's
EIGHTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
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Second Regular Session 
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■ - tOflirr i)( i" ; >1'!,i'
SENATE
S.B. No. 2217
*21 MAY 24 A10 59
lUiC:;' ■ D i. r.
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:
EXPLANATORY NOTE
Republic Act No. (RA) 9136, otherwise known as the Eiectric Power Industry 
Reform Act of 2001, provides that it is the deciared poiicy of the State (i) to ensure 
the quaiity, reiiabiiity, security and affordabiiity of the eiectric power suppiy; (ii) to 
enhance the inflow of private capitai and broaden the ownership base of the power 
generation sector; and (iii) "to ensure transparent and reasonabie prices of eiectricity 
in a regime of free and fair competition and fuii pubiic accountabiiity." Towards these 
ends, RA 9136 requires generation companies (GenCos) which are not pubiiciy iisted 
to offer and seii to the pubiic not iess than 15% of their common shares of stock "to 
ensure the successfui restructuring and modernization of the eiectric power industry."
However, after aimost 20 years since RA 9136 was passed, for various reasons 
this requirement no ionger serves its purpose. First, at present, the eiectric power 
industry has aiready been restructured with into four sectors: generation, 
transmission, distribution, and suppiy; Second, the generation sector is "competitive 
and open" in that it is not considered a pubiic utiiity operation. This enabied more


players to enter the market,1 evidenced by 96 generation companies with on-grid 
power plants in Luzon alone comprising about 17,354 megawatts (MW) instailed 
capacity in 2020;2 Third, as a business affected with pubiic interest, there are policies 
in place to ensure the protection of consumers in particular and the public in general, 
such as the requirement of a Certificate of Compiiance from the ERC,3 the reliability 
index which provides for a cap in the aliowed outages of power piants,4 and the 
competitive selection process requirement in the procurement of power suppiy by 
distribution utilities.5 All these policies require generation companies to modernize 
their facilities to meet regulatory standards and ensure market competitiveness; 
Fourth, there is a need to attract more investments in the generation sector as the 
next twenty years will require an additional total installed capacity of 71,817 MW under 
a clean energy scenario from 2018's total Installed capacity of 23,815 MW to meet 
projected peak demand of 57,303 MW by 2040.6 In particular, 9,508 MW or 13.24% 
of the additional total installed capacity will come from renewable energy capacity to 
meet the 1% renewable portfolio standard requirement under the Renewable Energy 
Act of 2008.
As can be seen above, the Initial purpose of the public offering requirement for 
generation companies in the EPIRA has been rendered irrelevant given all the 
developments in the electric power sector. Moreover, if we were to encourage more 
investments in generation to meet our demand needs in the next twenty years, it is 
crucial to eliminate this additional barrier to entry. As such, tl;)dimm^diate passage of 
this measure is sought.
1 What Is Energy Deregulation. Constellation. Available at https://www.constellation.com/energy-101/energy-choice/what-ls- 
energy-
deregulation.html#:~:text=Energy%20deregulation%20is%20the%20restructurlng,needs%20and%20spedalized%20product 
%20offerings.Accessed on 19 May 2021.
2 Ust of Existing Power Plants (Grid Connected) as of December 2020.DOE.
3 Section 6 of RA 9136.
* 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.
5 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.
6 Page 36.PEP 2018-2040. Available at https://www.doe.gov.ph/sites/default/files/pdf/pep/pep-2018-2040_20210323.pdf. 
Accessed on 22 May 2021.


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
Secon d Regular Session
SENi
S.B. No.
• . ' J5llifr i)l till' ‘-i- ■' •r ;
•21 HAY 24 A10S9
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:
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"SEC. 43. Functions of the ERC - The ERC shall promote competition, encourage
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market development, ensure customer choice and penalize abuse of market
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power in the restructured electricity industry. In appropriate cases, the ERC is
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authorized to issue cease and desist order after due notice and hearing. Towards
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this end, it shall be responsible for the following key functions in the restructured
9 
industry:
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XXX
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(t) Perform such other regulatory functions as are appropriate and
12 
necessary in order to ensure the successful restructuring and modernization
13 
of the electric power industry, such as, but not limited to, the rules and


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guidelines under which [genGration-companicsy] 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 [gonGration-companicsJ distribution utilities or their 
respective holding companies that are already listed in the PSE are deemed 
in compliance. For existing [eempanies] DISTRIBUTION UTILITIES, 
such public offering shall be implemented not later than five (5) years from 
the effectivity of this Act. New [companiGs] 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
X X X."
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
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parts thereof which are inconsistent With :pr contrary to the provisions of this Act are 
hereby repealed, amended or modified accordingly.
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SECTION 5. Effectivity. - This Act shall take effect fifteen (15) days after its complete
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publication in the Official Gazette or infe hational newspaper of general circulation.
■'S'iirl't'
Approved,