in the prevailing rates or will include such a
fraction, no reduction in rates shall be made to the extent of such
fraction but such amount shall be placed in a special fund of the
grantee available only for the improvement and expansion of the system:
Provided, further, That the reduction to be affected by the grantee in
accordance with the next preceding proviso shall not be conclusive but
may be further increased at such rates as shall be found justifiable in
the verification that shall be undertaken by the Public Service
Commission, with the cooperation of the General Auditing Office and
such other agencies of the Government as the President may designate,
of the rate base of the revenue, and of the operating expenses:
Provided, further, That any violation of any provision of this section,
including inflation of the rate base, padding of operating expenses and
understatement of revenues, shall be penalized with dismissal from the
service, and by imprisonment for not less than one year and not more
than five years, of the public officers and employees responsible for
the violation, without prejudice to the civil liability of the grantee
to the customers in double the amount of the overcharge plus attorneys
fees and costs of litigation, which liability may be enforced
independently of the criminal action arising from the same act. Sec. 3. Records of assets, liabilities, capital, income, etc. � The grantee shall make and keep complete records of its assets, liabilities, capital, revenues, expenses, income and operations in accordance with a detailed system of accounts which shall embody the cost principle as defined in section five hereof, and which shall be prescribed by the Public Service Commission, and such accounting system shall conform to the system approved by the Auditor General. The grantee shall account for retirements or replacements of, or additions to, its properties according to a classified list of units of property which the Public Service Commission shall prescribe. Until the Public Service Commission prescribes the aforementioned lists of units of property, the grantee may adopt its own lists of properties which it shall submit to the Public Service Commission for approval. Sec. 4. Record of amount of depreciation of depreciable property. � The grantee shall record in its accounts at the end of each month the estimated amount of depreciation of every depreciable property for that month computed according to the straight-line method, as defined in section five hereof. In estimating such accrued depreciation the grantee shall use its own judgment as to the estimated service lives and depreciation rates of its depreciable properties which it shall submit to the Public Service Commission for approval until such time as the Public Service Commission fixes the service lives and depreciation rates which the grantee shall be required to use thereafter.
Sec. 5. Definition of terms. � For purposes of
this Act, the following terms are defined as follows: "Cost" means the amount of money
actually paid for property or services or their cash value at the time
of the transaction.
"Units of property" means those items of property which when referred, with or without replacement, are accounted for by crediting the book cost thereof to the property account in which included. "Straight-line method" of depreciation means the spreading of depreciation of depreciable property in equal amounts monthly over its estimated service life. "Rate base" means the 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. Sec. 6. Limit of operating expenses quality of service. � The grantee shall abide by the limit of operating expenses that the Public Service Commission may impose and shall comply with the safety rules and render the quality of service which said Commission may provide.
Sec. 7. Power to borrow from government banking
institutions. � In order to finance its project, the grantee is
empowered to borrow from any financial institution or incur
indebtedness in excess of its borrowing capacity, notwithstanding any
provision of law to the contrary. Sec. 9. Right of National Government to acquire grantee's property. � It is expressly provided that, in the event the National Government should desire to maintain and operate for itself the system and enterprise herein authorized, the grantee shall surrender its franchise and turn over to the National Government all serviceable equipment therein, and the National Government shall pay the grantee its original investments and/or assume all the obligations of the grantee to finance the system.
Section 10. Penal provisions. � Any public officer
or employee found directly or indirectly responsible for the use of the
net profit of the grantee for any purpose other than the improvement
and expansion of the system shall be punished by a fine of not more
than five thousand pesos or imprisonment for not more than two years,
or both. Section 11. Repeal or modification of other laws, executive orders, etc. � All laws or parts of laws and all executive orders, rules and regulations or parts thereof inconsistent with the provisions of this Act are repealed or modified accordingly. Section 12. Separability clause. � If any provision of this Act or the application of such provision to any person or circumstance is declared invalid, the remainder of the Act or the application of such provision to any persons or circumstances shall not be affected by such declaration.
Section 13. Effectivity Clause. � This Act shall take
effect upon its approval. Approved: June 19, 1959 |