COMMITTEE ON ENERGY
HOUSE BILLS PROPOSING AMENDMENT TO THE EPIRA (R.A. 9136)
EPIRA
HB 3958
HB 351
HB 3633
HB 3676
HB 2922
HB 3847
(R.A. 9136)
Rep. Masongsong
Reps. Colmenares
& Zarate
Reps. Ridon,
Teodoro & J.
Belmonte
Rep. Evardone
Reps. Rivera &
Batocabe
Rep. J. Dela Cruz
Sec. 2. Declaration
of Policy. - It is
hereby declared the
policy of the State:
(a) xxx
(b) xxx
(c) xxx
(d) To enhance the
inflow of private
capital and broaden
the ownership base
of the power
generation,
transmission and
Sec. 2. Declaration
of Policy. - It is
hereby declared
the policy of the
State:
(a) xxx
(b) xxx
(c) xxx
(d) To enhance the
inflow of private
capital and
broaden the
ownership base of
the power
generation,
transmission and
HBs 4198, 4422
and 4389
HB 4479
HB 987
Rep. R. Umali
Rep. T. Baguilat
POSITION
PAPERS
Reps. R.
Rodriguez and M.
Rodriguez, Jr.
Sec. 2.Declaration of
Policy.- It is lweby
declared the policy of
the state:
XXX.
PIPPA suggests
amending
pertinent laws
that require the
approvals and
permits for power
projects,
otherwise,
declaration of
policy in EPIRA
will have little to
no effect.
The intention of
creating a “onestop shop” for
energy projects
may be done by
an EO or the
JCPC can direct
or mandate the
DOE to create a
task force which
may facilitate
issuance of
permits
NEA supports
H.B. 3958, 3633,
and 3676. These
important pieces
of legislation, in
addition to the
various views,
comments and
distribution sectors;
distribution sectors
IN ORDER TO
MINIMIZE THE
FINANCIAL RISK
EXPOSURE OF
THE NATIONAL
GOVERNMENTAN
D THEREBY
RATIONALIZE
OWNERSHIP TO
PREVENT
MONOPOLY AND
OLIGOPOLY IN
ANY OF THE
SECTORS OF
THE INDUSTRY;
recommendation
of various
stakeholders on
EPIRA, are very
helpful in
identifying the
issues and
concerns on how
to address the
same through
legislation, policy
and regulatory
issuances.
(e) TO ENSURE
TIMELY
COMPLETION OF
POWER
PROJECTS FOR
ENERGY SECURITY
AND MINTMIZE
COSTS BY
CONSIDERING
POWER PROJECTS
AS PROJECTS OF
NATIONAL
SIGNIFICANCE,
[AND/OR ARE]
IMBUED WITH
PUBLIC INTEREST;'
(e) To ensure fair
and nondiscriminatory
treatment of public
and private sector
entities in the
process of
restructuring the
electric power
industry;
f [(e)] To ensure fair
and nondiscriminatory
treatment of public
and private sector
entities in the
process of
restructuring the
electric power
industry;
(g) [(f)] xxx
(f) xxx
H [(g)] xxx
(g) xxx
(h) To promote the
utilization of
indigenous and new
and renewable
energy resources in
power generation in
order to reduce
dependence on
imported energy;
(i) To provide for an
orderly and
transparent
privatization of the
assets and liabilities
of the National Power
Corporation (NPC);
(j) To establish a
strong and purely
independent
regulatory body and
(h) To promote the
utilization of
indigenous and
new and renewable
energy resources
in power
generation in order
to reduce
dependence on
imported energy
AND COME UP
WITH POLICIES
THAT WOULD
ENCOURAGE
RATHER THAN
RESTRICT
INVESTORS IN
THIS AREA;
(i) To provide for an
orderly and
transparent
privatization of the
assets and
liabilities of the
National Power
Corporation (NPC),
WITH THE
ASSURANCE OF
PROVIDING A
WELL
UNDERSTOOD
PROCESS GIVING
EQUAL
OPPORTUNITY
OF
PARTICIPATION;
(j) To establish a
strong and purely
independent
regulatory body,
system to ensure
consumer protection
and enhance the
competitive operation
of the electricity
market; and
(k) xxx
Sec. 4.Definition of
Terms. –
(a) "Aggregator"
refers to a person or
entity, engaged in
consolidating electric
power demand of
end-users in the
contestable market,
for the purpose of
purchasing and
reselling electricity on
a group basis;
xxx
MANNED BY
INDEPENDENT
OFFICERS WITH
EXTENSIVE
BACKGROUND
OF INDUSTRY
PRACTICE, and
system to ensure
consumer
protection and
enhance the
competitive
operation of the
electricity market;
and
(k) xxx”
Sec. 4.Definition of
Terms. –
(a) "Aggregator"
refers to a person
or entity, engaged
in consolidating
electric power
demand of endusers in the
contestable market,
for the purpose of
purchasing and
reselling,
MANAGING FOR
THE OPTIMUM
UTILIZATION OF
THE
AGGREGATED
DEMAND, OR
SIMPLY POOLING
FOR THE
TENDERING
PROCESS IN
LOOKING FOR
SUPPLY, OF
electricity on a
 The proposed
amendment is
unnecessary.
The term “entity”
may be
considered to
refer to a firm,
partnership,
company,
corporation,
business,
organization and
the like. (PIPPA)
group basis;
(pp) "Privatization"
refers to the sale,
disposition, change
and transfer of
ownership and
control of assets and
IPP contracts from
the Government or a
government
corporation to a
private person or
entity;
xxx
xxx
(pp) "Privatization"
refers to the sale,
disposition, change
and transfer of
ownership and
control of assets
and IPP contracts
from the
Government or a
government
corporation to
ANOTHER
CORPORATION
OR FIRM OR a
private person or
entity;
xxx
Sec. 6.Generation
Sector. - Generation
of electric power, a
business affected
with public interest,
shall be competitive
and open.
Upon the effectivity
of this Act, any new
generation company
shall, before it
operates, secure
from the Energy
Regulatory
Commission (ERC) a
certificate of
Sec. 6.
Generation
Sector. Generation of
electric power, a
business
[affected]
IMBUED with
public interest,
[shall be
competitive and
open] IS
HEREBY
DECLARED A
PUBLIC UTILITY.
Sec.
6.Generation
Sector. Generation of
electric power [, a
business affected
with public
interest,] shall be
competitive and
open.
Upon the
effectivity of this
Act, any new
generation
company shall,
[before it
operates,] secure:
Upon the
effectivity of this
Act, any new
generation
company shall,
before it
operates, secure
from the Energy
Sec. 6.Generation
Sector. - Generation
of electric power, a
business affected
with public interest,
shall be competitive
and open.
Upon the effectivity
of this Act, any new
generation company
shall, before it
operates, secure
from the Energy
Regulatory
Commission (ERC) a
certificate of
 The proposal
to declare the
generation side
of the power
business as
public utility may
result in the
further reduction
of investors’
interest in
participating in
the gov’t’s
privatization
program.
Prospective
investors of
PSALM may
view the sudden
change as a
complete shift of
policy. Investor
confidence may
be adversely
affected.
compliance pursuant
to the standards set
forth in this Act, as
well as health, safety
and environmental
clearances from the
appropriate
government agencies
under existing laws.
1) FROM THE
CONGRESS OF
THE
PHILIPPINES A
NATIONAL
FRANCHISE,
2) from the
Energy
Regulatory
Commission
(ERC) a
certificate of
compliance
pursuant to the
standards set
forth in this Act,
[as well as]
3) Health, safety
and
environmental
clearances from
the appropriate
government
agencies AND
LOCAL
GOVERNMENT
UNITS under
existing laws.
ALL EXISTING
POWER
GENERATION
COMPANIES
ARE HEREBY
ORDERED TO
SECURE A
NATIONAL
FRANCHISE
FROM THE
CONGRESS OF
THE
PHILIPPINES.
Regulatory
Commission
(ERC) a
certificate of
compliance
pursuant to the
standards set
forth in this Act,
as well as health,
safety and
environmental
clearances from
the appropriate
government
agencies under
existing laws.
compliance pursuant
to the standards set
forth in this Act, as
well as health, safety
and environmental
clearances from the
appropriate
government agencies
under existing laws.
(PSALM)
 The
Congressional
franchise
requirement
may deter
prospective
investors. May
entail significant
period of time to
complete
attendant
processes and
documentary
requirements.
These may
serve as a
disincentive for
investors to
participate in the
power industry,
which is the
present
challenges
being
experienced by
the govt.
(PSALM)
 The proposal
to amend this
section might
not be attractive
to investors in
power
generation due
to added cost
and time in
seeking a
national
franchise and
the unstable
regulatory
environment due
to the revision of
the EPIRA.
Any law to the
contrary
notwithstanding,
power generation
shall not be
considered a public
utility operation. For
this purpose, any
person or entity
engaged or which
shall engage in
power generation
and supply of
electricity shall not be
required to secure a
local or national
franchise.
[Any law to the
contrary
notwithstanding,
power generation
shall not be
considered a
public utility
operation. For
this purpose, any
person or entity
engaged or which
shall engage in
power generation
and supply of
electricity shall
not be required to
secure a local or
national
franchise.]
Any law to the
contrary
notwithstanding,
power generation
shall [not] be
considered a
public utility
WHOSE
operation SHALL
BE SUBJECT TO
THE
PROVISIONS OF
THE PUBLIC
SERVICE ACT
(COMMONWEAL
TH ACT NO.
146). [For this
purpose, any
person or entity
engaged or which
shall engage in
power generation
and supply of
electricity shall
not be required to
secure a local or
national
franchise.]
EVEN UNDER A
REGIME OF
RETAIL
COMPETITION
AND OPEN
ACCESS, THE
EXISTENCE OF
WHICH SHALL
BE
DETERMINED
BY THE
DEPARTMENT
OF ENERGY
(DOE) AND THE
ENERGY
REGULATION
Any law to the
contrary
notwithstanding,
power generation
shall not be
considered a public
utility operation. For
this purpose, any
person or entity
engaged or which
shall engage in
power generation
and supply of
electricity shall not be
required to secure a
local or national
franchise.
(Transco)
 Sec 6 clearly
defines that the
generation
sector is not an
ordinary
business, as it is
a business
affected with
public interest.
Thus, it would
have to secure
from the ERC a
certificate of
compliance
(COC), as well
as other
requirements. In
securing a COC,
the generation
company shall
comply with
ERC rules and
regulation
necessary for
the generation
sector. Thus, the
generation
sector, although
without a
national
franchise, may
be considered
as subject to
special
regulations.
It is worth noting
that the
generation
sector does not
serve the public
directly.
Generators only
deal with the
transmission,
Upon implementation
of retail competition
and open access, the
prices charged by a
generation company
for the supply of
electricity shall not be
subject to regulation
by the ERC except
as otherwise
provided in this Act.
COMMISSION
(ERC) AND
CONCURRED
TO BY THE
CONGRESSION
AL POWER
COMMISSION,
THE PRICES
CHARGED BY A
GENERATION
COMPANY FOR
THE SUPPLY OF
ELECTRICITY
SHALL REMAIN
THE SUBJECT
OF
REGULATION
UNDER SUCH
TERMS AND
CONDITIONS AS
MAY BE
PROMULGATED
BY THE ERC.
Upon
implementation of
retail competition
and open access,
the prices
charged by a
generation
company for the
supply of
electricity MUST
NOT EXCEED
THE TWELVE
(12) PERCENT
RETURN ON
RATE BASE
(RORB) UNDER
THE PUBLIC
UTILITY
LAWAND shall
[not] be subject to
regulation by the
Upon
implementation of
retail competition
and open access,
the prices
charged by a
generation
company for the
supply of
electricity shall
not be subject to
regulation by the
ERC except as
otherwise
provided in this
Act.
Upon implementation
of retail competition
and open access, the
prices charged by a
generation company
for the supply of
electricity shall not be
subject to regulation
by the ERC except
as otherwise
provided in this Act.
distribution and
supply sectors.
They do not deal
with the
household level.
Generators do
not even have
captive
customers,
since distribution
utilities have the
right to choose
the generator
they will have a
contract with.
Moreover, the
profits of a
generation
company are not
guaranteed.
Investments in
the generation
sector depend
on economic
principle of price
signal under a
competitive
environment.
Subjecting the
generation
sector to
requirements of
a public utility
under the Public
Service Act will
make
investment in
the generator
sector harder. It
will be an
additional barrier
to the entry of
new players,
which will result
to even more
ERC [except as
otherwise
provided in this
Act].
Pursuant to the
objective of lowering
electricity rates to
end-users, sales of
generated power by
generation
companies shall be
value added tax
zero-rated.
The ERC shall, in
determining the
existence of market
power abuse or anticompetitive
behaviour, require
from generation
companies the
submission of their
financial statements.
library
Pursuant to the
objective of
lowering
electricity rates to
end-users, sales
of generated
power by
generation
companies shall
be value added
tax zero-rated.
The ERC shall [,
in determining the
existence of
market power
abuse or anticompetitive
behaviour,]
require from
generation
companies the
ANNUAL
submission of
[their]
INDEPENDENTL
Y AUDITED
financial
statements.”
supply deficit
and higher
prices. (PIPPA)
Pursuant to the
objective of
lowering
electricity rates to
end-users, sales
of generated
power by
generation
companies shall
be value added
tax zero-rated.
The ERC shall, in
determining the
existence of
market power
abuse or anticompetitive
behaviour,
require from
generation
companies the
submission of
their financial
statements,
OPERATIONAL
PLANS AND
SCUH OTHER
NECESSARY
DOCUMENTS
TO MAKE SUCH
DETERMINATIO
N IN AS
FACTUAL AND
PROPER A
MANNER AS
POSSIBLE.
Pursuant to the
objective of lowering
electricity rates to
end-users, sales of
generated power by
generation
companies shall be
EXEMPT FROM
value added tax
(VAT) [zero-rated].
The ERC shall, in
determining the
existence of market
power abuse or anticompetitive
behaviour, require
from generation
companies the
submission of their
financial statements.
 PIPPA
suggests to
amend the
EVAT law rather
than the EPIRA
 NPC agrees
the declaration
of power
generation
companies as
public utilities;
however, it has
reservation on
the requirement
that a new
generation
company shall
secure from
Congress a
national
franchise
because under
the current
situation, this
requirement is
not practical as
it will be
burdensome esp
for private sector
participation in
missionary
areas. In the
main grids, tis
will discourage
dispersed
entrepreneurshi
p which is
essential in
achieving true
competition.
 On putting a
cap on the price
charged by a
genco, NPC
cited that:
- NPC-SPUG is
the
only
genco
adopting
RORB. Other
gencos are
using
the
Weighted
Average Cost
of
Capital
(WACC)
- May not be
attractive to
some power
industry
players,
hence, they
will shy away
from
the
generation
business,
invariably
resulting to
lack
of
generation
capacities in
the future.
- In
implementing
RORB cost
control, there
is
natural
tendency of
proponents to
bloat
their
costs, thus,
the need for
ERC to be
properly and
adequately
manned with
competent,
dedicated and
knowledgeabl
e personnel
who
will
implement
such RORB
cost control
mechanics.
- An alternative
to cap on
price
and
perhaps the
better tact is
to benchmark
our electricity
price
with
those
with
other similarly
situated
countries as
provided in
section 43(f)
of the EPIRA.
 The 12% cap
on corporate
profit may be
seen as a
disincentive by
prospective
investors
compared to the
present RORB
rate-setting
methodology.
Even with the
arguably more
attractive set-up
in terms of
RORB, investors
are hesitant to
put in huge
resources due to
potential
changes in the
EPIRA.
Changing the
policy at this
point may
therefore prove
to be more
detrimental to
the energy
security goals of
the govt.
(PSALM)
 12% RORB
cap for
generator will be
beneficial to the
consumers.
(Transco)
SEC. 22.
Distribution Sector.
– The distribution of
electricity to endusers shall be a
regulated common
carrier business
requiring a national
franchise.
Distribution of electric
power to all endusers may be
undertaken by
private distribution
utilities, cooperatives,
local government
units presently
undertaking this
function and other
duly authorized
entities, subject to
regulation by the
SEC. 22. Distribution
Sector. – The
distribution of
electricity to endusers shall be a
regulated common
carrier business
requiring a national
franchise.
Distribution of electric
power to all endusers may be
undertaken by
private distribution
utilities, cooperatives,
local government
units presently
undertaking this
function and other
duly authorized
entities, subject to
regulation by the
ERC.
ERC.
SEC. 23. Functions
of Distribution
Utilities.- xxx
Sec. 23. Functions
of Distribution
Utilities.- xxx
SALES OF
ELECTRICITY BY
DISTRIBUTION
UTILITIES TO THE
END-USERS SHALL
BE EXEMPT FROM
VALUE ADDED TAX
(VAT)
SEC. 23. Functions
of Distribution
Utilities. – xxx
xxx
xxx
xxx
A distribution utility
shall have the
obligation to supply
electricity in the least
cost manner to its
captive market,
subject to the
collection of retail
rate duly approved
by the ERC.
xxx
A distribution utility
shall have the
obligation to supply
electricity in the least
cost manner to its
captive market
THROUGH A
PUBLIC AND
COMPETITIVE
SELECTION
PROCESS OR
SWISS CHALLENGE
PROCEDURE, AS
THE CASE MAY BE,
subject to the
collection of retail
rate AT SUCH
AMOUNTS AND IN
SUCH MANNER AS
PROVIDED HEREIN,
duly [approved]
AUTHORIZED by
the ERC[.];
PROVIDED, THAT
THE ERC, WITHIN
THREE (3) MONTHS
FROM THE
EFFECTIVITY OF
THIS ACT, SHALL
PIPPA is
supportive of tne
Competitive
Selection
Process (CSP)
for contracting of
power supplu by
DUs/ECs,
however, there is
no need to
amend the
EPIRA since the
proposed
amendments are
already covered
in the current
provisions of
EPIRA and the
ERC can issue
new rules and
regulation for
CSP. DUs should
be required to
fully contract the
requirements of
their captive
customers from
price spikes. A
time standard
PROVIDE THE
PARAMETERS FOR
THE CONDUCT OF
A PUBLIC AND
COMPETITIVE
SELECTION
PROCESS OR
SWISS CHALLENGE
PROCEDURE AS
THE CASE MAY BE;
PROVIDED,
FURTHER THAT,
ALL DISTRIBUTION
UTILITES SHALL BE
REQUIRED TO
FULLY OR
ADEQUATELY
CONTRACT THEIR
CURRENT AND
FUTURE ENERGY
AND DEMAND
REQUIREMENTS
FROM BILATERAL
POWER SUPPLY
CONTRACTS AS
DETERMINED BY
ERC BASED ON
MARKET
CONDITIONS AND
IN ACCORDANCE
WITH SUCH RULES
AND REGULATIONS
TO BE
PROMULGATED BY
THE COMMISSION.
FOR THE PURPOSE
OF THIS SECTION,
ËNERGY AND
DEMAND
REQUIREMENT”
SHALL MEAN THE
AMOUNT OF
ELECTRICITY THAT
IS REQUIRED FOR
THE DISTRIBUTION
should also be
set for regulator’s
approvals of
short term power
supply contracts
to regulated
utilities.
UTILITY TO
SUPPLY THE
ELECTRICITY
REQUIREMENTS
OF ITS
ELECTRICITY ENDUSERS AT ANY
GIVEN TIME.
TO ENSURE LEAST
COST SERVICE TO
ITS CUSTOMERS,
ALL DISTRIBUTION
UTILITIES, TN ITS
POWER SUPPLY
CONTRACTING,
SHALL ENSURE
THAT THE BASE
LOAD, MIDMERIT
AND PEAK LOAD
REQUIREMENTS IN
ACCORDANCE
WITH CONTRACTS
BASED ON THE
LOAD PROFILE,
SHALL BE FULLY
OR ADEQUATELY
COVERED BY
BILATERAL
CONTRACTS.'
To achieve
economies of scale
in utility operations,
distribution utilities
may, after due notice
and public hearing,
pursue structural and
operational reforms
such as but not
limited to, joint
actions between or
among the
distribution utilities,
subject to the
To achieve
economies of scale
in utility operations,
distribution utilities
may, after due
notice and public
hearing, pursue
structural and
operational reforms
such as but not
limited to, joint
actions between or
among the
distribution utilities,
XXX
guidelines issued by
the
ERC. Such joint
actions shall result in
improved
efficiencies, reliability
of service, reduction
of costs and
compliance to the
performance
standards prescribed
in the IRR of this Act.
Sec. 28. Demonopolization and
Shareholding
Dispersal.- In
subject to the
guidelines issued
by the ERC. IN
PURSUING JOINT
ACTIONS
PARTICULARLY
IN AGGREGATING
DEMAND TO
ATTRACT
INVESTMENTS
THAT WOULD
RESULT TO THE
REDUCTION OF
THE PER
KILOWATT HOUR
OF ELECTRICITY,
THE
DISTRIBUTION
UTILITIES MAY
CREATE A
SUBSIDIARY
COMPANY, THE
OWNERSHIP OF
WHICH SHALL BE
SUBJECT TO THE
LIMITATIONS
IMPOSED UNDER
THE CROSSOWNERSHIP
PROVISION. Such
joint actions shall
result in improved
efficiencies,
reliability of service,
reduction of costs
and compliance to
the performance
standards
prescribed in the
IRR of this Act.
xxx.
Sec. 28. Demonopolization
and Shareholding
Dispersal.- In
 As with the
existing policy
on crossownership, it
compliance with the
constitutional
mandate for
dispersal of
ownership and demonopolization of
public utilities, the
holdings of persons,
natural or juridical,
including directors,
officers, stockholders
and related interests,
in a generation
company, distribution
utility and their
respective holding
companies shall not
exceed twenty five
(25%) percent of the
voting shares of
stock unless the
utility or the company
holding the shares or
its controlling
stockholders are
already listed in the
Philippine Stock
Exchange (PSE):
Provided, That
controlling
stockholders of small
distribution utilities
are herby required to
list in the PSE within
five (5) years from
the enactment of this
Act if they already
own the stocks. New
controlling
stockholders shall
undertake such
listing within five (5)
years from the time
they acquire
ownership and
compliance with
the constitutional
mandate for
dispersal of
ownership and
demonopolization of
public utilities, the
holdings of
persons, natural
or juridical,
including
directors, officers,
stockholders and
related interests,
in a generation
company,
distribution utility
and their
respective
holding
companies shall
not exceed[
twenty five (25%)]
TEN (10%)
percent of the
voting shares of
stock unless the
utility or the
company holding
the shares or its
controlling
stockholders are
already listed in
the Philippine
Stock Exchange
(PSE): Provided,
That controlling
stockholders of
small distribution
utilities are herby
required to list in
the PSE within
five (5) years
from the
has been
observed that
Sec 28 on
demonopolizatio
n is too liberal
and should be
made stricter to
prevent the
creation of a
cartel to
preclude any
incidents of
collusion.
 The 25% cap
on
shareholdings
should be
reduced to 15%
for distribution
utilities that are
not listed in the
PSE (FGD
proposal as
consolidated by
Philreca)
 The proposed
changes will
restrict flow of
investments in a
very capital
intensive
industry, and
may ultimately
turn out to be a
barrier to entry
of new players.
This is contrary
to the intent and
policy behind
EPIRA to
enhance the
inflow of private
capital into the
electric power
control. A small
distribution company
is one whose peak
demand is equal to
or less than Ten
megawatts (10MW).
enactment of this
Act if they already
own the stocks.
New controlling
stockholders shall
undertake such
listing within five
(5) years from the
time they acquire
ownership and
control. A small
distribution
company is one
whose peak
demand is equal
to or less than
Ten megawatts
(10MW).
SEC. 29. Supply
Sector. – The supply
SEC. 29. Supply
Sector. – The
industry.
Moreover, with
no entity owning
more than 10%,
it is likely that no
one shareholder
will pay attention
to the
management of
the utility or
support it when
needed.
From the point
of view of
preventing
abuse of market
power, EPIRA
already imposes
very high
ownership and
market share
restrictions. The
existing
safeguards in
the EPIRA are
sufficient and
sound policies.
EPIRA was a
product of
numerous
congressional
debates and
studies, which
spanned three
congressional
terms. As such,
its policies
should not be
changed
overnight
because of
recent issues.
(PIPPA)
 The supply
sector is already
sector is a business
affected with public
interest. Except for
distribution utilities
and
electric
cooperatives
with
respect to their
existing
franchise
areas, all suppliers of
electricity to the
contestable market
shall
require
a
license from the
ERC.
supply sector is a
business affected
with
public
interest.
AS
SUCH
THE
OPERATIONS
OF
ALL
SUPPLIERS OF
ELCETRICITY
INCLUDING
THOSE
SUPPLYING TO
THE
CONTESTABLE
MARKET SHALL
BE SUBJECT TO
THE
PUBLIC
SERVICE LAW.
Except
for
distribution
utilities
and
electric
cooperatives with
respect to their
existing franchise
areas,
all
suppliers
of
electricity to the
contestable
market
shall
require a license
from the ERC.
For this purpose, the
ERC
shall
promulgate rules and
regulations
prescribing
the
qualifications
of
electricity suppliers
which shall include,
among
other
requirements,
a
demonstration
of
their
technical
For this purpose,
the ERC shall
promulgate rules
and regulations
prescribing the
qualifications of
electricity
suppliers which
shall
include,
among
other
requirements, a
demonstration of
subject to
special
regulations as it
requires a
license from the
ERC. Like the
generation
sector, it follows
special rules
and regulations.
The contestable
customer has a
choice from all
licensed retail
suppliers. The
supply sector is
unlike
distribution and
transmission
sectors, which
are subject to
franchise
because they
cater to captive
customers. The
captive
customers do
not have a
choice and are
merely pricetakers.
Subjecting the
supply sector to
requirements of
public utility
under the Public
Service Act will
further limit the
retail suppliers
which can cater
to the needs of
contestable
customers.
(PIPPA)
capability, financial
capability,
and
creditworthiness:
Provided, That the
ERC shall have
authority to require
electricity suppliers to
furnish a bond or
other evidence of the
ability of a supplier to
withstand
market
disturbances or other
events that may
increase the cost of
providing service.
Any law to the
contrary
notwithstanding,
supply of electricity to
the
contestable
market shall not be
considered a public
utility operation. For
this purpose, any
person or entity
which shall engage in
the
supply
of
electricity to the
contestable market
shall not be required
to secure a national
franchise.
The prices to be
charged by suppliers
their
technical
capability,
financial
capability,
and
creditworthiness:
Provided, That
the ERC shall
have authority to
require electricity
suppliers
to
furnish a bond or
other evidence of
the ability of a
supplier
to
withstand market
disturbances or
other events that
may increase the
cost of providing
service.
Any law to the
contrary
notwithstanding,
supply
of
electricity to the
contestable
market shall not
be considered a
public
utility
operation.
For
this purpose, any
person or entity
which
shall
engage in the
supply
of
electricity to the
contestable
market shall not
be required to
secure a national
franchise.
The prices to be
charged
by
for the supply of
electricity to the
contestable market
shall not be subject
to regulation by the
ERC.
suppliers for
supply
electricity to
contestable
market shall
be subject
regulation by
ERC.
Electricity suppliers
shall be subject to
the
rules
and
regulations
concerning abuse of
market
power,
cartelization,
and
other anti-competitive
or
discriminatory
behaviour to be
promulgated by the
ERC.
not
to
the
Electricity
suppliers shall be
subject to the
rules
and
regulations
concerning abuse
of market power,
cartelization, and
other
anticompetitive
or
discriminatory
behaviour to be
promulgated by
the ERC.
In its billings to endusers, every supplier
shall identify and
segregate
the
components of its
supplier’s charge, as
defined herein.
SEC. 30. Wholesale
Electricity
Spot
Market. - Within one
(1) year from the
effectivity
of
this Act, the DOE
shall establish a
wholesale electricity
spot
market
composed of the
wholesale electricity
spot
market
participants.
The
the
of
the
Sec.
30.
Wholesale
Electricity Spot
Market. - Within
one (1) year from
the effectivity of
this Act, the DOE
shall establish a
wholesale
electricity
spot
market composed
of the wholesale
electricity
spot
In its billings to
end-users, every
supplier
shall
identify
and
segregate
the
components of its
supplier’s charge,
as defined herein.
SEC. 30.
Wholesale
Electricity Spot
Market. - Within
one (1) year from
the effectivity of
this Act, the DOE
shall establish a
wholesale
electricity spot
market composed
of the wholesale
electricity spot
SEC. 30. Wholesale
Electricity Spot
Market. - Within one
(1) year from the
effectivity of
this Act, the DOE
shall establish a
wholesale electricity
spot market
composed of the
wholesale electricity
spot market
participants. The
 What are the
parameters or
indices that
should be used
to establish
availability of
supply? The
proposed
amendment will
introduce
ambiguity in the
law.(PIPPA)
market shall provide
the mechanism for
identifying
and
setting the price of
actual variations from
the
quantities
transacted
under
contracts between
sellers
and
purchasers
of
electricity.
Jointly with the
electric
power
industry participants,
the
DOE
shall
formulate
the
detailed
rules
for
the
wholesale electricity
spot market. Said
rules shall provide
the mechanism for
determining the price
of electricity not
covered by bilateral
contracts between
sellers
and
purchasers
of
electricity users. The
price determination
methodology
contained in said
rules
shall
be subject to the
approval of ERC.
Said rules shall also
reflect
accepted
economic principles
and
provide
a
level
market participants.
The market shall
provide
the
mechanism
for
identifying
and
setting the price of
actual variations
from the quantities
transacted under
contracts between
sellers
and
purchasers
of
electricity.
Jointly with the
electric
power
industry
participants,
the
DOE
shall
formulate
the
detailed
rules
for
the
wholesale
electricity
spot
market. Said rules
shall provide the
mechanism
for
determining
the
price of electricity
not covered by
bilateral contracts
between
sellers
and
purchasers
of
electricity
users.
The
price
determination
methodology
contained in said
rules
shall
be subject to the
approval of ERC.
Said rules shall
market
participants
WHICH SHALL
SERVE AS A
CLEARING
HOUSE AND [.
The market shall]
provide the
mechanism for
identifying and
setting the price
of actual
variations from
the quantities
transacted under
contracts
between sellers
and purchasers of
electricity.
Jointly with the
electric power
industry
participants, the
DOE shall
formulate the
detailed
rules for the
wholesale
electricity spot
market. Said
rules shall
provide the
mechanism for
determining the
price of electricity
not covered by
bilateral contracts
between sellers
and
purchasers of
electricity users.
The price
determination
methodology
market shall provide
the mechanism for
identifying and
setting the price of
actual variations from
the quantities
transacted under
contracts between
sellers and
purchasers of
electricity.
Jointly with the
electric power
industry participants,
the DOE shall
formulate the
detailed
rules for the
wholesale electricity
spot market. Said
rules shall provide
the mechanism for
determining the price
of electricity not
covered by bilateral
contracts between
sellers and
purchasers of
electricity users. The
price determination
methodology
contained in said
rules shall
be subject to the
approval of ERC.
Said rules shall also
reflect accepted
economic principles
and
provide a level
playing field to all
 There is no
need to amend
the EPIRA since
the issues,
which the
proposed
amends intends
to cover, are
already
addressed by
the current
WESM Rules.
playing field to all
electric
power
industry participants.
The rules shall
provide,
among
others,
procedures for:
also
reflect
accepted economic
principles SCUH
AS
THE
REQUIREMENT
OF
ESTABLISHING
AVAILABILITY OF
SUPPLY PRIOR
TO
THE
INTRODUCTION
OF THE WESM
and provide a level
playing field to all
electric
power
industry
participants. The
rules shall provide,
among
others,
procedures for:
contained in said
rules shall
be subject to the
approval of ERC.
Said rules shall
also reflect
accepted
economic
principles and
provide a level
playing field to all
electric power
industry
participants. The
rules shall
provide,
among others,
procedures for:
(a) xxx
(b) xxx
(c) xxx
(d) Prescribing
guidelines for the
market operation in
system emergencies;
and
(a) xxx
(b) xxx
(c) xxx
(d)
Prescribing
guidelines for the
market operation in
system
emergencies,
WHICH INCLUDE
THE
REQUIREMENT
OF
ESTABLISHING
THE
AVAILABILITY OF
SUPPLY IN A
CERTAIN
GRID
PRIOR TO THE
IMPLEMENTATIO
N OF THIS SAME;
and
(a) xxx
(b) xxx
(c) xxx
xxx
xxx
electric power
industry participants.
The rules shall
provide,
among others,
procedures for:
 In
clause
6.3.1.1 of the
WESM Rules,
emergency is
defined as the
existence of a
situation which
has an adverse
material effect
on
electricity
supply or which
poses as a
significant threat
to
system
security.
Emergency
situations are
enumerated in
Clause 6.3.1.2
of the WESM
Rules,
The
wholesale
electricity
spot
market shall be
implemented by a
market operator in
accordance with the
The
wholesale
electricity
spot
market shall be
implemented by a
market operator in
accordance with
The
wholesale
electricity
spot
market shall be
implemented by a
market operator
in
xxx
xxx
It is clear from
the foregoing
that a system
emergency is a
disturbance to
the power
system that
intrinsically
affects the
availability of
supply in the
Grid. The
requirement of
establishing the
availability of
supply prior to
the
implementation
of the guidelines
for the market
operation in the
event of system
emergencies is
unwarranted
because it
compromises
the ability of the
System
Operator to
immediately
respond to the
situation and
restore the grid
to normal state.
(PIPPA)
 Even without
amending the
provision,
consumers are
already
represented in
wholesale electricity
spot market rules.
The market operator
shall
be
an
autonomous group,
to be constituted by
DOE, with equitable
representation from
electric
power
industry participants,
initially under the
administrative
supervision of the
TRANSCO.
The
market operator shall
undertake
the
preparatory work and
initial operation of the
wholesale electricity
spot market. Not later
than one (1) year
after
the
implementation of the
wholesale electricity
spot market, an
independent entity
shall be formed and
the functions, assets
and liabilities of the
market operator shall
be transferred to
such entity with the
joint endorsement of
the DOE and the
electric
power
industry participants.
Thereafter,
the
administrative
supervision
of the TRANSCO
over such entity shall
cease.
the
wholesale
electricity
spot
market rules. The
market
operator
shall
be
an
autonomous group,
to be constituted by
DOE,
with
equitable
representation from
electric
power
industry
participants, initially
under
the
administrative
supervision of the
TRANSCO.
The
market
operator
shall undertake the
preparatory work
and initial operation
of the wholesale
electricity
spot
market. Not later
than one (1) year
after
the
implementation of
the
wholesale
electricity
spot
market,
an
independent entity
shall be formed
and the functions,
assets
and
liabilities of the
market
operator
shall be transferred
to such entity with
the
joint
endorsement of the
DOE and the
electric
power
industry
participants.
Thereafter,
the
accordance with
the
wholesale
electricity
spot
market rules. The
market operator
shall
be
an
autonomous
group, to be
constituted
by
DOE, with THE
ACTIVE
PARTICIPATION
OF
DULY
RECOGNIZED
CONSUMER
GROUPS AND
[equitable
representation]
REPRESENTATI
VES from electric
power
industry
participants,
initially under the
administrative
supervision of the
TRANSCO. The
market operator
shall undertake
the preparatory
work and initial
operation of the
wholesale
electricity
spot
market. Not later
than one (1) year
after
the
implementation of
the
wholesale
electricity
spot
market,
an
independent
entity shall be
formed and the
functions, assets
the PEM Board,
the governing
body of WESM.
The PEM Board
has 4
independent
director and 4
directors from
ECs and DUs.
This is found in
WESM Rules
Clause 1.4.2.4.
 Under Section
9 of the EPIRA,
the functions of
Transco are
limited to the
following:
(a) Act as the
system operator
of the
nationwide
electrical
transmission
and subtransmission
system,(b)
Provide open,
equal and nondiscriminatory
access to its
transmission
system to all
electricity users;
(c) Ensure and
maintain the
reliability,
adequacy,
security, stability
and integrity of
the nationwide
administrative
supervision
of the TRANSCO
over such entity
shall
cease.
NOTWITHSTANDI
NG THE FAILURE
OF
ESTABLISHING
WESM
IN
MINDANAO GRID,
TRANSCO SHALL
ACT AS THE
MARKET
OPERATOR OF
THE GRID, IN
CONTRADISTINCTION TO
THE ROLE OF
THE
NGCP
WHICH IS THE DE
FACTO SYSTEMS
OPERATOR OF
THE GRID.
Subject
to
the
compliance with the
membership criteria,
all
generating
companies,
distribution utilities,
suppliers,
bulk
consumers/endusers and other
similar
entities
authorized by the
ERC shall be eligible
to become members
of the wholesale
electricity
spot
market.
Subject to the
compliance
with
the
membership
criteria,
WHICH
SHALL
BE
PRMISED
ON
PROVISIONS
THAT
WILL
DETERMINE
VOLUNTARINESS
ON THE NATURE
OF MEMBERSHIP
all
generating
companies,
distribution utilities,
suppliers,
bulk
consumers/endusers and other
similar
entities
authorized by the
and liabilities of
the
market
operator shall be
transferred
to
such entity with
the
joint
endorsement of
the DOE and the
electric
power
industry
participants.
Thereafter, the
administrative
supervision
of the TRANSCO
over such entity
shall cease.
xxx
electrical grid
Considering
Transco was
created merely
to assume the
authority and
responsibility of
NPC for the
planning,
construction and
centralized
operation and
maintenance of
the high voltage
transmission
facilities,
including grid
interconnections
and ancillary
services, it
therefore lacks
the necessary
expertise and
experience to
operate the
wholesale
electricity spot
market. (PIPPA)
 The proposed
amendments
create ambiguity
in the law.
Shortage
in
supply can be
short term, such
as those caused
by disturbances
in the power
ERC shall be
eligible to become
members of the
wholesale
electricity
spot
market.
xxx
In cases of national
and international
security emergencies
or natural calamities,
the ERC
is hereby empowered
to suspend the
operation of the
wholesale electricity
spot market or
declare
a temporary
wholesale electricity
spot market failure.”
xxx
In cases of national
and international
security
emergencies
or
natural calamities,
INCLUDING
DURING
A
DECLARATION
OF
SUPPLY
SHORTAGE IN A
PARTICULAR
GRID SUCH AS
BUT NOT LIMITED
TO THE ONE IN
MINDANAO
the
ERC
is
hereby
empowered
to
suspend
the
operation of the
wholesale
electricity
spot
market or declare
a
temporary
wholesale
electricity
spot
market failure OR
IS
HEREBY
EMPOWERED TO
PREVENT
THE
IMPLEMENTATIO
N OF THE WESM
OR A SIMILAR
STRUCTURE OF
MARKET
OPERATIONS
WHEN
SUCH
xxx
In
cases
of
national
and
international
security
emergencies or
natural calamities
OR IF WITHIN A
THREE
DAY
TRADING
PERIOD THERE
IS
AN
EXTRAORDINAR
Y SPIKE IN
POWER RATES,
the
ERC
is
hereby
empowered
to
suspend
the
operation of the
wholesale
electricity
spot
market or declare
a
temporary
wholesale
electricity
spot
market failure.”
xxx
In cases of
national and
international
security
emergencies or
natural
calamities, OR
SUCH OTHER
CASES OR
REASONS
WHICH MAY
AFFECT THE
DELIVERY OF
ADEQUATE
SUPPLY OF
ELECTRICITY
IN ANY
PARTICULAR
GRID, the ERC
is hereby
empowered to
suspend the
operation of the
wholesale
electricity spot
market or
declare
a temporary
wholesale
electricity spot
market failure.”
system due to
outages
of
generating units,
transmission
lines
and
transformers.
When the grid is
in an extreme
state condition
arising from a
significant
supply capacity
shortfall, Market
Intervention by
the
System
Operator
is
permitted.
In
such case, the
System
Operator
is
tasked to take
all
necessary
measures
to
overcome the
emergency
event.
In the proposed
amendments,
under what
circumstances
should shortage
in supply
warrant the
suspension of
operations of the
WESM or the
declaration of
market failure?
Similarly, under
what
WILL
CLEARLY
RESULT
TO
INCREASE
OF
RETAIL
ELECTRICITY
PRICES DUE TO
THE
DEMAND
INCREASE
WITHOUT
THE
CORRESPONDIN
G INCREASE OR
THE
CORRESPONDIN
G
ADDITIONAL
SUPPLY IN THE
SAID GRID.”
Sec 31. Retail
Competition and
Open Access. – Any
law to the contrary
notwithstanding,
retail competition and
open access on
distribution wires
shall be implemented
not later than three
(3) years upon the
effectivity of this Act
subject to
compliance with the
following conditions
precedent:
Sec 31. Retail
Competition and
Open Access. –
Any law to the
contrary
notwithstanding,
WITHIN A
PERIOD OF SIX
(6) MONTHS
FROM THE
EFFECTIVITY
OF THIS ACT,
THE ERC IS
MANDATED TO
EVALUATE THE
PERFORMANCE
OF THE
WHOLESALE
ELECTRICITY
MARKET
TAKING INTO
Sec 31. Retail
Competition and
Open Access. –
Any law to the
contrary
notwithstanding,
retail
competition and
open access on
distribution wires
shall be
implemented not
later than three
(3) years upon
the effectivity of
this Act subject
to compliance
with the

circumstances
should this
prevent the
implementation
of the WESM or
similar market
operations?
 The proposed
amendment to
allow market
suspension due
to extraordinary
spike in power
rates” also
deserves a
second hard
look as it may
create
ambiguity.
Under what
circumstances
will rate spike be
extraordinary?
(PIPPA)

It is
unclear how the
proposed
amendment
seeks to amend
Section 31, on
the
implementation
of the retail
competition and
open access. If
the objective is
only to mandate
the evaluation of
the performance
of the market,
such function is
already
embedded in the
responsibilities
of ERC as per
xxx
Upon the initial
implementation of
open access, the
ERC shall allow all
electricity end-users
with a monthly
average peak
demand of at least
one megawatt (1MW)
CONSIDERATIO
N THE
EXPERIENCE
OF ALL
CONSUMERS
SPECIALLY
RESIDENTIAL,
MICRO AND
SMALL
ENTERPRISES
FROM THE TIME
THE SAME WAS
DECLARED
OPEN AND IN
PLACE TO
DETERMINE ITS
EFFECTIVENES
S AS A VEHICLE
FOR THE
PROVISION OF
SUSTAINABLE,
ACCESSIBLE
AND
AFFORDABLE
POWER , retail
competition and
open access on
distribution wires
shall be
implemented not
later than three
(3) years upon
the effectivity of
this Act subject to
compliance with
the following
conditions
precedent:
xxx
following
conditions
precedent:
xxx
xxx
Upon the initial
implementation of
open access, the
ERC shall allow all
electricity endusers with a
monthly average
peak demand of at
Section 43 of
the EPIRA.
(PIPPA)

The
proposed
amendment
could delay the
implementation
of the RCOA at
the household
demand level.
Without the
proposed
amendment,
after 2015, on
the basis of
ERC’s
evaluation, the
implementation
of the RCOA
may be
accelerated.
(PIPPA)
:
 Some ECs
want the open
access
threshold be
raised from 1
MW to 4 MW
during the initial
implementation
of open access,
in view of the
tight supply
situation in
Luzon. (FGD
proposals- -as
consolidated by
for the preceding
twelve (12) months to
be the contestable
market. Two (2)
years thereafter, the
threshold level for the
contestable market
shall be reduced to
Seven hundred fifty
kilowatts (750kW). At
this level,
aggregators shall be
allowed to supply
electricity to endusers whose
aggregate demand
within a contiguous
area is at least
Seven hundred fifty
kilowatts (750kW).
Subsequently and
every year thereafter,
the ERC shall
evaluate the
performance of the
market. On the basis
of such evaluation, it
shall gradually
reduce threshold
level until it reaches
the household
demand level. In the
case of electric
cooperatives, retail
competition and open
access shall be
implemented not
earlier than five (5)
years upon the
effectivity of this Act
brar y
least one megawatt
(lMW) for the
preceding twelve
(12) months to be
the contestable
market. Two (2)
years thereafter,
the threshold level
for the contestable
market shall be
reduced to seven
hundred fifty
kilowatts (750kw).
At this level.
aggregators shall
be allowed to
supply electricity to
end-users whose
aggregate demand
within a contiguous
area is at least
seven hundred fifty
kilowatts (750kW).
TWO (2) YEARS
THEREAFTER,
THE THRESHOLD
LEVEL SHALL BE
FURTHER
REDUCED TO
FIVE HUNDRED
KILOWATTS (500
KW).Subsequently
and every year
thereafter, the ERC
shall evaluate the
performance of the
market. on the
basis of such
evaluation, it shall
PHILRECA)
 In the case of
industries
located within
state-owned
industrial
estates, the Phil
Eco Zone
Authority has
requested
exemption from
the Retail
Competition and
Open Access
provision of the
EPIRA, and
wants
permission to
continue
choosing a
power distributor
on behalf of its
ecozone
locators (FGD
proposals PEZA)
 Ecozones and
industrial
estates should
be allowed to
connect directly
to the main grids
(FGD proposals
- Philexport)
gradually reduce
threshold level until
it reaches the
household demand
level. In the case of
electric
cooperatives, retail
competition and
open access shall
be implemented no
earlier than five (5)
years upon the
effectivity of this
Act."
SEC. 34. Universal
Charge. - Within one
(1) year from the
effectivity of this Act,
universal charge to
be determined, fixed
and approved by the
ERC,
shall
be
imposed
on
all
electricity end-users
for the following
purposes:
(a)xxx
(b)xxx
Sec. 34. Universal
Charge. - Within
one (1) year from
the effectivity of
this Act, universal
charge
to
be
determined, fixed
and approved by
the ERC, shall be
imposed on all
electricity
endusers
for
the
following purposes:
(a)xxx
(b)xxx
(c) xxx
(c) xxx
(d) An environmental
charge equivalent to
one-fourth of one
centavo per kilowatthour
(P0.0025/kWh),
which shall accrue to
an
environmental
(d)
An
environmental
charge equivalent
to one-fourth of one
centavo
per
kilowatt-hour
(P0.0025/kWh),
 Review the
imposition of the
Universal
Charge to
minimize the
impact that adds
to consumers’
burden. (FGD
proposals- NEA)
fund to be used
solely for watershed
rehabilitation
and
management. Said
fund
shall
be
managed by NPC
under
existing
arrangements; and
(e) A charge to
account for all forms
of cross-subsidies for
a
period
not
exceeding
three (3) years.
which shall accrue
to
an
environmental fund
to be used solely
for
watershed
rehabilitation and
management. Said
fund shall be
managed by NPC
under
existing
arrangements;
[and]
(e) A charge to
account for all
forms of crosssubsidies for a
period
not
exceeding
three
(3)
years[.];AND
(F) TO FUND THE
REHABILITATION
OF
LINES
PREVIOUSLY
CONSTRUCTED
USING
NEASUBSIDY FUNDS
AND/OR
PRIORITY
DEVELOPMENT
ASSISTANCE
FUND (PDAF) TO
ELECTRIFY FARFLUNG UNVIABLE
AREAS.
The universal charge
shall
be
nonbypassable charge
which
shall
be
passed on and
collected from all
The
universal
charge shall be
non-bypassable
charge which shall
be passed on and
collected from all
end-users on a
 It is worthy to
be specific on
whom the
responsibility of
managing the
funds for the
rehabilitation of
lines previously
constructed
using NEAsubsidy funds
and/or PDAF will
be bestowed
and to carefully
study the
potential effect
of this
responsibility on
the universal
charge, which
will ultimately be
a burden to
consumers.
(PIPPA)
end-users on a
monthly basis by the
distribution utilities.
Collections by the
distribution utilities
and the TRANSCO in
any given month
shall be remitted to
the
PSALM
Corp. on or before
the fifteenth (15 th) of
the
succeeding
month, net of any
amount due to the
distribution
utility.
Any end-user or selfgenerating entity not
connected to a
distribution
utility
shall
remit
its
corresponding
universal
charge
directly
to
the
TRANSCO.
The PSALM Corp.,
as administrator of
the fund, shall create
a Special Trust Fund
which shall be
disbursed only for the
purposes specified
herein in an open
and transparent
manner. All amounts
collected for the
universal charge
shall be distributed to
the respective
beneficiaries
within a reasonable
period to be provided
by the ERC.”
monthly basis by
the
distribution
utilities. Collections
by
the
distribution utilities
and the TRANSCO
in any given month
shall be remitted to
the
PSALM
Corp. on or before
the fifteenth (15 th)
of the succeeding
month, net of any
amount due to the
distribution utility.
Any end-user or
self-generating
entity
not
connected to a
distribution utility
shall remit its
corresponding
universal charge
directly to the
TRANSCO.
The PSALM Corp.,
as administrator of
the fund, shall
create a Special
Trust Fund which
shall be disbursed
only for the
purposes specified
herein in an open
and transparent
manner. All
amounts collected
for the universal
charge shall be
distributed to the
respective
beneficiaries within
a reasonable
period to be
provided by the
SEC. 35. Royalties,
Returns and Tax
Rates
for
Indigenous Energy
Resources. - The
provisions of Section
79 of Commonwealth
Act No. 137 (C.A.
No. 137) and any law
to
the
contrary
notwithstanding, the
President of the
Philippines
shall
reduce the royalties,
returns and taxes
collected for the
exploitation of all
indigenous sources
of energy, including
but not limited to,
natural gas and
geothermal steam,
so as to effect parity
of tax treatment with
the existing rates for
imported coal, crude
oil, bunker fuel and
other imported fuels.
xxx
ERC.”
Sec. 35. Royalties,
Returns and Tax
Rates
for
Indigenous
Energy
Resources. - The
provisions
of
Section 79 of
Commonwealth Act
No. 137 (C.A. No.
137) and any law to
the
contrary
notwithstanding,
the President of the
Philippines
shall
reduce
the
royalties, returns
and taxes collected
for
the
FOLLOWING:
1. INDIGENOUS
ENERGY
RESOURCES
–
FOR
THE
exploitation of all
indigenous sources
of energy, including
but not limited to,
natural gas and
geothermal steam,
so as to effect
parity
of
tax
treatment with the
existing rates for
imported
coal,
crude oil, bunker
fuel and other
imported fuels.
2.
TAX
FOR
ELECTRIC
COOPERATIVES
xxx
 The task of
the ERC is to
ensure
reasonable
electricity rates
for end-users,
which refer to
“any person or
entity requiring
the supply and
delivery of
electricity for its
own use”. If the
purpose of the
proposed
amendment is to
bolster this, why
limit to electric
cooperatives the
grant of reduced
royalties,
returns, and tax
and of lower
rates of power
from indigenous
sources of
energy?
It is not clear
from the
proposed
amendment how
the said purpose
will be achieved.
(PIPPA)
SEC. 37. Powers
and Functions of
the DOE. - In
addition to its existing
powers
and
functions, the DOE is
hereby mandated to
supervise
the
restructuring of the
electricity industry. In
pursuance thereof,
Section 5 of R. A.
7638
otherwise
known as "The
Department
of
Energy
Act of 1992" is
hereby amended to
read as follows:
(a) xxx
(b) xxx
(c) xxx
(d)
Ensure
the
reliability, quality and
security of supply of
electric power;
Sec. 37. Powers
and Functions of
the DOE. - In
addition to its
existing
powers
and functions, the
DOE is hereby
mandated
to
supervise
the
restructuring of the
electricity industry.
In
pursuance
thereof, Section 5
of R. A. 7638
otherwise known
as
"The
Department
of
Energy
Act of 1992" is
hereby amended to
read as follows:
(a) xxx
(b) xxx
(c) xxx
(d) Ensure the
reliability, quality
and security of
supply of electric
power,
PRIMED
ON
THE
INTEREST
OF
PROTECTING
THE
CONSUMERS
FROM
UNREASONABLE
INCREASE
OF
PRICES;
(e) xxx
(e) xxx
(f) Jointly with the
electric
power
(f) Jointly with the
SEC. 37. Powers
and Functions of
the DOE. xxx
xxx
 EPIRA’s
objective was to
ensure
“transparent and
reasonable
prices
of
electricity in a
regime of free
and
fair
competition and
full
public
accountability”
(Sec.
2(c),
EPIRA).
This
mandate
is
reiterated
in
sections 25, 32,
33 and 43(f) of
industry participants,
establish
the
wholesale electricity
spot market and
formulate
the
detailed
rules
governing
the
operations thereof;
(g) xxx
(h) xxx
(i) Develop policies
and procedures and,
as
appropriate,
promote a system of
energy development
incentives to enable
and
encourage
electric
power
industry participants
to
provide
adequate capacity to
meet
demand
including,
among
others,
reserve
requirements;
electric
power
industry
participants,
establish
the
wholesale
electricity
spot
market WHEN IT
IS WARRANTED
BY
UNCONDITIONAL
DECLARATION,
WHICH MUST BE
CONCURRED IN
BY THE ERC, OF
STABILITY
IN
POWER SUPPLY
and formulate the
detailed
rules
governing
the
operations thereof;
(g) xxx
(h) xxx
(i) Develop policies
and
procedures
and,
as
appropriate,
promote a system
of
energy
development
incentives
to
enable
and
encourage electric
power
industry
participants
to
provide
adequate capacity
to meet demand,
ESPECIALLY
A
SUDDEN SURGE
OF
DEMAND
THAT MAY ARISE
ON ENERGENCY
the EPIRA.
Even without the
proposed
amendment, this
is being ensured
in the current
regulatory
framework under
the ERC. (PIPPA)
 The proposed
amendment
seeks to limit the
power of DOE in
establishing the
electricity
market.
However, it blurs
the distribution
of
functions
between
the
DOE and ERC.
ERC’s
concurrence
may amount to
passing upon
the
policy
determination
which should be
within
the
prerogative of
the DOE, jointly
with
industry
participants.
Ambiguities will
also arise. Who
will make and
what will warrant
SITUATION
BROUGHT UPON
BY
A
SIMULTANEOUS
OUTAGE
BY
SEVERAL
GENERATORS,
OR A SINGLE
ONE,
REPRESENTING
A HUGE BULK OF
SUPPLY ON PER
GRID
BASIS,
including, among
others,
reserve
requirements;
(j) – (o) xxx
(k) xxx
(m) xxx
(n) xxx
(o) xxx
an
“unconditional
declaration”? On
which
parameters may
ERC based its
concurrence?
What
will
determine
“stability
in
power supply”?
(PIPPA)
(j) xxx
(k) xxx
(m) xxx
(n) xxx
(o) xxx
(P)EXERCISE
SUPERVISION
OVER
GOVERNMENT
AGENCIES IN THE
POWER SECTOR,
FOR
THEIR
COMPLIANCE TO
THIS ACT IN
ORDER
TO
MONITOR
AND
TAKE REMEDIAL
MEASURES
IN
PENALIZING
ABUSE
OF
MARKET POWER,
CARTELIZATION,
AND
ANTICOMPETITVE OR
DISCRIMINATORY
BEHAVIOUR. TO
THIS END, DOE IS
(p) SUPPORT THE
MODERNIZATION
OF THE ELECTRIC
GRID
INFRASTRUCTURE
BY FORMULATING
POLICIES AND
PROVIDING
INCENTIVES TO
PROMOTE
ADOPTION OF
SMART
GRID
TECHNOLOGIES,
PRACTICES AND
SERVICES TO
IMPROVE
RELIABILITY,
EFFICIENCY,
DEMAND
 The proposed
amendment
creates
ambiguity in the
law.
The
proposed
additional
function of the
DOE is already
entrenched in
the
responsibilities
of the ERC per
Section 43 of
the
EPIRA.
(PIPPA)
EMPOWERED
MOTU
PROPIO
TO INVESTIGATE
AND
FILE
CORRESPONDIN
G CHARGES, IN
THE
APPROPRIATE
COURT OR TO
THE
ARC,
AGAINST
VIOLATORS
PARTICULARLY
ON
CARTELIZATION,
ABUSE
OF
MARKET POWER,
ANTICOMPETITIVE OR
DISCRIMINATORY
BEHAVIOUR OF
INDUSTRY
PARTICIPANTS;
(p) Formulate such
rules and regulations
as may be necessary
to implement the
objectives of this Act;
and
(Q) [(p)] Formulate
such rules and
regulations as may
be necessary to
implement
the
objectives of this
Act; and
SEC. 38. Creation of
the
Energy
Regulatory
Commission. - xxx
(R) [(q)] Exercise
such other powers
as may be
necessary or
incidental to attain
the objectives
of this Act."
Sec. 38. Creation
of the Energy
Regulatory
Commission. - xxx
The
The
(q) Exercise such
other powers as may
be necessary or
incidental to attain
the
objectives
of this Act."
Commission
Commission
RESPONSE
SUPPORT,
INTEROPERABILITY
AND INTEGRATED
AUTOMATION OF
GENERATION,
TRANSMISSION
AND DISTRIBUTION
LINES,
ELECTRICITY
TRADING
MANAGEMENT.
(q) [(p)] Formulate
such rules and
regulations as may
be necessary to
implement the
objectives of this Act;
and
(R) [(q)] Exercise
such other powers as
may be necessary or
incidental to attain
the objectives
of this Act.
SEC. 38. Creation of
the Energy
Regulatory
Commission. - xxx
The Commission
 PIPPA
suggests
to
consider adding
the
ff
requirements:
shall be composed of
a Chairman and four
(4) members to be
appointed
by the President of
the Philippines. The
Chairman and the
members of the
Commission shall be
natural-born citizens
and residents of the
Philippines, persons
of
good
moral
character, at least
thirty-five (35) years
of age, and of
recognized
competence in any of
the following fields:
energy,
law,
economics, finance,
commerce,
or
engineering, with at
least three (3) years
actual
and
distinguished
experience in their
respective fields of
expertise: Provided,
That out of the
four(4) members of
the Commission at
least one (1) shall be
a member of the
Philippine Bar with at
least ten (10) years
experience in the
active practice of law,
and one (1) shall be
a certified public
accountant with at
least ten (10) years
experience in active
practice.
shall be composed
of a Chairman and
four (4) members
to be SELECTED
AND appointed by
the President of the
Philippines FROM
THE ROSTER OF
NOMINEES TO BE
SUBMITTED BY
THE JCPC OR A
SUBSTITUTE
BODY CREATED
WHEN
JCPC’S
TERM EXPIRES,
WHICH SHALL BE
CALLED MULTISTAKEHOLDER
POWER
ADVISORY
COUNCIL
FORMED,
PURSUANT
TO
THEIR
ADDIDTIONAL
MANDATE
DEFINED IN SEC.
62
OF
THIS
AMENDATORY
ACT.
The
Chairman and the
members of the
Commission shall
be
natural-born
citizens
and
residents of the
Philippines,
persons of good
moral character, at
least thirty-five (35)
years of age, [and
of
recognized
competence]
GRADUATE OF
AT LEAST FOUR-
shall be composed of
a Chairman and [four
(a)] EIGHT (8)
members, DIVIDED
INTO THREE (3)
DIVISIONS,
DESIGNATED FOR
LUZON, VISAYAS
AND MINDANAO,
CONSISTING OF
THREE (3)
COMMISSIONERS
EACH, WITH THE
CHAIRMAN SITTING
IN THE FIRST
DIVISION, to be
appointed by
the President of the
Philippines. The
chairman and the
members of the
Commission shall be
natural-born citizens
and residents of the
Philippines,
persons of good
moral character, at
least thirty-five (35)
years of age, and
of recognized
competence in any of
the following fields:
energy, law,
economics, finance,
commerce, or
engineering, with at
least [three (3)]
FIVE (5) years actual
and distinguished
experience in their
respective
fields of expertise:
Provided, That out of
the [four (4)] EIGHT
(8)members of the
One (1) Certified
Financial
Analyst (CFA) or
one (1) MBA
graduate, and
one
(1)
Economics
graduate.
 It is already
difficult to find
persons to lead
the
industry,
increasing the
number of the
Commissioners
would
not
resolve
the
concerns stated.
It may be more
beneficial
to
improve
the
competencies of
the staff in the
ERC.
 It is not clear
how the multistakeholder
power advisory
council will be
created. It is
important
to
determine the
objectives of its
creation,
its
composition, its
powers
and
functions, and
source
of
funding
to
xxx
xxx
YEAR COURSE in
any of the following
fields:
energy,
[law,] economics,
finance, commerce,
engineering, OR
ANY
RELATED
FIELDS AND with
at least with at
least [three (3)]TEN
(10) years [actual ]
OF
PROFESSIONAL
and
[distinguished]REL
EVANT experience
[in their respective
fields
of
expertise]LINKED
TO
THE
PROVISION OF
HIGH
LEVEL
POLICY ADVICE
OR
POLICY
MAKING IN THE
ELECTRIC
POWER
INDUSTRY:
Provided, That out
of the four(4)
members of the
Commission
at
least one (1) shall
be a member of the
Philippine Bar with
at least ten (10)
years experience in
the active practice
of law, ONE (1)
REPRESENTATIV
E FROM THE
ELECRIC
CONSUMER
GROUPS, and one
(1) shall be a
Commission at least
one (1) shall be a
member of the
Philippine Bar with at
least ten (10) years
experience in the
active practice
of law, [and] one (1)
shall be a certified
public accountant
with at least ten
(10) years
experience in active
practice, AND
THREE (3) SHALL
BE ENGINEERS
WITH AT LEAST
TEN (10) YEARS
EXPERIENCE IN
ACTIVE PRACTICE,
WHO WILL SIT IN
EACH DIVISION.
xxx
xxx
The presence of at
least [three (3)] FIVE
ensure that the
council will not
end
up
performing
similar functions
of an already
existing entity.
The proposed
amendment
must also be
taken
with
caution as this
may
further
politicize
the
appointment
process.
Requiring
relevant
experience linked
to the provision of
high level policy
advice or policy
making specific
to the electric
power industry is
too
limiting
inasmuch as it
effectively
hinders
other
subject
matter
experts who have
not
been
engaged
by
electric
power
industry policymakers to advise
or to defend their
positions
from
becoming
The presence of at
least
three
(3)
members of the
Commission
shall
constitute a quorum
and the majority vote
of two (2) members
in a meeting where a
quorum is present
shall be necessary
for the adoption of
any rule, ruling,
order,
resolution,
decision, or other act
of the Commission in
the exercise of its
quasi-judicial
functions: Provided,
That in fixing rates
and
tariffs,
an
affirmative vote of
three (3) members
shall be required.
certified
public
accountant with at
least ten (10) years
experience
in
active practice.
xxx
(5) members of the
Commission, sitting
en banc, shall
constitute a quorum
and the majority
vote of [two (2)]
THREE (3) members
in a meeting where a
quorum is
present shall be
necessary for the
adoption of any rule,
ruling, order,
resolution, decision,
or other act of the
Commission en banc
in the
exercise of its quasijudicial functions;
provided, That in
fixing rates and
tariffs, an affirmative
vote of [three (3)]
FIVE (5) members
shall be
required.
CASES OR
MATTERS HEARD
BY A DTVISION
SHALL BE
RESOLVED WITH
THE
CONCURRENCE OF
AT LEAST TWO (2)
MEMBERS. WHEN
THE REQUIRED
NUMBER IS NOT
OBTAINED,
THE CASE SHALL
BE DECIDED EN
BANC; PROVIDED
THAT NO
DECISION
RENDERED EN
members of the
ERC, even if they
possess
the
necessary
competence and
experience
in
their respective
fields
of
expertise.
 Even without
amending the
provision,
consumers are
already
represented in
the ERC. The
Commission is
composed
of
four
(4)
independent
members from
various fields of
expertise. (PIPPA)
BANC OR IN
DIVISION MAY BE
MODIFIED OR
REVERSED
EXCEPT BY THE
COMMISSION
SITTING EN BANC.
FOR THIS
PURPOSE THE
COMMISSION
SHALL DEFINE
THROUGH ITS
INTERNAL RULES
CASES OR
MATTERS THAT
SHALL BE
RESOLVED BY A
DIVISION AND
THOSE THAT
SHALL
BE RESOLVED
SITTING EN BANC.
SEC. 41. Promotion
of Consumer
Interests. – The
ERC shall handle
consumer complaints
and ensure the
adequate promotion
of consumer
THE ERC SHALL
ADOPT AN
EXPANDED
ORGANIZATIONAL
STRUCTURE AND
PLANTILLA
POSITIONS
NECESSARY TO
CARRY OUT AND
SUPPORT THE
POWERS AND
FLINCTIONS
LINDER THIS ACT.
SEC. 41. Promotion
of Consumer
Interests. – The
ERC shall handle
consumer complaints
and ensure the
adequate promotion
of consumer
interests.

interests.
FOR THIS
PURPOSE THE ERC
SHALL CREATE A
CONSUMER
ADVOCACY
OFFICE, WHICH
SHALL ACT AS
REPRESENTATIVE
FOR AND IN
BEHALF OF THE
CONSUMERS,
FOR PURPOSES
OF EITHER
PROSECUTION OR
DEFENSE, IN ANY
PROCEEDING,
CASE OR MATTER
BEFORE THE ERC.
THE CONSUMER
ADVOCACY OFFICE
SHALL BE LINDER
THE
ORGANIZATIONAL
STRUCTURE OF
THE ERC ONLY
FOR
PLANTILLA AND
COMPENSATION
PURPOSES. THE
SAID OFFICE
SHALL ACT
INDEPENDENTLY
OF THE
COMMISSION AND
SHALL BE HEADED
BY A CHIEF
ADVOCACY
OFFICER WHO
SHALL BE A
MEMBER OF THE
PHILIPPINE BAR
WITH AT LEAST
TEN (10) YEARS
EXPERIENCE IN
THE ACTIVE
PRACTICE OF
LAW.
THE CHIEF
ADVOCACY
OFFICER SHALL BE
ENTITLED
TO THE SAME
SALARY,
ALLOWANCE AND
BENEFIT AS THAT
OF A REGIONAL
TRIAL COURT
JUDGE. THE REST
OF THE
OFFICERS UNDER
THE CONSUMER
ADVOCACY OFFICE
SHOULD LIKEWISE
BE MEMBERS OF
THE PHILIPPINE
BAR
WITH AT LEAST (5)
YEARS
EXPERIENCE IN
THE ACTIVE
PRACTICE OF LAW
WHO SHALL BE
ENTITLED TO THE
SAME
SALARIES,
ALLOWANCES AND
BENEFITS AS
THOSE OF THE
METROPOLITAN
TRIAL COURT
JUDGES.
THE ERC SHALL, IN
ITS RULES OF
PRACTICE AND
PROCEDURE,
DEFINE THE
PROCEEDINGS,
SEC. 43. Functions
of the ERC. – xxx
(a) Enforce the
implementing rules
and regulations of
this Act;
(b) Within six (6)
months from the
effectivity of this Act,
promulgate
and
enforce,
in
accordance with law,
a National Grid Code
and a Distribution
Code which shall
include, but not
limited
to,
the
following:
Sec. 43.
Functions of the
ERC. – xxx
CASES OR
MATTERS
UNDER WHICH THE
CONSUMER
ADVOCACY OFFICE
IS ALLOWED TO
PARTICIPATE.
SEC. 43. Functions
of the ERC. – xxx
xxx
(a) Enforce the
implementing rules
and regulations of
this Act RELATIVE
TO
INDUSTRY
COMPETITION
AND
MARKET
ABUSE
TOGETHER WITH
OTHER
AGENCIES
AUTHORIZED TO
MONITOR
THE
STANDARDS IN
ACCORDANCE
WITH
THE
EXISTING RULES
AND
REGULATIONS
SET;
(b) Within six (6)
months from the
effectivity of this
Act,
promulgate
and enforce, in
accordance with
law, a National Grid
Code
and
a
Distribution Code
which shall include,
but
not
limited to, the
following:
 Limiting the
obligation of the
ERC to enforce
the
implementing
rules and
regulations of
the EPIRA
relative to
industry
competition and
market abuse
only threatens to
render the
regulatory
function of the
ERC weak and
ineffective
(PIPPA)
(i)
Performance
standards
for
TRANSCO O & M
Concessionaire,
distribution utilities
and
suppliers:
Provided, That in
the establishment
of
the
performance
standards,
the
nature
and
function of the
entities shall be
considered; and
(ii)
Financial
capability
standards for the
generating
companies,
the
TRANSCO,
distribution utilities
and
suppliers:
Provided, That in
the formulation of
the
financial
capability
standards,
the
nature
and
function of the
entity shall be
considered:
Provided, further,
That
such
standards are set
to ensure that the
electric
power
industry
participants meet
the
minimum
financial standards
to protect the
public
interest.
Determine, fix, and
(i) Performance
standards
for
TRANSCO O &
M
Concessionaire,
distribution
utilities
and
suppliers:
Provided, That in
the
establishment of
the
performance
standards, the
nature
and
function of the
entities shall be
considered; and
(ii)
Financial
capability
standards for the
generating
companies, the
TRANSCO,
distribution
utilities
and
suppliers:
Provided, That in
the formulation
of the financial
capability
standards, the
nature
and
function of the
entity shall be
considered:
Provided,
further,
That
such standards
are set to ensure
that the electric
power industry
participants meet
approve, after due
notice and public
hearings
the
universal charge,
to be imposed on
all electricity endusers pursuant to
Sections
34
hereof;
the
minimum
financial
AND
TECHNICAL
standards
to
protect the public
interest.
PROVIDED,
FURTHERMOR
E,
THAT
MONITORING
SUPERVISION
AND
ENFORCENME
NT
OF
FINANCIAL AND
TECHNICAL
STANDARDS
OF
THE
ELECTRIC
COOPERATIVE
S WILL BE
IMPLEMENTED
BY
THE
NATIONAL
ELECTRIFICATI
ON
ADMINISTRATI
ON, INCLUDING
EXISTING
GUIDELINES
PROMULGAED
BY
THE
ENERGY
REGULATORY
COMMISSION,
PRIOR TO THIS
AMENDMENT.
Determine, fix,
and
approve,
after due notice
and
public
hearings
the
universal charge,
to be imposed
on all electricity
 Small power
plants running
on renewable
energy should
(c) xxx
(d) xxx
xxx
xxx
(t) Perform such
other
regulatory
functions as are
appropriate
and
necessary in order to
ensure
the
successful
restructuring
and
modernization of the
electric
power
industry, such as, but
not limited to, the
rules and guidelines
under
which
generation
companies,
distribution utilities
which are not publicly
listed shall offer and
sell to the public a
portion not less than
fifteen percent (15%)
of their common
shares of stocks:
Provided, however,
That
generation
companies,
distribution utilities or
their
respective
holding companies
that are already listed
in the PSE are
deemed
in
compliance.
For
existing companies,
such public offering
shall be implemented
not later than five (5)
years
from
the
end-users
pursuant
Sections
hereof;
(c) xxx
(d) xxx
xxx
xxx
to
34
xxx
(t) Perform such
other regulatory
functions as are
appropriate in
order to ensure the
successful
restructuring and
modernization of the
electric power
industry, such as, but
not limited to, the
rules and
guidelines under
which generation
companies,
EXCLUDING
RENEWABLE
ENERGY AND
OTHER
GENERATION
FACILITIES
GENERATING
SMALL CAPACITIES
OF NOT MORE
THAN
TWENTY (20)
MEGAWATTS OF
INSTALLED
CAPACITY,
distribution utilities
which are not publicly
listed shall offer and
sell to the
public a portion not
less than fifteen
percent (I5%) of their
common
shares stocks:
Provided, however,
That generation
be exempted
from the
shareholding
dispersal
requirement.
(FGD proposalsPhil Sugar
Millers Ass)
 PIPPA
requests
clarification on
the reason for
the exemption of
renewable
energy and
other
generation
facilities of
20MW or less,
and the basis for
setting the
exemption at
20MW.
 The 20 MW
generating
facility is too
small. For an old
thermal facility
of this size, the
market
capitalization
might beless
than P200M.
This would
make the cost of
maintaining a
listing
prohibitive. Why
not consider 500
MW instead?
This amendment
may be
addressed by a
law on
effectivity of this Act.
New companies shall
implement
their
respective
public
offerings not later
than five (5) years
from the issuance of
their certificate of
compliance; and
xxx
Sec. 45.Cross
Ownership, Market
Power Abuse And
Anti-Competitive
Behaviour.- No
participant in the
electricity industry or
any other person
may engage in any
anti-competitive
behaviour including,
but not limited to,
cross-subsidization,
price or market
manipulation, or
other unfair trade
practices detrimental
to the
encouragement and
protection of
Sec. 45.Cross
Ownership,
Market Power
Abuse And AntiCompetitive
Behaviour.- No
participant in the
electricity industry
or any other person
may engage in any
anti-competitive
behaviour
including, but not
limited to, crosssubsidization, price
or market
manipulation, or
other unfair trade
practices
detrimental to the
Sec. 45.Cross
Ownership, Market
Power Abuse And
Anti-Competitive
Behaviour. - No
participant in the
electricity industry
or any other
person may
engage in any
anti-competitive
behaviour
including, but not
limited to, crosssubsidization,
price or market
manipulation, or
other unfair trade
practices
detrimental to the
companies,
distribution
utilities or their
respective holding
companies that are
already listed in the
PSE are deemed in
compliance. For
existing companies,
such public
offering shall be
implemented not
later than frve (5)
years from the
Effectivity of this Act.
New companies shall
implement their
respective
public offerings not
later than five (5)
years from the
issuance of their
certificate of
compliance; and
xxx
Sec. 45.Cross
Ownership, Market
Power Abuse And
Anti-Competitive
Behaviour. - No
participant in the
electricity industry or
any other person
may engage in any
anti-competitive
behavior including
but not limited to,
cross subsidization,
price or market
manipulation, or
other unfair trade
practices detrimental
renewable
energy rather
than an
amendment to
the EPIRA.
 The
prohibition on
crow-ownership
should apply to
all sectors of the
power industry –
generation,
transmission,
distribution and
supply. (FGD
proposalsTUCP)
 Allow DUs to
source 100% of
total demand
from its own
generating plant
or an associated
firm engaged in
generation (FGD
contestable markets.
encouragement
and protection of
contestable
markets.
encouragement
and protection of
contestable
markets.
NO
DISTRIBUTION
UTILITY, OR ITS
RESPECTIVE
SUBSIDIARY OR
AFFILIATE OR
STOCKHOLDERS
OR OFFICIAL OR
DIRECTOR OR
ANY OF THEIR
RELATIVES
WITHIN THE
FOURTH CIVIL
DEGREE OF
CONSANGUINITY
OR AFFINITY,
SHALL BE
ALLOWED TO
HOLD ANY
INTEREST
DIRECTLY OR
INDIRECTLY, IN
ANY
GENERATION
COMPANY,
LIKEWISE, NO
GENERATION
COMPANY, OR
ITS RESPECTIVE
SUBSIDIARY OR
AFFILIATE OR
STOCKHOLDERS
OR OFFICIAL OR
DIRECTOR OR
ANY OF THEIR
RELATIVES
WITHIN THE
FOURTH CIVIL
DEGREE OF
CONSANGUINTY
to the
encouragement and
protection of
[contestable markets]
ELECTRICITY ENDUSERS[.];
PROVIDED THAT,
TRANSMISSION
AND
DISTRIBUTION
SECTORS SHALL
REMAIN THEIR
NATURAL
MONOPOLY
BUSINESSES AND,
THEREFORE,
CROSSOWNERSHIP
SHALL NOT BE
ALLOWED;
PROVIDED
HOWEVER, THAT
NOTHING IN THIS
SECTION SHALL
BE HELD TO
AFFECT OR IMPAIR
ANY RIGHT,
PRIVILEGE OR
INTEREST
HERETOFORE
LEGALLY
ACQUIRED.
AS USED IN THIS
ACT, CROSS
OWNERSHIP
SHALL REFER
TO THE HOLDING
OF ANY INTEREST,
IN WHATEVER
proposalsBENECO)
 Reduction of
market share
cap from 30% to
25% per grid
(FGD proposalsKaamulan
Chambers)
 Reduction of
bilateral
contracting of
DUs with affiliate
generation
companies from
50% to 10%
(FGD proposalsOro Chamber,
Kaamulan
Chamber)
o DUs should
be allowed to
source from
associated firms
engaged in
generation of
power as
follows: 50 MW
and below- 60%
o 51-100 MW 50%
o 101-250 MW
– 30%
o 251-500 MW
– 30%
o 501 MW and
above – 25%
(FGD proposalsAMRECO)
 To date, the
ownership and
cross-ownership
caps has not yet
been violated,
OR AFFINITY,
SHALL BE
ALLOWED TO
HOLD ANY
INTEREST,
DIRECTLY OR
INDIRECTLY IN
ANY
DISTRIBUTION
COMPANY:
PROVIDED, THAT
THE
DISTRIBUTION
UTILITY, ITS
RESPECTIVE
SUBSIDIARY OR
AFFILIATE OR
STOCKHOLDER
OR OFFICIAL OF
A DISTRIBUTION
UTILITY
HOLDING AN
INTEREST IN
ANY
GENERATION
COMPANY, AND
VICE VERSA, AT
THE TIME OF
THE PASSAGE
OF THIS ACT,
SHALL BE
REQUIRED TO
DIVEST THE
SAME WITHIN
ONE (1) YEAR
FROM THE
EFFECTIVITY OF
THIS ACT.
FORM,
DIRECTLY AND
INDIRECTLY, BY
ANY ENTITY
ENGAGED IN
THE GENERATION,
SUPPLY,
DISTRIBUTION OR
TRANSMISSION
OF ELECTRICITY,
IN OR WITH
ANOTHER ENTITY
SIMILARLY
ENGAGED IN THE
GENERATION,
SUPPLY,
DISTRIBUTION OR
TRANSMISSION OF
ELECTRICITY.
ACCORDINGLY, NO
ELECTRIC
INDUSTRY
PARTICIPANT,
SUCH AS A
GENERATION
COMPANY,
SUPPLIER OF
ELECTRICITY,
DISTRIBUTION
UTILITY OR
TRANSMISSION
COMPANY OR ITS
CONCESSIONAIRE,
AND THEIR
RESPECTIVE
AFFILIATES,
SUBSIDIARIES,
INCLUDING ANY
OF ITS
however PSALM
poses no
objection on the
proposed
revision as it
aims to ensure
genuine
competition in
the power
sector.
 Transco
agrees with the
prohibition of
cross ownership
between
distribution and
generation to
allow more
players in the
sector to come
in and
discourage
connivance
particularly in
terms of
sourcing the
demand of DUs
from related
generation
companies.
 NPC favors
H.B. 3676
because it will
rectify an
apparent flaw in
the EPIRA in
regard to the
power industry’s
ownership
structures. Prior
to the passage
of EPIRA, what
STOCKHOLDERS,
DIRECTORS,
OFFICERS,
EMPLOYEES OR
RELATIVES WITHIN
THE FOURTH CIVIL
DEGREE OF
CONSAGUINITY OR
AFFINITY
SHALL BE
ALLOWED TO
HOLD ANY
INTEREST, IN
WHATEVER
FORM, DIRECTLY
OR INDIRECTLY, IN
OR WITH ANY
OTHER
ENTITY SIMILARLY
ENGAGED IN THE
GENERATION,
SUPPLY,
DISTRIBUTION OR
TRANSMISSION OR
ITS
CONCESSIONAIRE,
AS PROVIDED IN
THIS ACT.
No generation
company, distribution
utility, or its
respective subsidiary
or affiliate or
stockholder or official
of a generation
company or
distribution utility, or
other entity engaged
in generating and
supplying electricity
specified by ERC
No generation
company,
distribution utility,
or its respective
subsidiary or
affiliate or
stockholder or
official of a
generation
company or
distribution utility,
AND ANY OF
THEIR
No generation
company,
distribution utility,
or its respective
subsidiary or
affiliate or
stockholder or
official of a
generation
company or
distribution utility,
or other entity
was expected by
most
professional or
practitioners in
the power
industry was the
prohibition of
cross ownership
between
distributors and
generators and
not the between
the generators
and distributors
lumped in one
party and with
the transmission
provider as the
other party.
xxx
 We would like
to clarify the
basis of
prohibiting
relatives up to
the sixth degree
of affinity for
generation or
distribution,
within the fourth civil
degree of
consanguinity or
affinity shall be
allowed to hold any
interest, directly or
indirectly, in
TRANSCO or its
concessionaire.
Likewise, the
TRANSCO, or its
concessionaire or
any of its
stockholders or
officials or any of
their relatives within
the fourth civil degree
of consanguinity or
affinity, shall not hold
any interest, whether
directly or indirectly,
in any generation
company or
distribution utility.
Except for ex-officio
governmentappointed
representatives, no
person who is an
officer or director of
the TRANSCO or its
concessionaire shall
be an officer or
director of any
generation company,
distribution utility or
supplier.
RELATIVES
WITHIN THE
SIXTH CIVIL
DEGREE OF
CONSAGUNITY
OR AFFINITY, or
other entity
engaged in
generating and
supplying electricity
specified by ERC
[within the fourth
civil degree of
consanguinity or
affinity], EXCEPT
WITH THE
OFFICIALS OF A
NON-STOCK AND
NON-PROFIT
ELECTRIC
COOPERATIVES,
shall be allowed to
hold any interest,
directly or
indirectly, in
TRANSCO or its
concessionaire.
Likewise, the
TRANSCO, or its
concessionaire or
any of its
stockholders or
officials or any of
their relatives
within the [fourth]
SIXTH civil degree
of consanguinity or
affinity, shall not
hold any interest,
whether directly or
indirectly, in any
generation
company or
distribution utility.
Except for ex-
engaged in
generating and
supplying
electricity specified
by ERC within the
fourth civil degree
of consanguinity or
affinity shall be
allowed to hold
any interest,
directly or
indirectly, in
TRANSCO or its
concessionaire.
Likewise, the
TRANSCO, or its
concessionaire or
any of its
stockholders or
officials or any of
their relatives
within the fourth
civil degree of
consanguinity or
affinity, shall not
hold any interest,
whether directly or
indirectly, in any
generation
company or
distribution utility.
Except for exofficio
governmentappointed
representatives,
no person who is
an officer or
director of the
TRANSCO or its
concessionaire
shall be an officer
or director of any
generation
company,
while exempting
non-stock and
non-profit
electric
cooperatives.
The proposed
amendment
exempting
officials of nonstock and nonprofit electric
cooperatives
from the
coverage of the
prohibition
against cross
ownership in
Transco is
counterproductive to the
intention of the
EPIRA. (PIPPA)
 From a
bilateral contract
with an affiliated
company.
Imposing crossownership
restrictions may
not be the right
solution as this
may delay or
discourage
needed
investments in
the power
sector.
 The proposed
changes
will
restrict flow of
investments in a
officio governmentappointed
representatives, no
person who is an
officer or director of
the TRANSCO or
its concessionaire
shall be an officer
or director of any
generation
company,
distribution utility or
supplier.
xxx
xxx
To promote true
market competition
and prevent harmful
monopoly
and
market
power
abuse, the ERC shall
enforce the following
safeguards:
To promote true
market competition
and
prevent
harmful monopoly
and market power
abuse, the ERC
shall enforce the
following
safeguards:
(a) No company or
related group can
own, operate or
control more than
thirty percent (30%)
of
the
installed
generating capacity
of a grid and/or
twenty-five percent
(25%) of the national
installed
capacity.
“Related
group”
include a person’s
business interests,
including
its
(a) No company or
related group can
own, operate or
control more than
[thirty
percent(30%)]FIFT
EEN
PERCENT
(15%)of
the
installed generating
capacity of a grid
[and/or twenty-five
percent (25%) of
the
national
installed capacity]
distribution utility
or supplier. A
GENERATION
COMPANY MY BE
PERMITTED TO
HOLD
INTEREST,
DIRECTLY OR
INDIRECTLY, IN
ANOTHER
GENERATION
COMPANY:
PROVIDED, THAT
THE EXTENT OF
SUCH INTEREST
SHALL BE LESS
THAN THE
AMOUNT OF
SHARES
NEEDED TO
VOTE ONE
MEMBER OF THE
BOARD OF
DIRECTORS.
xxx.
very
capital
intensive
industry. This is
contrary to the
intent and policy
behind EPIRA to
enhance
the
inflow of private
capital into the
electric power
industry.
xxx
To promote true
market competition
and prevent harmful
monopoly and
market power
abuse, the ERC shall
enforce the following
safeguards:
(a) No company or
related group can
own, operate or
control more than
[thirty] TWENTYFIVE percent ([30]
25%) of the installed
generating capacity
of a grid and/or
[twenty-five]
TWENTY percent
With no one
company
or
related
group
owning, operating
or
controlling
more that fifteen
(15%) of the
installed
generating
capacity of a grid,
it is likely that no
investments for
addition capacity
to solve the
Mindanao power
crisis will be
made by existing
industry players.
There
also
appears
no
rational basis for
extending
the
definition
of
related group to
relatives within
the sixth civil
degree
of
subsidiaries
,
affiliates, directors or
officers or any of
their relatives by
consanguinity
or
affinity, legitimate or
common law, within
the
fourth
civil
degree;
AS IN LUZON,
VISAYAS
AND
MINDANAO GRID,
THE SAME LEVEL
OF OWNERSHIP
SHALL
BE
MAINTAINED ON
A PER ISLAND
GRID BASIS EVEN
AFTER
THE
INTERCONNECTI
ON
OF
THE
THREE
MAIN
GRIDS. “Related
group” include a
person’s business
interests, including
its subsidiaries ,
affiliates, directors
or officers or any of
their relatives by
consanguinity or
affinity, legitimate
or common law,
within the [fourth]
SIXTH
civil
degree[;].
THE SECURITIES
AND EXCHANGE
COMMISSION
(SEC) IS HEREBY
TASKED
TO
CONSIDER
IN
THEIR TEMPLATE
OF APPLICATION
FOR
REGISTRATION
OF ALL POWER
INDUSTRY
PLAYERS
INFORMATION
RELATIVE
TO
ABOVE AND WILL
BE
HELD
([25] 20%) of the
national
installed capacity[.]
REGARDLESS OF
THE ENTITY OR
ENTITIES
CONTROLLING
THE TERMS AND
CONDITIONS OF
THE PRICES OR
QUANTITIES OF
THE OUTPUT
SOLD; OR THE
ENTITY OR
ENTITIES
CONTROLLING
SUCH CAPACITY;
OR IN THE CASE
OF NPC AND ITS
INDEPENDENT
POWER
PRODUCERS, THE
ENTITY WHICH
ACTUALLY
CONTROLS THE
QUANTITY OR
DISPATCH LEVEL
GENERATED
FROM THE
SUBJECT POWER
PLANTS AND THE
PRICE OF
ELECTRICITY
OFFERED TO THE
MARKET;
PROVIDED THAT
ÏNSTALLED
GENERATING
CAPACITY” SHALL
consanguinity or
affinity.
The
crossownership and
market
share
restrictions under
EPIRA
are
already very high
and restrictive.
They should not
be
disturbed
merely because
of
recent
unfounded
allegations
of
market
abuse
against industry
players. (PIPPA)

EPIRA
allowed
the
cross-ownership
in generation and
distribution, with
a limit of up to
50% contracting
because
eventually there
will be full Open
Access. There
will come a time
that
the
distributor will not
have any captive
customers
for
passing on its
generation
charges.

PIPPA
RESPONSIBLE IN
CASE
OF
VIOLATION
OF
THE PROVISION
FOR ANY POWER
INDUSTRY
PLAYER
THAT
CAN REGISTER
EVEN IF NOT
QUALIFIED
PURSUANT
TO
THE
ABOVE
PROHIBITION;
(b)
Distribution
utilities may enter
into bilateral power
supply
contracts
subject
to
review by ERC.
Provided, That such
review shall only be
required
for
(b)[Distribution
utilities may enter
into bilateral power
supply contracts
subject
to
review by ERC.
Provided,
That
such review shall
only be required for
REFER TO THE
MAXIMUM OUTPUT
OR NAMEPLATE
RATING LESS
PERMANENT
REDUCTIONS, BUT
EXCLUDING
TEMPORARY
REDUCTIONS DUE
TO PLANT
SHUTDOWN OR
TRANSMISSION
CONSTRAINTS, OR
SUCH OTHER
TEMPORARY
REDUCTIONS OF A
PLANT’S
GENERATING
CAPACITY.
“Related group”
include a person’s
business interests,
including its
subsidiaries ,
affiliates, directors or
officers or any of
their relatives by
consanguinity or
affinity, legitimate or
common law, within
the fourth civil
degree;
(b) Distribution
utilities may enter
into bilateral power
supply contracts
subject to
review by ERC.
suggests
to
accelerate Open
Access
by
lowering
the
threshold
for
average monthly
consumption of
contestable
customers
to
500KW.
distribution utilities
whose markets have
not
reached
household demand
level.
For
the
purpose
of
preventing
market
power
abuse
between associated
firms engaged in
generation
and
distribution,
no
distribution
utility
shall be allowed to
source from bilateral
power
supply
contracts more than
fifty percent (50%) of
its total demand from
an associated firm
engaged
in
generation but such
limitation, however,
shall not prejudice
contracts
entered
into prior to the
effectivity of this Act.
An associated firm
with
respect
to
another entity refers
to any person which,
alone or together
with
any
other
person, directly or
indirectly,
through
one
or
more
intermediaries,
controls, is controlled
by, or is under
common control with,
such entity; and
distribution utilities
whose
markets
have not reached
household demand
level. For the
purpose
of
preventing market
power
abuse
between
associated firms
engaged
in
generation
and
distribution,
no
distribution utility
shall be allowed to
source
from
bilateral
power
supply contracts
more than fifty
percent (50%) of its
total demand from
an associated firm
engaged
in
generation
but
such
limitation,
however, shall not
prejudice contracts
entered into prior to
the effectivity of
this
Act.
An
associated
firm
with respect to
another
entity
refers
to
any
person
which,
alone or together
with any other
person, directly or
indirectly, through
one
or
more
intermediaries,
controls,
is
controlled by, or is
under
common
control with, such
Provided, That such
review shall only be
required for
distribution utilities
whose markets have
not reached
household demand
level; PROVIDED
FURTHER, THAT
SUCH BILATERAL
CONTRACTS
SHALL BE
SUBJECT TO
PUBLIC AND
COMPETITIVE
BIDDING OR
SWISS
CHALLENGE
PROCEDURE AS
THE CASE MAY BE,
UNDER SUCH
RULES AND
REGULATIONS AS
THE ERC MAY
PROMULGATE. For
the purpose of
preventing market
power abuse
between associated
firms engaged in
generation and
distribution, no
distribution utility
shall be allowed to
source from bilateral
power supply
contracts more than
fifty percent (50%) of
its total demand from
 Preventing
entity; and] FOR
THE
PURPOSE
OF PREVENTING
MARKET POWER
ABUSE BETWEEN
ASSOCIATED
FIRMS ENGAGED
IN GENERATION
AND
DISTRIBUTION,
DISTRIBUTION
UTILITY IS ONLY
ALLOWED
TO
SOURCE FROM
BILATERAL
POWER SUPPLY
CONTRACT OF
ITS
TOTAL
DEMAND FROM
ITS ASSOCIATED
FIRMS ENGAGED
IN GENERATION
AS FOLLOWS:
DUS’S TOTAL
DEMAND
50 MW AND
BELOW
51-100 MW
101-250 MW
251-500 MW
501 MW AND
ABOVE
(c) For the first five
(5) years from the
establishment of the
wholesale electricity
spot market, no
distribution
utility
shall source more
than ninety percent
(90%) of its total
demand
from
bilateral
power
supply contracts.
xxx.
ALLOWED
BILATERAL
CONTRACT
6O%
50%
40%
30%
25%
(c) [For the first five
(5) years from the
establishment of
the
wholesale
electricity
spot
market,
no
distribution utility
shall source more
than ninety percent
(90%) of its total
demand
from
bilateral
power
supply contracts.]
UPON
an associated firm
engaged in
generation but such
limitation, however,
shall not prejudice
contracts entered
into prior to the
effectivity of this Act.
An associated firm
with respect to
another entity refers
to any person which,
alone or together
with any other
person, directly or
indirectly, through
one or more
intermediaries,
controls, is controlled
by, or is under
common control
with, such entity; and
xxx
distribution
utilities from fully
contracting
exposes
its
customers
to
price volatilities
in the spot
market,
especially during
tight
supply
periods of highdemand
summer months.
By fully
contracting its
total demand, a
distribution utility
is guaranteed
reliable and
stable supply of
electricity from
its supplier and
a fixed and
predictable
electricity cost
year-round,
which is
consistent with
Section 2 of the
EPIRA
mandating
continuous,
reliable, efficient
and affordable
power supply.
(PIPPA)
OPERATION OF
THE
VARIOUS
WHOLESALE
ELECTRICITY
SPOT MARKET,
NO
DISTRIBUTION
UTIITY
SHALL
SOURCE MORE
THAN 90% OF ITS
DEMAND FROM
BILATERAL
CONTRACT
IF
THE SAME IS
MORE THAN 15
MW AND THAT
THERE IS NO
AVAILABLE
RENEWABLE
ENERGY
SOURCES THAT
CAN
BE
DEVELOPED IN
ITS FRANCHISE
AREA. TO THE
CONTRARY,
A
DISTRIBUTION
UTILITY WITH A
TOTAL DEMAND
OF 15 MW AND
BELOW MAY OPT
TO SOURCE ITS
POWER
REQUIREMENT
THROUGH
BILATERAL
CONTRACT OR
DEVELOP
ITS
OWN
GENERATING
PLANT,
ESPECIALLY IF
RENEWABLE
ENERGY
IS
EMBEDDED
IN
ITS FRANCHISE
AREA.
xxx.”
Sec.
47.
NPC
Privatization.
–
Except for the assets
of
SPUG,
the
generation assets,
real
estate, and other
disposable assets as
well as IPP contracts
of NPC shall be
privatized
in
accordance with this
Act. Within six (6)
months from the
effectivity of this Act,
the PSALM Corp.
shall submit a plan
for the endorsement
by
the
Joint
Congressional Power
Commission and the
approval of the
President of the
Philippines, on the
total privatization of
the
generation
assets, real estate,
other
disposable
assets as well as
existing
IPP
contracts of NPC and
thereafter, implement
the
same,
in
accordance with the
following guidelines,
except as provided
for in paragraph (f)
herein:
Sec.
47.NPC
Privatization.
–
Except for the
[assets of SPUG,]
AGUS
AND
PULANGUI
HYDRO
ELECTRIC
PLANTS
COMPLEXES, the
generation assets,
real
estate, and other
disposable assets
as well as IPP
contracts of NPC
shall be privatized
in
accordance with
this Act[. Within six
(6) months from the
effectivity of this
Act, the PSALM
Corp. shall submit
a plan for the
endorsement
by
the
Joint
Congressional
Power Commission
and the approval of
the President of the
Philippines, on the
total privatization of
the
generation
assets, real estate,
other disposable
assets as well as
existing
IPP
contracts of NPC
and
thereafter,
Sec 47. NPC
Privatization. –
Except for the
assets of SPUG,
the
generation
assets,
real
estate, and other
disposable assets
as well as IPP
contracts of NPC
shall be privatized
in
accordance with
this Act. Within six
(6) months from
the effectivity of
this
Act,
the
PSALM Corp. shall
submit a plan for
the endorsement
by
the
Joint
Congressional
Power
Commission and
the approval of the
President of the
Philippines, on the
total privatization
of the generation
assets, real estate,
other disposable
assets as well as
existing
IPP
contracts of NPC
and
thereafter,
implement
the
same,
in
accordance with
the
following
guidelines, except
Sec. 47.NPC
Privatization. –
Except for the
assets of SPUG,
the generation
assets, real
estate, and other
disposable assets
as well as IPP
contracts of NPC
shall be privatized
in
accordance with
this Act. Within six
(6) months from
the effectivity of
this Act, the
PSALM Corp.
shall submit a
plan for the
endorsement by
the Joint
Congressional
Power
Commission and
the approval of
the President of
the Philippines, on
the total
privatization of the
generation assets,
real estate, other
disposable assets
as well as existing
IPP contracts of
NPC and
thereafter,
implement the
same, in
accordance with
Sec. 47. NPC
Privatization - Except
for the assets of
SPUG, AGUS AND
PULANGUI HYDRO
POWER
COMPLEXES AND
OTHER NPC
ASSETS IN
MINDANAO, the
generation assets,
real
estate, and other
disposable assets as
well as IPP contracts
of NPC shall be
privatized in
accordance with this
Act. Within six (6)
months from the
effectivity of this Act,
the PSALM Corp.
shall submit a plan
for the endorsement
by the Joint
Congressional Power
Commission and the
approval of the
President of the
Philippines, on the
total privatization of
the generation
assets, real estate,
other disposable
assets as well as
existing IPP
contracts of NPC and
thereafter, implement
the same, in
accordance with the
 Agus and
the Pulangui
should stay
in
government
hands and
should not
be privatized
(Kaamulan
Chamber,
Oro
Chamber)
 At the most,
government
can offer the
Operation
and
Maintenance
contract for
the two
plants to a
private
concessionai
re, but retain
ownership of
the said
assets (as
consolidated
by PEPOA)
 Create a
Mindanao
Power
Corporation
to manage
the AgusPulangui
Complex
(AMRECO)
 Allow NPC
to continue
 NPC favors
and
support
H.B.
351,
particularly its
explanatory note
that ‘it is wrong
for govt to fully
let go to private
hands the vital
power
generation
sector’.
Retaining and
operating
the
governmentowned electric
power
generating
assets
in
Mindanao will
provide NPC an
additional
revenue
of
about Php 10
Billion/year,
while still selling
electricity at a
low of Php
4/kwh. With that
additional
income,
NPC
will better serve
the SPUG area,
better operate,
maintain
and
(a) xxx
(b) xxx
(c) xxx
implement
the
same,
in
accordance with]
the
following
guidelines, except
as provided for in
paragraph
(f)
herein:
(a) xxx
(b) xxx
(c) xx
as provided for in
paragraph
(f)
herein:
the following
guidelines, except
as provide
following guidelines,
except as provided
for in paragraph (f)
herein:
(a) xxx
(b) xxx
(c) xxx
(a) xxx
(b) xxx
(c) xxx
to operate,
maintain and
expand
generation
plants
dedicated
primarily for
the provision
of long-term
Ancillary
Services
(Transco)
rehab
the
hydroelectric
plants
in
Mindanao, and
can
perhaps
pursue Agues IV
power project if
allowed by the
govt.
 It
is
acknowledged
by the author of
the proposed bill
that people in
Mindanao object
to the selling of
the Agus and
Pulangi Hydro
Complexes for
fear that it will
raise the price of
electricity. If the
fear
is
the
increase in rates
from
privatization, the
government can
privatize plants
with fixed price
contracts
attached.
However, this
will reduce the
value paid for
these plants and
their
privatization in
this manner will
not contribute
toward reducing
the
national
debt.
(d) All assets of NPC
shall be sold in an
open and transparent
manner through
public bidding, and
the same shall apply
to the disposition of
IPP contracts;
(d) xxx
(d) All THE
REMAINING
POWER assets of
NPC shall be [sold
in an open and
transparent
manner through
public bidding, and
the same shall
apply to the
disposition of IPP
contracts]
RETAINED BY
THE NATIONAL
GOVERNMENT,
AND MANAGED
BY THE
NATIONAL
CORPORATION
(NAPOCOR) ;
(d) xxx
(e) In cases of
transfer of
possession , control,
operation or
privatization of multipurpose hydro
facilities, safeguards
shall be prescribed to
ensure that the
national government
may direct water
usage in cases of
shortage to protect
potable water,
irrigation, and all
other requirements
imbued with public
interest;
(e) xxx
(e) In cases of
transfer of
possession ,
control[,] OR
operation [or
privatization] of
multi-purpose
hydro facilities,
NATIONAL
GOVERNMENT
safeguards AND
PROTOCOLS
shall be STRICTLY
prescribed to
ensure that [the
national
government may]
direct water usage
AND RELEASES
(e) xxx
 The proposed
amendment of
Sec. 47 would
deprive PSALM
of its funding
source for the
payment of its
assumed loan of
ECs with NEA.
There is no
proposal in the
bill on how this
matter will be
addressed
(NEA)
(f) The Agus and the
Pulangui complexes
in Mindanao shall be
excluded from
among the
generation
companies that will
be initially privatized.
Their ownership shall
be transferred to the
PSALM Corp. and
both shall continue to
be operated by the
NPC. Said
complexes may be
privatized not earlier
than ten (10) years
from the effectivity of
this Act, and except
for Agus III, shall not
be subject to BuildOperate-Transfer (BO-T), BuildRehabilitate-OperateTransfer (B-R-O-T)
and other variations
thereof pursuant to
Republic Act No.
6957, as amended
by Republic Act No.
7718. The
(f) The Agus and
the Pulangui
complexes in
Mindanao shall be
excluded from
among the
generation
companies that will
be [initially]
privatized. Their
ownership shall be
transferred to the
PSALM Corp. and
both shall continue
to be operated by
the NPC. Said
complexes [may be
privatized not
earlier than ten (10)
years from the
effectivity of this
Act, and except for
Agus III, shall not
be subject to BuildOperate-Transfer
(B-O-T), BuildRehabilitateOperate-Transfer
(B-R-O-T) and
other variations
thereof pursuant to
in cases of
shortages AND
INCLEMENT
WEATHER
CALAMITIES to
protect potable
water, irrigation,
AGRICULTURAL
AND
RESIDENTIAL
LANDS and all
other requirements
imbued with public
interest;
(f) The Agus and
the Pulangui
complexes in
Mindanao, THE
ANGAT
HYDROELECTRIC
POWER PLANT IN
LUZON, THE
NAGA POWER
PLANT
COMPLEXES IN
VISAYAS, AND
ALL STATE
POWER BARGES
shall be excluded
from
PRIVATIZATION
[among the
generation
companies that will
be initially
privatized]. Their
ownership shall be
RETAINED OR
transferred to the
NAPOCOR
[PSALM Corp.]
and [both] shall
continue to be
operated by the
[NPC] NAPOCOR.
(f) The Agus and
the Pulangui
complexes in
Mindanao shall be
excluded from
among the
generation
companies that
will be [initially]
privatized. Their
ownership shall
be transferred to
the PSALM Corp.
and both shall
continue to be
operated by the
NPC[.]; [Said
complexes may
be privatized not
earlier than ten
(10) years from
the effectivity of
this Act, and
except for Agus
III, shall not be
subject to BuildOperate-Transfer
(B-O-T), BuildRehabilitateOperate-Transfer
(B-R-O-T) and
(f) The Agus and the
Pulangui complexes
in Mindanao shall be
RETAINED AND
MANAGED BY THE
STATE AND
excluded from
among the
generation
companies that will
be [ initially]
privatized. Their
ownership shall be
transferred to the
PSALM Corp. and
both shall continue to
be operated by the
NPC; [Said
complexes may be
privatized not earlier
than ten (10) years
from the effectivity of
this Act, and except
for Agus III, shall not
be subject to BuildOperate-Transfer (BO-T), BuildRehabilitate-OperateTransfer (B-R-O-T)
and other variations
thereof pursuant to
 ERC supports
the nonprivatization of
Agus, Pulangui
and Naga Power
plant complexes
to prevent the
ownership and
control of a
single
generation
company over a
substantial
amount of
capacity which
will effectively
reduce
competition in
the market. But
the said
privatization
should not be
made perpetual.
Privatization of
the Agus and
Pulangui
complexes
should be upon
the introduction
of a competitive
energy market in
privatization of Agus
and Pulangui
complexes shall be
left to the discretion
of PSALM Corp. in
consultation with
Congress;
Republic Act No.
6957, as amended
by Republic Act
No. 7718. The
privatization of
Agus and Pulangui
complexes shall be
left to the discretion
of PSALM Corp. in
consultation with
Congress;] SHALL
BE RETAINED TO
GENERATE
POWER WHICH
WILL SERVE AS
BUFFER SUPPLY
TO AVERT
POWER CRISES.
THE
GOVERNMENT
THROUGH THE
NPC SHALL
ENSURE ITS
IMMEDIATE
REHAIBLITATION
TO MAXIMIZE ITS
CAPACITY
OUTPUT
THROUGH LOANS
WHICH SHALL BE
RECOVERED IN A
GENERATION
RATE TO BE
FILED WITH THE
ERC WHO’S
REVENUE SHALL
BE USED FOR
THE REPAYMENT
OF ITS
REHABILITATION
AND OPERATION
EXPENSES.
PROVIDED, THAT
ELECTRIC
COOPERATIVES
THE said
complexes [may
be privatized not
earlier than ten
(10) years from the
effectivity of this
Act, and except for
Agus III,] shall [not]
be subject to
REHABILITATION,
UPGRADING,
AND
MAINTENANCE
BY THE
NAPOCOR [BuildOperate-Transfer
(B-O-T), BuildRehabilitateOperate-Transfer
(B-R-O-T) and
other variations
thereof pursuant to
Republic Act No.
6957, as amended
by Republic Act
No. 7718. The
privatization of
Agus and Pulangui
complexes shall be
left to the
discretion of
PSALM Corp. in
consultation with
Congress];
other variations
thereof pursuant
to Republic Act
No. 6957, as
amended by
Republic Act No.
7718. The
privatization of
Agus and
Pulangui
complexes shall
be left to the
discretion of
PSALM Corp. in
consultation with
Congress;]
Republic Act No.
6957, as amended
by Republic Act No.
7718. The
privatization of Agus
and Pulangui
complexes shall be
left to the discretion
of PSALM Corp. in
consultation with
Congress;]
the Mindanao
grid.
 The
government may
ease the power
rates in other
ways such as:
(1) Decreasing
or eliminating
VAT and other
taxes in the
power sector;
(2) Subsidizing
(government to
pay
private
companies
certain amount
for
the
corresponding
decrease
in
rates); and (3)
Assistance on
permits
for
generation and
other
power
related
businesses.
One
of
the
reasons
for
privatization was
to resolve the
constant problem
of
poor
availability
of
power
plants
(relative to their
private
counterparts)
under
the
SHALL BE
PRIORITIZED IN
CONTRACTING
THESE
COMPLEXES’CAP
ACITY TO SERVE
THE NEED OF
THE
RESIDENTIAL
CONSUMERS.
operational
control of NPC.
Stopping
the
privatization of
these plants may
actually result in
less
reliable
power
for
consumers.
FOR THE
PURPOSE OF
ENSURING THE
VIABILITY OF
OPERATION OF
THE AGUS AND
PULANGI HYDRO
ELECTRIC
PLANTS
COMPLEXES, A
MINDANAO
POWER
CORPORATION
SHALL BE
CREATED THAT
WILL MANAGE,
OPERATE AND
MAINTAIN THE
PLANTS. FOR
THIS PURPOSE,
THE ASSETS AND
LIABILITIES OR
OBLIGATIONS
AND DEBTS OF
NAPOCOR/PSALM
RELATED TO THE
OPERATION OF
THE MINDANAO
GENERATION
(MINGEN) SHALL
BE SEPARATED
FROM THE BOOK
OF ACCOUNTS
OF NAPOCOR
In addition, the
proposal
to
acquire loans for
the rehabilitation
and
operation
expenses of the
Agus and Pulangi
Hydro
Complexes may
actually result in
higher electricity
prices
in
Mindanao – the
burden
which
people
in
Mindanao fear
most – since the
principal
and
interest on the
loan would have
to be recovered
through
the
generation rates.
It bears stressing
that the proceeds
from privatization
are used to repay
the existing NPC
debts guaranteed
AND
TRANSFERRED
TO THE NEW
ENTITY, THE
MINDANAO
POWER
CORPORATION.
THE MINDANAO
POWER
CORPORATION
SHALL BE A
GOVERNMENT
OWNED AND
CONTROLLED
CORPORATION
BUT SHALL BE
MANAGED AND
OPERATED IN A
PRIVATELY
OWNED TYPE OF
MANAGEMENT,
WHOSE
COMPOSITION IN
ITS BOARD OF
DIRECTORS
SHALL INCLUDE
ONLY THE
SECRETARY OF
THE MINDANAO
DEVELOPMENT
AUTHORITY AS
CHAIRMAN,
OTHER BOARD
MEMBERS
COMPOSED OF A
MAXIMUM OF
FIVE EXCLUDING
THE CHAIRMAN
SHALL BE
REPRESENTATIV
E OF ELECTRIC
COOPERATIVES
IN MINDANAO,
PRIVATELY
by the national
government.
Stopping
the
privatization of
the NPC assets
will
keep
electricity prices
low but effectively
raise taxes or
reduce
government
spending
on
other
governmental
services in the
future. (PIPPA)
(g) The steam field
assets and
generating plants of
each geothermal
complex shall not be
sold separately. They
shall be combined
and each geothermal
complex shall be sold
as one package
through public
bidding. The
geothermal
complexes covered
by this requirement
include, but are not
limited to, TiwiMakban, Leyte A and
B (Tongonan),
Palinpinon, and Mt.
Apo;
OWNED DU’S IN
MINDANAO,
CONSUMER
ORGANIZATION,
BUSINESS
SECTOR
REPRESENTATIV
E, AND FROM
LAKE LANAO
WATERSHED
PROTECTION
AND
DEVELOPMENT
COUNCIL.
(g) xxx
(g) THE STATE
SHALL
ENDEAVOR TO
DEVELOP THE
GEOTHERMAL
RESOURCES OF
THE COUNTRY
AND BUILD NEW
GEOTHERMAL
PLANTS. The
steam field assets
and generating
plants of each
EXISTING
geothermal
complex shall not
be [sold
separately]
PRIVATIZED.
[They shall be
combined and
each geothermal
complex shall be
sold as one
package through
public bidding.]
The geothermal
complexes
covered by this
requirement
include, but are not
 The financial
effect to the
government of
the continuous
operations of the
remaining NPC
assets (incl
maintenance
and rehab
expenses)
should first be
analysed.
Moreover, the
effect of govt
competing with
the private
sector in terms
of geothermal
energy should
also be studied,
as it may
impede the
other private
investments in
the power
sector. Rather
than build new
plants itself, govt
should adopt
policy that
encourages
limited to, [TiwiMakban,] Leyte A
and B (Tongonan),
Palinpinon, and
Mt. Apo;
(i) Not later than
three (3) years from
the effectivity of this
Act, and in no case
later
than the initial
implementation of
open access, at least
seventy percent
(70%) of the total
capacity of
generating assets of
NPC and of the total
capacity of the power
plants under contract
with NPC located in
Luzon and Visayas
shall have been
privatized: Provided,
That any unsold
capacity shall be
privatized not later
than eight (8) years
from the effectivity of
this Act; and
(i) Not later than
three (3) years
from the effectivity
of
this
AMENDATORY
Act, and in no case
later than the initial
implementation of
open access, at
least
seventy
percent (70%) of
the total capacity of
generating assets
of NPC and of the
total capacity of the
power plants under
contract
with NPC located in
Luzon and Visayas
WITH
THE
EXCEPTION OF
THOSE
WHICH
ARE EXCLUDED
FROM
PRIVATIZATION
AND SALE BY
THIS
AMENDATORY
ACT shall have
been
privatized:
Provided, That any
unsold
capacity
[shall be privatized
not later than eight
(8) years from the
effectivity of this
Act] AT THE TIME
OF
THE
private sector to
use its capital
and knowledge
to build
geothermal
plants. (PIPPA)
The remaining
unsold capacity
of PSALM may
not be sufficient
to supply all
ancillary service
requirements for
both the Luzon
and
Visayas
grids.
 The financial
impact to the
government of
the continuous
operations of the
remaining NPC
assets (including
maintenance
and
rehabilitation
expenses)
should first be
analysed. It
should be noted
that some of the
remaining
assets of
PSALM/NPC
like Casecnan
and Malaya are
not designed to
provide ancillary
service. (PIPPA)
APPROVAL
OF
THIS
AMENDMENT,
WITH
THE
EXCEPTION OF
THOSE TO BE
FORMED UNDER
THE MINDANAO
POWER
CORPORATION,
SHALL
BE
RETAINED
AS
ASSETS OF NPC
TO SERVE AS
ANCILLARY
SERVICE
PROVIDER
OF
THE LUZON AND
VISAYAS GRID;
and
(j) NPC may
generate and sell
electricity only from
the undisposed
generating assets
and IPP contracts of
PSALM Corp and
shall not incur any
new obligations to
purchase power
through bilateral
contracts with
generation
companies or other
suppliers.
(j) NPC SHALL[
may] generate and
sell electricity [only]
from the
undisposed
generating assets
[and IPP contracts
of PSALM Corp
and shall not incur
any new
obligations to
purchase power
through bilateral
contracts with
generation
companies or other
suppliers]
EXCLUSIVE OF
THE AGUS AND
PULANGUI
HYDRO
COMPLEXES IN
MINDANAO
WHICH SHALL BE
(j)[ NPC may
generate and sell
electricity only
from the
undisposed
generating assets
and IPP contracts
of PSALM Corp
and shall not incur
any new
obligations to
purchase power
through bilateral
contracts with
generation
companies or
other suppliers.]
THE
GOVERNMENT,
THRU THE NPC
OR ANY OTHER
GOVERNMENT
OWNED OR
CONTROLLED
 To reiterate,
the financial
impact to the
government of
the continuous
operations of the
remaining NPC
assets (including
maintenance
and
rehabilitation
expenses)
should first be
analysed. It
should be noted
that some of the
remaining
assets of
PSALM/NPC
may not be
designed to
provide ancillary
service. (PIPPA)
OPERATED BY A
SEPARATE
ENTITY AND IPP
CONTRACTS,
INCLUDING NEW
POWER SUPPLY
PORTFOLIO
WHICH SHOULD
NOT BE LESS
THAN THE
REQUIRED
ANCILLARY
CAPACITY OF
EACH GRID IN
LUSON, VISAYAS
AND MINDANAO
AS DETERMINED
BY THE GRID
MANAGEMENT
COMMITTEE AND
TO BE UPRATED
ON THE BASE
LOAD
REQUIREMENT
OF THE GRID
PLUS TEN
PERCENT (10%).
THE CAPACITY
FEE OF ALL NPC
POWER PLANTS
AND POWER
SUPPLY
CONTRACTS
THAT WILL
SERVE AS
ANCILLARY
SHALL BE
RECOVERED IN A
FORM OF
ANCILLARY
SERVICE
CHARGE TO BE
COLLECTED
FROM ALL
CORPORATION
IS HEREBY
AUTHORIZED TO
GENERATE AND
SELL
POWER/ELECTR
ICITY FROM
RENEWABLE
ENERGY
SOURCES AS
DEFINED IN
REPUBLIC ACT
9513 AND TO
INCUR NEW
OBLIGATIONS
TO PURCHASE
POWER
THROUGH
BILATERAL
CONTRACTS
WITH
GENERATION
COMPANIES OR
OTHER
SUPPLIERS.
ELECTRICITY
END USERS BY
THE GRID
OPERATOR AND
REMITTED
DIRECTLY TO
THE NPC.
ANCILLARY
CHARGES SHALL
INCLUDE FIXED
COST AND A
CERTAIN MARGIN
WHICH SHOULD
BE APPLIED BY
NPC TO THE ERC
FOR COST
DETERMINATION
AND APPROVAL.
SEC. 48. National
Power Board of
Directors. - Upon
the passage of this
Act, the
provisions of R.A.
6395, as amended,
referring to the
IN CASE OF
EMERGENCY
AND IN ORDER
TO STABILIZE
THE PRICE IN
THE WESM, NPC
POWER PLANT
SHALL OPERATE
AS BASE LOAD
PLANTS WITH
GENERATION
COST TO BE
DETERMINED BY
ERC BASED ON
THE
TECHNOLOGY
USED.
“Sec. 48.
[National Power
Board of
Directors]
NATIONAL
POWER
CORPORATION. Upon the passage
composition of
the National Power
Board of Directors,
are hereby repealed
and a new Board
shall be
immediately
organized. The new
Board shall be
composed of the
Secretary of Finance
as
Chairman, with the
following as
members: the
Secretary of Energy,
the Secretary of
Budget and
Management, the
Secretary of
Agriculture, the
Director-General of
the National
Economic and
Development
Authority, the
Secretary of
Environment and
Natural Resources,
the Secretary of
Interior and Local
Government, the
Secretary of the
Department of Trade
and Industry, and the
President of the
National Power
Corporation.
of this Act, the
provisions of R.A.
6395, as amended,
referring to the
composition of
the National Power
Board of Directors,
are hereby
repealed and a
new Board shall be
immediately
organized. The
new Board shall be
composed of the
Secretary of
Finance as
Chairman, with the
following as
members: the
Secretary of
Energy, the
Secretary of
Budget and
Management, the
Secretary of
Agriculture, the
Director-General of
the National
Economic and
Development
Authority, the
Secretary of
Environment and
Natural Resources,
the Secretary of
Interior and Local
Government, the
Secretary of the
Department of
Trade and Industry,
and the
President of the
National Power
Corporation.
THE NATIONAL
POWER
CORPORATION
SHALL REMAIN
AS A
GOVERNMENT
OWNED AND
CONTROLLED
CORPORATION
(GOCC),
HOWEVER, ITS
OPERATIONAL
GOVERNANCE
AND CONDUCT
OF BUSINESS
SHOULD BE
BASICALLY
SIMILAR TO THAT
OF A PRIVTE
UTILITY THAT
ENSURES
BUSINESS
VIABILITY AND
THEREFORE THE
QUALIFICATIONS
AND HIRING
PERSONNEL AS
WELL AS ITS
ORGANIZATION
STRUCTURE
SHOULD BE
ALIGNED TO
THAT OF A
PRIVATELY
OWNED
COMPANY OR
CORPORATION.
FOR THIS
PURPOSE, THE
DEPARTMENT OF
TRADE AND
INDUSTRY (DTI)
SHALL
ESTABLISH THE
BUSINESS
STRUCTURE OF
NPC, INCLUDING
PLANTILLA
POSITION AND
SALARY SCALE
AS WELL AS HOB
DESCRIPTIONS,
WITHIN SIX (6)
MONTHS FROM
THE EFFECTIVITY
OF THIS
AMENDATORY
ACT.
THE
COMPOSITION
OF THE
CORPORATE
BOARD OF NPC
SHALL BE PART
OF THE
PLANTILLA THAT
SHALL BE
DETERMINED BY
THE DTI,
EXCLUDING
POLITICAL
APPOINTEES.”
Sec. 50.Purpose and
Objective, Domicile
and Term of
Existence. - The
principal purpose of
the Corporation is to
manage the orderly
sale, disposition, and
privatization of NPC
generation assets,
real estate and other
disposable assets,
and IPP contracts
with the objective of
liquidating all NPC
Sec. 50.Purpose
and Objective,
Domicile and
Term of
Existence. - The
principal purpose
of the Corporation
is to manage the
orderly sale,
disposition, and
privatization of
NPC generation
assets, real
estate and other
disposable
financial obligations
and stranded
contract costs in an
optimal manner.
The PSALM Corp
shall have its
principal office and
place of business
within Metro Manila.
The PSALM Corp
shall exist for a
period of twenty five
(25) years from the
effectivity of this Act,
unless otherwise
provided by law, and
all assets held by it,
all moneys and
properties belonging
to it, and all its
liabilities outstanding
upon the expiration
of its term of
existence shall revert
to and be assumed
by the National
Government.
assets, and IPP
contracts with the
objective of
liquidating all
NPC financial
obligations and
stranded contract
costs in an
optimal manner.
The PSALM Corp
shall have its
principal office
and place of
business within
Metro Manila.
The PSALM Corp
shall exist for a
period of [twenty
five (25)] THIRTY
FIVE (35) years
from the
effectivity of this
Act, unless
otherwise
provided by law,
and all assets
held by it, all
moneys and
properties
belonging to it,
and all its
liabilities
outstanding upon
the expiration of
its term of
existence shall
revert to and be
assumed by the
National
Government.
SEC. 62. Joint
Congressional
Power Commission.
- xxx
Sec. 62. Joint
congressional
power
commission. - xxx
The
Commission
shall, in aid of
legislation, perform
the
following
functions,
among
others:
The commission
shall, in aid of
legislation, perform
the
following
functions, among
others:
(a) xxx
(a) xxx
(b) xxx
(b) xxx
(c) xxx
(c) xxx
(d)xxx
(d)xxx
(e) xxx
(e) xxx
(f) xxx
(f) xxx
(g)
Determine
inherent weaknesses
in the law and
recommend
necessary remedial
legislation
or
executive measures;
and
(g)
Determine
inherent
weaknesses in the
law
THAT
BREEDS
REGULATORY
FLAWS
and
recommend
necessary remedial
legislation
or
executive
measures; [and]
(h) Perform such
other duties and
functions as may be
necessary to attain
its
objectives.
xxx
(h)ENHANCE
QUALITY OF
SEARCH,
SCREEING,
SELECTION
PROCESS
THE
THE
AND
FOR
THE FOLLOWING
POSITIONS:
SECRETARY OF
THE
DEPARTMENT OF
ENERGY,
CHAIRMAN
OF
THE
ERC,
PRESIDENT OF
NPC, PRESIDENT
OF
PEMC,
PRESIDENT AND
CEO
OF
TRANSCO,
PRESIDENT AND
CEO OF PSALM,
AND
OTHER
HEADS
OF
AGENCIES
COVERED
BY
EPIRA;
(I) SUBMIT A LIST
OF
FIVE
(5)
NOMINEES FOR
EACH POSITION
ENUMERATED IN
SECTION 62 (H)
TO
THE
PRESIDENT OF
THE PHILIPPINES
FOR
FINAL
APPOINTMENT
AT LEAST ONE (1)
YEAR
BEFORE
THE
INCUMBENT’S
TERM EXPIRES;
AND
[(h)](J)
Perform
such other duties
and functions as
may be necessary
to
attain
its
objectives.
xxx
SEC. 63. Separation
Benefits of Officials
and Employees of
Affected Agencies. –
National government
employees displaced
or separated from the
service as a result of
the restructuring of
the
electricity
industry
and
privatization of NPC
assets pursuant to
this Act, shall be
entitled to either a
separation pay and
other benefits in
accordance
with
existing laws, rules or
regulations or be
entitled to avail of the
privileges provided
under a separation
plan which shall be
one and one-half
month salary for
every year of service
in the government:
Provided, however,
That those who avail
of such privilege shall
start
their
government service
anew if absorbed by
any
governmentowned
successor
company. In no case
shall there be any
diminution of benefits
under the separation
plan until the full
SEC. 63.
Separation
Benefits of
Officials and
Employees of
Affected
Agencies. –
National
government
employees
displaced or
separated from
the service as a
result of the
restructuring of
the electricity
industry and
privatization of
NPC assets
pursuant to this
Act, [shall be
entitled to either a
separation pay
and other benefits
in accordance
with existing laws,
rules or
regulations or be
entitled to avail of
the privileges
provided under a
separation plan
which shall be
one and one-half
month salary for
every year of
service in the
government:
Provided,
however, That
those who avail of
implementation of the
restructuring
and
privatization.
xxx
such privilege
shall start their
government
service anew if
absorbed by any
governmentowned successor
company.] SHALL
BE ENTITLED TO
A SEPARATION
PAY
EQUIVALENT TO
ONE AND ONEHALF MONTH
SALARY FOR
EVERY YEAR OF
SERVICE IN THE
GOVERNMENT
WHICH IS OVER
AND ABOVE THE
EXISTING
RETIREMENT
BENEFITS IN
ACCORDANCE
WITH LAWS,
RULES AND
REGULATIONS:
PROVIDED,
HOWEVER,
THAT THOSE
WHO ARE
ABSORBED BY
ANY
GOVERNMNT –
OWNED
INSTITUTION OR
GOVERNMENT
OWNED AND
CONTROLLED
CORPORATION
NOT CREATED
UNDER THE
CORPORATION
CODE SHALL
NOT SUFFER
THE PENALTIES
OF
DISCONTINUED
SERVICE AND
SHALL BE
CONSIDERED
TO HAVE
CONTINUOUS
GOVERNMENT
SERVICE FOR
PURPOSES OF
RETIREMENT
BENEFITS. THIS
PROVISION
SHALL HAVE
RETROACTIVE
EFFECT. In no
case shall there
be any diminution
of benefits under
the separation
plan until the full
implementation of
the restructuring
and privatization.
xxx
SEC. 66. Benefits to
Host Communities.
- The obligations of
generating
companies
and
energy
resource
developers
to
communities hosting
energy generating
facilities
and/or
energy
resource developers
as defined under
Chapter II, Sections
289 to 294 of the
Local Government
Code and Section
5(i) of Republic Act
SEC. 66. Benefits
to
Host
Communities. The obligations of
generating
companies
and
energy resource
developers
to
communities
hosting
energy
generating facilities
and/or
energy
resource
developers
as
defined
under
Chapter
II,
Sections 289 to
294 of the Local
The term “host
community” as
used or referred
to Republic Act
No. 7160,
otherwise known
as the Local
Government
Code; Republic
Act No. 7638,
otherwise known
as the
Department of
Energy Act of
1992; and
Republic Act No.
9136, otherwise
known as the
 DILG
commented that
the
Local
Government
Code of 1991
does
not
mention
the
term
“host
community” .
 DILG
admitted that the
department is
not competent to
determine the
reasonableness
No. 7638 and their
implementing rules
and regulations and
applicable orders and
circulars consistent
with this Act shall
continue: Provided,
That the obligations
mandated
under
Chapter II, Section
291 of Republic Act
No. 7160, shall
apply to privatelyowned corporations
or entities utilizing
the national wealth of
the locality.
xxx.
Government
Code and Section
5(i) of Republic Act
No. 7638 and their
implementing rules
and
regulations
and
applicable
orders
and
circulars
[consistent with this
Act shall continue:
Provided,
That the obligations
mandated under
Chapter II, Section
291 of Republic Act
No. 7160, shall
apply to privatelyowned corporations
or entities utilizing
the national wealth
of the locality]
INCONSISTENT
WITH THIS ACT
ARE
HEREBY
AMENDED
TO
SIMPLIFY
THE
DISTRIBUTION OF
THE SHARES IN
NATIONAL
WEALTH TAX.
THE
COMMUNITIES
HOSTING
ANY
SOURCE
OF
ENERGY SHALL
BE ENTITLED TO
THE
EIGHTY
PERCENT (80%)
OF
THE
NATIONAL
WEALTH
TAX;
PROVIDED, THAT
THE
Electric Power
Industry Reform
Act as amended,
shall be redefined
as follows;
a) with respect to
hydroelectric
generation
facilities, the host
local government
unit (LGU) or
host region is that
where the
hydroelectric
generating facility
is located.
b) With respect to
hydroelectric
energy
resources, the
host LGU or the
host region is that
where the
waterway or
water system
used as energy
resource is
located,
beginning at the
point of origin of
the waterway or
water system and
terminating at the
point where the
hydroelectric
generation facility
concerned is
located.
In the case of
hydroelectric
generation
facilities and
of the amount to
be collected as
benefit to host
communities
mentioned in the
Bill.
 DILG
suggests that
since
the
concept of “host
community” is
sought to be
expanded, the
manner
or
breakdown of
shares among
the
host
communities be
indicated
to
avoid
further
confusion
 PIPPA
supports
the
effort of the
government in
enforcing
the
Franchise
Benefit to Host
Communities
(FBTHC). We
agree that these
funds should be
remitted directly
to the LGUs or
host
communities.
However,
guidelines
should
be
GENERATION
FACILITIES
AND/OR ENERGY
RESOURCE
DEVELOPERS
SHALL DEDUCT
THIS
AMOUNT
FROM
THE
POWER BILLS OF
THE ELECTRIC
COOPERATIVES
/DISTRIBUTION
UTILITIES;
PROVIDED
FURTHER, THAT
THIS SHALL HAVE
RETROACTIVE
EFFECT
FROM
THE TIME THE
GENERATION
FACILITES
AND/OR ENERGY
RESOURCE
DEVELOPERS
STARTED
TO
OPERATE IN THE
HOST
COMMUNITIES .
hydroelectric
energy
resources, the
amount to be
collected as
benefit to host
communities
shall not be less
than twenty-five
percent (25%) of
one centavo for
every kilowatthour generated
by the
hydroelectric
generation facility
concerned.
All amounts
collected as
benefit to host
communities from
hydroelectric
generation
facilities and
hydroelectric
energy resources
shall be shared
equally by the
host communities
concerned.
xxx.
SEC. 70. Missionary
Electrification. Notwithstanding the
divestment and/or
privatization of NPC
assets, IPP contracts
and spun-off
corporations, NPC
shall remain as a
National
Government-owned
and -controlled
corporation to
perform the
Sec. 70.
Missionary
Electrification.–
[Notwithstanding
the divestment
and/or
privatization of
NPC assets, IPP
contracts and
spun-off
corporations, NPC
shall remain as a
National
Government-
SEC. 70.
Missionary
Electrification. Notwithstanding
the divestment
and/or
privatization of
NPC assets, IPP
contracts and
spun-off
corporations,
NPC shall remain
as a National
Government-
clearly set to
ensure that the
amounts/funds
remitted really
redound to the
benefit of the
host
communities,
and
not
misused.
Furthermore, the
“host
communities”
should be clearly
identified.
The
local government
units may be a
provincial
government,
municipal/city
government or
even
the
barangays.
 NEA was
created to
promote,
encourage and
assist public
service entities,
particularly
cooperatives, to
the end of
achieving the
objective of
making service
available
throughout the
missionary
electrification
function through the
Small Power Utilities
Group (SPUG) and
shall be responsible
for providing power
generation and its
associated power
delivery systems in
areas that are not
connected to the
transmission system.
The missionary
electrification
function shall be
funded from the
revenues from sales
in missionary areas
and from the
universal charge to
be collected from all
electricity end-users
as determined by the
ERC.
owned and controlled
corporation to
perform the
missionary
electrification
function through
the Small Power
Utilities Group
(SPUG) and shall
be responsible
for providing power
generation and its
associated power
delivery systems in
areas that are not
connected to the
transmission
system.] THE
MISSIONARY
ELECTRIFICATIO
N FUNCTIONS OF
NPC-SPUG SHALL
BE PERFORMED
BY THE
NATIONAL
ELECTRIFICATION
ADMINISTRATION
AS AN
ADDITIONAL
MANDATE IN
ACCORDANCE
UNDER SECTION
58 OF THIS ACT.
THE NEA SHALL
BE RESPONSIBLE
IN PROVIDING
POWER
GENERATION
AND ITS
ASSOCIATED
POWER
DELIVERY
SYSTEM. The
missionary
owned and controlled
corporation
RESPONSIBLE
IN PROVIDING
THE NEEDED
POWER
SECURITY AND [
to] perform
OTHER [the]
RELATED
missionary
[electrification]
functionS
through, AMONG
OTHERS, the
Small Power
Utilities Group
(SPUG) and shall
be responsible
for providing THE
MEANS TO
ENSURE power
generation and its
associated power
delivery systems
IN TIMES OF
EMERGENCY
OR MARKET
FAILURE AND in
areas that are not
connected to the
transmission
system. The
POWER
SECURITY AND
missionary
electrification
function shall be
funded from AN
INCREASE IN
THE
CAPITALIZATIO
N OF THE NPC,
ANNUAL
nation on an
area coverage
basis as rapidly
as possible. It
lacks the
expertise in
providing power
generation and
power delivery
systems
(PIPPA)
 It is worthy to
be specific on
the responsibility
being imposed
on NPC and to
carefully study
the potential
effect of this
responsibility on
the universal
charge, which
will ultimately be
a burden to
consumers.
electrification
function shall be
funded from the
revenues from
sales in missionary
areas and from the
universal charge to
be collected from
all electricity endusers as
determined by the
ERC AND TO BE
REMITTED AND
ADMINISTERED
BY THE NEA. THE
NEA MAY OPT TO
TRANSFER OR
RELINQUISH THE
OPERTION OF
THE OFF-GRID
POWER PLANTS
TO THE
ELECTRIC
COOPERATIVE
AFTER A SOUND
EVALUATION OF
THE SAID EC, IF
EC IS
TECHNICALLY
AND
FINANCIALLY
CAPABLE OF
MAINTAINING
THE PLANT AND
IF SO DOING THE
ASSETS OF NPCSPUG BE
TRANSFERRED
TO NEA.
APPROPRIATIO
NS, SALE OF
BONDS AND
OTHER
GOVERNMENT
SECURITIES
AND the
revenues from
sales in
missionary areas
and from the
universal charge
to be collected
from all electricity
end-users as
determined by the
ERC.
SEC. 71. Electric
Power Crisis
Provision - Upon the
determination by the
President of the
Philippines of an
imminent shortage of
the supply of
electricity, Congress
may authorize,
through a joint
resolution, the
establishment of
additional generating
capacity under such
terms and conditions
as it may approve.
Sec. 71. Electric
Power Crisis
Provision - Upon
the determination
by the President of
the Philippines of
an imminent
shortage of the
supply of electricity,
[Congress may
authorize, through
a joint resolution,
the establishment
of additional
generating capacity
under such terms
and conditions as it
may approve] THE
PRESIDENT
SHALL
AUTHORIZE THE
ESTABLISHMENT
OF ADDITIONAL
GENERATING
CAPACITY.”
SEC. 71. Electric
Power Crisis
Provision – THE
DEPART OF
ENERGY (DOE)
AND THE
ENERGY
REGULATORY
COMMISSION (
ERC) ARE
MANDATED TO
SUBMIT TO
CONGRESS AN
ANNUAL
REPORT ON
THE ENERGY
SITUATION
WHICH SHALL
FORM THE
BASIS FOR THE
DECLARATION
OF A POSSIBLE
POWER CRISIS
AS
NECESSARY.
Upon the
determination by
the President of
the Philippines of
an imminent
shortage of the
supply of
electricity,
Congress may
authorize,
through a joint
resolution, the
establishment of
additional
generating
capacity under
such terms and
conditions as it
may approve.
SEC. 71. Electric
Power Crisis
Provision - Upon the
determination by the
President of the
Philippines AND
RECOMMENDATIO
N OF THE DOE
SECRETARY
BASED ON INDICES
AND BENCHMARKS
AS DETERMINED
BY DOE, of an
imminent shortage of
the supply of
electricity, Congress,
THROUGH THE
JOINT
CONGRESSIONAL
POWER
COMMISSION OR
“POWER
COMMISSION”,
may authorize,
through a [joint]
resolution, the
establishment BY
THE PRESIDENT of
additional generating
capacity under such
terms and conditions
as it may approve.
 Emergency
Powers may be
accorded to the
President of the
Philippines in
the event of an
energy crisis,
these powers
may emanated
from the
Executive
Branch instead
of from
Congress
(Kaamulan
Chamber
 The framers
of
EPIRA
intended to carry
out a system of
checks
and
balances
by
granting
the
President of the
Philippines the
authority
to
determine
an
imminent
shortage
in
supply on one
hand,
and
granting
the
Congress,
through a joint
resolution, the
authority
to
approve
the
establishment of
additional
generating
capacity.
The general idea
of this system is
to balance the
power of the
President, such
that should the
President be illadvised
and
determine
imminent
shortage
of
supply
of
electricity, both
houses of the
Congress can still
deliberate
and
decide through a
joint resolution if
the establishment
of
additional
capacity
is
needed.
Rather than
build new plants
itself,
government
should adopt
policy that
encourages
private sector to
use its capital
and knowledge
to build new
plants. (PIPPA)
SEC. 80.
Applicability and
Repealing Clause
– xxx
SEC. 80.
Applicability and
Repealing Clause
– xxx
SEC. 80.
Applicability
and Repealing
Clause – xxx
xxx
xxx
xxx
The provision with
respect to electric
power of Section
11 (c) of Republic
Act 7916, as
amended, and
Section 5(f) of
Republic Act 7227,
are hereby
repealed or
modified
accordingly.
The provision with
respect to electric
power of Section
[11] 12 (c) of
Republic Act 7916,
as
amended, and
Section 5(f) of
Republic Act 7227,
are hereby
repealed or
modified
accordingly.
The provision
with respect to
electric power
of Section [11]
121(c) of
Republic Act
7916, as
amended, and
Section 5(f) of
Republic Act
7227, are
hereby
repealed or
xxx”
xxx”
modified
accordingly.
(Meralco)
xxx
Repealing Clause.
- Sections 108
(AXii) and 109 (1)
of the
National Internal
Revenue Code, as
amended by
Republic Act No.
9337, and Sections
24
(A) and (B) of
Republic Act No.
9337 are hereby
repealed. All other
previous or existing
laws, decrees,
executive orders,
rules and
regulations or parts
thereof inconsistent
with
this Act are hereby
repealed, amended
or modified
accordingly.