NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Third Regular Session
SENATE 
S.B. NO. 2943
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25 , IAN 22 P6 32
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Introduced by SEN. WIN GATCHALIAN
AN ACT AMENDING REPUBLIC ACT NO. 9511, ENTITLED "AN ACT 
GRANTING THE NATIONAL GRID CORPORATION OF THE PHILIPPINES A 
FRANCHISE TO ENGAGE IN THE BUSINESS OF CONVEYING OR 
TRANSMITTING ELECTRICITY THROUGH HIGH VOLTAGE BACK-BONE 
SYSTEM OF INTERCONNECTED TRANSMISSION LINES, SUBSTATIONS AND 
RELATED FACILITIES, AND FOR OTHER PURPOSES"
EXPLANATORY NOTE
On December 1, 2008, Republic Act No. 9511, otherwise known as "An Act Granting 
the National Grid Corporation of the Philippines (NGCP) a Franchise to Engage in the 
Business of Conveying or Transmitting Electricity through High Voltage Backbone 
System of Interconnection Transmission Lines, Substations and Related Facilities and 
for Other Purposes" (RA 9511) was enacted, granting the NGCP the 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."


To date, there has been a number of incidents which put to question NGCP's capability 
to comply with its obligations under Republic Act No. (RA) 9136, otherwise known as 
the Electric Power Industry Reform Act of 2001, RA 9511, and other related orders, 
rules and regulations. In addition, the NGCP's dividend policy remains questionable 
amid its struggle to complete some transmission projects, including potential threats 
to national security.
In a Senate hearing, the NGCP stated that the buik - or 75% to 99% of its net income 
made in 2014, 2015, 2017, and 2019 - were paid out as dividends to shareholders. 
In 2014, NGCP's dividends exceeded its net income with P24 billion issued to 
shareholders even though it only earned P22 billion. Since 2009, NGCP has earned 
P286 billion. Of this amount, P208 billion had been distributed as dividends to 
shareholders.1
In 2019, it was reported that China's State Grid Corporation has a 40% stake in the 
NGCP. The same report claimed that Chinese engineers had access to "key elements 
of the system, and that power could in theory be deactivated remotely on Beijing's 
orders."2
In 2022, the Energy Regulatory Commission (ERC) has asked the NGCP to explain why 
it should not be penalized for its failure to comply with existing policies designed to 
ensure enough power reserves when power plant capacities decline. In its order dated 
September 15, 2022, the ERC asked the NGCP to explain why no administrative 
penalty should be imposed for its failure to comply with a Department of Energy 
circular on contracting ancillary services. Such services are necessary to support the 
uninterrupted transmission of electricity from power plants to end users.3
On April 27,2023, the NGCP reported a system disturbance in the Visayas grid, causing 
a loss of 322.3 MW and power interruptions that persisted until April 30 and lasting
1 
Ralf Rivas. EXPLAINER: How China got into the Phiiippines’ power grid. Rappler. May 29, 
2023.
<https://www.rappler.com/business/explainer-ngcp-how-china-got-philippines-power-grid/>
2 James Griffiths. China can shut off the Phiiippines' power grid at any time, ieaked report warns. CNN. November 26, 2019. 
<https://edition.cnn.com/2019/ll/25/asia/phiiippines-china-power-grid-inti-hnk/index.htmi>
3 Jordeene B. Lagare. NGCP ordered to expiain iack of power reserve deais. Phiiippine Daiiy Inquirer. September 19, 2022 
<https://newsinfo.inquirer.net/1666482/ngcp-ordered-to-expiain-iack-of-power-reserve-deais >


up to 12 hours in the islands of Panay, Guimaras, and Negros, affecting over 1.5 
million households.4
On May 8, 2023, the NGCP reported red and yellow alerts in the Luzon grid due to a 
tripping of the Bolo-Masinloc 230kV Line 2, leading to the tripping of 2 units of the 
Masinloc Coal Power Plant which, in turn, caused power loss of 659 megawatts (MW) 
in the Luzon grid. The following day, the Manila Electric Co. (Meralco) reported power 
supply cuts due to a temporary system imbalance caused by a sudden plant outage.5
On January 2, 2024, a massive blackout hit Panay Island, and Iloilo City is estimated 
to have lost around between P400 million to P500 million daily - or P 1.5 billion in 
three days - following the blackout.6 The prolonged power outages in Panay Island 
have forced the suspension of classes in at least 733 public schools.7
Despite the delay of NGCP transmission projects, the costs of such infrastructure 
buildup are already being passed-on in the monthly electric bills of consumers, which 
aggravate their financial burden.8
As a measure to penalize the NGCP, to curb its bloated dividends despite its failure to 
maintain a "brownout-free" operation of the grid, and to instill discipline in its present 
and future leadership, this measure seeks to remove the system operation function 
from the franchise of the NGCP along with its special tax privilege of a franchise tax 
of 3% in lieu of other taxes, as well as to introduce provisions to strengthen 
government and congressional oversight, bearing in rnjPKTthdIapses of the NGCP and 
pending further review of NGCP's worthiness to continue hdiding its franchise.
[N GATCHALl
4 Wilnard Bacelonia. Senate panel eyes review of NGCP franchise amid frequent outages. Philippine News Agency. May 15, 2023. 
<https;//www.pna.gov.ph/articles/1201519>
5 Ibid.
6 
Jennifer Rendon. Blackout: Iloilo losing up to PSOO million dally. The Philippine Star. 5 January 2024. 
<https://www.philstar.eom/headlines/2024/01/05/2323533/blackout-iloilo-losing-p500-million-daily>
7 Ibid.
8 Myma M. Velasco. ERC vows sanctions vs NGCP on over 70 delayed projects. Manila Bulletin. May 25, 2023. 
<https://mb.com.ph/2023/5/25/erc-vows-sanctions-vs-ngcp-on-more-than-70-delayed-projects#google_vignette>


>Oli i:
NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
Third Regular Session
25 JAN 22 P6 32
SEN
Introduced by Senator Sherwin Gatchalian
AN ACT AMENDING REPUBLIC ACT NO. 9511, ENTITLED "AN ACT 
GRANTING THE NATIONAL GRID CORPORATION OF THE PHILIPPINES A 
FRANCHISE TO ENGAGE IN THE BUSINESS OF CONVEYING OR 
TRANSMITTING ELECTRICITY THROUGH HIGH VOLTAGE BACK-BONE 
SYSTEM OF INTERCONNECTED TRANSMISSION LINES, SUBSTATIONS 
AND RELATED FACILITIES, AND FOR OTHER PURPOSES"
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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SECTION 1. Section 1 of Republic Act No. 9511 is hereby amended to read as
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follows:
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SECTION 1. Nature and Scope of Franchise. — Subject to the provisions of the
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Constitution and applicable laws, rules and regulations, and subject to the
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terms and conditions of the concession agreement and other documents
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executed with the National Transmission Corporation (TransCo) and the Power
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Sector Assets and Liabilities Management Corporation (PSALM) pursuant to
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Section 21 of Republic Act No. 9136, which are not inconsistent herewith, there
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is hereby granted to the National Grid Corporation of the Philippines,
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hereunder referred to as the Grantee, its successors or assigns, a franchise to
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operate, manage and maintain, and in connection therewith, to engage in the


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business of conveying or transmitting electricity through high voltage back­
bone system of interconnected transmission iines, substations and reiated 
facilities, [systems operations/] and other activities that are necessary to 
support the safe and reliabie operation of a transmission system and to 
construct, instaii, finance, manage, improve, expand, operate, maintain, 
rehabiiitate, repair and refurbish the present nationwide transmission system 
of the Repubiic of the Phiiippines: PROVIDED, THAT THE PRIVILEGE TO 
OPERATE THE TRANSMISSION SYSTEM GRANTED HEREWITH TO 
THE GRANTEE SHALL EXCLUDE SYSTEM OPERATION. The Grantee shaii 
continue to operate and maintain the subtransmission systems which have not 
been disposed by TRANSCO. Likewise, the Grantee is authorized to engage in 
[ancillary business and] any reiated business which maximizes utiiization 
of its assets such as, but not limited to, teiecommunications system, pursuant 
to Section 20 of Repubiic Act No. 9136. The scope of the franchise shaii be 
nationwide in accordance with the Transmission Deveiopment Pian (TDP), 
subject to amendments or modifications of the said Pian, as may be approved 
by the Department of Energy (DOE) of the Repubiic of the Phiiippines; 
PROVIDED, THAT TRANSMISSION ASSETS TO BE CONSTRUCTED 
AND MAINTAINED BY THE GRANTEE SHALL BE DETERMINED AND 
SPECIFIED BY THE DOE IN THE TDP; PROVIDED FURTHER, THAT 
CRITICAL INFRASTRUCTURE PROJECTS IN THE TDP, AS MAY BE 
DETERMINED BY DOE, MAY BE CONSTRUCTED BY ANOTHER PARTY 
AND THEN TURNED OVER TO THE GRANTEE FOR MANAGEMENT, 
IMPROVEMENT, EXPANSION, MAINTENANCE, REHABILITATION, 
REPAIR, AND REFURBISHMENT. THE GRANTEE SHALL NOT, 
WHETHER DIRECTLY OR INDIRECTLY, ENGAGE IN SYSTEMS 
OPERATION OF THE TRANSMISSION GRID. "SYSTEM OPERATION" 
SHALL BE DEFINED AS THE REAL-TIME CONTROL, MANAGEMENT, 
AND COORDINATION OF THE ELECTRICAL POWER GRID, 
INCLUDING BUT NOT LIMITED TO LOAD DISPATCH, GRID
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BALANCING, VOLTAGE CONTROL, FREQUENCY REGULATION, AND
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ALL ACTIVITIES NECESSARY TO ENSURE THE SAFE, RELIABLE, AND
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EFFICIENT OPERATION OF THE TRANSMISSION SYSTEM.
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SECTION 2. Section 9 of Republic Act No. 9511 is hereby amended to read as
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follows:
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SECTION 9. Tax Provisions. — [In consideration of the franchise and
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rights hereby granted/ the] THE Grantee, its successors or assigns, shall
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pay [a franchise tax equivalent to three percent (3%) of all gross
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receipts derived by the Grantee from its operation under this
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franchise! Said tax shall be in-lieu of] income tax and any and all taxes,
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duties, fees and charges of any kind, nature or description levied, established
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or collected by any authority whatsoever, local or national, on its franchise,
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rights, privileges, receipts, revenues and profits, and on properties used in
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connection with its franchise^ from which taxes/ duties and charges/ the
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Grantee is hereby expressly exempted]: Provided, That the Grantee, its
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successors or assigns, shall be liable to pay the same taxes on their real estate,
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buildings and personal property, exclusive of this franchise, as other
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corporations are now or hereby may be required by law to pay: Provided,
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further. That payment by Grantee of the concession fees due to PSALM under
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the concession agreement shall not be subject to income tax and value-added
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tax (VAT): PROVIDED FINALLY, THAT THE GRANTEE SHALL NOT BE
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ALLOWED TO PASS-ON TAXES TO CONSUMERS.
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SECTION 3. Section 15 of Republic Act No. 9511 is hereby amended to read as
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follows:
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SECTION 15. Reportoriai Requirement - The Grantee shall submit,
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INCLUDING BUT NOT LIMITED TO, an annual report of finances and
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operations to the Congress of the Philippines^], THROUGH THE JOINT


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CONGRESSIONAL ENERGY COMMISSION (JCEC), ON ITS
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COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE
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FRANCHISE AND ON ITS OPERATIONS ON OR BEFORE APRIL 30
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EVERY YEAR AFTER THE EFFECTIVITY OF THIS ACT, AND SUCH
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OTHER DOCUMENTS OR INFORMATION AS MAY BE REQUIRED BY
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THE JCEC.
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THE ANNUAL REPORT SHALL INCLUDE AN UPDATE ON THE ROLLOUT,
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DEVELOPMENT, OPERATION AND/OR EXPANSION OF THE
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BUSINESS; COMPLIANCE WITH THE TDP; AUDITED FINANCIAL
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STATEMENTS; LATEST GIS OFFICIALLY SUBMITTED TO THE SEC (IF
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AVAILABLE OR APPLICABLE); AND CERTIFICATION FROM THE ERC
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ON THE STATUS OF ITS PERMITS AND OPERATIONS.
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IN ADDITION TO THEIR EXISTING POWERS AND FUNCTIONS UNDER
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REPUBLIC ACT NO. 7638, REPUBLIC ACT NO. 9136, AND OTHER
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APPLICABLE LAWS, THE DOE AND THE ERC SHALL REGULATE THE
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COMPLIANCE OF THE GRANTEE WITH THE TDP, AND ITS OTHER
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OBLIGATIONS UNDER THIS FRANCHISE, ITS CONCESSION
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AGREEMENT, AND OTHER APPLICABLE LAWS, RULES AND
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REGULATIONS.
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SECTION 4. Repealing Clause. - All laws, decrees, orders, issuances, rules and
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regulations or parts thereof which are inconsistent with this Act are hereby repealed
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or modified accordingly.
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SECTION 5. Effectivity. - This Act shall take effect fifteen (15) days after its
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publication in the Official Gazette or in at least two (2) newspapers of general
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circulation.
Approved,