PHILIPPINES Law and Practice Contributed by: Maria Lethel C. Alburo-Mejia, Puno Law
4.2 Obtaining Approvals to Construct and Operate Transmission Lines and Associated Facilities See response in 3.2 Obtaining Approvals to Construct and Operate Generation Facilities . As previously mentioned, the operation of trans- mission lines and associated facilities is a public utility that requires a franchise from Congress. The granting of such franchise is subject to pub- lic hearings. 4.3 Terms and Conditions Imposed on Approvals to Construct and Operate a Transmission Line and Associated Facilities The legislative franchise provides key approval for the operation of transmission lines and asso- ciated facilities. The franchise is typically valid for up to 50 years and contains the following rights and obligations: • authority of the transmission network pro- vided (TNP) to exercise the right of eminent domain in so far as it may reasonably be necessary for the construction, expansion and efficient maintenance and operation of the transmission system and grid, and the efficient operation and maintenance of the subtransmission systems; • prohibition of the sale, lease or transfer of the franchise or of the rights and privileges acquired thereunder; • not to engage in any anti-competitive behav- iour including, but not limited to, cross-sub- sidisation, price or market manipulation or other unfair trade practices detrimental to the encouragement and protection of contestable markets; and • the obligation to list and make a public offer- ing of the shares representing at least 20% of the outstanding capital stock or a higher
percentage that may hereafter be provided by law, within ten years from the commencement of its operations. 4.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Transmission Lines and Associated Facilities The legislative franchise authorises the TNP to exercise the right of eminent domain in so far as it may reasonably be necessary for the construc- tion, expansion and efficient maintenance and operation of the transmission system and grid, and the efficient operation and maintenance of the subtransmission systems. Just compensation is the fair market value of the property based on the current tax declaration of the property to be expropriated. 4.5 Monopoly Rights to Provide Transmission Services The EPIRA has granted TransCo a monopoly over the high-voltage network and subjected it to performance-based regulations. The conces- sion granted by TransCo to the NGCP as the TNP is on an exclusive basis which translates to a natural monopoly. Generation companies, however, are allowed to develop, construct, own and operate a point-to- point transmission facility for the sole purpose of connecting the generating facility to the grid. The same is subject to the approval of the ERC, whose approval contains a condition that the NGCP will carry out the operations and mainte- nance of such point-to-point transmission line. 4.6 Transmission Charges and Terms of Service The transmission charges are determined in accordance with the Amended Rules for Setting
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