Section 16Sec./Art. 16

Transition of Operations. - In the public interest and to ensure uninterrupted supply of electricity, the current operator, CENECO, shall continue to operate the existing distribution system within the franchise area as well as implement its existing power supply agreements with generation companies that have been provisionally or finally approved by the ERC until the acquisition by the Grantee of ownership of its own distribution system and its complete transition towards full operations as determined by the ERC, which period shall in no case exceed two (2) years from the effectivity of this Act.

The Grantee shall source its initial power requirements from the existing power supply contracts of CENECO at the rates duly approved by the ERC for such power supply contracts, subject to applicable rules and regulations of the ERC and the DOE. The Grantee shall renegotiate such power supply contracts to reduce the generation costs.

To reduce the length of the transition period, ERC and all agencies issuing the requisite licenses shall prioritize all applications relevant to the transfer and operation of the distribution system under this franchise.

The Grantee shall, as far as practicable and subject to required qualifications, hire qualified former employees of CENECO upon the commencement of its business operations.

An information dissemination campaign in the franchise areas regarding public services and operations of the Grantee shall be made available to all end-users in the franchise area.

The Grantee and CENECO shall jointly ensure that all employees terminated by CENECO shall receive all separation and/or retirement benefits they are entitled to in accordance with applicable laws and any valid collective bargaining agreement between CENECO and its employees.

The DOE shall, during the transition, ensure that there will be an uninterrupted supply of electricity in the existing franchise area.

The Grantee shall comply with the system loss cap prescribed for private distribution utilities within the transition period determined by the ERC: Provided, That such transition period shall not exceed five (5) years from the grant of the Grantee's CPCN: Provided, further, That within six (6) months from the issuance of the CPCNB, the Grantee shall submit to the ERC a proposed implementation strategy including the estimated rate impact on consumers to achieve the prescribed system loss cap within such transition period.