Republic of the Philippines
HOUSE OF REPRESENTATIVE
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

HOUSE BILLNO.__9035

INTRODUCED BY
1-CARE PARTY LIST REPRESENTATIVE SALVADOR P.
CABALUNA III

EXPLANATORY NOTE

This bill seeks to grant Rural Electric Cooperative Associations
the right of first refusal to purchase state-owned power generation
plants.

By virtue of Republic Act No. 9136, otherwise known as the
Electric Power Industry Reform Act of 2001, all state-owned power
generation plants are to be privatized in order to allow the entry of a
deregulated market in the energy sector. However, despite the good
intent of the said law, the unfolding of recent events have shown that
instead of serving the common good, the detriment of the public is
being threatened by the impending power rate increases resulting
from the covert maneuverings of a few in the power sector.

The Rural Electric Cooperatives are defenseless in the midst of
this orchestrated move to create an oligopoly in the energy sector
and without any armor to shield it from the economic abuse of the
Players in power generation, the rights of the rural energy consumers
will be compromised.

Allowing the rural electric cooperatives to have the right of first
refusal will equip them with the necessary power to operate
generation plants. By allowing them to run power generation plants,
tural energy consumers are being empowered to control the price of
electricity.

Immediate approval of this bill is earnestly Sout

SALVADOR P. CABALUNA III
Sectoral Representative
1-CARE Party-List


Republic of the Philippines
HOUSE OF REPRESENTATIVE
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO.

INTRODUCED BY
1-CARE PARTY LIST REPRESENTATIVE SALVADOR P. CABALUNA III

AN ACT
GRANTING RURAL ELECTRIC COOPERATIVE ASSOCIATIONS THE RIGHT
OF FIRST REFUSAL TO PURCHASE STATE-OWNED POWER GENERATION
PLANTS, AMENDING FOR THE PURPOSE SECTION 28 OF REPUBLIC ACT
NO. 9136 OTHERWISE KNOWN AS THE ELECTRIC POWER INDUSTRY
REFORM ACT OF 2001 AND FOR OTHER PURPOSES

SECTION 1. Short title. This Act shall be known as the "Rural Electric
Cooperative Associations’ Right of First Refusal Act of 2011.”

SEC. 2. Definitions. As used in this Act:

(a) _ "Rural Electric Cooperative Association" means an aggrupation of
two (2) or more geographically adjacent rural electric cooperatives organized for
the purpose of asset consolidation in order to muster the necessary amount of
money to purchase and operate state-owned generation plant or plants

(b) “State-owned generation plant’ means any plant capable of
generating energy from any of the sources available including but not limited to
hydroelectric, geothermal, biomass, diesel-fueled and coal-fired: and

(c) _ "Right of first refusal" means the right granted under this Act to
Rural Electric Cooperative Association to have the first opportunity to purchase a
state-owned power generation plant upon the government's decision to sell the
same at the terms and conditions offered by a third party or at predetermined
terms.

SEC. 3. Right of First Refusal of Rural Electric Cooperative
Associations. Rural Electric Cooperative Associations are hereby granted the
right of first refusal to purchase state-owned generation plant or plants. This right
shall be enjoyed only by a Rural Electric Cooperative Association after it has
consolidated its assets for the purpose of procuring a state-owned generation
plant.

SEC. 4. Remedial Measure of a Rural Electric Cooperative
Association. In the event that the assets of a Rural Electric Cooperative
Association is not sufficient for the purpose of purchasing a state-owned
generation plant, the National Electrification Administration (NEA), in tandem with
local or international financing institutions, is empowered to infuse additional fund
solely for the purpose of acquiring the generation plant. In the event that a Rural
Electric Cooperative Association shall secure a loan from international financing
institutions for the purchase of a generation plant, the loan shall be provided
sovereign guarantee.


SEC. 5. Registration of the Rural Electric Cooperative Association
with the National Electrification Administration (NEA). A Rural Electric
Cooperative Association, after its organization, shall be registered with the
National Electrification Administration and shall function in accordance with the
tules and regulations to be set forth by NEA.

SEC. 6. Function of the Rural Electric Cooperative Association. A
Rural Electric Cooperative Association, after its purchase of a state-owned
generation plant, is hereby empowered to govern the operation of the
generation plant subject to the provisions on consolidation and merger of
Presidential Decree 269.

SEC. 7. Implementing Rules and Regulations. Within ninety (90) days
after the approval of this Act, the National Electrification Administration, in
coordination with the National Power Corporation (NAPOCOR), Energy
Regulatory Commission (ERC) and the Power Sector Assets and Liabilities
Management (PSALM) Corporation shall promulgate the implementing rules
and regulations of this Act which shall define the powers and functions of the
Rural Electric Cooperative Association in connection with its governing powers
in the purchased generation plant.

SEC 8. Construction. This Act shall be construed liberally. The
enumeration of any object, purpose, power, manner, method, or thing shall
not be deemed to exclude like or similar objects, purposes, powers,
manners, methods or things.

SEC. 9. Repealing Clause. Section 28 of Republic Act No. 9136
otherwise known as the Electric Power Industry Reform Act of 2001 and
provisions of other laws inconsistent with this Act are hereby repealed or
modified accordingly.

SEC 10. Separability. |f any provision of this Act or the application
of such provision to any person, entity or circumstance is held invalid, the
remainder of the Act and the application of such provisions to other persons,
entities or circumstances shall not be affected thereby.

SEC. 11. Effective date. This Act shall take effect within fifteen (15) days
after its publication in any three (3) newspapers of national circulation.

Adopted,