NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE
S.B. No. 486
•22 JUU3 AlO-58
RUCElVtO
Introduced by Senator WIN GATCHALIAN
AN ACT REMOVING THE PUBLIC OFFERING REQUIREMENT OF 
GENERATION COMPANIES, AMENDING FOR THE PURPOSE SECTION 43(T) 
OF REPUBLIC ACT NO. 9136, OTHERWISE KNOWN AS THE ELECTRIC 
POWER INDUSTRY REFORM ACT OF 2001
EXPLANATORY NOTE
Republic Act No. (RA) 9136, otherwise known as the Electric Power Industry Reform 
Act of 2001, provides that it is the declared policy of the State (i) to ensure the quality, 
reliability, security and affordability of the electric power supply; (il) to enhance the 
Inflow of private capital and broaden the ownership base of the power generation 
sector; and (iii) "to ensure transparent and reasonable prices of electricity in a regime 
of free and fair competition and full public accountability." Towards these ends, RA 
9136 requires generation companies (GenCos) which are not publicly listed to offer 
and sell to the public not less than 15% of their common shares of stock "to ensure 
the successful restructuring and modernization of the electric power industry."
After almost 20 years since RA 9136 was passed, various reasons show that this 
requirement no longer serves its purpose. First, at present, the electric power industry 
has already been restructured with Into four sectors: generation, transmission, 
distribution, and supply; Second, the generation sector is "competitive and open" in 
that It is not a public utility operation thus allowing more players to enter the market. 
Only the generation companies' power supply agreements with distribution utilities are 
subject to the approval of the Energy Regulatory Commission (ERC). As a result of 
these two reasons, there are now more participants In the generation sector with


about 151 generation companies accounting for 26,865.15 megawatts (MW) of 
installed capacity in 2020.1 Third, as a business affected with public interest, there 
are policies in place to ensure the protection of consumers and the public in general, 
such as the requirement of a Certificate of Compliance from the ERC,2 the reliability 
index which provides for a cap in the allowed outages of power plants,3 and the 
competitive selection process (CSP) requirement in the procurement of power supply 
by distribution utilities.4 These require generation companies to modernize their 
facilities to meet regulatory standards and ensure market competitiveness to compete 
in the CSP. Fourth, it is expected that the demand for electric power supply will 
increase In the next 20 years. According to the Philippine Energy Plan (PEP) 2020- 
2040, by 2040, the projected total peak demand is 54.66 gigawatts (GW) under 
business as usual scenario (BAU) while 52.40 GW under clean energy scenario (CES).5 
These require an additional total installed capacity of 69.4 gigawatts (GW) under BAU 
and 92.3 GW under CES in 2040 from 26.3GW in 2020.6 Moreover, under country's 
objective to attain 50% of energy mix attributed to renewable energy by 2040, the 
country needs an additional RE capacity of 45.6 GW under BAU and 73.9 GW under 
CES by 2040.7 Towards these ends, the country needs an environment which attracts 
more investment in the generation sector especially for RE.
Given the foregoing, the initial purpose of the public offering requirement for 
generation companies In the EPIRA no longer serves its purpose and If we are to 
encourage more investments in generation to meet our demanch^eeds In the next 
twenty years, it Is crucial to eliminate this additional barrier/to (i^ry. As such, the 
immediate passage of this measure is sought.
1 DOE Power Statistics (2022).
2 Section 6 of RA 9136.
3 ERC Resolution No. 10 Series of 2020. A Resolution Adopting the Interim Reliability Performance Indices and Equivalent Outage 
Days Per Year of Generating Units. Issued on 16 November 2020. Effective on 3 January 2021.
4 Department of Energy (DOE) Department Circular No. DC 2018-02-0003. Adopting and Prescribing the Policy for the Competitive 
Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreement for the Captive Market. Signed on
1 February 2018. Effective on 10 February 2018. (As amended by DOE Department Circular No. DC 2021-09-0030)
5 Pages 180 and 196.PEP 2020-2040. Available at https://www.doe.gov.ph/sites/default/files/pdf/pep/PEP_2020- 
2040_signed_01102022.pdf. Accessed on 6 June 2022.
6 Pages 181 and 
191.PEP 2020-2040. 
Available 
at 
https://www.doe.gov.ph/sites/default/files/pdf/pep/PEP 2020-
2040_signed_01102022.pdf. Accessed on 6 June 2022.
2 
Pages 92 
and 
94.PEP 
2020-2040. 
Available 
at 
https://www.doe.gov.ph/sites/default/files/pdf/pep/PEP 2020-
2040_signed_01102022.pdf. Accessed on 6 June 2022.


4
5
6
7
8 
9
10
11
12
13
NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE
s.B. No. 486
Ik' h Srnn-x
of the
'22 JUL13 A10 58
Rl:CE!V£D BV;
Introduced by Senator WIN GATCHALIAN
AN ACT REMOVING THE PUBLIC OFFERING REQUIREMENT OF 
GENERATION COMPANIES, AMENDING FOR THE PURPOSE SECTION 43(T) 
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 of the Philippines in 
Congress assembled:
1 
SECTION 1. Removal of Public Offering Requirement of Generation Companies. -
2 
Section 43(t) of Republic Act No. 9136, otherwise known as the Electric Power Industry
3 
Reform Act of 2001, is hereby amended to read as follows:
"SEC. 43. Functions of the ERC. - The ERC shall promote competition, encourage 
market development, ensure customer choice and penalize abuse of market 
power in the restructured electricity industry. In appropriate cases, the ERC is 
authorized to issue cease and desist order after due notice and hearing. Towards 
this end, it shall be responsible for the following key functions in the restructured 
industry:
XXX
(t) Perform such other regulatory functions as are appropriate and 
necessary in order to ensure the successful restructuring and modernization 
of the electric power industry, such as, but not limited to, the rules and


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
26
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 share of stocks: Provided/ 
however, That [generation companiosj distribution utilities or their 
respective holding companies that are already listed in the PSE are deemed 
in compliance. For existing [companies] DISTRIBUTION UTILITIES, 
such public offering shall be implemented not later than five (5) years from 
the effectivity of this Act. New [companies] DISTRIBUTION 
UTILITIES shall implement their respective public offerings not later than 
five (5) years from the issuance of their certificate [of-compliance] OF 
PUBLIC CONVENIENCE AND NECESSITY; and
XXX."
SECTION 2. Implementing Rules and Regulations. - The Energy Regulatory 
Commission shall, in consultation with the Department of Energy, other relevant 
government agencies, the electric power industry participants, consumers, and other 
public and private stakeholders, promulgate the Implementing Rules and Regulations 
of the Act within ninety (90) calendar days from its effectivity.
SECTION 3. Separability Clause. - If, for any reason, any provision of this Act is 
declared to be unconstitutional or invalid, the other sections or provisions hereof which 
are not affected thereby shall continue to be in full force or effect.
SECTION 4. Repealing Clause. - All laws, decrees, orders, rules and regulations or 
parts thereof which are inconsistent with or contrary to the provisions of this Act are 
hereby repealed, amended or modified accordingly.
24 
SECTION 5. Effectivity. - This Act shall take effect fifteen (15) days after its complete
25 
publication in the Official Gazette or in a national newspaper of general circulation.
Approved,