EPIRA PROPOSED AMENDMENTS SIMPLIFIED MATRIX
- A simplified Matrix of all the House Bills proposing amendments to the EPIRA
- Compiled by the Staff and Consultants of the Joint Congressional Power Commission (JCPC) House Branch and the House Committee on Energy
EPIRA
HB 4479 – Umali
Sec. 2. Declaration of Policy. - It is Sec. 2. Declaration of Policy.
hereby declared the policy of the
New provision:
State:
(e) To ensure fair and nondiscriminatory treatment of public
and private sector entities in the
process of restructuring the electric
power industry;
(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);
House Bills with a Different Position
Sec. 2. Declaration of Policy.
No proposed amendment.
(e) TO ENSURE TIMELY COMPLETION
OF POWER PROJECTS FOR ENERGY
SECURITY AND MINIMIZE COSTS BY
CONSIDERING POWER PROJECTS AS
PROJECTS OF NATIONAL
SIGNIFICANCE, [AND/OR ARE]
IMBUED WITH PUBLIC INTEREST;
Comments
Sec. 2. Declaration of Policy
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff and the House Committee on
Energy:
We agree with the proposal to
consider power projects as projects of
national significance. Further, we
suggest to add the phrase:
“TOWARDS THIS END, ALL NATIONAL
GOVERNMENT AGENCIES AND LOCAL
GOVERNMENT UNITS SHALL
EXPEDITE THE ISSUANCE OF THE
NECESSARY PERMITS TO ENSURE THE
TIMELY COMMISSIONING AND
OPERATION THEREOF.”
HB 3958 (Rep. Masongsong):
Added in the end, “and come up with
policies that would encourage rather
than restrict investors in the area.”
HB 3958 (Rep. Masongsong):
Added, “WITH THE ASSURANCE OF
PROVIDING A WELL UNDERSTOOD
PROCESS GIVING EQUAL
OPPORTUNITY OF PARTICIPATION”
HB 3958 (Rep. Masongsong):
(j) To establish a strong and purely
independent regulatory body and
system to ensure consumer
protection and enhance the
competitive operation of the
electricity market; and
Added, “MANNED BY INDEPENDENT
OFFICERS WITH EXTENSIVE
BACKGROUND OF INDUSTRY
PRACTICE”
SECTION 4
Sec. 4.Definition of Terms. –
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;
No proposed amendment.
(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;
Sec. 4.Definition of Terms.
HB 3958 (Rep. Masongsong):
Added, “MANAGING FOR THE
OPTIMUM UTILIZATION OF THE
AGGREGATED DEMAND, OR SIMPLY
POOLING FOR THE TENDERING
PROCESS IN LOOKING FOR SUPPLY,
OF” electricity on a group basis;
HB 3958 (Rep. Masongsong):
Added, “… ANOTHER CORPORATION
OR FIRM OR” a private person or
entity;
HB 4822 (Rep. Mendoza):
Added a definition of what Public
Utility is: a business or service
engaged in regularly supplying or
providing the public with a basic
commodity or service of public
consequence, or indispensable to the
interest of the general public such as
Sec. 4.Definition of Terms.
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
There is no need for this amendment.
We believe that this concern had
already been adequately addressed
by the Draft DOE Circular “Adopting a
Demand Aggregation and Supply
Auctioning Policy (DASAP) in the
Electric Power Industry”
water, electricity, transportation,
communications, and media services.
SECTION 6
Sec. 6. Generation Sector. Generation of electric power, a
business affected with public
interest, shall be competitive and
open.
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.
Sec. 6. Generation Sector. Generation of electric power, a
business affected with public
interest, shall be competitive and
open.
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].
Sec. 6. Generation Sector
Sec. 6. Generation Sector
HB 3633 (Rep. Ridon), HB 3847 (Rep.
De la Cruz) , HB 4822 (Rep.
Mendoza):
- All of them want the supply
sector to be a public utility.
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
All the amendments proposed under
Section 6 are to make the generation
sector a public utility.
HB 4822 (Mendoza):
- As a Public Utility, the prices We agree with the comments of
charged by a Gen Co. shall be PIPPA, PSALM, and TRANSCO. A
regulated by the ERC.
sudden shift in making the
generation sector as a public utility
will make it harder for investors to
come it. If there are less investors,
then the supply may be inadequate.
HB 3633 (Rep. Ridon), HB 3847 (Rep. Also, a legislative franchise to set up
De la Cruz) , HB 4822 (Rep. a generation company will be highly
Mendoza):
inconvenient.
-
No change on VAT for generation No VAT equals lower electricity rates
companies.
for the end-user. This will reflect the
mandate of the EPIRA of reasonable
rates. However, if the VAT is
removed,
revenue
from
the
government will be lost.
SECTION 22
Sec. 22. Distribution Sector. - The
distribution of electricity to end-users
shall be a regulated common carrier
business requiring a franchise.
Distribution of electric power to all
end-users 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.
Sec. 22. Distribution Sector
Sec. 22. Distribution Sector
Sec. 22. Distribution Sector
Congressional
Power
SALES
OF
ELECTRICITY
BY No proposed amendment from other Joint
Commission (JCPC) Consultants and
DISTRIBUTION UTILITIES TO THE house bills.
Staff:
END-USERS SHALL BE EXEMPT FROM
VALUE ADDED TAX (VAT)
The proposed exemption from VAT of
the sales of electricity by distribution
utilities under HB 4479 will definitely
reduce the price of electricity for
consumers (end-users). This is in
keeping with the objective of the
EPIRA to make electric power
affordable to consumers.
SECTION 23
Sec. 23. Functions of Distribution
Utilities. - A distribution utility shall
have the obligation to provide
distribution services and connections
to its system for any end-user within
its franchise area consistent with the
distribution code. Any entity engaged
therein shall provide open and nondiscriminatory
access
to
its
distribution system to all users.
SEC. 23. Functions of Distribution SEC. 23. Functions of Distribution SEC. 23. Functions of Distribution
Utilities
Utilities
Utilities
HB 4479 states that 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, and that the
HB 3958 (Rep. Masongsong):
Joint
Congressional
Power
Commission (JCPC) Consultants and
HB 3958 states that distribution
Staff:
utilities may, after due notice and
public hearing, pursue structural and
operational reforms, including joint HB 4479 proposes very good
actions between or among the amendments to the EPIRA by
distribution utilities, subject to the requiring more from distribution
Any distribution utility shall be
entitled to impose and collect
distribution retail wheeling charges
and connection fees from such endusers as approved by the ERC. A
distribution utility shall have the
obligation to supply electricity in the
least cost manner to its captive
market, subject to the collection of
distribution retail supply rate duly
approved by the ERC.
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 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. Distribution
utilities shall submit to the ERC a
statement of their compliance with
the
technical
specifications
prescribed in the Distribution Code
and the performance standards
prescribed in the IRR of this Act.
Distribution utilities which do not
ERC shall provide the parameters for
the conduct of such public and
competitive selection process or
Swiss challenge procedure.
HB 4479 requires 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 the
ERC based on market conditions and
in accordance with such rules and
regulations to be promulgated by the
said Commission.
HB 4479 defines energy and demand
requirement as the amount of
electricity that is required for the
distribution utility to supply the
electricity requirements of its
electricity end-users at any given
time.
HB 4479 further states that all
distribution utilities, in its power
supply contracting and to ensure
least cost service to its customers,
shall ensure that the base load,
midmerit
and
peak
load
requirements in accordance with the
contracts based on the load profile,
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.
utilities.
HB
4479
requires
distribution utilities to go through a
public and competitive selection
process or swiss challenge procedure.
This would ensure that there will be
competition among distribution
utility
proponents
and
that
consumers will be able to get their
supply of electricity at least cost.
In addition, HB 4479 also requires
distribution utilities to fully or
adequately contract current and
future energy demand requirements
from
bilateral
power
supply
contracts, and to ensure that the
base load, midmerit and peak load
requirements shall be fully or
adequately covered by bilateral
contracts.This would ensure a stable
and reliable supply of electricity and
that the demand requirements of any
given franchise area is adequately
met at any given time.
This is all in keeping with the
objectives of the EPIRA to ensure a
stable and reliable supply of
electricity.
HB 3958
formally recognizes
aggregation of demand: a practice
done by some electric cooperatives
to be able to effectively bargain with
power generation companies to
reduce the price of electricity in their
comply with any of the prescribed shall be fully or adequately covered
technical
specifications
and by bilateral contracts.
performance standards shall submit
to the ERC a plan to comply, within
three (3) years, with said prescribed
technical
specifications
and
performance standards. The ERC
shall, within sixty (60) days upon
receipt of such plan, evaluate the
same and notify the distribution
utility concerned of its action. Failure
to submit a feasible and credible plan
and/or failure to implement the same
shall serve as grounds for the
imposition of appropriate sanctions,
fines or penalties.
Distribution utilities shall prepare and
submit to the DOE their annual
distribution development plans. In
the case of electric cooperatives,
such plans shall also be submitted
through the National Electrification
Administration.
Distribution utilities shall provide
universal service within their
franchise, including unviable areas, as
part of their social obligations in a
manner that shall sustain the
economic viability of the utility,
subject to the approval by the ERC in
the case of private or governmentowned utilities. Areas which a
power supply contracts. It would be
good for HB 4479 to recognize this
practice as well. HB 4479 may
provide that the Department of
Energy (DOE) shall encourage
aggregation of demand by electric
cooperatives to reduce the price of
electricity in bilateral contracts.
The recommendation in the position
paper
of
PIPPA
(Philippine
Independent
Power
Producers
Association) on requiring distribution
utilities to fully contract the demand
requirements of their customers is
already contained in HB 4479.
PIPPA
(Philippine Independent
Power
Producers
Association)
Position Paper:
While PIPPA is supportive of the
Competitive Selection Process (CSP)
for contracting of power supply by
DUs/ECs as contained in HB 447, it
believes that there is no need to
amend the EPIRA since the proposed
amendments can easily be achieved
using the ERC. The ERC can issue new
rules and regulation for Competitive
Selection Process and there is no
need to amend the EPIRA for this
purpose. Distribution Utilities should
be required to fully contract the
franchised distribution utility cannot
or does not find viable may be
transferred to another distribution
utility, if any is available, who will
provide the service, subject to
approval by ERC. In cases where
franchise holders fail and/or refuse
to service any area within their
franchise territory and allowed
another utility to service the same,
then the status quo shall be
respected. To this end, distribution
utilities shall submit to the DOE their
plans for serving such areas as part of
their distribution development plans.
In cases of major or serious economic
and/or technical reasons, the
distribution utility shall seek prior
authority from the ERC to defer such
expansion or improvement.
requirements of their captive
customers from price spikes. A time
standard should also be set for
regulator’s approvals of short term
power supply contracts to regulated
utilities.
Distribution utilities may exercise the
power of eminent domain subject to
the requirements of the constitution
and existing laws.
SECTION 28
Sec. 28. De-monopolization and Sec. 28. De-monopolization and Sec. 28. De-monopolization and Sec. 28. De-monopolization and
Shareholding Dispersal
Shareholding Dispersal
Shareholding
Dispersal
In Shareholding Dispersal
compliance with the constitutional
Both HB 3847 and HB 4822 propose Joint
Congressional
Power
mandate for dispersal of ownership No proposed amendment.
to provide stricter measures in Commission (JCPC) Consultants and
and de-monopolization of public
preventing a monopoly in both Staff:
utilities, the holdings of persons,
generation companies, distribution
natural or juridical, including
utilities, and their respective holding The EPIRA provides that the holdings
directors, officers, stockholders and
companies. Whereas the EPIRA states of persons, natural or juridical, in
related interests, in a generation
distribution utilities and their holding
that the limit to the holdings of a
company, distribution utility and
companies shall not exceed 25 % of
person in a generation company,
their respective holding companies
the voting stock.
distribution
utility,
and
their
shall not exceed twenty-five percent
respective holdings must not exceed Two House Bills propose to provide
(25%) of the voting shares of stock
twenty-five percent (25 %), HB 4822 stricter measures in preventing a
unless the utility or the company
(Mendoza) proposes that such monopoly in both generation
holding the shares or its controlling
holdings must not exceed fifteen companies and distribution utilities.
stockholders are already listed in the
percent (15%) while HB 3847 (De la HB 4822 imposes stricter measures
Philippine Stock Exchange (PSE):
Cruz) proposes that such holdings than the EPIRA by stating that this
Provided,
That
controlling
must not exceed ten percent (10 %). “De-Monopolization Provision” shall
stockholders of small distribution
apply to both generation companies
utilities are required to list in the PSE
In addition, whereas the EPIRA and distribution utilities and that the
within five (5) years from the
requires controlling stockholders of limit of shareholding by any person
enactment of this Act if they already
only small distribution utilities to list shall not exceed 15% of total voting
own the stocks. New controlling
in the PSE, HB 4822 proposes that stock. HB 3847 goes even further by
stockholders shall undertake such
ALL GENERATION and DISTRIBUTION stating that this limit shall likewise
listing within five (5) years from the
UTILITIES (except for electric apply to both generation companies
time they acquire ownership and
and distribution utilities and that the
cooperatives) to list in the PSE.
limit of shareholding by any person
control. A small distribution company
shall not exceed 10% of total voting
is one whose peak demand is One
stock.
hundred megawatts (100MW) or
HB 4822 (Mendoza):
less.
…the holdings of persons, natural or It would be good for HB 4479 to have
The ERC shall, within sixty (60) days
juridical, including directors, officers, a similar amendment by limiting the
from the effectivity of this Act,
stockholders and related interests, in ownership of voting stocks of any
promulgate the rules and regulations
to implement and effect this
provision.
a generation company, distribution
utility and their respective holding
companies shall not exceed FIFTEEN
(15%) 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 ALL
GENERATION AND DISTRIBUTION
UTILITIES,
except
for
electric
cooperatives, are required to list in
the PSE…
single person, natural or juridical, in a
generation company and in a
distribution utility. This would be
pursuant to the objectives of EPIRA
to broaden the ownership base of
the power generation, transmission
and distribution sectors, ensure
transparent and reasonable prices of
electricity in a regime of free and fair
competition, and enhance the
competitive operation of the
electricity market;
HB 3847 (De la Cruz):
…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 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):...”
SECTION 29
Sec. 29. Supply Sector.
of electricity to the
market shall require a
the ERC, except for
- The supply Sec. 29: Supply Sector
contestable
license from No proposed amendment.
distribution
Sec. 29: Supply Sector
Sec. 29: Supply Sector
Both HB 4822 (Rep. R. Mendoza) and Joint
Congressional
Power
HB 3847 ( De la Cruz) propose that Commission (JCPC) Consultants and
utilities and electric cooperatives
with respect to their existing
franchise areas.
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
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 local or national
franchise.
The prices to be charged by suppliers
for the supply of electricity to the
contestable market shall not be
the supply of electricity should be
considered a public utility operation
and therefore requires a franchise
from Congress.
In addition, HB 3847 ( De la Cruz)
proposes to subject all power
suppliers to the Public Service Law.
HB 3847 (De la Cruz):
SEC. 29. Supply Sector. – The 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.
Staff:
HB 3847 proposes to subject power
supply companies to the public
service law and thus require them to
secure a franchise from Congress
before operating. However, as the
PIPPA Position Paper correctly
argues, this will make it more difficult
for power suppliers to enter the
market and this will unreasonably
limit power supply. This will be
anathema to the objective of the
EPIRA to ensure the security and
reliability of the supply of electricity.
HB 4479 is correct in not putting
forward this amendment.
PIPPA
(Philippine Independent
Power
Producers
Association)Position Paper:
PIPPA’s position is that the supply
sector should not be subject to the
Public Service Act. 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.
The supply sector is already subject
to special regulations as it requires a
license from the ERC. Like the
subject to regulation by the ERC.
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 price-takers.
There is no need and no reason to
subject the supply sector to the
Public Service Act.
Electricity suppliers shall be subject
to the rules and regulations
concerning abuse of market power,
cartelization, and other anticompetitive
or
discriminatory
behavior to be promulgated by the
ERC.
In its billings to end-users, every
supplier shall identify and segregate
the components of its supply charge,
as defined herein.
SECTION 30
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 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.
Sec. 30. Wholesale Electricity Spot Sec. 30. Wholesale Electricity Spot Sec. 30. Wholesale Electricity Spot
Market.
Market.
Market.
In constituting the market operator,
HB 4479 proposes that the DOE does
it with THE ACTIVE PARTICIPATION
OF DULY RECOGNIZED CONSUMER
GROUPS AND REPRESENTATIVES
from electric power
industry
participants..”.
This amendment on the inclusion of
consumer groups as among those
constituting the Market Operator is
also similarly proposed by HB 4822
Jointly with the electric power and HB 3847.
industry participants, the DOE shall
formulate the detailed rules for the HB 4479 also adds to the conditions
In cases of national and international
HB 4822 (Mendoza):
Joint
Congressional
Power
Commission (JCPC) Consultants and
SEC. 30. Wholesale Electricity Spot Staff:
Market. – xxx
Jointly with the electric power
industry
participants,
AND
ELECTRICITY
CONSUMERS
REPRESENTATIVES INCLUDING THE
BUSINESS SECTOR, COMMERCIAL
SECTOR, AND THE RESIDENTIAL
CONSUMERS,
the
DOE
shall
formulate the detailed rules for the
wholesale electricity spot market.
Said rules shall provide the
mechanism for determining the price
HB 4479 proposes that duly
recognized Consumer Groups be
among those which would constitute
the Market Operator which is initially
to be under the supervision of the
TRANSCO. This is also similarly
proposed by HB 4822 and HB 3847.
This is a wise amendment to the
EPIRA as it would give Consumer
Groups active participation in the
wholesale electricity spot market and
would enable them to protect 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 electric power
industry participants. The rules shall
provide, among others, procedures
for:
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.”
HB 3847 similarly proposes that the
market operator shall be constituted
by the DOE with THE ACTIVE
PARTICIPATION
OF
DULY
RECOGNIZED CONSUMER GROUPS
(a) Establishing the merit order
AND REPRESENTATIVES from electric
dispatch instructions for each time
power industry participants,
period;
(b) Determining the market-clearing
price for each time period;
(c) Administering the market
including criteria for admission to
and termination from the market
which
includes
security
or
performance bond requirements,
voting rights of the participants,
surveillance and assurance of
of electricity not covered by bilateral interests of consumers.
contracts between sellers and
purchasers of electricity users. HB 4822 goes by stating that
Consumer Groups should also be part
IN CASES WHERE THERE ARE of those which would endorse and
INDICATIONS OF INFLATIONARY approve the existence and operation
of the independent market operator
PRICE
BIDDING,
ECONOMIC
which would be the transferee of all
WITHHOLDING
OR
PHYSICAL
the functions, assets and liabilities of
WITHOLDING
OF
SUPPLY
OF the former market operator which
ELECTRICITY, AND OF MARKET ABUSE was under the supervision of the
OR
COLLUSION,
AND
OTHER TRANSCO. It would be good to add
UNUSUAL
MARKET
BEHAVIOR this amendment to HB 4479 to give
INDICATING GAMING OF THE Consumer Groups more active
MARKET, THE WESM SHALL BE participation in the Wholesale
SUSPENDED
BY
THE
ENERGY Electricity Spot Market.
REGULATORY COMMISSION UNTIL
THE INVESTIGATION IS COMPLETED.
THE
ENERGY
REGULATORY The EPIRA gives the ERC the power to
COMMISSION WILL BE MANDATED suspend the operation of the
wholesale electricity spot market or
TO SET UP THE DEFAULT PRICE
declare a temporary wholesale
COVERING THE CONTESTED PERIOD
electricity spot market failure in
WHERE
THE
GROUNDS
FOR cases of national and international
SUSPENDING THE WESM OCCURED.
security emergencies or natural
The market operator shall be an
autonomous group, to be constituted
by
DOE,
with
equitable
representation from electric power
industry
participants,
AND
ELECTRICITY CONSUMERS, BUSINESS
AND LABOR, initially under the
administrative supervision of the
TRANSCO. The market operator shall
calamities. HB 4479 adds to the
conditions by which the ERC can
suspend the operation of the
wholesale electricity spot market by
including other cases or reasons
which may affect the delivery or
adequate supply of electricity in any
particular grid. This is a very good
amendment as it would ensure that
consumers are protected from price
compliance of the participants with
the rules and the formation of the
wholesale electricity spot market
governing body;
(d) Prescribing guidelines for the
market
operation
in
system
emergencies; and
(e) Amending the rules.
The wholesale electricity spot market
shall be implemented by a market
operator in accordance with 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
undertake the preparatory work and hikes due to inadequate supply of
initial operation of the wholesale electricity which may be brought
about by a variety of causes. The
electricity spot market.
phrase “other cases or reasons which
Not later than one (1) year after the may affect the delivery or adequate
implementation of the wholesale supply of electricity” is broad enough
electricity
spot
market,
an to cover the concerns and conditions
independent entity shall be formed mentioned in HB 4822 and HB 3958
and the functions, assets and on this issue and other causes which
liabilities of the market operator shall may bring about an inadequacy in the
be transferred to such entity with the supply of electricity which would
joint endorsement of the DOE [and] result in an increase of electricity
the
electric
power
industry prices.
participants,
AND
ELECTRICITY
HB 4479 is also broad enough to
CONSUMERS
REPRESENTATIVES
cover the concerns brought up by the
INCLUDING FROM THE BUSINESS Position Paper of the PIPPA
SECTOR
AND
RESIDENTIAL (Philippine Independent
Power
CONSUMERS, AND THE LABOR Producers Association) in which it
SECTOR.
Thereafter,
the inquired as to an ambiguity in other
administrative supervision of the house bills on this matter as to what
TRANSCO over such entity shall kind of cases that could result in an
inadequacy in the supply of
cease...”
electricity would justify suspension of
the market by the ERC. HB 4479 is
HB 3847 (De la Cruz) :
clear that any case or reason which
may cause inadequacy in the supply
SEC. 30. Wholesale Electricity Spot
of electricity in any particular grid is
Market. - Within one (1) year from
sufficient reason for the ERC to
the effectivity of this Act, the DOE
suspend the operation of the
shall establish a wholesale electricity
wholesale electricity spot market.
spot market composed of the
The point here is that the ERC should
wholesale electricity spot market
be able to protect consumers from
participants WHICH SHALL SERVE AS
electricity price hikes due to an
A CLEARING HOUSE. The market
inadequacy in the supply of
shall] provide the mechanism for
participants.
Thereafter,
the
administrative supervision of the
TRANSCO over such entity shall
cease.
Subject to the compliance with the
membership criteria, all generating
companies, distribution utilities,
suppliers, bulk consumers/end-users
and other similar entities authorized
by the ERC shall be eligible to
become members of the wholesale
electricity spot market.
The ERC may authorize other similar
entities to become eligible as
members of the wholesale electricity
spot market either directly or
indirectly. All generating companies,
distribution utilities, suppliers, bulk
consumers/end-users and other
similar entities authorized by the
ERC, whether direct or indirect
members of the wholesale electricity
spot market, shall be bound by the
wholesale electricity spot market
rules with respect to transactions in
that market. NEA may, in exchange
for adequate security and a
guarantee fee, act as a guarantor for
purchases of electricity in the
wholesale electricity spot market by
any electric cooperative or small
distribution utility to support their
identifying and setting the price of electricity.
actual variations from the quantities
transacted under contracts between HB 3958 proposes that the adequacy
sellers and purchasers of electricity.
of supply of energy in a particular
grid should first be established
In cases of national and international before the wholesale electricity spot
security emergencies or natural market could be implemented there.
calamities OR IF WITHIN A THREE This is a good amendment that may
DAY TRADING PERIOD THERE IS AN be adopted in HB 4479. The
EXTRAORDINARY SPIKE IN POWER argument
of
the
PIPPA
RATES,
the
ERC (Philippine Independent
Power
is hereby empowered to suspend the Producers Association) that this
operation of the wholesale electricity amendment would compromise the
spot
market
or
declare ability of the System Operator to
a temporary wholesale electricity immediately respond to the situation
spot market failure.”
and restore the grid to normal state
is irrelevant because of the fact that
HB 3958 (Rep. Masongsong) :
this does not guarantee that
consumers would be protected from
HB 3958 proposes that the electricity price hikes brought about
availability of electricity supply must by an inadequacy in the supply of
first be established prior to the electricity. The point is that the law
introduction and implementation of must do its utmost to guarantee the
the WESM in a certain grid. This must protection of consumers from
be contained in the Regular WESM electricity price hikes due to an
Rules as well as in the guidelines for inadequacy in the supply of
market operations during system electricity. This amendment can help
emergencies.
make
such
guarantee.
HB 3958 also proposes that, in the
event of the failure to establish the
WESM in the Mindanao Grid,
TRANSCO shall act as the Market
Operator of such Grid, in contradistinction to the role of the NGCP
PIPPA
(Philippine Independent
Power
Producers
Association)
Position Paper:
The position of PIPPA is that the
credit standing consistent with the
provisions hereof. For this purpose,
the authorized capital stock of NEA is
hereby increased to Ten billion pesos
(P10,000,000,000.00).
All electric cooperatives which have
outstanding uncollected billings to
any local government unit shall
report such billings to NEA which
shall, in turn, report the same to the
Department
of
Budget
and
Management (DBM) for collection
pursuant to Executive Order 190
issued on December 21, 1999.
The cost of administering and
operating the wholesale electricity
spot market shall be recovered by
the market operator through a
charge applied to all market
members: Provided, That such charge
shall be filed with and approved by
the ERC.
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.
which is the de facto systems addition of conditions by which the
operator of the grid.
ERC may suspend market operation
(such as lack of power supply or
In cases of national and international extraordinary electricity price hikes)
security emergencies or natural is ambiguous and is not necessary
calamities, INCLUDING DURING A because intervention by the System
DECLARATION OF SUPPLY SHORTAGE Operator
to
overcome
such
IN A PARTICULAR GRID SUCH AS BUT emergency events is permitted under
NOT LIMITED TO THE ONE IN such conditions. In such conditions,
MINDANAO the ERC is hereby the System Operator may undertake
empowered
to
suspend
the all necessary measures to overcome
operation of the wholesale electricity such
emergency
events.
spot market or declare a temporary
wholesale electricity spot market Further, the PIPPA also argues that
failure OR IS HEREBY EMPOWERED the requirement of establishing the
TO PREVENT THE IMPLEMENTATION availability of supply prior to the
OF THE WESM OR A SIMILAR implementation of the guidelines for
STRUCTURE
OF
MARKET the market operation in the event of
OPERATIONS WHEN SUCH WILL system emergencies is unwarranted
CLEARLY RESULT TO INCREASE OF because it compromises the ability of
RETAIL ELECTRICITY PRICES DUE TO the System Operator to immediately
THE DEMAND INCREASE WITHOUT respond to the situation and restore
THE CORRESPONDING INCREASE OR the grid to normal state.
THE CORRESPONDING ADDITIONAL
SUPPLY IN THE SAID GRID.”
SECTION 31
Sec. 31. Retail Competition and
Open Access. - 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.
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 (lMW) for the preceding
twelve (12) months to be the
(a) Establishment of the wholesale contestable
market.
electricity spot market;
(b)
Approval
of
unbundled
transmission and distribution retail
wheeling charges;
(c) Initial implementation of the cross
subsidy removal scheme; and
(d) Privatization of at least 70% of the
total capacity of generating assets of
NPC and of the total capacity of the
power plants under contract with
NPC in Luzon and Visayas. Upon the
initial implementation of open
access, the ERC shall allow all
electricity end-users located in Luzon
with a maximum demand of at least
two megawatts (2MW) to be the
contestable market. For the Visayas
and Mindanao areas, the initial
threshold level shall be one and a
quarter
megawatts
(1.25MW).
However, the ERC shall, on January 1,
Sec. 31. Retail Competition and Sec. 31. Retail Competition and
Open Access.
Open Access.
HB 3847 (J. Dela Cruz) proposes that
the ERC must be mandated to
evaluate the performance of the
wholesale electricity spot market
taking into consideration the
experience of all consumers within 6
months from the effectivity of this
Two (2) years thereafter, the Act.
threshold level for the contestable
HB 4822 (Rep. R. Mendoza) adds to
market shall be reduced to seven
the conditions by which retail access
hundred fifty kilowatts (750kw). At
and open competition are to be
this level, aggregators shall be
implemented:
allowed to supply electricity to endusers whose aggregate demand (F) THE INSTALLED CAPACITY HAS
within a contiguous area is at least REACHED AT LEAST FIFTEEN PERCENT
seven hundred fifty kilowatts (15%) OVER THE AVERAGE ACTUAL
DEMAND FOR THE PAST YEAR;
(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
gradually reduce threshold level until
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
HB 4479 proposes a very good
amendment in that it specifies the
conditions by which open access is
slowly to be implemented until it can
reach the household level. This is
important in order for open access to
be
properly
implemented.
HB 3847 proposal that retail
competition and open access must
result in lower rates is a good
amendment.
PIPPA
(Philippine Independent
Power
Producers
Association)
(G) TARIFF SIMULATIONS ARE Position Paper:
UNDERTAKEN
TO
SHOW
It is unclear how the proposed
DEMONSTRABLE BENEFIT TO THE 
CONTESTABLE MARKET AND NO amendment seeks to amend Section
ADVERSE EFFECT ON THE CAPTIVE 31, on the implementation of the
CUSTOMERS. FUTHER, THE DOE AND retail competition and open access.
THE ERC SHALL CONDUCT PUBLIC If the objective is only to mandate
HEARINGS WITH THE CONSUMERS IN the evaluation of the performance
THE CONTESTABLE MARKET, AS WELL of the market, such function is
embedded
in
the
AS WITH THE CAPTIVE RESIDENTIAL already
AND COMMERCIAL CONSUMERS; responsibilities of ERC as per Section
43 of the EPIRA. (PIPPA)
2004, reduce the maximum demand
for the contestable market in Luzon
to one megawatt (1MW) for at least
two (2) years and Seven hundred fifty
kilowatts (750kW) for the Visayas and
Mindanao areas. Thereafter, the ERC
shall determine a threshold level
when open access shall apply to all
distribution utilities.
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.
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."
(H) RETAIL COMPETITION AND OPEN
ACCESS MUST RESULT IN LOWER
RATES OR MUST BE REVENUE
NEUTRAL
TO
THE
CAPTIVE
CONSUMERS.

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 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)
SECTION 32
Sec. 32. NPC Stranded Debt and Sec. 32. NPC Stranded Debt and Sec. 32. NPC Stranded Debt and
Contract Cost Recovery
Contract Cost Recovery. - Stranded Contract Cost Recovery
debt of NPC shall refer to any unpaid
HB 4822 (Rep. R. Mendoza) proposes
financial obligations of NPC which No proposed amendment.
that an Inter-Agency IPP Review
have not been liquidated by the
Committee (IAC, with representation
proceeds from sales and privatization
from labor, business, and consumer
of NPC assets.
sectors) review all IPP contracts in
Stranded contract costs of NPC shall
which NPC has stranded debt. The
refer to the excess of the contracted
IPP Contracts found by the IAC to be
cost of electricity under eligible IPP
onerous or where the contracting
contracts of NPC over the actual
party is in breach of its own
selling price of such contracts in the
obligations under the said contracts
market. Such contracts shall have
are ineligible for stranded contract
been accredited by the DOE or NPC
cost recovery and such contracts are
and approved by the ERB as of the
subject
to
abrogation
or
effectivity of this Act.
renegotiation.
The national government shall, in
exchange for the equivalent amount
of the equity of NPC, directly assume
a portion of the financial obligations
of NPC in an amount not to exceed
Two
Hundred
Billion
Pesos
(P200,000,000,000.00).
For
this
purpose, the capital stock of NPC
shall be increased to Three hundred
billion pesos (P300,000,000,000.00)
common shares which shall be
divided
into
Three
billion
(3,000,000,000.00) shares with a par
value of One hundred pesos
HB 4822 also proposes that the ERC
should similarly conduct a review of
the implementation of the IPP
contracts and determine whether
there are breaches of obligations to
determine whether there is underrecovery or over-recovery and adjust
(tune-up) the level of stranded cost
recovery charge accordingly.
Sec. 32. NPC Stranded Debt and
Contract Cost Recovery
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
HB 4822 proposal for an IAC to
review all IPP contracts which have
NPC stranded contract costs is a very
good amendment as it is only
reasonable that the Government
should not pay for onerous contracts
or contracts in which the other party
is in breach of obligations. Further,
this would reduce the expenses to be
paid by the Government
(P100.00) per share.
The ERC shall verify the reasonable
amounts and determine the manner
and duration for the full recovery of
stranded debt and stranded contract
costs as defined herein: Provided,
That the duration for such recovery
shall not be shorter than fifteen (15)
years nor longer than twenty-five
(25) years. The ERC shall, at the end
of
the
first
year
of
the
implementation of stranded cost
recovery and every year thereafter,
conduct a review to determine
whether there is under-recovery or
over-recovery and adjust (true-up)
the level of stranded cost recovery
charge accordingly.
The NPC and PSALM shall have the
duty to mitigate all potential
stranded contract costs of NPC.
SECTION 34
Sec. 34. Universal Charge. - Within Sec. 34. Universal Charge
one (1) year from the effectivity of
this Act, a universal charge to be No proposed amendment.
determined, fixed and approved by
the ERC, shall be imposed on all
electricity end-users for the following
purposes:
(a) Payment for the stranded debts
and stranded contract costs of NPC
and qualified distribution utilities
resulting from the restructuring of
the industry;
(b) Missionary electrification;
(c) The equalization of the taxes and
royalties applied to indigenous or
renewable sources of energy vis--vis
imported energy fuels;
(d) An environmental charge
equivalent to one-fourth of one
centavo
per
kilowatt-hour
(P0.0025/kWh), 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 cross-subsidies for a period not
exceeding three (3) years.
The universal charge shall be a nonby-passable charge which shall be
Sec. 34. Universal Charge
Sec. 34. Universal Charge
HB 3958 (Masongsong)
Joint
Congressional
Power
Commission (JCPC) Consultants and
Sec. 34. Universal Charge. - Within Staff:
one (1) year from the effectivity of
this Act, universal charge to be NEA’s position to review the
determined, fixed and approved by universal charge is a good proposal to
the ERC, shall be imposed on all reduce the price of electricity for
electricity end-users for the following consumers.
purposes:
However, if the universal charge is
(F) TO FUND THE REHABILITATION not eliminated, then HB 3958’s
OF LINES PREVIOUSLY CONSTRUCTED proposal to use such funds to
USING NEA-SUBSIDY FUNDS AND/OR rehabilitate power lines and electrify
PRIORITY
DEVELOPMENT far-flung
areas
is
highly
ASSISTANCE FUND (PDAF) TO recommended.
ELECTRIFY FAR-FLUNG UNVIABLE
AREAS.
NEA – FGD PROPOSALS
Review the imposition of the
Universal Charge to minimize the
impact that adds to consumers’
burden.
PIPPA
(Philippine Independent
Power
Producers
Association)
Position Paper:
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
SECTION 35
Sec. 35. Royalties, Returns and Tax
Rates for Indigenous Energy
Resources. - The provision of Sec. 79
of Commonwealth Act No. 137 (C.A.
No. 137) and any law to the contrary
notwithstanding,
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, shall be adjusted so as to
effect parity of tax treatment with
the existing rates for imported coal,
crude oil, bunker fuel and other
imported fuels.
To ensure that the adjustment of tax
rates and royalties shall result in
lower rates for end-users, the
Department of Finance shall, within
sixty (60) days from the effectivity of
this Act, issue the rules and
regulations thereof. Consistent with
this objective, the ERC shall forthwith
revise the rates of power from all
indigenous sources of energy.
Sec. 35. Royalties, Returns and Tax Sec. 35. Royalties, Returns and Tax Sec. 35. Royalties, Returns and Tax
Rates for Indigenous Energy Rates for Indigenous Energy Rates for Indigenous Energy
Resources
Resources
Resources
No proposed amendment.
HB 3958 (Masongsong)
Joint
Congressional
Power
Commission (JCPC) Consultants and
The provisions of Section 79 of Staff:
Commonwealth Act No. 137 (C.A. No.
137) and any law to the HB 3958’s proposal for the President
contrary
notwithstanding,
the to reduce royalties, returns and taxes
President of the Philippines shall is a very good amendment which
reduce the royalties, returns and would reduce the prices of electricity.
taxes collected for the FOLLOWING:
PIPPA
(Philippine Independent
1. INDIGENOUS ENERGY RESOURCES
Power
Producers
Association)
– FOR THE exploitation of all
Position Paper:
indigenous sources of energy,
including but not limited to, natural  The task of the ERC is to ensure
gas
and
geothermal
steam, reasonable electricity rates for endso as to effect parity of tax treatment users, which refer to “any person or
with the existing rates for imported entity requiring the supply and
coal, crude oil, bunker fuel and other delivery of electricity for its own
imported fuels.
use”. If the purpose of the proposed
amendment is to bolster this, why
2. TAX FOR ELECTRIC COOPERATIVES
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)
SECTION 37
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, Sec. 5
of R. A. 7638 otherwise known as
"The Department of Energy Act of
1992" is hereby amended to read as
follows:
"(a) Formulate policies for the
planning and implementation of a
comprehensive program for the
efficient supply and economical use
of energy consistent with the
approved national economic plan and
with the policies on environmental
protection and conservation and
maintenance of ecological balance,
and provide a mechanism for the
integration, rationalization, and
coordination of the various energy
programs of the Government
(b) Develop and update annually the
existing Philippine Energy Plan,
hereinafter referred to as 'The Plan',
which shall provide for an integrated
and comprehensive exploration,
development,
utilization,
distribution, and conservation of
Sec. 37. Powers and Functions of the Sec. 37. Powers and Functions of the Sec. 37. Powers and Functions of the
DOE
DOE
DOE
HB 4479:
HB 3958 (Masongsong) proposes Joint
Congressional
Power
Commission
(JCPC)
Consultants
and
that part of the DOE’s powers and
(p) SUPPORT THE MODERNIZATION
functions
must
be: Staff:
OF THE ELECTRIC
GRID
INFRASTRUCTURE
BY
1. to ensure the reliability and HB 4479 proposal for the DOE to
FORMULATING POLICIES AND
support the modernization of the
PROVIDING
INCENTIVES
TO security of supply of electric power electric grid infrastructure is very
primed on the interest of protecting
PROMOTE ADOPTION OF SMART
good as this would ensure the
from
unreasonable
GRID TECHNOLOGIES, PRACTICES consumers
efficient delivery of electricity.
AND SERVICES TO IMPROVE
increase
of
prices,
RELIABILITY, EFFICIENCY, DEMAND
All of HB 3958’s proposals are good
RESPONSE SUPPORT,
2. to jointly establish the wholesale and may be adopted in HB 4479,
INTEROPERABILITY AND INTEGRATED electricity spot market when there is especially the provision empowering
AUTOMATION OF
unconditional declaration on the the DOE to motu propio investigate
GENERATION, TRANSMISSION AND stability
in
power
supply, and file charges against violators in
DISTRIBUTION LINES,
relation to cartelization, abuse of
ELECTRICITY TRADING
3. to provide adequate capacity to market power, anti-competitive or
MANAGEMENT.
meet demand, especially a sudden discriminatory behavior of industry
surge of demand that may arise on participants.
emergency situations,
4. To exercise supervision over
government agencies in the power
sector, and
5. To motu propio investigate and file
corresponding charges (in the
appropriate court or to the ARC)
against violators particularly on
CARTELIZATION, ABUSE OF MARKET
POWER, ANTI-COMPETITIVE OR
energy resources, with preferential
bias
for
environment-friendly,
indigenous, and low-cost sources of
energy. The plan shall include a policy
direction towards the privatization of
government agencies related to
energy, deregulation of the power
and energy industry, and reduction of
dependency on oil-fired plants. Said
Plan shall be submitted to Congress
not later than the fifteenth day of
September every year thereafter;
(c) Prepare and update annually a
Power Development Program (PDP)
and integrate the same into the
Philippine Energy Plan. The PDP shall
consider and integrate the individual
or joint development plans of the
transmission,
generation,
and
distribution sectors of the power
industry, which are submitted to the
Department: Provided, however,
That the ERC shall have exclusive
authority covering the Grid Code and
the pertinent rules and regulations it
may issue;
(d) Ensure the reliability, quality and
security of supply of electric power;
……
(f) Jointly with the electric power
industry participants, establish the
DISCRIMINATORY BEHAVIOUR
INDUSTRY PARTICIPANTS;
OF
wholesale electricity spot market and
formulate
the
detailed
rules
governing the operations thereof;
….
(h) Exercise supervision and control
over all government activities relative
to energy projects in order to attain
the goals embodied in Sec. 2 of RA
7638;
(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;
………..
(p) Formulate such rules and
regulations as may be necessary to
implement the objectives of this Act;
and
SECTION 38
Sec. 38. Creation of the Energy
Regulatory Commission. - There is
hereby created an independent,
quasi-judicial regulatory body to be
named the Energy Regulatory
Commission (ERC). For this purpose,
the existing Energy Regulatory Board
(ERB) created under Executive Order
No. 172, as amended, is hereby
abolished.
The Commission 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
Sec. 38. Creation of the Energy Sec. 38. Creation of the Energy Sec. 38. Creation of the Energy
Regulatory Commission
Regulatory Commission
Regulatory Commission
HB 4479:
HB 4822 (Rep. R. Mendoza)
The Commission shall be composed
of a Chairman and 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
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
Commission at least one (1) shall be a
member of the
Philippine Bar with at least ten (10)
years experience in the active
practice
The Commission shall be composed
of a Chairman and SIX (6) 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 SIX (6) 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[.], ONE
(1) FROM THE CONSUMER SECTOR,
AND ONE (1) FROM THE LABOR
SECTOR
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
HB 4479, HB 4822, HB 4819, and HB
3958 propose amendments to the
composition
(Chairman
and
Members) of the ERC, manner of
selection, requirements for the
Chairman and Members of the
Commission, and manner of reaching
decisions.
with at least ten (10)
experience in active practice.
years of law, [and] one (1) shall be a
certified public accountant with at
least ten
Within three (3) months from the (10) years experience in active
creation of ERC, the Chairman shall practice, AND THREE (3) SHALL BE
submit for approval of the President ENGINEERS WITH AT LEAST TEN (10)
of the Philippines the new YEARS EXPERIENCE IN
organizational structure and plantilla ACTIVE PRACTICE, WHO WILL SIT IN
positions necessary to carry out the EACH DIVISION.
powers and functions of the ERC.
The presence of at least FIVE (5)
The Chairman of the Commission members of the
who shall be a member of the Commission, sitting en banc, shall
Philippine Bar shall act as the Chief constitute a quorum and the majority
Executive Officer of the Commission. vote of THREE (3) members in a
meeting where a quorum is
All members of the Commission shall present shall be necessary for the
have a term of seven (7) years: adoption of any rule, ruling, order,
Provided, That for the first resolution, decision, or other act of
appointees, the Chairman shall hold the Commission en banc in the
office for seven (7) years, two (2) exercise
of
its
quasi-judicial
functions;
provided,
That
in fixing
members shall hold office for five (5)
years and the other two (2) members rates and
shall hold office for three (3) years: tariffs, an affirmative vote of FIVE (5)
Provided, further, That appointment members shall be
to any future vacancy shall only be required.
for the unexpired term of the
CASES OR MATTERS HEARD BY A
predecessor: Provided, finally, That
DTVISION SHALL BE
there shall be no reappointment and RESOLVED WITH THE CONCURRENCE
in no case shall any member serve for OF AT LEAST TWO (2) MEMBERS.
more than seven (7) years in the WHEN THE REQUIRED NUMBER IS
Commission.
NOT OBTAINED, THE CASE SHALL BE
DECIDED EN BANC; PROVIDED THAT
NO DECISION RENDERED EN BANC
All members of the Commission shall
have a term of seven (7) years:
Provided, That for the first
appointees, the Chairman shall hold
office for seven (7) years, [two (2)]
THREE (3) members shall hold office
for five (5) years and the other [two
(2)] THREE (3) members shall hold
office for three (3) years; Provided,
further, That appointment to any
future vacancy shall only be for the
unexpired term of the predecessor:
Provided, finally, That there shall be
no reappointment and in no case
shall any member serve for more
than seven (7) years in the
Commission.
The presence of at least FIVE (5)
members of the Commission shall
constitute a quorum and the majority
vote of THREE (3) members in a
meeting where a quorum is present
shall be necessary for the adoption of
any rule, ruling, order, resolution,
decision[,] INCLUDING THE FIXING
OF RATES AND TARIFFS or other act
of the Commission in the exercise of
its quasi-judicial functions:
HB 4819 (Rep. B. Salimbangon)
The Commission shall be composed
The Chairman and Members of the
Commission shall assume office at
the beginning of their terms:
Provided, That, if upon the effectivity
of this Act, the Commission has not
been constituted and the new
staffing pattern and plantilla
positions have not been approved
and filled-up, the current Board and
existing personnel of ERB shall
continue to hold office.
The existing personnel of the ERB, if
qualified, shall be given preference in
the filling up of plantilla positions
created in the ERC, subject to existing
civil service rules and regulations.
Members of the Commission shall
enjoy security of tenure and shall not
be suspended or removed from office
except for just cause as specified by
law.
The Chairman and members of the
Commission or any of their relatives
within the fourth civil degree of
consanguinity or affinity, legitimate
or common law, shall be prohibited
from
holding
any
interest
whatsoever, either as investor,
stockholder, officer or director, in
any company or entity engaged in
the business of transmitting,
generating, supplying or distributing
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.
THE ERC SHALL ADOPT AN
EXPANDED
ORGANIZATIONAL
STRUCTURE
AND
PLANTILLA
POSITIONS NECESSARY TO CARRY
OUT AND SUPPORT THE POWERS
AND FLINCTIONS LINDER THIS ACT.
of a Chairman and EIGHT 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]) EIGHT (8) members of
the Commission, at least TWO (2)
shall be a member of the Philippine
Bar with at least ten (10) years
experience in the active practice of
law, and [one (1)] THREE (3) shall be
a certified public accountant with at
least ten (10) years experience in
active practice.
OF THE EIGHT (8) MEMBERS OF THE
COMMISSION, TWO (2) SHALL BE
ASSIGNED TO THE LUZON DIVISION,
THREE (3) TO THE VISAYAS DIVISION
AND THE REMAINING THREE (3) TO
THE MINDANAO DIVISION.
THE
CHAIRMAN
OF
THE
COMMISSION SHALL BE PRESIDING
any form of energy and must,
therefore, divest through sale or legal
disposition of any and all interests in
the energy sector upon assumption
of office.
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 of
transmission, and distribution retail
wheeling charges and tariffs of
franchise electric utilities and all
electric power rates, an affirmative
vote of three (3) members shall be
required.
COMMISSIONER OF THE LUZON
DIVISION.
THE
PRESIDING
COMMISSIONERS OF THE VISAYAS
AND MINDANAO DIVISIONS SHALL
BE MEMBERS OF THE PHILIPPINE
BAR.
Within three (3) months from the
creation of the ERC, the Chairman
shall submit for the approval by the
President of the Philippines the new
organizational structure and plantilla
positions necessary to carry out the
powers and functions of the ERC
WHICH SHALL TAKE INTO ACCOUNT
THE
TECHNICAL
AND
ADMINISTRATIVE SUPPORT OF THE
VISAYAS
AND
MINDANAO
DIVISIONS.
The Chairman of the Commission,
who shall be a member of the
Philippine Bar, shall act as the Chief
Executive Officer of the Commission.
All members of the Commission shall
have a term of seven (7) years:
Provided, That THOSE MEMBERS OF
THE COMMISSION WHEN THESE
AMENDMENTS TAKE EFFECT SHALL
CONTINUE TO HOLD OFFICE UNTIL
THE EXPIRATION OF THEIR TERM
UNDER THE ORIGINAL R.A. 913;
PROVIDED, FURTHER, THAT FOR THE
PURPOSE OF DETERMINING WHO
WOULD BE ASSIGNED TO WHICH
DIVISION, THE MEMBRS PRIOR TO
THIS AMENDMENT SHALL AGREE
AMONG
THEMSELVES
THEIR
RESPECTIVE ASSIGNMENTS; [for the
first appointees, the Chairman shall
hold office for seven (7) years, two
(2) members shall hold office for five
(5) years and the other two (2)
members shall hold office for three
(3) years; ] Provided, FURTHERMORE,
That appointment to any future
vacancy shall only be for the
unexpired term of the predecessor:
Provided, finally, That there shall be
no reappointment TO ANY VACANCY
IN THE COMMISSION EITHER IN THE
SAME DIVISION OR TO ANOTHER
DIVISION and in no case shall any
member serve for more than seven
(7) years in the Commission.
THE CHAIRMAN AND Members of the
Commission shall enjoy security of
tenure and shall not be suspended or
removed from office except for just
cause as specified by law.
THE COMMISSION MEETING EN
BANC IS NECESSARY FOR THE
ADOPTION
OF
ANY
RULE,
RESOLUTION OR DECISION OF
NATIONAL APPLICATION. LIKEWISE,
CASES BEFORE THE COMMISSION
THAT HAVE NO PRECEDENCE OR
NECESSITATING POLICY DECISIONS
SHALL
BE
HEARD
BY
THE
COMMISSION EN BANC.
THE COMMISSION EN BANC SHALL BE
COMPOSED OF ALL MEMBERS OF
THE COMMISSION. THE CHAIRMAN
SHALL PRESIDE THE SESSIONS OF THE
COMMISSION EN BANC WHERE TWOTHIRDS (2/3) MAJORITY SHALL
CONSTITUTE A QUORUM.
The presence of ALL
three (3)
members of
DIVISION shall be
necessary for the adoption of any
ruling, order, 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
HB 3958 (Masongsong)
The Commission 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 MULTI-STAKEHOLDER
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-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]RELEVANT 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)
REPRESENTATIVE FROM THE ELECRIC
CONSUMER GROUPS, and one (1)
shall be a certified public accountant
with at least ten (10) years
experience in active practice.
xxx
SECTION 39
Sec. 39. Compensation and Other Sec. 39. Compensation and Other
Emoluments for ERC Personnel. - The Emoluments for ERC Personnel
compensation and other emoluments
for the Chairman and members of No proposed amendment.
the Commission and the ERC
personnel shall be exempted from
the coverage of Republic Act No.
6758, otherwise known as the Salary
Standardization Act. For this purpose,
the schedule of compensation of the
ERC personnel, except for the initial
salaries and compensation of the
Chairman and members of the
Commission, shall be submitted for
approval by the President of the
Philippines. The new schedule of
compensation shall be implemented
within six (6) months from the
effectivity of this Act and may be
Sec. 39. Compensation and Other Sec. 39. Compensation and Other
Emoluments for ERC Personnel
Emoluments for ERC Personnel
HB 4819 (Rep. B. Salimbangon)
Joint
Congressional
Power
Commission (JCPC) Consultants and
THE SALARY AND BENEFITS OF THE Staff:
ERC
PERSONNEL
SHALL
BE
EQUIVALENT TO THOSE OF THE HB 4819 proposes that the salary and
PERSONNEL OF THE SUPREME benefits of ERC Personnel shall be
COURT. FOR THIS PURPOSE, THE ERC equivalent to those of the personnel
SHALL BE ALLOWED TO RETAIN A of the Supreme Court. This is a good
PORTION
OF
ITS
REVENUES amendment as this would encourage
ADEQUATE FOR THE PERFORMANCE and provide incentive to ERC
OF ITS FUNCTIONS.
personnel in the performance of their
tasks.
upgraded by the President of the
Philippines as the need arises:
Provided, That in no case shall the
rate be upgraded more than once a
year.
The Chairman and members of the
Commission shall initially be entitled
to the same salaries, allowances and
benefits as those of the Presiding
Justice and Associate Justices of the
Supreme Court, respectively. The
Chairman and the members of the
Commission, upon completion of
their term or upon becoming eligible
for retirement under existing laws
shall be entitled to the same
retirement benefits and privileges
provided for the Presiding Justice and
Associate Justices of the Court of
Appeals, respectively.
SECTION 41
Sec. 41. Promotion of Consumer
Interests. - The ERC shall handle
consumer complaints and ensure the
adequate promotion of consumer
interests.
Sec. 41. Promotion of Consumer Sec. 41. Promotion of Consumer Sec. 41. Promotion of Consumer
Interests
Interests
Interests
SEC. 41.
Interests.
consumer
adequate
interests.
Promotion of Consumer
– The ERC shall handle No proposed amendment.
complaints and ensure the
promotion of consumer
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
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
Both HB 4479 and HB 4822 provide
for the creation of a Consumer
Advocacy Office or a Consumer
Assistance Office.
The proposal for a Consumer
Advocacy Office under HB 4479 is
much better because such entity is
independent and provides more
assistance to consumers by aiding
and
representing
them
in
prosecution or defense in any matter
before the ERC. This amendment is
one of the most important and
relevant
amendments
being
proposed as it would empower
consumers to be adequately
represented in controversies relating
to energy and electricity.
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, CASES OR MATTERS
UNDER WHICH THE CONSUMER
ADVOCACY OFFICE IS ALLOWED TO
PARTICIPATE.
Similarly, HB 4822 (Rep. R. Mendoza)
also proposes the creation of a
Consumer Assistance Office. This
office will be under the ERC and shall
assist consumers in understanding
the technical nature of the industry,
petitions for rate adjustments and
tariffs and all other petitions
submitted
decision.
before
the
ERC
for
SECTION 42
Sec. 42. Fiscal Autonomy of the ERC. Sec. 42. Fiscal Autonomy of the ERC
- The ERC shall enjoy fiscal autonomy,
subject to regular audits by the No proposed amendment.
Commission on Audit. The amount of
One hundred fifty million pesos (PHP
150,000,000.00) is hereby allocated
from the existing budget of the ERB
for the initial operation of the ERC.
Any balance shall initially be sourced
from the Office of the President of
the Philippines. Thereafter, the
annual budget certified by the ERC,
through its chairman, as necessary to
defray its expenses shall be provided
for in the regular or special
appropriations and shall be released
automatically and regularly.
Sec. 42. Fiscal Autonomy of the ERC
Sec. 42. Fiscal Autonomy of the ERC
HB 4819 (Rep. B. Salimbangon)
SEC. 42. Budget of the ERC. – The
amount of FIVE HUNDRED million
pesos P500,000,000.00 is hereby
allocated FOR THE ERC. Any balance
shall initially be sourced from the
Office of the President of the
Philippines. Thereafter, the annual
budget of the ERC shall be
DETERMINED BY THE COMMISSION.
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
The amendment under HB 4819 by
which the annual budget of the ERC
shall be determined by the
Commission is not necessary as the
current law already provides that the
annual budget is to be certified by
the ERC through its Chairman.
SECTION 43
Sec. 43. Functions of the ERC. - The
ERC shall promote competition,
encourage market development,
ensure
customer
choice
and
discourage/penalize abuse of market
power in the restructured electricity
industry. Towards this end, it shall be
responsible for the following key
functions in the restructured
industry:
(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:
(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
(f) Amend or revoke the authority to
operate of any person or entity which
fails to comply with the provisions
Sec. 43. Functions of the ERC
Sec. 43. Functions of the ERC
Sec. 43. Functions of the ERC
HB 4479 excludes renewable energy
and other generation facilities
generating small capacities of not
more than 20 megawatts of installed
capacity from the requirement of
offering and selling to the public at
least 15% of their common shares of
stocks.
HB 4822 (Rep. R. Mendoza) proposes Joint
Congressional
Power
that the following amendments be Commission (JCPC) Consultants and
adopted
for
paragraph
(f): Staff:
1. The entire electricity sector must The proposal under HB 4479 to
be recognized as a public utility exclude renewable energy companies
operation,
and generation facilities with small
generating capacities encourages
2. That THE TARIFF TO BE IMPOSED private enterprises to invest in
BY THE ERC SHOULD ALLOW A renewable energy facilities and helps
RETURN ON RATE BASE (RORB) FOR small power generation facilities
THE POWER CORPORATIONS NOT TO thereby promoting more private
EXCEED TWELVE PERCENT (12%), and investments in the generation sector.
3. That the POWER COMPANIES CAN
ONLY
RECOVER
FOR
COSTS PIPPA
(Philippine Independent
INCURRED WHERE THE COSTS MUST Power
Producers
Association)
BE BOTH USEFUL AND NECESSARY Position Paper:
FOR THE OPERATION OF THE POWER
CORPORATION OR UTILITY AND  Limiting the obligation of the ERC
WHERE THE COSTS ARE BASED ON to enforce the implementing rules
ACTUAL TIME OF USE OF THE and regulations of the EPIRA relative
EQUIPMENT OR ASSET.
to industry competition and market
abuse only threatens to render the
regulatory function of the ERC weak
and ineffective
HB 3958 (Rep. Masongsong)
 Small power plants running on
renewable energy should be
Proposes that the ERC enforce and
exempted from the shareholding
implement rules relative to industry
dispersal
requirement.
(FGD
competition and market abuse, and
proposals-Phil Sugar Millers Ass)
set standards to ensure that electric
power industry participants meet the  PIPPA requests clarification on the
hereof, the IRR or any order or
resolution of the ERC, after due
notice and hearing. In the event a
divestment is required, the ERC shall
allow the affected party sufficient
time to remedy the infraction or for
an orderly disposal, but shall in no
case exceed twelve (12) months from
the issuance of the order;
(g) In the public interest, establish
and enforce a methodology for
setting transmission and distribution
wheeling rates and retail rates for the
captive market of a distribution
utility, taking into account all
relevant considerations, including the
efficiency or inefficiency of the
regulated entities. The rates must be
such as to allow the recovery of just
and reasonable costs and a
reasonable return on rate base
(RORB) to enable the entity to
operate viably. The rate-setting
methodology so adopted and applied
must ensure a reasonable price of
electricity. The rates prescribed shall
be non-discriminatory. To achieve
this objective and to ensure the
complete removal of cross subsidies,
the cap on the recoverable rate of
system losses prescribed in Sec. 10 of
Republic Act No. 7832, is hereby
minimum financial and technical reason for the exemption of
standards to protect the public renewable energy and other
interest. The monitoring and generation facilities of 20MW or
supervision of financial and technical less, and the basis for setting the
standards of electric cooperatives will exemption at 20MW.
be implemented by the National
The 20 MW generating facility is too
Electrification Administration.
small. For an old thermal facility of
this size, the market capitalization
might be less 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
renewable energy rather than an
amendment to the EPIRA.
amended and shall be replaced by
caps which shall be determined by
the ERC based on load density, sales
mix, cost of service, delivery voltage
and other technical considerations it
may promulgate. The ERC shall
determine such form of rate-setting
methodology, which shall promote
efficiency…
(u) 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,
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 effectivity of this
Act. New companies shall implement
their respective public offerings not
later than five (5) years from the
issuance of
compliance.
their
certificate
of
SECTION 45
Sec. 45. Cross Ownership, Market
Power Abuse And Anti-Competitive
Behavior. - No participant in the
electricity industry may engage in any
anti-competitive behavior including,
but
not
limited
to,
crosssubsidization, price or market
manipulation, or other unfair trade
practices
detrimental
to
the
encouragement and protection of
contestable markets.
No
generation
company
or
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 shall be
allowed to hold any interest, direct or
indirect, 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 direct or indirect, in any
generation company or distribution
Sec. 45. Cross Ownership, Market Sec. 45. Cross Ownership, Market Sec. 45. Cross Ownership, Market
Power Abuse And Anti-Competitive Power Abuse And Anti-Competitive Power Abuse And Anti-Competitive
Behavior
Behavior
Behavior
HB 4822 (Rep. R. Mendoza)
Proposes that cross-ownership shall - Cross ownership is absolutely
not be allowed, provided that any
prohibited
between
the
right, privilege, or interest legally
generators,
distribution,
acquired shall not be affected or
transmission, and supply. It
impaired.
applies to stockholders and
officials IN ANY ONE SECTOR
CROSS OWNERSHIP SHALL REFER TO
DISQUALIFYING THEM FROM
THE HOLDING OF ANY INTEREST, IN
OWNERSHIP IN OTHER SECTORS
IN THE ELECTRICITY SECTOR.
WHATEVER FORM, DIRECTLY AND
INDIRECTLY,
BY
ANY
ENTITY
ENGAGED IN THE GENERATION, HB 4822 also proposes stricter
on
owning
or
SUPPLY,
DISTRIBUTION
OR requirements
TRANSMISSION OF ELECTRICITY, IN controlling an installed generating
OR
WITH
ANOTHER
ENTITY capacity in a grid must not exceed
15 % (compared to 40 % in the
SIMILARLY
ENGAGED IN THE GENERATION, current law), and/or 15 % of the
national installed capacity (compared
SUPPLY, DISTRIBUTION OR
to 30 % in the current law).
TRANSMISSION OF ELECTRICITY.
ACCORDINGLY,
NO
ELECTRIC
INDUSTRY PARTICIPANT, SUCH AS A
GENERATION COMPANY, SUPPLIER
OF
ELECTRICITY,
DISTRIBUTION
UTILITY
OR
TRANSMISSION
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
The amendment contained in HB
4479, HB 4822, HB 3958, HB 3676 on
the prohibition on cross-ownership is
a good way to reduce electricity
costs. Cross-ownership refers to the
holding of an interest in any of the
four sectors of the energy industry
(supply, generation, transmission and
distribution) while holding an interest
in another sector of the energy
industry (whether supply, generation,
transmission or distribution). This
prohibition is good and would surely
reduce electricity costs because
electric power participants would
now be prohibited from contracting
with themselves at high prices which
they would then pass on to
consumers.
In addition, HB 4822 proposes that
ALL power supply contracts among
and between companies that are
present in the respective sectors: THE
GENERATION,
DISTRIBUTION,
TRANSMISSION AND SUPPLY SECTOR,
HB 4479, HB 4822, and HB 3958 also
are subject to APPROVAL by ERC.
utility. Except for governmentappointed representatives, no person
who is an officer or director of
TRANSCO or its concessionaire shall
be an officer or director of any
generation company, distribution
utility or supplier.
To promote true market competition
and prevent harmful monopoly and
market power abuse, the ERC shall
enforce the following safeguards:
COMPANY OR ITS CONCESSIONAIRE,
AND THEIR RESPECTIVE AFFILIATES,
SUBSIDIARIES, INCLUDING ANY OF
ITS 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.
(a) Starting not later than five (5)
years from the approval of this Act
and until such time that the ERC has
reduced the threshold level to one
hundred kilowatts (100kW), no
company or related group can own In addition, HB 4479 also proposes
and operate or control and operate stricter requirements on owning or
more than forty percent (40%) of the controlling an installed generating
installed generating capacity of a grid capacity in a grid must not exceed
percent
(25%)
and/or thirty percent (30%) of the TWENTY-FIVE
national installed capacity; and (compared to 40 % in the current
law), and/or TWENTY percent (20%)
of the national installed capacity
(b) Distribution utilities may enter
(compared to 30 % in the current
into bilateral power supply contracts
law).
subject to review by ERC. Provided,
That such review shall only be HB 4479 further proposes that
required for distribution utilities bilateral contracts entered into by
whose markets have not reached distribution utilities subject to PUBLIC
COMPETITIVE
SELECTION
household demand level. For the AND
purpose of preventing market power PROCESS OR SWISS CHALLENGE
HB 3958
proposes:
(Rep.
Masongsong)
1. Stricter requirements on owning
or controlling an installed generating
capacity in a grid must not exceed 15
% (compared to 40 % in the current
law), and/or 25 % of the national
installed capacity (compared to 30 %
in the current law).
similarly impose stricter limits to
holdings in generating capacities. The
stricter the limits in holdings in
generating capacities, the better it is
for the public interest as this would
prevent a monopoly in the
generation sector and will bring
down prices due to active
competition. HB 4822 is the strictest
(15 % for any particular grid, 15 %
national capacity), followed by HB
3958 (15 % for any particular grid, 25
% national capacity), and by HB 4479
(25 % for any particular grid, 20 %
national capacity).
2. Stricter requirements in holding
any interest in TRANSCO (person
holding interest in generation or
distribution or relative within 6th
degree of consanguinity) (compared PIPPA
(Philippine Independent
to 4th degree of consanguinity in the Power
Producers
Association)
current law) shall be allowed to hold Position Paper:
any interest in TRANSCO. (Proposal
prohibition
on
crowincludes suggestion that officials of  The
ownership
should
apply
to
all
sectors
non-stock,
non-profit
electric
cooperatives be exempt from this of the power industry – generation,
transmission,
distribution
and
requirement).
supply. (FGD proposals-TUCP)
3. That a DISTRIBUTION UTILITY IS  Allow DUs to source 100% of total
ONLY ALLOWED TO SOURCE FROM demand from its own generating
BILATERAL
POWER
SUPPLY plant or an associated firm engaged
CONTRACT OF ITS TOTAL DEMAND in generation (FGD proposalsFROM ITS ASSOCIATED FIRMS BENECO)
ENGAGED IN GENERATION AS  Reduction of market share cap
from 30% to 25% per grid (FGD
FOLLOWS:
proposals-Kaamulan Chambers)
50 MW AND BELOW - 6O%
 Reduction of bilateral contracting
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 (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.
For purposes of this Sec., the grid
basis shall consist of three (3)
separate grids, namely Luzon, Visayas
and Mindanao. The ERC shall have
the authority to modify or amend this
definition of a grid when two or more
of the three separate grids become
PROCEDURE, AS THE CASE MAY BE,
and that the ERC shall provide the
parameters for the conduct of such
public and competitive selection
process
or
Swiss
challenge
procedure.
51-100 MW - 50%
101-250 MW - 40%
251-500 MW - 30%
501 MW AND ABOVE - 25%
4. That upon operation of the various
wholesale electricity spot market, NO
DISTRIBUTION UTIITY SHALL SOURCE
MORE THAN 90% OF ITS DEMAND
HB 4822 (Mendoza) also prohibits FROM BILATERAL CONTRACT IF THE
SAME IS MORE THAN 15 MW AND
cross-ownership.
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.
HB 3676 (Rep. Evardone) proposes
that no distribution utility (or
stockholder thereof) shall be allowed
to hold any interest in any generation
company. Likewise, no generation
company (or stockholder thereof)
shall be allowed to hold any interest
in any distribution utility.
of DUs with affiliate generation
companies from 50% to 10% (FGD
proposals-Oro 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 proposals-AMRECO)
 To date, the ownership and crossownership caps has not yet been
violated, 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
was expected by most professional
or practitioners in the power
sufficiently
interconnected
to
constitute a single grid or as
conditions may otherwise permit.
Exceptions from these limitations
shall be allowed for isolated grids
that are not connected to the high
voltage transmission system. Except
as otherwise provided for in this Sec.
, any restriction on ownership and/or
control between or within sectors of
the electricity industry may be
imposed by ERC only insofar as the
enforcement of the provisions of this
Sec. is concerned.
The ERC shall, within one (1) year
from the effectivity of this Act,
promulgate rules and regulations to
promote competition, encourage
market development and customer
choice
and
discourage/penalize
abuse of market power, cartelization
and
any
anti-competitive
or
discriminatory behavior, in order to
further the intent of this Act and
protect the public interest. Such rules
and regulations shall define the
following:
(a) the relevant markets for purposes
of establishing abuse or misuse of
monopoly or market position;
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.
 We would like to clarify the basis
of prohibiting relatives up to the
sixth degree of affinity for
generation or distribution, while
exempting non-stock and non-profit
electric cooperatives. The proposed
amendment exempting officials of
non-stock and non-profit 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 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
(b) areas of isolated grids; and
(c)
the
periodic
reportorial
requirements of electric power
industry participants as may be
necessary to enforce the provisions
of this Sec.,
The ERC shall, motu propio, monitor
and penalize any market power
abuse or anti-competitive or
discriminatory act or behavior by any
participant in the electric power
industry.
Upon finding that a market
participant has engaged in such act
or behavior, the ERC shall stop and
redress the same. Such remedies
shall, without limitation, include the
imposition of price controls, issuance
of injunctions, requirement of
divestment or disgorgement of
excess profits and imposition of fines
and penalties pursuant to this Act.
The ERC shall, within one (1) year
from the effectivity of this Act,
promulgate rules and regulations
providing for a complaint procedure
that, without limitation, provides the
accused party with notice and an
opportunity to be heard.
industry.
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 consanguinity or
affinity.
The cross-ownership 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 crossownership 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 suggests to accelerate
Open Access by lowering the
threshold for average monthly
consumption
of
contestable
customers to 500KW.
 Preventing
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)
SECTION 47
SEC. 47: NPC PRIVATIZATION
Sec. 47. NPC Privatization. - Except
for the assets of SPUG, the
generating assets, real estate, and
other disposable assets as well as
generation 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 generation
contracts of NPC and thereafter,
implement the same, in accordance
with the following guidelines, except
as provided for in paragraph (e)
herein:
(a) The privatization value to the
national government of the NPC
generation assets, real estate, other
disposable assets as well as IPP
contracts shall be optimized;
(b) The participation by Filipino
citizens and corporations in the
purchase of NPC assets shall be
encouraged;
SEC. 47: NPC PRIVATIZATION
SEC. 47: NPC PRIVATIZATION
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.
HB3958 (Rep. Masongsong)
Joint
Congressional
Power
- Removed SPUG, but added the Commission (JCPC) Consultants and
PULANGUI HYDRO ELECTRIC Staff:
PLANTS COMPLEXES,
HB 351 (Reps. Colmenares and
Zarate)
- States that it is wrong for Govt to
fully let go to private hands the vital
power generation sector.
SEC. 47: NPC PRIVATIZATION
The proposed amendment is an
attempt to assuage fears of increased
power rates in Mindanao that could
result from the privatization of the
Agus-Pulangui Power Complexes. It
would be incumbent on NG to not
allow such fear to occur in the future
by strengthening the ERC through: a)
the appointment of qualified
professionals and not tainted with
political intervention; b) provision for
more plantilla positions with
upgraded salary and benefit scales
for the agency; and c) more and upto-date staff training locally and
overseas.
FGD proposition and/or position
paper submitted:
 NPC favors and supports 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
In the case of foreign buyers at least
seventy-five percent (75%) of the
funds used to acquire NPCgenerating assets and generating
contracts shall be inwardly remitted
and registered with the Bangko
Sentral ng Pilipinas.
(c) The NPC plants, its related assets
and assigned liabilities, if any, shall
be grouped in a manner which shall
promote the viability of the resulting
generating companies (gencos),
ensure
economic
efficiency,
encourage
competition,
foster
reasonable electricity rates and
create market appeal to optimize
returns to the government from the
sale and disposition of such assets in
a manner consistent with the
objectives of this Act. In the grouping
of the generating assets of NPC, the
following criteria shall be considered:
(1) A sufficient scale of operations
and balance sheet strength to
promote the financial viability of the
restructured units;
(2) Broad geographical groupings to
ensure efficiency of operations but
without the formation of regional
companies or consolidation of
operating the government-owned
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 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.
market power;
(3) Portfolio of plants to achieve
management
and
operational
synergy without dominating any part
of the market or of the load curve;
and
(4) Such other factors as may be
deemed beneficial to the best
interest of the national government
while ensuring attractiveness to
potential investors.
(d) All generation assets and IPP
contracts shall be sold in an open and
transparent manner through public
bidding;
NEA Position:
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)
HB 351 (Reps. Colmenares and Joint
Congressional
Power
Zarate)
Commission (JCPC) Consultants and
Staff:
(d) All THE REMAINING POWER
assets of NPC shall be RETAINED BY The proposed amendment defies the
THE NATIONAL GOVERNMENT, AND privatization objective of NG, it
MANAGED BY THE NATIONAL being understood that NG lacks the
CORPORATION (NAPOCOR) ;
funds necessary not only for running
and maintaining the power assets but
also for paying salaries, wages, and
benefits of government personnel.
NG’s meagre financial resources can
better be utilized for social projects
that will benefit the nation’s poor
and the underprivileged people.
(e) The Agus and the Pulangui
complexes in Mindanao shall be
excluded from among the generating
companies that will be initially
privatized. Their ownership shall be
transferred to the PSALM Corp. and
both shall continue to be operated by
NPC. In case of privatization, said
complexes may be privatized not
earlier than ten (10) years from the
effectivity of this Act, and, until
privatized, shall not be subject to
Build-Operate-Transfer
(B-O-T),
Build-Rehabilitate-Operate-Transfer
(B-R-O-T) and other variations
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;
HB 351 (Reps. Colmenares and
Zarate):
(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 and
shall continue to be operated by the
NAPOCOR. THE said complexes shall
be subject to REHABILITATION,
UPGRADING, AND MAINTENANCE BY
THE NAPOCOR.
HBs 4198, 4422 and 4389 (Reps. R.
Rodriguez and M. Rodriguez, Jr.):
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
The proposed amendment defies the
privatization objective of NG, it
being understood that NG lacks the
funds necessary not only for running
and maintaining the power assets but
also for paying salaries, wages, and
benefits of government personnel.
NG’s meagre financial resources can
better be utilized for social projects
that will benefit the nation’s poor
and the underprivileged people.
FGD proposition and/or position
submitted by relevant stakeholders:
(f) The Agus and the Pulangui
complexes in Mindanao shall be
excluded from among the generation ERC Position:
companies that will be privatized.
Their ownership shall be transferred ERC supports the non-privatization of
to the PSALM Corp. and both shall Agus, Pulangui and Naga Power plant
continue to be operated by the NPC; 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.
HB3958 (Rep. Masongsong):
But the said privatization should not
(f) The Agus and the Pulangui be made perpetual. Privatization of
complexes in Mindanao shall be the Agus and Pulangui complexes
excluded from among the generation should be upon the introduction of a
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 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 SHALL BE
PRIORITIZED IN CONTRACTING THESE
COMPLEXES’CAPACITY TO SERVE THE
NEED
OF
THE
RESIDENTIAL
CONSUMERS.
competitive energy market in the
Mindanao grid.
PIPPA
(Philippine Independent
Power
Producers
Association)
Position Paper:
 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 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 In addition, the proposal to acquire
NAPOCOR/PSALM RELATED TO THE 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
THE
MINDANAO
POWER through the generation rates.
CORPORATION
SHALL
BE
A It bears stressing that the proceeds
GOVERNMENT
OWNED
AND from privatization are used to repay
CONTROLLED CORPORATION BUT the existing NPC debts guaranteed by
SHALL BE MANAGED AND OPERATED the national government. Stopping
IN A PRIVATELY OWNED TYPE OF the privatization of the NPC assets
MANAGEMENT,
WHOSE will keep electricity prices low but
COMPOSITION IN ITS BOARD OF effectively raise taxes or reduce
DIRECTORS SHALL INCLUDE ONLY government spending on other
THE SECRETARY OF THE MINDANAO governmental services in the future.
DEVELOPMENT
AUTHORITY
AS
CHAIRMAN,
OTHER
BOARD
MEMBERS
COMPOSED
OF
A
MAXIMUM OF FIVE EXCLUDING THE
CHAIRMAN
SHALL
BE
REPRESENTATIVE
OF
ELECTRIC
COOPERATIVES
IN
MINDANAO,
PRIVATELY
OWNED
DU’S
IN
MINDANAO,
CONSUMER
ORGANIZATION, BUSINESS SECTOR
REPRESENTATIVE, AND FROM LAKE
LANAO WATERSHED PROTECTION
AND DEVELOPMENT COUNCIL
OPERATION OF THE MINDANAO
GENERATION (MINGEN) SHALL BE
SEPARATED FROM THE BOOK OF
ACCOUNTS OF NAPOCOR AND
TRANSFERRED TO THE NEW ENTITY,
THE
MINDANAO
POWER
CORPORATION.
(f) 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 not
limited to, Tiwi-Makban, Leyte A and
B (Tongonan), Palinpinon, and Mt.
Apo;
Joint
Congressional
Power
HB 351 (Reps. Colmenares and Commission (JCPC) Consultants and
Zarate):
Staff:
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 PRIVATIZED. The
geothermal complexes covered by
this requirement include, but are not
limited to, Leyte A and B (Tongonan),
Palinpinon, and Mt. Apo;
The proposed amendment defies the
privatization objective of NG, it
being understood that NG lacks the
funds necessary not only for running
and maintaining the power assets
but also for paying salaries, wages,
and benefits of government
personnel. NG’s meagre financial
resources can better be utilized for
social projects that will benefit the
nation’s
poor
and
the
underprivileged people.
PIPPA
(Philippine Independent
Power
Producers
Association)
Position Paper:
The financial effect to the
government of the continuous
operations of the remaining NPC
assets (including maintenance and
rehab expenses) should first be
analyzed. 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,
the Government should adopt policy
that encourages private sector to use
its capital and knowledge to build
geothermal plants.
(h) 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; and
HB 3958 (Rep. Masongsong):
Joint
Congressional
Power
Commission (JCPC) Consultants and
(i) Not later than three (3) years from Staff:
the
effectivity
of
this
AMENDATORY Act, and in no case The proposed amendment defies the
later than the initial implementation privatization objective of NG, it
of open access, at least seventy being understood that NG lacks the
percent (70%) of the total capacity of funds necessary not only for running
generating assets of NPC and of the and maintaining the power assets
total capacity of the power plants
but also for paying salaries, wages,
under
contract
and benefits of government
with NPC located in Luzon and
Visayas WITH THE EXCEPTION personnel. NG’s meagre financial
OF
THOSE
WHICH
ARE resources can better be utilized for
EXCLUDED
FROM social projects that will benefit the
poor
and
the
PRIVATIZATION AND SALE BY nation’s
underprivileged
people.
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
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;”
HB 3958 (Rep. Masongsong):
(i) NPC may generate and sell
electricity only from the undisposed
generating assets and IPP contracts
of PSALM Corp.: Provided, That any
unsold capacity shall be privatized
not later than eight (8) years from
the effectivity of this Act.
Joint
Congressional
Power
Commission (JCPC) Consultants and
(j) NPC SHALL generate and sell Staff:
electricity from the undisposed
generating assets EXCLUSIVE OF THE The proposed amendment defies the
AGUS AND PULANGUI HYDRO privatization objective of NG, it being
COMPLEXES IN MINDANAO WHICH understood that NG lacks the funds
SHALL BE OPERATED BY A SEPARATE necessary not only for running and
ENTITY AND IPP CONTRACTS, maintaining the power assets but
INCLUDING NEW POWER SUPPLY also for paying salaries, wages, and
PORTFOLIO WHICH SHOULD NOT BE benefits of government personnel.
LESS
THAN
THE
REQUIRED The National Government’s meagre
ANCILLARY CAPACITY OF EACH GRID financial resources can better be
IN LUZON, VISAYAS AND MINDANAO utilized for social projects that will
AS DETERMINED BY THE GRID benefit the nation’s poor and the
MANAGEMENT COMMITTEE AND TO underprivileged people.
BE UPRATED ON THE BASE LOAD
REQUIREMENT OF THE GRID PLUS
TEN PERCENT (10%).
PIPPA
(Philippine Independent
Power
Producers
Association)
THE CAPACITY FEE OF ALL NPC
Position Paper:
POWER PLANTS AND POWER SUPPLY
CONTRACTS THAT WILL SERVE AS
ANCILLARY SHALL BE RECOVERED IN The remaining unsold capacity of
A FORM OF ANCILLARY SERVICE PSALM may not be sufficient to
all
ancillary
service
CHARGE TO BE COLLECTED FROM ALL supply
ELECTRICITY END USERS BY THE GRID requirements for both the Luzon and
OPERATOR AND REMITTED DIRECTLY Visayas grids.
TO THE NPC.
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
IN CASE OF EMERGENCY AND IN PSALM/NPC like Casecnan and
ORDER TO STABILIZE THE PRICE IN Malaya are not designed to provide
THE WESM, NPC POWER PLANT ancillary service.
SHALL OPERATE AS BASE LOAD
PLANTS WITH GENERATION COST TO To reiterate, the financial impact to
BE DETERMINED BY ERC BASED ON the government of the continuous
THE TECHNOLOGY USED.
operations of the remaining 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.
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.
(i) NPC may generate and sell
electricity only from the undisposed
generating assets and IPP contracts
of PSALM Corp.: Provided, That any
unsold capacity shall be privatized
not later than eight (8) years from
the effectivity of this Act.
HBs 4198, 4422 and 4389 (Reps. R. Joint
Congressional
Power
Rodriguez and M. Rodriguez, Jr.):
Commission (JCPC) Consultants and
Staff:
(j) THE GOVERNMENT, THRU THE
NPC OR ANY OTHER GOVERNMENT
OWNED
OR
CONTROLLED
CORPORATION
IS
HEREBY
AUTHORIZED TO GENERATE AND
SELL POWER/ELECTRICITY 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.
The
proposed
amendment
concerning the generation and sale
of renewable energy by NPC or any
GOCC would entail the appropriation
of NG resources and the creation of a
a new layer of bureaucracy. The
Consultant finds this unnecessary
since it has been proven that private
sector interest in the development
of renewable energy is strong.
Government should get itself
involved to pioneer in projects where
there is practically little or no such
interest from the private sector.
SECTION 48
SEC. 48: NATIONAL POWER BOARD SEC. 48: NATIONAL POWER BOARD SEC. 48: NATIONAL POWER BOARD
OF DIRECTORS
OF DIRECTORS
OF DIRECTORS
Sec. 48. National Power Board of
HB 3958 (Rep. Masongsong):
Directors. - Upon the passage of this No proposed amendment.
Act, the provisions of R.A. 6395,
Upon the passage of this Act, the
otherwise known as the NPC Charter,
provisions of R.A. 6395, as amended,
referring to the composition of the
referring to the composition of the
National Power Board of Directors,
National Power Board of Directors,
are hereby repealed and a new Board
are hereby repealed and a new Board
shall be immediately organized. The
shall be immediately organized. The
new Board shall be composed of the
new Board shall be composed of the
Secretary of Finance as Chairman,
Secretary of Finance as Chairman,
with the following as members: the
with the following as members: the
Secretary of Energy, the Secretary of
Secretary of Energy, the Secretary of
Budget and Management, the
Budget and Management, the
Secretary of Agriculture, the DirectorSecretary of Agriculture, the DirectorGeneral of the National Economic
General of the National Economic
and Development Authority, the
and Development Authority, the
Secretary of Environment and
Secretary of Environment and
Natural Resources, the Secretary of
Natural Resources, the Secretary of
Interior and Local Government, the
Interior and Local Government, the
Secretary of the Department of Trade
Secretary of the Department of Trade
and Industry, and the President of
and Industry, and the President of
the National Power Corporation.
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
SEC. 48: NATIONAL POWER BOARD
OF DIRECTORS
JCPC Consultants and Staff:
The proposed amendments
materially unnecessary.
are
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 JOB
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.”
SECTION 50
Sec. 50. Purpose and Objective, Sec. 50. Purpose and Objective, Sec. 50. Purpose and Objective, Sec. 50. Purpose and Objective,
Domicile and Term of Existence.
Domicile and Term of Existence.
Domicile and Term of Existence.
Domicile and Term of Existence.
The principal purpose of the No proposed amendment.
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
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.
HB 2922
Batocabe):
(Reps.
Rivera
and
Joint
Congressional
Power
Commission (JCPC) Consultants and
Sec. 50. Purpose and Objective, Staff:
Domicile and Term of Existence. - The
principal purpose of the Corporation
is to manage the orderly sale, The proposed amendment is
disposition, and privatization of NPC anticipatory of the nearing end of the
generation assets, real estate and corporate life of PSALM. Extending
other disposable assets, and IPP by 10 years the corporate life of
contracts with the objective of PSALM is not an assurance that its
liquidating
all
NPC
financial privatization task will be completed.
obligations and stranded contract There must be an independent
costs in an optimal manner.
evaluation and determination as to a
realistic privatization timeline.
The PSALM Corp shall have its
principal office and place of business PSALM must be requested to provide
within Metro Manila.
relevant information such as the
assets already privatized (including
The PSALM Corp shall exist for a lessons learned in the privatization
period of THIRTY FIVE (35) years process), the remaining assets still to
from the effectivity of this Act, be privatized, and the timeline for
unless otherwise provided by law, such privatization.
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.
SECTION 57
SEC. 57. Conversion of Electric
SEC. 57. Conversion of Electric
SEC. 57. Conversion of Electric
Cooperatives. –Electric cooperatives Cooperatives.
Cooperatives.
are hereby given the option to
convert into either stock cooperative No proposed amendment.
under the Cooperatives Development
Act or stock corporation under the
HB 4822 (Rep. R. Mendoza):
Corporation Code. Nothing contained
Electric cooperatives are hereby
in this Act shall deprive electric
given the option to convert into
cooperatives of any privilege or right
either stock cooperative under the
granted to them under Presidential
Cooperatives Development Act or
Decree No. 269, as amended, and
stock
corporation
under
the
other existing laws.
Corporation Code. THE NATIONAL
ELECTRIFICATION ADMINISTRATION
(NEA) , IN COOPERATION WITH THE
SECURITIES
AND
EXCHANGE
COMMISSION
AND
THE
COOPERATIVE
DEVELOPMENT
AUTHORITY
(CDA), UNDER THE
GUIDANCE FROM THE OFFICE OF THE
PRESIDENT, SHALL UNDERTAKE A
REFERENDUM
TO
DETERMINE
WHETHER
THE
ELECTRIC
COOPERATIVES WISH TO REGISTER
AND BE CONVERTED TO A
COOPERATIVE UNDER R.A. 9520
OTHERWISE KNOWN AS THE
PHILIPPINE
DEVELOPMENT
COOPERATIVE CODE OF 2008 OR AS
A CORPORATION UNDER BATAS
PAMBANSA BILANG 68 OTHERWISE
KNWON AS THE CORPORATION CODE
OF THE PHILIPPINES. FOR PURPOSES
OF THIS SECTION, THE QUORUM
REQUIREMENT IS TWENTY PERCENT
SEC. 57. Conversion of Electric
Cooperatives.
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
The proposal of HB 4822 is a good
one as it implements the manner by
which an electric cooperative may
convert to either a stock cooperative
or a stock corporation. It provides the
means of a referendum as the
implementing
mechanism
and
provides the requirements in order
to get a binding decision. This makes
the process more transparent and
democratic for members of electric
cooperatives.
(20%) OF THE TOTAL NUMBER OF ALL
BONAFIDE MEMBERS IN GOOD
STANDING WITHIN ONE (1) YEAR
FROM ENACTMENT OF THIS ACT. A
MAJORITY VOTE BASED ON THIS
QUORUM SHALL CONSTITUTE A
VALID AND BINDING DECISION BY
THE ELECTRIC COOPERATIVE. Nothing
contained in this Act shall deprive
electric cooperatives of any privilege
or right granted to them under
Presidential Decree No. 269, as
amended, and other existing laws.
SECTION 60
SEC. 60. Debts of Electric
Cooperatives.
SEC. 60. Debts of Electric
Cooperatives.
Upon the effectivity of this Act, all
outstanding financial obligations of
electric cooperatives to NEA and
other government agencies incurred
for the purpose of financing the rural
electrification program shall be
assumed by the PSALM Corp. in
accordance with the program
approved by the President of the
Philippines within one (1) year from
the effectivity of this Act which shall
be implemented and completed
within three (3) years from the
effectivity of this Act. The ERC shall
ensure a reduction in the rates of
No proposed amendment.
SEC. 60. Debts of Electric
Cooperatives.
SEC. 60. Debts of Electric
Cooperatives.
HB 4822 (Rep. R. Mendoza):
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
The ERC shall ensure a reduction in
the rates of electric cooperatives
commensurate with the resulting
savings due to the removal of the
amortization payments of their loans.
Within five (5) years from the
condonation of debt, any electric
cooperative which shall transfer
ownership or control of its assets,
franchise or operations thereof shall
repay PSALM Corp. the total debts
HB 4822’s proposal of the PSALM
Corp. and NEA taking an active role
to undertake remedial measures that
would reflect the condonation of the
loans of the electric cooperatives for
the benefit of consumers is a good
one as this would ensure lower rates.
electric cooperatives commensurate
with the resulting savings due to the
removal of the amortization
payments of their loans. Within five
(5) years from the condonation of
debt, any electric cooperative which
shall transfer ownership or control of
its assets, franchise or operations
thereof shall repay PSALM Corp. the
total debts including accrued
interests thereon.
including accrued interests thereon.
THE PSALM CORP. AND NEA, ALONG
WITH THE CONCERNED
COOPERATIVES SHALL HEREBY
BALANCE THEIR BOOKS AND
UNDERTAKE SUCH OTHER REMEDIAL
MEASURES FOR THE CONSUMERS OF
ELECTRIC COOPERATIVES TO REFLECT
THE CONDONATION HEREIN THE
RATES MANDATED.
SECTION 62
SEC. 62. Joint Congressional Power SEC. 62. Joint Congressional Power SEC. 62. Joint Congressional Power SEC. 62. Joint Congressional Power
Commission
Commission
Commission
Commission
The Commission shall, in aid of
legislation, perform the following No proposed amendment.
functions, among others:
HB 3958 (Rep. Masongsong):
XXX
-
(g) Determine inherent weaknesses
in the law and recommend necessary
remedial legislation or executive
measures; and
(h) Perform such other duties and
functions as may be necessary to
-
Joint
Congressional
Power
Commission (JCPC) Consultants and
Added under letter G, “that Staff:
breeds irregularity in the law.”
Inserted new provisions:
o To enhance in the The new phrase added by HB 3958
screening and selection of “that breeds irregularity in the law” is
the Secretary, President, not necessary as this is covered by
CEO, or Chairman of the existing phrase “inherent
following: DOE, ERC, NPC, weaknesses in the law.”
PEMC, TRANSO, PSALM,
and other heads covered
by the EPIRA.
o With this, the JCPC shall
submit 5 nominees for
each position. The final
appointment shall be
made the President of the
Philippines.
attain its objectives.
Xxx
SECTIONS 63
SEC. 63. Separation Benefits of SEC. 63. Separation Benefits of SEC. 63. Separation Benefits of SEC. 63. Separation Benefits of
Officials and Employees of Affected Officials and Employees of Affected Officials and Employees of Affected Officials and Employees of Affected
Agencies.
Agencies.
Agencies.
Agencies.
National government employees No proposed amendment.
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 government-owned successor
company. In no case shall there be
any diminution of benefits under the
separation plan until the full
implementation of the restructuring
HBs 4198,
Rodriguez)
-
-
4422,
4389
(Rep.
Changed the separation benefits
of the displaced employees to
separation pay equivalent to ½
month salary for every year of
service which is over and above
the existing benefits under the
current law.
The benefits are retroactive in
effect.
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
This is a good proposal from HBs
4198, 4422 and 4389 because it is for
the benefit of the former employees
of the NPC who were removed due to
the restructuring of the NPC.
and privatization.
SECTION 66
SEC.
66.
Benefits
Communities. –
to
Host SEC.
66.
Benefits
Communities.
The obligations of generating
companies and energy resource No proposed amendment.
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
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.
to
Host SEC.
66.
Benefits
Communities.
to
Host SEC.
66.
Benefits
Communities.
HB 3958 (Rep. Masongsong):
-
-
-
Added that communities hosting
any source of energy shall be
entitled to 80% of the national
wealth tax.
This tax shall be deducted from
the power bills of the electric
cooperatives and DUs by the
generation facilities and energy
resource developers.
This shall also have a retroactive
effect from the time the
generation facilities and energy
resource developers started to
operate.
-
redefined host communities
with hydro generation: where the
facility is located
hydro energy resources: where
the water resource is located
Host
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
HB 3958’s proposal is good as this
would ensure that the local
community is benefited from the
development and utilization of their
natural resources.
DILG:
-
HB 987 (Rep. Baguilat):
to
the Local Govt. Code does not
define what a host community is
they also admit not competent to
determine the amount collected
for the host community
-
from the point of origin
amount to be collected for the
(Philippine Independent
local host community shall not PIPPA
Producers
Association)
bees than 25% of one centavo for Power
Position Paper:
every KWh.
-
-
-
The funds collected should be
directly remitted to the LGUs or
host communities.
Guidelines should be made to
make sure that the funds
redound to the benefit of the
community.
The host communities should be
clearly identified and defined.
SECTION 70
SEC. 70. Missionary Electrification.
SEC. 70. Missionary Electrification
Notwithstanding the divestment
and/or privatization of NPC assets, No proposed amendment.
IPP
contracts
and
spun-off
corporations, NPC shall remain as a
National
Government-owned-andControlled 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 electrification
function shall be funded from the
SEC. 70. Missionary Electrification
SEC. 70. Missionary Electrification
HB 3958 (Rep. Masongsong):
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
-
Removed the NPC as the lead
agency and put NEA instead.
Also, the NEA may relinquish the
operation of the off-grid power
plants to the ECs after an
evaluation by the EC.
HB 3847 (Rep. Dela Cruz):
-
HB 3958’s proposal is not good. The
NPC already has experience in power
generation and rural electrification
while NEA has none. The NPC must
retain this function for SPUG areas.
HB 3847’s proposal is good as this
would enhance the power of the NPC
Added more responsibility to the
tin its power missionary functions.
NPC:
o To provide power security
revenues from sales in missionary
areas and from the universal charge
to be collected from all electricity
end-users as determined by the ERC.
-
o To perform other related
missionary functions
o To
ensure
power
generation in time of
emergency or market
failure.
Funding shall be from the
increased capitalization of the
NPC, annual appropriations, sale
of bonds and other government
securities.
PIPPA
(Philippine Independent
Power
Producers
Association)
Position Paper:
-
-
NEA is not the best agency to be
in charge. It lacks the expertise in
providing generation and power
delivery systems.
The added responsibility to the
NPC should be further studied
and its effect on the universal
charge paid by the consumers.
SECTION 71
SEC. 71.
Provision
Electric
Power
Crisis SEC. 71.
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.
Electric
Power
Crisis SEC. 71.
Provision
Upon the determination by the
President of the Philippines AND
RECOMMENDATION 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,
Electric
Power
Crisis SEC. 71.
Provision
Electric
Power
Crisis
HB 3958 (Rep. Masongsong) and HB Joint
Congressional
Power
Commission (JCPC) Consultants and
987 (Rep. Baguilat):
Staff:
- Removed the participation of the
Congress.
- Emergency power shall emanate HB 4479’s proposal is good as the
decision by Congress and the
for the executive branch.
President in providing additional
generating capacity will be a more
HB 3847 (Rep. Dela Cruz):
informed one since it will be based
- The DOE and the ERC are on the recommendation by the DOE
mandated to submit an annual
report on the energy situation Secretary and based on indices and
which shall be the basis for the benchmarks as determined by the
declaration of an emergency DOE.
crisis.
the
establishment
BY
THE
PRESIDENT
of
additional
generating capacity under such terms
and conditions as it may approve.
HB 4763 (Rep. Oaminal):
-
Deleted the whole section.
PIPPA
(Philippine Independent
Power
Producers
Association)
Position Paper:
-
-
The participation of both the
legislative and executive is
essential for the checks and
balances of a democratic form of
govt.
Rather than building new power
plants, the govt should encourage
the power sector to use its capital
and knowledge to build new
plants.
SECTION 80
SEC. 80. Applicability and Repealing
Clause
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.
SEC. 80. Applicability and Repealing
Clause
SEC. 80. Applicability and Repealing
Clause
SEC. 80. Applicability and Repealing
Clause
No proposed amendment.
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
Joint
Congressional
Power
Commission (JCPC) Consultants and
Staff:
xxx”
hereby repealed or modified
accordingly.
xxx”
HB 4479’s typographical correction is
correct. Its additions in the repealing
clause is also good as this specifies
provisions and laws the EPIRA
expressly repeals and this makes
clear that these provisions and laws
are all hereby repealed.
MERALCO:
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.
Agrees with HB 4479 on the
typographical correction.