Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

16™ Congress
2" Regular Session

nouse BiLLNo4819

Introduced by HON. BENHUR L, SALIMBANGON.

EXPLANATORY NOTE

‘The energy sector is vital in the progress of our nation, One of the laws that govern
the energy industry is the electric power industry reform act of 2001. Certain provisions of
the said law have become obsolete due to the changing times, The law is not responsive
anymore to the varying needs of the stakeholders in the energy sector. Therefore, there is a
need to amend certain provisions of the saéd law. Moreover, the proposed amendments are in
answer to the many complaints from stakeholders that some cases lodged before the ERC
takes forever, Identified as major culprits fr the delay are as follows:

1) The very technical nature of the cases entertained by the Commission and the
associated voluminous documents

2) ‘The fact that there are more than a hundred utilities regulated by the Commission
that are required to file periodic applications/petitions, not to mention force
majeure and capex applications that are dependent on occurrence or when the
necessity arises.

3) The highly-centralized organizational structure of the ERC

4) The very limited budget allocation

5) Other logistical issues due to the mandate of EPIRA, albeit necessary, that the
Commission shall hold at least one hearing in the municipality or locality that will
be affected by the Commission

6) The fact that issues may not be the same or common among the three geographical
subdivisions which are made even more distinct because they are served by
different grids, despite the interconnection of Luzon and the Visayas.

7) The fact that the ERC is undermanned, a fact that even the USAID recognized

As recommended by the ADB, the ERC needs reorganization due to the myriad of
changes that the industry has undergone since the enactment of the EPIRA. ‘The proposed
amendments are designed to decentralize the Commission by increasing the number of
‘Commissioners and dedicate one division each for Luzon, Visayas and Mindanao.

Hence, the approval of this bill is earnestly requested.

|BENHUR L. SALIMBANGON


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

16™ Congress
2” Regular Session

House BILLNo,_ 4819

Introduced by HON. BENHUR L. SALIMBANGON

A BILL AMENDING REPUBLIC ACT 9136, OTHERWISE KNOWN AS “THE
ELECTRIC POWER INDUSTRY REFORM ACT OF 2001” AND EXPANDING AND
ENHANCING THE ENERGY REGULATORY COMMISSION

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

Chapter IV of R.A. 9136 is hereby amended to read as follows
(CHAPTER IV
REGULATION OF THE POWER INDUSTRY
Sec. 38, Creation of the Energy Regulatory Commission. x x x

‘The Commission shall be composed of a Chairman and eight (8) 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 (3) years actual and distinguished experience
in their respective fields of expertise: Provided, that out of the 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 law, and 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 Commi
Division. The Presiding Commissioners of the Visayas and Mindanao
members of the Philippine Bar.

ion shall be Presiding Commissioner of the Luzon
ivisions shall be



Within three (3) months from the time this law take effect, the Chairman shall submit
for the approval of 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 shalll 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. 9136; Provided,
further, that for the purpose of determining who would be assigned to which Division, the
members prior to this amendment shall agree among themselves their respective assignments;
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
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 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 any form of energy and must, therefore, divest through sale or legal disposition of
any and all interest in the energy sector upon assumption of office.

‘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 bane.

‘The Commission en banc shall be composed of all members of the Commission.
‘The Chairman shall preside the sessioms of the Commission en banc where two-t
(2/3) majority shall constitute a quorum.

‘The presence of at 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.

SEC.39. Compensation and other Kmoluments for ERC Personnel. ~ The
compensation and other emoluments for tie Chairman and members of the Commission and
the ERC personnel shall be exempted from the coverage of Republic Act No, 6758, otherwise
‘known as the “Salary Standardization Act”.


‘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 shall
upon completion of their term or upon becoming eligible for retirement under existing laws,
be entitled to the same retirement benefits and the privileges provided for the Presiding
Justice and Associate Justices of the Supreme Court, respectively.

‘The salary and benefits of the ERC personnel shall be equivalent to those of the
personnel of the Supreme Court. For thiis purpose, the ERC shall be allowed to retain a
portion of its revenues adequate for the performance of its functions.

SEC.40, Enhancement of technical Competence. ~The ERC shall establish rigorous
training programs for its staff for the purpose of enhancing the technical competence of the
ERC in the following areas: evaluation of technical performance and monitoring of
compliance with service and performance: standards, performance-based rate-setting reform,
environmental standards and such other areas as will enable the ERC to adequately perform
its duties and functions

SEC, 41. Promotion of Consumer Interest, - The ERC shall handle consumer
complaints and ensure the adequate promotion of consumer interests

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

Approved,