1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL No. _____ 
-------------------------------------------------------------------------------------------------------- 
Introduced by  
ACT Teachers Party-List Rep. FRANCE L. CASTRO,  
GABRIELA Women’s Party Rep. ARLENE D. BROSAS,  
and KABATAAN Party-List Rep. RAOUL DANNIEL A. MANUEL 
-------------------------------------------------------------------------------------------------------- 
AN ACT 
PROHIBITING OWNERSHIP BY ELECTRICITY DISTRIBUTION UTILITIES 
IN ELECTRICITY GENERATION COMPANIES AND RETAIL ELECTRICITY 
SUPPLIERS 
EXPLANATORY NOTE 
The Philippines has the unenviable reputation of having one of the highest 
electricity rates in Asia.1 Despite 20 years of the Electric Power Industry Reform Act or 
EPIRA, the country has not moved from its top spot in the world’s most expensive 
electricity list. 
One major flaw of the EPIRA is that it allows distribution utilities to own generation 
companies. The industry uses a seemingly indifferent term for it – cross-ownership. But 
far from being indifferent, recent developments reveal that cross-ownership is generously 
biased in favor of the distribution utility and poverty-inducing to the consumers.  
The logic is simple. Given that the generation cost of electricity is passed on by the 
distribution utility to the consumers, the higher the generation price, the higher the rates 
the consumers will pay. If the distribution utility also owns the generation company, it will 
be to its financial interest to pay a higher generation cost. In other words, cross-ownership 
brings about a conflict of interest that the distribution utility will resolve to fatten its 
pockets rather than lower electricity rates to consumers. 
It is often touted that competitive mechanisms such as retail competition and open 
access is an effective countermeasure because consumers will have the power to choose 
the electricity supplier anyway and ignore the generation companies owned by the 
distribution utility when they are expensive. However, this is not what is happening in the 
real world. In the name of the EPIRA, the regulator has abetted conflicted distribution 
utilities to own retail electricity suppliers or be one themselves, or both. It is not difficult 
to guess which generation companies these retail electricity suppliers prefer. 
1 As of January 2018, the country’s average electricity price for residential customers ranked second highest in Asia. 
https://businessmirror.com.ph/2018/08/07/average-electricity-price-in-phl-2nd-highest-in-asia-think-tank/ 
May 12, 2023
2:55 pm
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It has also been the convenient excuse that competitive selection process or CSP 
prevents the conflicted distribution utility from unduly awarding power supply agreements 
(PSAs) to the generation companies it owns or has business ties with. Again, this is not the 
reality. Like most public biddings, the CSP can be rigged. Never underestimate a 
monopoly’s power to abuse. 
 
Case in point: MERALCO.  It is the largest distribution utility in the country, 
accounting for 55% of the country’s total electricity output and with a customer base of 
almost 7 million.  No other monopoly comes remotely close to its size and power. 
 
In April 2016, MERALCO signed seven (7) “sweetheart” power supply agreements 
or PSAs amounting to 3,551 megawatts (MW) in contracted capacity, at a time when peak 
demand stood at 6,748 MW.  In other words, it contracted more than 50% of its peak 
demand at that time, breaching the limit allowed by EPIRA. 
 
As disturbing as the disregard of the legal limits was, the fact that MERALCO’s 
partners in these PSAs are generation companies or Gencos that were either wholly-owned 
or partly-owned by MERALCO was too brazen to ignore: 
 
 
GenCo 
PSA 
Meralco Interest 
1 
Atimonan One 
Energy, Inc. 
1,200 MW 100% owned by Meralco PowerGen 
Corporation (“MGen”);  in turn 100% owned by 
MERALCO 
2 
Global Luzon 
Energy 
Development 
Corporation 
600 MW 
100% owned by Global Business Power 
Corporation; in turn owned by MGen and 
companies controlled by M V Pangilinan and/or 
Salim Group of Indonesia (Beacon Powergen 
Holdings Inc., Beacon Electric Asset Holdings 
Inc., Metro Pacific Investments Corporation and 
PLDT Communications and Energy Ventures, 
Inc.) 
3 
Mariveles Power 
Generation 
Corporation 
528 MW 
49% owned by MERALCO’s MGen; 51% 
owned by SMC Global Power Holdings 
4 
Central Luzon 
Premiere Power 
Corporation 
528 MW 
100% owned MERALCO partner in Mariveles 
Power Generation Corporation, SMC Global 
Power Holdings 
5 
St. Raphael Power 
Generation 
Corporation 
400MW 
50% owned by MERALCO’s MGen; 50% by 
Semirara Mining and Power Corp. 
6 
Redondo 
Peninsula Energy 
Inc. 
225MW 
47% owned by MERALCO’s MGen; 0.03% by 
MERALCO Pension Fund; remaining held by 
Therma Power, Inc., Taiwan Cogeneration Int’l. 
Corp. and several individuals 
7 
Panay Energy 
Development 
Corporation 
70MW 
100% owned by Panay Power Holdings Corp., 
in turn 89.3% owned by Global Business Power 
Corporation that traces its ownership base to 
MERALCO and MERALCO’s controlling 
shareholders 
 


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In 2017, the House of Representatives Joint Committees on Energy and Good 
Government and Public Accountability launched an inquiry to look into these deals of 
MERALCO with its affiliated Gencos. For being privately contracted with haste and in 
such bulk never been seen before in the industry, these PSAs were called MERALCO’s 
midnight deals. 
 
After several exhaustive hearings, the investigation resulted in a recommendation, 
among others, to “review the EPIRA with the view of strengthening the policy against 
cross-ownership, market abuse and anti-competitive behavior in the power industry, 
including the prohibition on a distribution utility to own or have any beneficial interest in 
power generation company and limiting Gencos in the business of generating and supply 
of electric power.” 
 
It was further revealed during the course of the inquiry that the PSAs were very 
expensive and actually cost significantly higher than what MERALCO has declared.  The7 
PSAs’ average price of P5.12 per kWh was found to be P1.45 per kWh higher, translating 
to more pass on charges to consumers in the amount of P159.3 billion a year or P3.19 
trillion in 20 years.   
 
 
MERALCO’s expensive self-dealing contracts were also taken up by the Supreme 
Court after the Alyansa para sa Bagong Pilipinas, Inc. filed a petition against MERALCO, 
ERC, DOE and the seven partners of MERALCO in the PSAs.  On 17 May 2019, the 
Supreme Court ordered that all PSA applications submitted to the ERC on or before 30 
June 2015 should undergo CSP.  The 7 MERALCO PSAs were thus invalidated. The SC 
ruled that “both Meralco and the ERC have been remiss in their obligations.  Going 
through competitive bidding as prescribed in the 2015 DOE Circular is the only way to 
ensure a transparent and reasonable cost of electricity to consumers.” 
 
  
MERALCO proceeded in 2019 to conduct CSP for its power supply requirements.  
Out of the three CSPs that were launched, 2 were successful with several GenCos 
winning for the 1700 MW of MERALCO’s power supply requirements.  
 
The one CSP that failed was mired in suspicions of bid rigging in favor of 
MERALCO’s nullified 1200 MW deal with its subsidiary MGen’s Atimonan One Energy.  
The subject CSP’s bidding terms were deemed to be so skewed towards Atimonan that no 
other Genco believed it was worth submitting a bid for.  
 
In the latter part of 2020, MERALCO commenced a CSP anew for 1800 MW of 
power supply needed starting 2024. Again, the terms of reference have been under question 
for appearing to bag a PSA for Atimonan.  
 
Outside of the CSP quagmire, MERALCO has also been asked to answer allegations 
of irregularity in the power pricing of Quezon Power Philippines Ltd. (QPPL), owner and 
operator of a coal-fired power plant in Mauban, Quezon.   
 
During the 18th Congress, Bayan Muna Representatives Carlos Zarate, Ferdinand 
Gaite and Eufemia Cullamat filed House Resolution 1350 which revealed that “QPPL has 
been perennially the most expensive coal power in the country since 2000 with rates 9 to 
12 percent higher than the other coal plants. However, in 2020, Meralco paid QPPL 51 to 
82 percent higher than other coal plants.”  
 


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According to Matuwid na Singil sa Kuryente, QPPL is fully owned by Electricity 
Generating Public Company Limited (EGCO) of Thailand. The Thai company is MGen’s 
minority partner in San Buenaventura Power Ltd. Co., which in turn owns a separate 460-
megawatt coal-fired power plant, also in Mauban, that likewise supplies electricity to 
MERALCO.   
 
  The investigation in aid of legislation was sought to shed light on the alleged 
overpriced generation rates paid by MERALCO to QPPL whose owner is a MERALCO 
partner in another coal plant project. MERALCO has never answered the issue specifically 
and simply hid behind unresponsive generalizations in the media. 
 
This pattern of anti-competitive behavior and abuse of monopoly power that 
MERALCO has consistently displayed begs the prohibition of cross-ownership in the 
distribution sector and the rest of the industry. The retail competition and open access and 
the competitive selection process mechanisms are not enough to protect the consumers 
from MERALCO’s shameless self-dealing. 
 
 In gist, any entity should not be allowed ownership in a distribution utility like 
MERALCO, while at the same time owning any beneficial interest in generation companies 
and retail electricity suppliers. 
 
   This Bill was first filed by Bayan Muna Party-list Representatives Carlos Zarate, 
Ferdinand Gaite and Eufemia Cullamat as HB 9260. The passage of this bill is earnestly 
sought. 
 
 
 
 
________________________________ 
Rep. FRANCE L. CASTRO 
ACT Teachers Party-List 
 
 
 
 
________________________________ 
Rep. ARLENE D. BROSAS 
GABRIELA Women’s Party 
 
 
________________________________ 
Rep. RAOUL DANNIEL A. MANUEL 
KABATAAN Party-List 


1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL No. _____ 
-------------------------------------------------------------------------------------------------------- 
Introduced by  
ACT Teachers Party-List Rep. FRANCE L. CASTRO,  
GABRIELA Women’s Party Rep. ARLENE D. BROSAS,  
and KABATAAN Party-List Rep. RAOUL DANNIEL A. MANUEL 
-------------------------------------------------------------------------------------------------------- 
AN ACT 
PROHIBITING OWNERSHIP BY ELECTRICITY DISTRIBUTION UTILITIES 
IN ELECTRICITY GENERATION COMPANIES AND RETAIL ELECTRICITY 
SUPPLIERS 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. 
Short Title. – This Act shall be known as the “Electricity 
Consumer Protection Against Cross-ownership Act”. 
SEC. 2. Declaration of State Policy. – It is hereby declared the policy of the State 
that any form of ownership by an electricity distribution utility in any person engaged in 
electric power generation or electricity supply is inimical to the interests of the electricity 
consumers, the general public, and the national economy. 
SEC. 3. Prohibition Against Cross-Ownership. – Any provision of law 
notwithstanding, it shall be unlawful for an electricity distribution utility, or its affiliate, to 
hold any interest, directly or indirectly, in any person engaged in electric power generation 
or electricity supply. 
The foregoing prohibition shall also apply to: 
(a) stockholders and officers of the electricity distribution utility
company, including their relatives within the fourth civil degree of 
consanguinity or affinity;  
(b) any juridical entity holding any financial interest in the electricity
distribution utility; and 
(c) stockholders and officers of any juridical entity holding any
financial interest in the electricity distribution utility and their relatives 
within the fourth civil degree of consanguinity or affinity. 
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SEC. 4. Definition of Terms. – As used in this Act: 
 
(a) “Affiliate” means any person which, alone or together with any 
other person, directly or indirectly, through one or more intermediaries, 
controls, is controlled by, or is under common control with another person.  
 
(b) “Control” means the power to direct or cause the direction of the 
management policies of a person by contract, agency, or otherwise. 
(c) “Energy Regulatory Commission” or “ERC” refers to the 
regulatory agency created under Section 38 of Republic Act 9136 or its 
successor as may be provided by law. 
 
(d) “Electricity distribution utility” refers to private distribution 
utilities, cooperatives, and other entities authorized by the ERC to engage in 
the distribution of electricity or in the conveyance of electricity through a 
distribution system to end-users pursuant to Republic Act 9136 and/or other 
laws. 
 
(e) “Indirect interest” includes beneficial ownership or the ability to 
exercise any right usually accorded to an owner by virtue of trust or other 
contractual arrangements. 
 
(f) “Person engaged in electric power generation” refers to a natural 
or juridical person authorized by the ERC to operate facilities used in the 
generation of electricity pursuant to Republic Act 9136 and/or other laws. 
 
(g) “Person engaged in electricity supply” refers to a natural or 
juridical person selling, trading, or dealing in electricity or rights to 
electricity supply including the retail electricity suppliers authorized by the 
ERC to sell, broker, market or aggregate electricity to the end-users pursuant 
to Republic Act 9136. 
 
(h) “Philippine Competition Commission” or “PCC” refers to the 
independent quasi-judicial body created under Republic Act 10667. 
 
Sec. 5. Any interest in an electricity distribution utility or a person engaged in 
electric power generation or electricity supply that becomes unlawful upon the effectivity 
of this Act shall be divested through absolute transfer by its holder within one (1) year from 
the date of said effectivity. 
 
Sec. 6. Any agreement by and between an electricity distribution utility company as 
one party and an affiliate person engaged in electric power generation or an affiliate person 
engaged in electricity supply as the other party, although valid under Republic Act 9136 at 
the time of its execution, shall ipso facto be considered void six (6) months from the date 
of the effectivity of this Act unless the same has expired at an earlier date, in which case it 
shall be considered terminated.  
 
All electricity distribution utilities shall report such agreements that have come into 
its knowledge to the Philippine Competition Commission within thirty (30) days from the 
effectivity of this Act and the latter, in turn, shall promptly publish a consolidated list in its 
official website. The failure by the distribution utility company to report or by the PCC to 


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publish the list shall not in any way delay or negate the voiding of any agreement pursuant 
to the preceding paragraph but shall constitute a violation of this Act. 
 
Sec. 7. Administrative Fines. – Any person who holds an interest that is unlawful 
under Section 3 of this Act shall be fined an amount equivalent to the face value of the 
interest, the market value of the interest if determinable, or an amount equivalent to Twenty 
Million Pesos (₱20,000,000.00), whichever is higher. 
 
Any person who fails to divest a prohibited interest as provided under Section 5 of 
this Act shall be fined an amount equivalent to the face value of the interest, the market 
value of the interest if determinable, or the amount of Ten Million Pesos (₱10,000,000.00), 
whichever is higher. 
 
Any distribution utility company that fails to make the report under Section 6 of this 
Act shall be fined the amount of Five Million Pesos (₱5,000,000.00) for every agreement 
unreported. 
 
Any electricity consumer may file a complaint with the PCC, which shall promptly 
decide on the complaint in accordance with its rules of procedure. Where the existing rules 
of procedure of the PCC cannot be utilized for the purpose, the PCC shall promulgate the 
necessary rules within six (6) months from the effectivity of this Act. 
 
Sec. 8. Criminal Penalties. – Affiliated distribution utility companies, electric 
power generation companies, and retail electricity suppliers entering into an agreement 
relating to the supply of electricity despite the existence of an unlawful interest under 
Section 3 shall, for each and every violation, be penalized by imprisonment from two (2) 
to seven (7) years, and a fine of Fifty Million Pesos (₱50,000,000.00) or the estimated 
value of the relevant agreement, whichever is higher. The penalty of imprisonment shall 
be imposed on their officers, directors, or employees holding managerial positions, who 
are knowingly and willfully responsible for such violation. 
 
Sec. 9. Separability Clause. – If any clause, sentence, section or part of this Act 
shall be adjudged by a court of competent jurisdiction to be invalid, such judgment shall 
not affect, impair or invalidate the remainder of this Act, but shall be confined in its 
operation to the clause, sentence, paragraph, section, or part thereof directly involved in 
the controversy. 
 
Sec. 10. Repealing Clause. – All laws, decrees, executive orders, and regulations, 
or part or parts thereof, including Republic Act 9136, inconsistent with any provision of 
this Act are hereby repealed, amended, or modified accordingly.   
 
Sec. 11. Effectivity Clause. – This Act shall take effect fifteen (15) days following 
its publication in the Official Gazette or at least two (2) national newspapers of general 
circulation.  
 
Approved,