Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ______ 
Introduced by Rep. Rodante D. Marcoleta and Rep. Caroline L. Tanchay 
EXPLANATORY NOTE 
The Electric Power Industry Reform Act of 2001 (EPIRA) mandated the privatization 
of the transmission facilities of the country, including grid interconnections and ancillary 
services either through an outright sale or concessi`on contract. Thus in 2007, the concession 
agreement for the management and operation of the country’s transmission facilities was 
opened for competitive bidding. Under the EPIRA, the concessionaire shall have a contract 
period of twenty-five (25) years subject to review and renewal for a maximum period of another 
twenty-five (25) years.  
The 25-year concession agreement of the National Transmission Corporation 
(TransCo) with respect to the country’s sole transmission business, was awarded to the 
consortium of Monte Oro Grid Resources, Calaca High Power Corp., and State Grid Corp. of 
China. The Concession Agreement among Power Sector Assets and Liabilities Management 
Corporation (PSALM), TransCo, and National Grid Corporation of the Philippines (NGCP) 
was executed on 28 February 2008. Thereafter, in December 2008 and on the basis of Republic 
Act No. 9511, the National Grid Corporation of the Philippines was granted a fifty (50)-year 
franchise to operate, manage and maintain, and in connection therewith, to engage in the 
business of conveying or transmitting electricity through high voltage back-bone system of 
interconnected transmission lines, substations and related facilities, system operations, and 
other activities that are necessary to support the safe and reliable operation of the transmission 
system and to construct, install, finance, manage, improve, expand, operate, maintain, 
rehabilitate repair and refurbish the present nationwide transmission system of the Republic of 
the Philippines (“NGCP Franchise”).1  
Over the years, several concerns against the NGCP Franchise were raised by energy 
stakeholders, more particularly:  
(a) The NGCP Franchise allowed for 40% foreign ownership. Presently, the State Grid
Corp. of China owns 40% of the NGCP, with a concurrent four (4) seats out of ten (10)
on its board of directors. Due to technological development over the years, the grid has
transitioned digitally, i.e., it can be accessed remotely anywhere. This means that the
Chinese shareholders can potentially shut down our grid. NGCP earlier opposed this
allegation and presented its supposedly stringent cyber security measures to protect the
grid from remote access. However, this does not remove the threat of control of the
Chinese counterparts over the sole transmission facility of our country.
1 Republic Act No. 9511, Section 1. 
September 15, 2022
3:24 pm
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(b) The Concession Agreement provided for a concession term of only twenty-five (25) 
years subject to review on the 20th year of NGCP’s operation. This is consistent with 
the EPIRA’s mandate that the concession shall be only for a period of twenty-five (25) 
years, subject to review and renewal for another period of twenty-five (25) years. 
However, the NGCP Franchise Term is an outright grant of a full fifty (50) year period. 
This deprives the State of enough room to change its framework on how to best manage 
the mission-critical, national security-laden electricity grid. 
 
(c) The NGCP Franchise provides that its scope shall be in accordance with the 
Transmission Development Plan (TDP), subject to amendments or modifications of the 
said plan, as may be approved by the Department of Energy of the Republic of the 
Philippines.2 Section 9 (f) of the EPIRA directed the TransCo to prepare the TDP and 
submit the same to the DOE for integration with the Power Development Plan of the 
Philippines.  
 
However, the Concession Agreement provides that the TDP is left to the discretion of 
NGCP which is contrary to the State’s objective of protecting the public interest as it is 
affected by the rates and services of electric utilities and other providers of electric 
power. In the hands of the private sector, plans will always be profit-driven. But there 
is a bigger governance objective in the lay-out of the national transmission grid to cover 
reliability and maximum reach, which may not be within the consideration of NGCP.  
 
(d) NGCP is granted unbridled power to exercise eminent domain without any guidance 
and/or approval requirement from the government. There should be refinement of the 
safeguards against potential abuse by a private entity in the exercise of one of the State’s 
inherent powers.  
 
(e) The Franchise Tax of three percent (3%) in lieu of income tax and any and all taxes, 
duties, fees and charges of any kind should be rationalized considering the nature of the 
business of NGCP.  
 
(f) The dispersal of ownership of NGCP is indirectly allowed by the current wording 
of RA 9511. This means that if any company with at least 30% ownership of the 
outstanding capital stock of NGCP is listed in the PSE, the dispersal of ownership 
requirement is already complied with. This is in contravention with the spirit of the law 
of ensuring more public participation and sharing in the fruits of the energy sector’s 
crown jewel. 
 
 
 
In view of the foregoing, approval of this bill is urgently recommended. 
 
 
 
 
             RODANTE D. MARCOLETA                   CAROLINE L. TANCHAY 
   
 
 
 
2 Republic Act No. 9511, Section 1. 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ______ 
Introduced by Rep. Rodante D. Marcoleta and Rep. Caroline L. Tanchay 
AN ACT AMENDING PERTINENT PROVISIONS OF RA9511, OTHERWISE 
KNOWN AS THE NATIONAL GRID CORPORATION OF THE PHILIPPINES 
FRANCHISE 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
Section 1. The following provisions of RA 9511 are hereby amended and shall read as 
follows: 
Section 1. Nature and Scope of Franchise - Subject to the provisions of the 
Constitution and applicable laws, rules and regulations, and subject to the terms 
and conditions of the concession agreement and other documents executed with the 
National Transmission Corporation (TRANSCO) and the Power Sector Assets & 
Liabilities Management Corporation (PSALM) pursuant to Section 21 of Republic 
Act No. 9136, which are not inconsistent herewith, there is hereby granted to the 
National Grid Corporation of the Philippines, hereunder referred to as the Grantee, 
its successors or assigns, a franchise to operate, manage and maintain, and in 
connection therewith, to engage in the business of conveying or transmitting 
electricity through high voltage back-bone system of interconnected transmission 
lines, substations and related facilities, system operations, and other activities that 
are necessary to support the safe and reliable operation of the transmission system 
and to construct, install, finance, manage, improve, expand, operate, maintain, 
rehabilitate repair and refurbish the present nationwide transmission system of the 
Republic of the Philippines, The Grantee shall continue to operate and maintain the 
sub-transmission system which have not been disposed by TRANSCO. Likewise, 
the Grantee is authorized to engage in construct, install, finance, improve, expand, 
rehabilitate and repair the nationwide transmission system and the grid of the 
Republic of the Philippines and related ancillary businesses. and any related 
business which maximizes utilization of its assets such as, but not limited to, 
telecommunications system, pursuant to Section 20 of Republic Act No. 9136. The 
scope of the franchise shall be nationwide in accordance with the Transmission 
Development Plan, subject to amendments or modifications of the said Plan, as 
may be approved by the Department of Energy of the Republic of the Philippines. 
Section 2. Terms and Conditions of Franchise - This franchise shall be for a term 
of twenty-five (25) years from the date of effectivity of this Act, subject to review 
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and renewal for a maximum period of another twenty-five (25) years. The renewal 
for the next twenty-five years of this franchise shall be reviewed by the Joint 
Congressional Energy Commission in accordance with faithful compliance with 
the terms and conditions of this franchise and the satisfactory performance of its 
obligations in the Concession Agreement with PSALM and TRANSCO. The 
Grantee is hereby directed to submit to the JCEC its application for the renewal of 
its franchise not later than 30 days after the twentieth (20th) anniversary of the 
Concession Agreement. This franchise is hereby granted under the condition that 
it shall be subject to amendment, alteration, or repeal by Congress when the 
common good so requires. During the period of operation of the franchise herein 
granted, at least sixty per centum (60%) of the capital of the Grantee shall be owned 
by citizens of the Philippines, subject to the full control over the operation and 
maintenance of the nationwide transmission system and the grid of the Republic of 
the Philippines and related ancillary businesses by citizens of the Philippines. The 
Grantee shall comply with the Constitution and applicable laws pertaining to 
foreign ownership and management of public utilities. 
Section 3. Manner of Operation of System - The transmission system, grid and 
related facilities maintained, operated or managed by the Grantee, its successors or 
assigns, shall be operated and maintained at all times in accordance with industry 
standards, and it shall be the duty of the Grantee, its successors or assigns, 
whenever required to do so by the Energy Regulatory Commission (ERC) or its 
legal successor, to modify, improve and change such system or facilities in such 
manner and to such extent as the progress in science and improvements in the 
electric power services may reasonably require. The Grantee shall ensure 
compliance with the Grid Code of the Philippines providing connectivity services 
to power generation facilities, distribution utilities and direct customers in the most 
expeditious manner across all services from grid impact study to actual investment 
and construction of last-mile transmission facilities. The Energy Regulatory 
Commission shall provide guidelines on the time-bound rules at which the Grantee 
shall execute its responsibilities on connectivity services under the RA 9136 
EPIRA Law and the Grid Code of the Philippines. 
Section 4. Right of Eminent Domain - Subject to the limitations and procedures 
prescribed by law, the Grantee is authorized to exercise the right of eminent domain 
insofar as it may be reasonably necessary for the construction, expansion, and 
efficient maintenance and operation of the transmission system and grid and the 
efficient operation and maintenance of the sub-transmission systems which have 
not yet been disposed by TRANSCO. The Grantee may acquire such private 
property as is actually necessary and solely for the realization of the purposes for 
which this franchise is granted. Provided, that the Grantee shall seek prior written 
clearance from TRANSCO on any proposed exercise of such right. Provided 
further, That the applicable law on eminent domain shall be observed, particularly, 
the prerequisites of taking of possession and the determination and payment of just 
compensation. 
Section 5. Right of the Government - A special right is hereby reserved to the 
President of the Philippines, in times of war, rebellion, public peril, calamity, 
emergency, disaster, or disturbance of peace and order, or in other such instances 
when public interest so requires, to temporarily or permanently take over and 
operate the transmission system and/or the sub-transmission systems operated and 


maintained by the Grantee, to temporarily suspend the operation of any portion 
thereof or the facility in the interest of public safety, security and public welfare, 
or to authorize the temporary use and operation thereof by any agency of the 
government upon due compensation to the Grantee for the use of the said 
transmission system and sub-transmission systems and any portion thereof during 
the period when they shall be so operated. 
Section 8. Dispersal of Ownership. - The Grantee shall list, subject to the 
requirements of the Securities and Exchange Commission (SEC) and the PSE, and 
make a public offering of the shares representing at least twenty per centum (20%) 
of its outstanding capital stock or a higher percentage that may hereafter be 
provided by law within ten (10) years from the commencement of its 
operations: Provided, That the listing in the PSE of any company which directly or 
indirectly owns or controls at least thirty per centum (30%) of the outstanding 
shares of stock of the Grantee shall be considered full compliance of this listing 
requirement. In case compliance with this requirement is not reached, the ERC 
may, upon application of the Grantee, and after notice and hearing, allow such 
reasonable extension of the period within which the Grantee should list its shares 
of stock, if the market condition is not suitable for such listing. 
Section 9. Tax Provisions. - In consideration of the franchise and rights hereby 
granted, the Grantee, its successors or assigns, shall pay a franchise tax equivalent 
to twenty percent (20%) of all gross receipts derived by the Grantee from its 
operation under this franchise. Said tax shall in lieu of income tax and any and all 
taxes, duties, fees and charges of any kind, nature or description levied, established 
or collected by any authority whatsoever, local or national, on its franchise, rights, 
privileges, receipts, revenues and profits, and on properties used in connection with 
its franchise, from which taxes, duties and charges, the Grantee is hereby expressly 
exempted: Provided, That the Grantee, its successors or assigns, shall be liable to 
pay the same taxes on their real estate, buildings and personal property, exclusive 
of this franchise, as other corporations are now or hereby may be required by law 
to pay: Provided, further, That payment by Grantee of the concession fees due to 
PSALM under the concession agreement shall not be subject to income tax and 
value-added tax (VAT). 
Section 2. Crafting of Transmission Development Plan (TDP)– the responsibility to craft, 
design and propose the Transmission Development Plan of the Philippines shall be a joint 
responsibility of the Grantee and the National Transmission Corporation of the Philippines 
(TRANSCO). The initial preparation of the TDP shall be the responsibility of the Grantee, 
which shall be subject to the review and approval of TRANSCO before it can be submitted for 
the approval of the Department of Energy.  
Section 3. Separability Clause. - If, for any reason, any of the sections or provisions of this 
Act is declared unconstitutional or invalid, the other parts or provisions hereof which are not 
affected thereby shall continue to be in full force and effect. 
Section 4. Repealing Clause. – All laws, decrees, issuances, orders, letters of instructions, 
administrative orders, rules and regulations or parts thereof contrary to or inconsistent with any 
of the provisions of this Act are hereby repealed, amended or modified accordingly. 


Section 5. Effectivity Clause. - This Act shall take effect fifteen (15) days from the date of its 
publication, upon the initiative of the Grantee, in at least two (2) newspapers of general 
circulation in the Philippines. 
 
Approved,