Republic of the Philippines 
House of Representatives 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
House Bill No. 859 
Introduced by 
PhilRECA Party-List Representative Presley C. De Jesus 
EXPLANATORY NOTE 
The passage of Republic Act No. 9136 or the Electric Power Reform Act (EPIRA) 
of 2001 liberalized and privatized the power industry. Its main objectives were 
to secure the power supply and to reduce the cost of electricity through 
competition and efficiency. Through EPIRA, the government should have been 
freed from subsidizing capital-intensive power projects. The private sector is 
expected to be aggressive in putting up new power plants. 
Different sectors have strongly manifested the need to review EPIRA 
expressing discontent on its supposed rationale and objectives. It is generally 
found out that EPIRA has even resulted to the opposite of its objectives and 
instead unjustifiably gave way to rising costs of electricity. 
The reality is that the transition to market operations is not paved well; that 
rising costs are not avoided; and the liberalization of the industry promoted 
by EPIRA pre-supposing competition to lower the costs was not realized. The 
policy of the State to promote the economic development of the country and 
ensure availability of electricity at reasonable cost as a catalyst for economic 
growth and progress must be recognized. 
Unfortunately, the hope that the private sector would be aggressive to put up 
power plants to provide ancillary support and buffer to the ever-expanding 
energy requirements of the economy did not materialize. The private capitalist 
needed to wait, contract, and accumulate enough power requirement before 
they even start building the power plants. Or in other words, they needed a 
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“bigger problem” before they can propose a solution. And by the time the 
solution is proposed and accomplished, the energy requirement has ballooned 
already. 
And with such new energy situation comes burden to consumers because 
with bigger demand and same supply comes increases in power rates. The 
generation companies cannot be faulted on this problem. They simply would 
not put up plants without assurance of enough contracts or distribution 
utilities who would purchase the power they will generate – to the detriment 
of the consumers. 
The only way to solve the problem is for the government to intervene and 
provide the gap. The government needs to provide the necessary generating 
assets so that the consumers would not suffer either from high prices of 
electricity or no electricity at all. 
The passage of this bill is earnestly sought. 
REP. PRESLEY C. DE JESUS 
PhilRECA Party-List 


Republic of the Philippines 
House of Representatives 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
House Bill No. 859 
Introduced by 
PhilRECA Party-List Representative Presley C. De Jesus 
AN ACT 
MANDATING THE GOVERNMENT TO CONSTRUCT, OPERATE, AND 
MAINTAIN POWER GENERATING ASSETS TO ENSURE GRID STABILITY 
AND SUPPLY RELIABILITY FOR ANCILLARY AND OTHER PURPOSES, 
AMENDING FOR THE PURPOSE SECTION 47 OF REPUBLIC ACT NO. 
9136, OTHERWISE KNOWN AS THE ELECTRIC POWER INDUSTRY 
REFORM ACT OF 2001  
Be it enacted by the Senate and the House of Representatives on the Philippines 
in Congress assembled: 
SECTION 1. Participation of Government in Power Generation. - 
1 
The Government is hereby allowed to participate in power generation to help 
2 
provide stability of the grid and in securing reserve capacity for the country. 
3 
Provided, that the generated capacity of these government power plants will 
4 
be used primarily as ancillary services. Provided further, that the cost of 
5 
construction or capital investment of all government-owned power plants 
6 
shall not form part as component of the generation cost or capital recovery 
7 
fee (CRF) of all the power generated in its operation regardless of its utilization, 
8 
except interest of loans or borrowings by government, if any, incurred in the 
9 
construction of said facilities. Provided finally, that only the actual cost of 
10 
operations and maintenance shall be recovered as part of the generation cost 
11 
of all power generated from the government-owned power plants. 
12 


SECTION 2. Ownership and Operation of the Agus and Pulangui 
1 
Hydro Electric Plants Complexes. - To continue the provision of low power 
2 
rates in Mindanao, Agus and Pulangui hydroelectric power complexes in 
3 
Lanao Del Sur and Bukidnon provinces, respectively, will be permanently 
4 
exempted from privatization. For this purpose, Section 47 of the EPIRA is 
5 
hereby amended as follows:  
6 
“SEC. 47. NPC Privatization. – Except for THE AGUS AND PULANGUI 
7 
HYDRO ELECTRIC PLANTS COMPLEXES, the generation assets, real 
8 
estate, and other disposable assets as well as IPP contracts of NPC shall 
9 
be privatized in accordance with this Act AND the following guidelines, 
10 
except as provided for in Paragraph (f) herein: 
11 
a) Xxx… 
12 
b) Xxx… 
13 
c) Xxx… 
14 
d) Xxx… 
15 
e) Xxx… 
16 
f) The Agus and the Pulangui complexes in Mindanao shall be 
17 
excluded from among the generation companies that will be 
18 
privatized. Their ownership shall be transferred to the PSALM 
19 
Corp. and both shall continue to be operated by the NPC. Said 
20 
complexes SHALL BE RETAINED TO GENERATE POWER 
21 
WHICH WILL SERVE AS BUFFER SUPPLY TO AVERT 
22 
POWER CRISES. ELECTRIC COOPERATIVES SHALL BE 
23 
PRIORITIZED IN CONTRACTING THESE COMPLEXES’ 
24 
CAPACITY TO SERVE THE NEED OF THE RESIDENTIAL 
25 
CONSUMERS.  
26 
g) XXX 
27 
h) XXX 
28 
i) XXX 
29 
SECTION 3. Construction and Maintenance of Additional Power 
30 
Plants. - To ensure dependable reserve across the different grids without the 
31 
energy-consuming public suffering the cost of such ancillary services, the 
32 
government is mandated to construct, operate, and maintain its own power 
33 
plants outside of the market competition for power supply. For this purpose, 
34 
Section 47 (j) of EPIRA is hereby amended as follows: 
35 


“(j)  
NPC SHALL generate and sell electricity AND SHALL 
1 
CONSTRUCT 
AND 
MAINTAIN 
ADDITIONAL 
CAPACITY 
2 
EQUIVALENT TO THE CAPACITY OF THE BIGGEST POWER 
3 
PLANT IN EVERY GRID, FOR ANCILLARY PURPOSES AND TO 
4 
STABILIZE THE GRID IN ANY GIVEN TIME THAT A BASE 
5 
PLANT EXPERIENCE OUTAGE.” 
6 
SECTION 4. Non-impairment Clause. - Nothing in this Act shall be 
7 
construed as to diminish, impair or repeal rights recognized, granted, or made 
8 
available to disadvantaged, marginalized, or specific sectors under existing 
9 
laws. 
10 
SECTION 5. Implementing Rules and Regulations (IRR). - The 
11 
Department of Energy shall, in consultation with the concerned government 
12 
agencies and stakeholders, promulgate the implementing rules and 
13 
regulations to carry out the provisions of this Act.  
14 
SECTION 6. Separability. - Any portion or provision of this Act that 
15 
may be declared unconstitutional shall not have the effect of nullifying other 
16 
portions or provisions hereof as long as such remaining portions or provisions 
17 
can still subsist and be given effect in their entirety. 
18 
SECTION 7. Repealing Clause. - Sections and provisions of any laws, 
19 
rules, and regulations inconsistent with the provisions of this Act are hereby 
20 
repealed, amended, or modified accordingly. 
21 
SECTION 8. Effectivity. - This Act take effect fifteen (15) days after its 
22 
publication in the Official Gazette or in two (2) newspapers of general 
23 
circulation in the Philippines. 
24 
Approved, 
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