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THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
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First Regular Session 
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Introduced by SENATOR JUAN M. FLAVIER 
Explanatory Note 
The discovery of natural gas in the country has raised hopes about a 
brighter future for all of us. As an alternative to crude oil, natural gas may 
hold the key to the current energy crisis and our over dependence on 
petroleum products. 
However, this can only happen if we allow the natural gas industry to 
flourish and be fully developed. It is therefore imperative that we create 
conditions favorable to the establishment of a downstream Natural Gas 
Industry that will, among others, accelerate the expansion of natural gas 
service for the benefit of the populace. Likewise, it is also important that we 
lay down a regulatory framework that will ensure the quality, regularity, 
security and reasonableness of charges for the transmission, distribution 
and supply of natural gas. 
It is about time that we develop the downstream natural gas industry 
and transform it from an emerging industry to one that is mature and 
competitive. This, ultimately, will redound to the benefit of the country and 
will help ensure that power will always be a'Jailable. 
For these reasons, I urge the immediate passage of the bill. 
R, MD, M.P.H. 
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THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHIUPPINES 
) 
First Regular Session 
) 
SENATI 
a @ N n  
Introduced by SENATOR JIIAN M. FLAVIER 
AN ACT 
ORDAINING THE DEVELOPMENT OF THE DOWNSTREAM NATURAL GAS 
INDUSTRY 
AND CONSOLIDATING FOR THAT PURPOSE ALL LAWS 
RELATING TO THE TRANSMISSION, DISTRIBUTION AND SUPPLY OF 
NATURAL GAS AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
CHAPTER r 
TITLE AND DECLARATION OF POLICY 
SEC. 1. Short Title. - This Act shall be known as the “Downstream 
Natural Gas Industry Act of 2004”. I t  shall hereinafter be referred to as the 
Act. 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of 
the State: 
(a) 
To promote the role of Natural Gas as an environment- friendly and 
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economically efficient source of energy by creating favorable conditions for 
establishing a Downstream Natural Gas Industry that will accelerate the 
expansion of Natural Gas service for the benefit of all segments of the 
nation’s population and all sectors of its economy; 
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(b) 
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(c) 
To ensure transparent and reasonable rates and prices of Natural Gas 
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Transmission, Distribution and Supply in a regime of free and fair 
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competition and fuil public accountability that will promote greater 
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operational and economic efficiency and the enhanced competitiveness of 
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Philippine products in the global market; 
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(d) 
To encourage the inflow of private capital in providing the 
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infrastructure and services necessary to :develop new gas supplies and 
To ensure the safety, quality, reliabiiity, security and affordability of 
the Transmission, Distribution and Supply of Natural Gas; 
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increase the utilization of Natural Gas; 
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(e) 
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To ensure fair and non-discriminatory treatment of public and private 
sector entities in the development of the Downstream Natural Gas Industry; 
To protect the public interest as it is affected by the quality of, and the 
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rates charged for, the Transmission, Distribution and Supply of Natural Gas 
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and related services; 
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(g) 
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To assure the development of a Downstream Natural Gas Industry 
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infrastructure that is socially acceptable and compliant with existing 
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environmental laws; 
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(h) 
To ensure that the Downstream Natural Gas Industry shall be 
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regulated in a manner that will ensure the quality, reliability, security and 
reasonableness of charges for the Transmission, Distribution and Supply of 
Natural Gas, encourage private investment in the Downstream Natural Gas 
Industry and promote the efficient and competitive operation thereof ; 
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(i) 
support the development of the Downstream Natural Gas Industry; 
fj) 
To develop the necessary trades, technical expertise and skills to 
To facilitate the development of end-uses of Natural Gas that promotes 
fuel diversity and compliance with existing environmental laws including, 
but not limited to, the use of Natural Gas as a vehicular fuel; and 
(k) 
Gas Distribution Utilities by the general public. 
To encourage equity participation in Gas Transmission Utilities and 
SEC. 3. Scope. - This Act shall provide a framework for the 
development of a Downstream Natural Gas Industry and its transition from 
an emerging to a mature industry status and competitive Natural Gas 
market, and define the responsibilities of various government agencies and 
private entities in furtherance of this national goal. 
All activities of the DOE and the ERC relevant to the development and 
regulation of the Downstream Natural Gas Industry shall be in accordance 
with this Act. 
SEC. 4. Definition of Terms. - As used in this Act, the following 
terms shall have the following meanings: 
(a) 
“Captive Market” refers to Natural Gas End-users who do not have 
the choice of a transporter or distributor, or Supplier of Natural Gas or other 
economically competitive energy substitute, as may be determined by the 
ERC in accordance with this Act; 
(b) 
“Congress” refers to the Congress of the Philippines; 
(c) 
“Contestable Market” is a market which is not a Captive Market; 
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(d) 
of Natural Gas and the Supply of Natural Gas, at wholesale or retail; 
(e) 
created pursuant to Republic Act No. 7638, as amended; 
(0 
“Department of Environment and Natural ResourceS” or “DENR” 
refers to the government agency created pursuant to Executive Orders Nos. 
192 and 292, as amended; 
(g) 
“DeZiverly” refers to the Transportation Transmission or Distribution 
“Department of Energy” or “DOE’ i-efers to the government agency 
“Distribution” refers to the conveyance of Natural Gas by a Gas 
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Distribution Utility through its Gas Distribution System; 
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(h) 
“Downstream Natural Gas Industry” refers to the Transmission, 
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Distribution and Supply of Natural Gas ar d related activities, such as but 
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not limited 
to processing, storing, regassification, 
interconnection, 
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measurement and/or metering; 
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(i) 
“End-user” refers to any person that receives delivery of Natural Gas 
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for its own use; 
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(j) 
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‘(Energy Regulatory Commission” or “ERC” refers to the regulatory 
agency created pursuant to Republic Act No. 9136 or the Electric Power 
Industry Reform Act of 2001 whose expanded functions are provided in this 
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Act; 
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(k) “Franchise” refers to the right, privilege and authority issued by 
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Congress authorizing a person to engage in the Transmission and/or 
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Distribution of Natural Gas within a specific geographical area;; 
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(1) 
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under a Franchise; 
“Franchise Area” refers to a geographical area assigned or granted 
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(m) 
“Gas DistrZbution C~de” refers to the code to be formulated by the 
DOE as required by the Act that sets the technical performance standards 
for operating Gas Distribution Utilities and the minimum financial 
standards for Gas Distribution Utilities; 
(n) 
and 
“Gas Distribution System” refers to the system of pipelines, storage 
related facilities extending from the delivery points where the Gas 
Distribution System receives the Natural Gas to the point of connection to 
the premises of the End-User; 
(0) 
“Gas Distribution UtiZitg refers to any Person that has a Franchise 
granted by Congress to operate a Gas Distribution System; 
(p) 
{‘Gas Permit” refers to an authorization issued by the DOE for the 
construction, operation, expansion and modification of Gas Transmission 
Systems and Gas Distribution Systems and for the Supply of Natural Gas. 
(9) 
Gas between a Supplier and a purchaser; 
(r) 
(‘Gas Transmission Code” refers to the code to be developed by the 
DOE as required by the Act that sets the technical performance standards 
for operating Gas Transmission Systems and the minimum financial 
standards for Gas Transmission Utilities; 
(s) 
“Gas Transmission System” refers generally to the system of 
pipelines, storage and related facilities that are used to transport Natural 
“Gas SuppZy Contract” refers to a contract for the Supply of Natural 
Gas from the interconnection with Gathering Facilities, LNG regassification 
facilities or other Gas Transmission Systems to the interconnections with 
Gas Distribution Systems, other Gas Transmission Systems, or End-users; 
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(t) 
“Gas 
Transmission Utility‘) refers to any Person that has a 
Franchise to operate a Gas Transmission System and does not include those 
who operate own-use pipelines, storage and related facilities operated 
independently of the pipeline or those intending to operate a Gas 
Transmission System: 
(u) 
“Gathering FaciZities” refers to Natural Gas pipelines and related 
facilities used to gather gas in the field and bring it to a location for 
processing or for delivery at an interconnection with the Gas Transmission 
System; the terms (‘Gather” and “Gathering” shall be construed accordingly; 
(v) 
c5Joule’y refers to the unit of energy or work done when the point of 
application of a force of one Newton is displaced a distance of one meter in 
the direction of the force. It is also equal to one watt-second; 
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(w) 
((LNG’ 
refers to Liquefied Natural Gas”; 
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(x) 
“Natural Gas” refers to hydrocarbons, primarily methane, which, at 
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atmospheric temperature and pressure, are in a gaseous phase. For 
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(y) 
“Person” refers to a natural or juridical person, as the case may be, 
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including the national and local government of the Republic of the 
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Philippines, its agencies and instrumentalities, and government-owned and 
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-controlled corporations; 
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(2) 
purposes of this Act, the term “Natural Gas” shall be inclusive of LNG; 
“Petroleum Operations” as defined in PD 87, refers to searching for 
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and obtaining petroleum within the Philippines through drilling and 
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pressure or suction or the like, and all other operations incidental thereto. It 
includes the transportation, storage, handling and sale (whether for export 
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or for domestic consumption) of petroleum so obtained but does not include 
any: (1) transportation of petroleum outside the Philippines; (2) processing 
or refining at a refinery; or (3) any transactions in the products so refined; 
(aa) “Philippine Energy Plan” or “PEP’ refers to the overall energy 
program formulated and updated yearly by the DOE and submitted to 
Congress pursuant to Republic Act No. 7638, as amended; 
(bb) “Senvlce Contract’ refers to the award granted by the Philippine 
government to a qualified Person to engage in the exploration, development 
and utilization of natural resources through joint venture, co-production, 
production-sharing or other similar arrangement with the State pursuant to 
Article XII, Section 2, of the Constitution, including, 
Service Contracts 
under Presidential Decree No. 87, as amended; 
(cc) 
the Supply of Natural Gas; 
(dd) 
Gas for wholesale or retail; 
(ee) “Third Party Access” refers to the system of allowing any qualified 
Person access to the Gas Transmission Systems and Gas Distribution 
Systems under the conditions prescribed in Chapter I1 Sec. 10 hereof; 
(fTJ 
Gas Transmission System; 
(gg) “Unbundled Service” refers to the pricing of the energy value of 
Natural Gas separately from the rates charged for natural gas Transmission 
or Distribution; and 
“Supplier” refers to any Person authorized by the DOE to engage in 
“Supply” means refers to the domestic trading and/or sale of Natural 
“Transmission” refers to the transportation of Natural Gas through a 
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(hh) “Vehicular 
” means Natural Gas that is used as a fuel in 
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a self-propelled vehicle. 
CHAPTER I1 
ORGANIZATION AND OPERATION OF THE 
DOWNSTREAM NATURAL GAS INDUSTRY 
SEC. 5. Organization. - For purposes of this Act, the Downstream 
Natural Gas Industry shall be divided into three (3) sectors, namely: 
Transmission, Distribution and Supply of Natural Gas. 
SEC. 6. Regulation of Transmission, Distribution and Supply 
Sectors. - The Transmission, Distribution and Supply of Natural Gas are 
businesses affected with public interest and the regulation of these 
businesses as provided for in this Act is hereby deemed necessary in the 
public interest. 
SEC. 7. Franchise Requirement. - 
(a) 
Transmission and Distribution of Natural Gas declared public utilities. 
The Transmission and Distribution of Natural Gas as provided for in this Act 
are hereby declared to be public utility operations, requiring a Franchise or 
similar legislative authorization; 
(b) 
Congressional Franchise and similar legislative authorization. Any 
person that seeks to operate for commercial purposes a Gas Transmission 
System or Gas Distribution System shall first be required to hold or obtain a 
Franchise, any law to the contrary notwithstanding. 
The Franchise 
requirement shall apply with respect to all Gas Transmission Systems and 
Gas Distribution Systems, regardless of the size or pressure of the pipeline. 
The foregoing, notwithstanding, this Franchise requirement does not apply 
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to operators of facilities for the Transmission and Distribution of Natural 
Gas for Own-use and related facilities that .are operated independently from 
the pipeline; 
(c) Prior regulatory approvals. The grantee of such Franchise shall also be 
required to secure from the DOE a Gas Permit as provided herein, and to 
secure from the appropriate government agencies all other regulatory 
approvals, licenses, permits and authorizations applicable to such grantee 
under existing laws. The DOE shall not unreasonably withhold or delay the 
grant of any Gas Permit, and may not reopen any legislative determination 
in the review and grant of any Franchise. 
SEC. 8. Philippine Ownership Requirement. - As 
Article XII, Section 11, of the Constitution of the Republic of 
required under 
the Philippines, 
no Franchise, certificate, or any other form of authorization of a public 
utility shall be granted except to citizens of the Philippines or to 
corporations or associations organized under the laws of the Philippines at 
least sixty per centurn (60%) of whose capital is owned by such citizens. 
SEC. 9. Gas Transmission Systems of Service Contract Holders. - 
Any Person who is a holder of a Service Contract that authorizes the 
construction and operation of facilities for the Transmission or Distribution 
of Natural Gas shall not be required to obtain a Franchise or other 
legislative authorizations under this Act only to the extent such facilities are: 
(a) located in the production area and upstream of gas processing or refining 
facilities and are not used to serve End-users; or (b) used exclusively to 
provide service to existing customers or such Person under a Gas Supply 
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Contract entered into prior to the effectivity of this Act, which Gas Supply 
Contract shall not be affected by the enactment of this Act. In all other 
cases, Service Contract holders shall be subject to the Franchise and other 
regulatory approval requirements set forth in this Act. 
SEC. 10. Third Party Access. - Gas Transmission Systems and Gas 
Distribution Systems excluding those constructed and operated for own use 
shall be available for non-discriminatory access by third party users which 
may include parties to a Service Contract, Suppliers and End-users, with 
due regard to the economic viability of the operation of such facilities. Such 
operators shall negotiate in good faith with third-party users the provision 
and terms of access in accordance with guidelines to be promulgated by the 
DOE. 
a) Available Capacity. Third Party Access obligations shall apply only to the 
available capacity of the Gas Transmission Systems and Gas Distribution 
Systems as determined by subtracting the volume of capacity that is: 
(i) 
Used by the owner or operator to serve his own customer; 
and/or 
(ii) 
Allocated by the owner or operator to third parties under 
transportation contracts 
from the design capacity of the Gas Transmission Systems and Gas 
Distribution Systems. 
Nondiscriminatory third-party access shall be available to users by 
contract with the Gas Transmission or Gas Distribution Utility. If the Gas 
Transmission or Gas Distribution Utility with available capacity refuses 
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was denied. 
service to a user or offers discriminatory service, the affected party may 
request the DOE’S intervention. The Gas Transmission or Distribution Utility 
shall be required to file proof that capacity was not available when service 
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b) Deferment of Third Party Access Obligation. As a condition imposed by a 
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Permit, the DOE may determine that implementation of Third Party Access 
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to Gas Transmission Systems and Gas Distribution Systems may be 
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deferred where: 
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(i) 
It can be demonstrated that such deferment is necessary to 
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enable the efficient planning of the infrastructure and 
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aggregation of 
the initial demand necessary to justify 
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investments in the Gas Transmission Systems and Gas 
Distribution Systems ; or 
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(ii) 
It is in the interest of the End-users served by the Gas 
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Transmission System and Gas Distribution System to ensure 
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stability of supply. 
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In either case, the DOE shall not defer implementation of Third Party 
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Access for a period longer than three (3) years after completion of 
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construction in the case of Gas Transmission Systems and five (5) years 
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after completion or construction in the case of Gas Distribution Systems. 
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grounds. 
Provided, however, that the deferment period can be extended on reasonable 
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(c) Approved Access Conditions for Gas Transmission Utilities and Gas 
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Distribution Utilities. Prior to conducting negotiations with third parties, a 
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Gas Transmission Ulility and a Gas Distribution Utility shall request the 
DOE to approve its access conditions. 
The DOE shall approve access 
conditions after it has determined that they are consistent with the 
guidelines which it shall promulgate pursuant to this Act 
SEC. 11. Environmental Protection. - Gas Transmission Utilities, 
Gas Distribution Utilities and Suppliers shall comply with all environmental 
laws, rules, regulations and standards promulgated by the DENR and other 
appropriate governmental agencies. 
CHAPTER I11 
POWERS AND. FUNCTIONS OF THE DOE 
SEC. 12. Powers and Functions of the DOE. In addition to its 
existing powers and functions, the DOE shall have the overall responsibility 
of supervising and monitoring the development of the Natural Gas Industry 
and regulation of the construction and operation of Natural Gas pipelines 
and related facilities for the Transmission, Distribution and Supply of 
Natural Gas. Towards this end, the DOE shall have the following powers and 
functions: 
(a) 
for the Transmission, Distribution and SupfYy of Natural Gas; 
(b) 
Establish standards setting forth the characteristics for classifying 
pipeline and related facilities either as Gas Transmission Systems, Gas 
Distribution Systems, or Gathering Facilities. These standards may include 
both the physical characteristics related to the diameter, size and pressure 
of pipeline facilities, and the functional characteristics of such facilities; 
Issue permits for the construction of pipelines and related facilities 
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(c) Prepare and periodically update a five-year Natural Gas Development 
Plan and integrate the same into the PEP. The DOE shall consider and 
integrate the individual or joint development plans prepared and submitted 
to it by the Downstream Natural Gas industry participants pursuant to this 
Act. Appropriate mechanisms shall be provided to protect the confidentiality 
of any information that is commercially sensitive. The DOE shall publish an 
initial draft of the plan and undertake public consultations thereon prior to 
its adoption; 
(d) Before the end of April of each year, submit to the Office of the 
President and Congress an annual report; 
(e) 
Gas. 
Industry, the DOE shall, among others: 
Ensure the safety, reliability, quality and security of supply of Natural 
Consistent with the development of the Downstream Natural Gas 
0) 
(ii) 
(iii) 
Encourage private sector investments in delivery infrastructure 
and promote the development of domestic markets for Natural 
Gas; 
In consultation with the Downstream Natural Gas Industry 
participants and other government agencies, promote a system 
of incentives to encourage industry participants, including new 
producers and End-users to provide adequate and reliable 
supply of Natural Gas; and 
Undertake, in coordination with other governmental agencies, 
as appropriate, an information campaign to educate the public 
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on the benefits of developing the Natural Gas Industry and the 
potential for utilizing Natural Gas as a source of energy. 
(ij 
Within one (1) year from the effectivity of this Act, promulgate rules 
and regulations to promote competition, encourage market development and 
customer choice and prohibit/penalize abuse of market power, cartelization 
and any anti-competitive or discriminatory behavior, in order to further the 
intent of this Act and protect the public interest. 
Such rules and regulations shall: 
(4 
(ii) 
(iii) 
define the relevant product and geographic markets for 
purposes of establishing anti-competitive conduct; 
provide criteria to determine the relevant market structure; and 
establish the periodic reportorial requirements of Natural Gas 
Industry participants as may be necessary to enforce the 
provisions of this Section. 
(8) 
Within six (6) months from the effectivity of this Act, the DOE shall, 
preparatory to the holding of public consultations with Natural Gas industry 
participants, issue draft Gas Transmission and Distribution Codes which 
shall contain, among others, the following: 
(i) 
Technical performance standards for Gas Transmission and 
Distribution Utilities; provided, that in the establishment of the 
performance standards, the nature and function of the entities 
shall be considered; and 
Minimum financial capability standards for Gas Transmission 
and Distribution Utilities: provided, that such standards are set 
(ii) 
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to ensure that the Natural Gas Industry participants meet the 
minimum financial standards to protect the public interest. 
In consultation with Natural Gas industry participants, the DOE shall issue 
final Gas Transmission and Distribution Codes within twelve (12) months 
from the effectivity of this Act. 
(h) 
By order, revoke, after due notice and hearing, the Gas Permit of any 
Person that fails to comply with the rules and regulations promulgated 
pursuant to this Act, the Gas Transmission Code, the Gas Distribution 
Code, or any requirement of this Act. The DOE shall allow such Person 
sufficient time to remedy the violation for an orderly disgorgement, when 
applicable, but in no case shall such remediation period exceed twelve (1 2) 
months from the date of issuance of the order. 
(i) Encourage private enterprises in the Downstream Natural Gas Industry 
to broaden the base of their ownership and thereby encourage the widest 
public ownership thereof; 
0) 
Formulate, in consultation with the Downstream Natural Gas Industry 
Participants, rules and regulations as may be necessary to implement the 
objectives of this Act; 
(k) 
attain the objectives of this Act; and 
(1) 
Exercise original and exclusive jurisdiction over all cases dealing with 
issuance of Permits, non-price regulatory measures, fees, fines and penalties 
imposed by the DOE in the exercise of the above-mentioned powers. 
Exercise such other powers as ma? be necessary or incidental to 
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C 
ER N 
POWERS AND FUNCTIONS OF THE ERC 
SEC. 13. Powers and Functions of the ERC. - In addition to its 
existing powers and functions, ERC shall assume sole regulatory 
responsibility for establishing the rates and related terms and conditions of 
service for the Transmission, Distribution, and Supply of Natural Gas to the 
extent that each such activity is regulated pursuant to the requirements set 
forth in this Act. Towards this end, the ERC shall have the following powers 
and functions; 
(a) 
In the public interest, establish and enforce a methodology for setting 
Transmission, Distribution, and Supply rates taking into account all 
relevant considerations, including the efficiency or inefficiency of the 
regulated entities. The rates must be such as to allow the recovery of the 
just and reasonable costs and a reasonable return on rate base (RORB) to 
enable the entity to operate viably. The ERC may adopt alternative forms or 
internationally-accepted 
rate-setting methodology as it 
may 
deem 
appropriate. The rate-setting methodology so adopted and applied must 
ensure a reasonable price or tariff. The rates prescribed shall be non- 
discriminatory. 
The ERC shall determine such form of rate-setting 
methodology which shall promote efficiency. 
(b) 
Determine whether take-or-pay chazges, minimum bill payments or 
similar fiied obligations contained in Gas Sales and Purchase Contracts or 
pipeline Transmission contracts entered into by Gas Transmission and 
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Distribution Utilities and electric power industry participants can be 
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(c) 
Apply administrative procedures that will ensure the Constitutional 
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right to due process. 
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CHAPTER V 
6 
NATURAL GAS TRANSMISSION SECTOR 
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SEC. 14. Gas Permit Requirement - Any Person that holds a 
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Franchise granted by Congress authorizing it to serve as a Gas 
recovered from their tariffs to their own customers; 
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Transmission Utility shall, before it operates, maintains or constructs Gas 
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Transmission Systems, secure from the DOE a Gas Permit issued pursuant 
to the standards set forth in this Act and the rules and regulations 
promulgated by the DOE. The DOE shall issue a public notice of all Gas 
Permit applications and afford interested parties reasonable opportunity to 
comment upon such applications. The DOE shall issue a Gas Permit upon 
its determination that the construction, control, installation, operation and 
maintenance of the Gas Transmission System would be consistent with the 
policy declarations contained in this Act. Provided, however, that if a Gas 
Permit is sought for new service that would be provided within the Franchise 
area of Gas Transmission Utility, the DOE shall consider the economic 
effects of granting such a Gas Permit upon that Gas Transmission Utility 
and its End-users. 
SEC. 15. Terms and Conditions of Permits. - In issuing a Gas 
Permit, the DOE shall have the power to impose such reasonable terms and 
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conditions as the public interest may require. 
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Among such conditions shall be the requirement that the Permit 
holder complies in full with the Gas Transmission Code promulgated by the 
DOE pursuant to Section 17 hereof. 
Gas Transmission Utilities shall not be obligated to undertake, nor 
may DOE require, the expansion of an existing Gas Transmission System to 
serve additional customers or the sizing of a Gas Transmission System for 
the purpose of increasing capacity to serve load in excess of the maximum 
design capacity of the pipeline proposed by the Gas Transmission Utility; 
SEC. 16. Functions/Obligations of Gas Transmission Utilities. - 
A Gas Transmission Utility shall have the obligation to provide Transmission 
services and connections to its Gas Transmission System for any End-user 
subject to economic viability. Any Gas Transmission Utility engaged therein 
shall provide nondiscriminatory access to its Gas Transmission System to 
any Supplier and eligible End-users under Section 10, Chapter I1 of this Act. 
SEC. 17. Gas Transmission Code Compliance. - All 
Gas 
Transmission Utilities shall be required to ensure and maintain the safety, 
reliability, adequacy, security, stability and integrity of 
their Gas 
Transmission Systems in accordance with the performance standards set 
forth in Gas Transmission Code to be promulgated by the DOE. Each Gas 
Transmission Utility shall submit to the DOE a statement of its compliance 
with tlie technical specifications prescribed in the Gas Transmission Code 
and the performance standards prescribed in the rules and regulations 
implementing this Act. A Gas Transmission Utility that does not comply 
with a prescribed technical specification or performance standard shall 
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include within such statement of compliance a plan for achieving 
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compliance with said technical specifications and performance standards 
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within three (3) years or such lesser period as may be necessary to prevent 
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safety, reliability, or environmental harm. The DOE shall, within sixty (60) 
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days upon receipt of such plan, evaluate.. the same and notify the Gas 
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penalties. 
Transmission Utility concerned whether its plan is accepted. 
Failure to 
submit a feasible and credible plan and/or failure to implement the same 
shall serve as grounds for the imposition of appropriate sanctions, fines or 
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SEC. 18. Abandonment of Gas Transmission Systems. - No holder 
of a Permit for the construction, installation, operation or maintenance of a 
Gas Transmission System shall abandon or withdraw from service any 
portion of such Gas Transmission System without obtaining prior 
authorization from the DOE, which determination shall be made within one 
hundred eighty (180) days from the filing of the application for 
abandonment. Such abandonment shall be done in accordance with existing 
laws. 
SEC. 19. Fees. - The DOE shall have the authority to prescribe and 
19 
collect fees and charges relating to the issuance and/or review of Permits, 
20 
and other services related to the supervision and regulation of Gas 
21 
Transmission Systems. 
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CHAPTER VI 
23 
NATURAL GAS DISTRIBUTION SECTOR 
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SEC. 20. Gas Permit Requirement - Any Person that holds a 
Franchise granted by Congress authorizing, it to serve as a Gas Distribution 
Utility shall, before it operates, maintains or constructs Distribution 
Systems, secure from the DOE a Gas Permit issued pursuant to the 
standards set forth in this Act and the rules and regulations promulgated by 
the DOE. The DOE shall issue a public notice of all Gas Permit applications 
and afford interested parties reasonable opportunity to comment upon such 
applications. The DOE shall issue a Gas Permit upon its determination that 
the construction, control, installation, operation and maintenance of the 
Gas Distribution System would be consistent with the policy declarations 
contained in this Act. Provided, however, that if a Gas Permit is sought for 
new service that would be provided within the Franchise area of Gas 
Distribution Utility, the DOE shall consider the economic effects of granting 
such a Gas Permit upon that Gas Distribution Utility and its End-users. 
SEC. 21. Terms and Conditions of Permits. - In issuing a Permit, 
the DOE shall have the power to impose such reasonable terms and 
conditions as the public interest may require. Among such conditions shall 
be the requirement that the Permit holder complies in full with the Gas 
Distribution Code promulgated by the DOE pursuant to Section 23 hereof, 
SEC. 22. Functions of Gas Distribution Utilities. - 
(a) 
A Gas Distribution Utility shall have the obligation to provide 
Distribution services and connections to its Gas Distribution System for any 
End-user within the area covered by its Gas Permit consistent with the Gas 
Distribution Code. 
Any Gas Distribution Utility engaged therein shall 
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provide nondiscriminatory access to its Gas Distribution System to eligible 
End-users under Section 10, Chapter I1 of this Act; 
(b) 
Any Gas Distribution Utility shall be entitled to impose and collect 
Distribution charges and connection fees from such End-users as approved 
by the ERC; 
(c) 
A Gas Distribution Utility shall submit to the DOE annually its plan 
for maintaining and developing its Gas Distribution System in compliance 
with the obligations imposed by this Act; 
(d) 
A Gas Distribution Utility shall provide universal service within the 
area covered by its Gas Permit except as provided herein. 
A Gas 
Distribution Utility shall be obliged to develop and maintain an efficient 
system for the Supply of Natural Gas at the reasonable request of End-users 
within its Franchise Area including: 
(i) 
The installation of pipes where the connection to the End-user 
is within twenty (20) meters of the Gas Distribution System; or 
Increasing the capacity of existing Gas Distribution Systems; 
provided, however, that no new service shall be required if such 
service would not be economically viable. A determination by a 
Gas Distribution Utility that it cannot viably serve a portion of 
its Franchise Area shall be subject to review by the DOE upon 
(ii) 
filing of a complaint by the requesting End-user. 
The obligation of the Gas Distribution Utility to provide universal access 
involves both an obligation to connect End-users within twenty-five (25) 
meters from the main pipeline and an obligation to supply such End-users, 
22 
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to the extent that the Gas Distribution Utility is the sole gas Supplier. Upon 
implementation of Third Party Access, the utility shall be relieved of his 
obligation to supply End-users eligible for retail access as defined in the 
guidelines to be promulgated by the DOE, but not his obligation to provide 
connection to his distribution system to such End-users. Whether or not 
the Gas Distribution Utility is the sole gas supplier in the area, prices 
charged by the utility for the supply of gas will be negotiated for Contestable 
Market and regulated by the ERC for the Captive Market. 
(e) 
A Gas Distribution Utility shall submit annually to the DOE its plan 
for maintaining and developing its Gas Distribution System in compliance 
with the obligations prescribed in this Act. 
SEC. 23. Gas Distribution Code Compliance. All Gas Distribution 
Utilities shall be required to ensure and maintain the safety, reliability, 
adequacy, security, stability and integrity of their Gas Distribution Systems 
in accordance with the performance standards set forth in Gas Distribution 
Code to be promulgated by the DOE. Each Gas Distribution Utility shall 
submit to the DOE a statement of it compliance with the technical 
specifications prescribed in the Gas Distribution Code and the performance 
standards prescribed in the rules and regulations implementing this Act. A 
Gas Distribution Utility that does not comply with a prescribed technical 
specification or performance standard shall include within such statement 
of compliance a plan for achieving compliance with said technical 
specifications and performance standards' within three (3) years or such 
lesser period as may be necessary to prevent safety, reliability, or 
23 


environmental harm. The DOE shall, within sixty (60) days upon receipt of 
such plan, evaluate the same and notify the Gas Distribution Utility 
concerned whether its plan is accepted. Failure to submit a feasible and 
credible plan and/or failure to implement the same shall serve as grounds 
for the imposition of appropriate sanctions, fines or penalties. 
SEC. 24. Abandonment of Gas Distribution Systems. - No holder of 
a Permit for the construction, installation, operation or maintenance of a 
Gas System shall abandon or withdraw from service any portion of such Gas 
Distribution System without obtaining prix authorization from the DOE, 
10 
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SEC. 25. Fees. - The DOE shall have the authority to prescribe and 
14 
collect fees and charges relating to the issuance and/or review of Permits, 
15 
and other services related to the supervision and regulation of Gas 
16 
Distribution Systems. 
which determination shall be made within one hundred eighty (180) days 
from the filing of the application for abandonment. Such abandonment shall 
be done in accordance with existing laws. 
17 
CHAPTER VI1 
18 
SUPPLY SECTOR 
19 
SEC. 26. Gas Permit Requirement. - Any law to the contrary 
20 
notwithstanding, no Person may engage in any Supply activity unless it has 
21 
obtained a Permit, as appropriate, from the DOE. For this purpose, the 
22 
DOE shall promulgate rules and regulations prescribing the qualifications of 
23 
Suppliers which shall include, among other requirements, a demonstration 
24 
of their technical capability, financial capability, and creditworthiness. The 
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DOE shall have authority to require Suppliers to furnish a bond or other 
evidence of the ability of a Supplier to withstand market disturbances or 
other events that may increase the cost of providing service. 
SEC. 27. Condition for Suppliers' Access to Customers of Gas 
Distribution Systems. - Upon the implementation of Third Party Access as 
stipulated in the Gas Permit for a particulqr Gas Distribution System, large 
end-users in the geographic area served by that Gas Distribution System 
which meet the criteria set forth in the guidelines promulgated by the DOE 
pursuant to this Act may enter into Gas Supply Contracts with any 
Supplier. The DOE shall determine End-users or classes of End-users that 
are eligible for direct access by Suppliers, giving consideration to relevant 
factors including whether such End-users or class of End-users constitute a 
Contestable Market and the financial consequences of any assets potentially 
stranded by expanding Supply competition. 
CHAPTER VI11 
OWN-USE 
FACILITIES 
SEC. 28. Own-Use Permits. Permits for the Transmission and/or 
Distribution of Natural Gas for own-use shall be granted for a specific 
capacity and defined route, and only final users may be the holders of such 
permits. In issuing a Permit, the DOE shall have the power to attach such 
reasonable terms and conditions to the Permit as the public interest may 
require. Among such conditions shall be the requirement that the Permit 
holder comply in full with the Gas Transmission or Distribution Code 
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promulgated by the DOE, as such may be amended from time to time, and 
to ongoing regulation by the DOE as provided herein. 
CHAPTER IX 
RATES AND CHARGES 
SEC. 29. Regulation of Rates and Charges. The ERC shall review 
and approve the rates, charges and other amounts proposed to be charged 
by Gas Transmission and Distribution Utilities and Suppliers. Where such 
rates are applicable to products and services provided to Captive Markets, 
the ratemaking methodology to be applied by the ERC shall be based on 
the principle of full recovery of prudent and reasonable costs incurred, 
including a reasonable return on rate base that is equal to the rate of 
return on investments of comparable risk, or such other principles that 
will promote the determination of just and reasonable rates. Rates and 
charges for products and/or services in Contestable Markets shall be 
deregulated. Rates and charges shall be calculated on the basis of 
Unbundled Service. 
SEC. 30. Prohibition of Discriminatory and Unreasonable Rates 
and Charges. - No Gas Transmission Utility, Gas Distribution Utility or 
Supplier shall, with respect to the Transmission, Distribution, or Supply of 
Natural Gas (1) make or grant any undue preference or advantage or (2) 
maintain any unreasonable difference in rates, charges, service, facilities, 
or in any other respect, between locations , or between classes of service; 
or types of customers. 
26 


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SEC. 31. Prohibition of Cross Subsidies. Gas Transmission and 
:2 
Distribution Utilities shall not, directly or indirectly, subsidize the 
.3 
provision of service with rates for other service or for the marketing of gas, 
4 
or subsidize the marketing of gas with rates for other service. 
.5 
SEC. 32. Separate Accounting Systems. For purposes of the 
6 
preceding section, Gas Transmission and Distribution Utilities must 
’7 
separate, if applicable the financial information relevant to the provision of 
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Transmission, storage and Distribution services, as well as the marketing 
‘9 
of gas, in such a way as to clearly ident$y income, costs and operational 
10 
expenses of each item. 
11 
SEC. 33. Take-or-Pay Obligations. For the purpose of determining 
1 2  
their eligibility for a passthrough to End-users, take-or-pay provisions in 
13 
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Index the contract price to the price of competing alternative 
15 
fuels such as heavy fuel oil 
and/or gas oil based on 
16 
internationally accepted reference standards; 
Gas Sales and Purchase Contract shall 
(i) 
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Include re-opener mechanisms to allow for the adjustment of 
1 8  
the price and/ or volume commitments under extraordinary 
I !? 
circumstances causing severe economic hardship to either party 
20 
such as price movements in competing alternative fuel market 
(ii) 
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or changes in the gas purchaser’s market such as substantial 
22 
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(iii) 
Provide for a reasonable period for recovery of take-or-pay 
contraction in forecast demand levels; 
24 
payments. 
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Potential parties to a Gas Sales and Purchase Contract may, at their 
option, and prior to the execution of such contract, request that the DOE 
review their take-or-pay provisions for their consistency with a(i) and a(ii) 
above; 
No party to a Gas Sales and hrchase Contract may be compelled to 
renegotiate any term or condition of a duly executed Gas Sales and 
Purchase Contract or to incorporate terms or conditions in such contract 
which are not commercially acceptable to it or its counterparty, it being 
sufficient that the terms and conditions of the contract as a whole mitigate 
the potential impact upon End-users of take-or-pay provisions. 
CHAPTER X 
RATEMAKING PROCEDURES OF THE ERC 
SEC. 34. FiZing of Rate ScheduZes. - Under such rules and 
regulations as the ERC may prescribe, the ERC may require reports or 
documents from Gas Transmission Utilities, Gas Distribution Utilities or 
Suppliers showing all rates and charges for the Transmission, Distribution, 
or Supply of Natural Gas and the classifications, practice, and regulations 
affecting such rates, charges, and classifications and services, provided that 
the ERC shall, in the implementing rules and regulations of this Act, provide 
appropriate mechanisms to protect the confidentiality of any information 
that is commercially or competitively sensitive; 
SEC. 35. Changes in Rate and Charges. - Within thirty (30) days 
of filing for a change in rates, the ERC shall issue an order accepting, 
rejecting, or setting for hearing such change. The ERC may, upon the filing 
28 


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of an application therefore or at any stage thereafter with or without prior 
hearing, on the basis of supporting papers duly verified or authenticated, 
and with such notice to the affected parties and opportunity for such parties 
to make such submissions as the ERC determines to be appropriate in the 
circumstances, grant provisional relief fixing interim rates for the 
Transmission, Distribution or Supply of Natural Gas applicable during the 
pendency of the hearing on the application, on motion of a party in the case 
or on its own initiative, without prejudice to a final decision after hearing, 
9 
should the ERC find that the pleadings, together with such affidavits, 
documents and other evidences which may be submitted in support of the 
motion, substantially support the provisional order. The final order fixing 
10 
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the applicable rates shall provide for over- or under-recovery of costs 
13 
occasioned by the application of ERC-approved interim rates. 
At any 
14 
hearing involving rates adjustment, the burden of proof to show that the 
15 
increased rates are just and reasonable shall be upon the Gas Transmission 
16 
Utility, Gas Distribution Utility or Supplier. 
1 ‘7 
CHAPTER XI 
113 
PROMOTION OF COMPETITION 
1 !> 
SEC. 36. Market Power Abuse and Anti-Competitive Behavior. - 
20 
[a] 
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No Gas Transmission Utility, Gas Dktribution Utility or Supplier, or 
affiliate thereof may abuse its market power. Such abuse may include, but 
shall not be limited to, agreeing with competitors to fix prices, fix output of 
products or services, or divide markets or customers; tying arrangements; 
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unduly discriminatory or preferential practices; or misrepresentation or false 
advertising; 
[b] 
The DOE shall monitor and, after due notice and hearing upon 
complaint or on its own initiative, penalize any such market power abuse or 
anti-competitive or discriminatory act or behavior. 
Upon finding that a 
natural gas industry participant has engaged in such act or behavior, the 
DOE shall stop and redress the same. 
Such remedies shall, without 
limitation, include the imposition of price controls, issuance of injunctions, 
or disgorgement of excess profits and imposition of administrative fines and 
penalties pursuant to this Act; 
[c] 
The DOE shall, within one (1) year from the effective date of this Act, 
promulgate rules and regulations providing for a complaint procedure that, 
without limitation, provides the party alleged to have engaged in anti- 
competitive or abusive activities with notice and an opportunity to be heard. 
SEC. 37. Affiliated Suppliers. - 
In order to prevent Anti- 
Competitive Conduct, Service Contractors, Gas Transmission Utilities and 
Gas Distribution Utilities that own or control Affiliates that are Suppliers 
shall conduct their business as follows: 
(a) 
No preference will be given to the Affiliated Supplier over other 
Persons through contracting for available capacity, scheduling, balancing, 
curtailment priority or Tariffs; 
(b) 
Marketing information provided to the Affiliated Supplier will be 
provided to any non-Affiliated Supplier that is a competitor or potential 
competitor; 
30 


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(c) 
possible, function independently in making business decisions; and 
(d) 
maintained separately. 
Employees of the Affiliated Supplier shall, to the maximum extent 
Books of accounts and records of the Affiliated Supplier shall be 
CHAPTER XI1 
TAXES 
SEC. 38. Franchise Taxes. - Gas Transmission Utilities and Gas 
Distribution Utilities shall pay a Franchise tax equivalent to two percent 
(2%) of gross revenues obtained from the rendering of Natural Gas 
Transmission or Distribution services, as appropriate, pursuant to Republic 
Act No. 8424, otherwise known as the comprehensive Tax Reform Law, as 
the same may be amended from time to time. Franchise taxes imposed shall 
1:3 
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be in lieu of all other taxes imposed under existing law. 
SEC. 39. Excise Tcwc. - The Supply of Natural Gas to the Contestable 
Market shall be the only component of the gas retail rate which shall be 
16 
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181 
time to time. 
19 
SEC. 40. Withdrawal of Exemptions. - In order to achieve the 
subject to excise taxes under the Republic Act No. 8424, otherwise known 
as the Comprehensive Tax Reform Law, as the same may be amended from 
20 
declared policies of this Act, including the promotion of fair and 
21 
nondiscriminatory treatment of public and private sector entities in the 
22 
development of the domestic natural gas delivery infrastructure, all existing 
23 
tax exemptions applicable to Persons engaged in the Transmission or the 
24 
Distribution of Natural Gas, insofar as such exemptions relate to revenues 
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derived from the Transmission or the Distribution of Natural Gas, shall, any 
law to the contrary notwithstanding, be deemed revoked as of the effectivity 
of this Act. 
CHAPTER XI11 
ADMINISTRATIVE FINES AND PENALTIES 
SEC. 41. Administrative Fines and Penalties. - 
(a) 
The administrative fines and penalties that shall be imposed by the 
DOE for Sec. 36 and any violation of or non-compliance with this Act or the 
implementing rules and regulations for this Act shall range from a minimum 
of fifty thousand pesos (P50,OOO.OO) to a maximum of fifty million pesos 
(P50,000,000.00) ; 
(b) 
Any Person who is found to have engaged in any of the prohibited acts 
pursuant to Section x hereof shall suffer the administrative penalty or fine 
ranging from ten thousand pesos (P10,OOO.OO) to ten million pesos 
(P10,000,000.00), at the discretion of the DOE; 
(c) 
The members of the Board of Directors of any Person that violates the 
provisions of this Act may be fined by an G.mount not exceeding double the 
amount of damages caused by the offender at the discretion of the DOE. 
This rule shall apply to the members of the Board who knowingly or by 
neglect allow the commission or omission under the law; 
(d) 
Any party to an administrative proceeding may, at any time, make an 
offer to the DOE, conditionally or otherwise, for a consent decree, voluntary 
compliance or desistance and other settlement of the case. The offer and 
any or all of the ultimate facts upon which the offer is based shall be 
32 


considered for settlement purposes only and shall not constitute an 
admission by the party making the offer of any violation of the laws, rules, 
regulations, orders and resolutions of the DOE, nor as a waiver to file any 
warranted criminal actions; 
(e) 
In addition Congress may, upon recommendation of the DOE, revoke 
such Franchise or privilege granted to the party who violated the provisions 
of this Act. 
CHAPTER XIV 
ANTI-PILFERAGE PROVISIONS 
SEC. 42. Pilferage. - It is hereby declared unlawful for any Person 
to: 
(a) 
Tap, make or cause to be made any connection with any Gas 
Transmission System or Gas Distribution System without previous authority 
or consent of the Gas Transmission Utility or Gas Distribution Utility 
concerned; 
(b) 
Tamper, install or use tampered meters or any other device which 
interferes with proper or accurate registry or metering of Natural Gas flows 
or otherwise results in its diversion in a manner whereby Natural Gas is 
stolen or wasted; 
(c) 
Damage or destroy any Natural Gas meter, equipment, pipeline or 
conduit or any part of a Gas Transmission System or Gas Distribution 
System or allow any of them to be so damaged or destroyed as to interfere 
with the proper or accurate metering of Natural Gas flows; and 
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(d) 
Knowingly use or receive the direct benefit of Natural Gas delivery 
service obtained through any of the acts mentioned in subsections (a), (b), 
and (c) above. 
SEC. 43. Theft of Equipment and Materials. - It is hereby declared 
unlawful for any person to: 
(a) 
Cut, saw, slice separate, split, severe, smelt, or remove any portion of 
a Gas Transmission System or Gas Distribution System, including pipeline 
materials and meters, from any installation or place of installation or any 
other place or site where it may be rightfully or lawfully stored, deposited, 
kept, stocked, inventoried, situated or located, without the consent of the 
Gas Transmission Utility or Gas Distribution Utility concerned, whether or 
not the act is done for profit or gain; 
(b) 
Take, carry away or remove or transfer, with or without the use of a 
motor vehicle or other means of conveyance, load, carry, ship or move from 
one place to another, whether by land, air or sea, any portion of a Gas 
Transmission System or Gas Distribution System, including pipeline 
materials or meters, from any installation or place of installation, or any 
place or site where it may be rightfully or lawfully stored, deposited, kept, 
stocked, inventoried, situated or located without the consent of the Gas 
Transmission Utility or Gas Distribution Utility concerned, whether or not 
the act is done for profit or gain; and 
(c) 
Store, possess or otherwise keep in his premises, custody or control, 
without lawful purpose, anyaportion of a Gas Transmission System or Gas 
Distribution System, including pipeline materials or meters, without the 
34 


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consent of the Gas Transmission Utility or Gas 
Distribution Utility 
2 concerned, whether or not the act is done for profit or gain. 
3 
SEC. 44. Penalties. - 
4 
(a) 
Violation of Section 42. The penalty of prision mayor or a fine ranging 
5 
from Ten thousand pesos (P10,OOO.OO) to Twenty thousand pesos 
6 
(P20,OOO.OO) or both, at the discretion of the court, shall be imposed on any 
7 
Person found guilty of violating Section 42 hereof. 
8 
(b) 
9 
Violation of Section 43. The penalty of reclusion temporal or a fine 
ranging from Fifty thousand pesos (P50, 000.00) to One hundred thousand 
10 
pesos (P100, 000.00) or both at the discretion of the court, shall be imposed 
11 
on any person found guilty of violating Section 42 hereof. 
12 
(c) 
Provision common to violations of Sections 42 and 43 hereof. If the 
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violation of Section 42 and Section 43 hereof is committed by, or in 
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connivance with, an officer or employee of the Gas Transmission Utility or 
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Gas Distribution Utility concerned, such officer or employee than the 
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penalty provided herein, and forthwith be dismissed and perpetually 
17 
disqualified from employment in any public or private utility or service 
18 
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company and from holding any public office. 
If the 'violation of Section 42 and Section 43 hereof is committed by a 
20 
partnership, firm, corporation, association or any other legal entity, 
2 1 
including a government-owned or controlled corporation, the penalty shall 
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be imposed on the president, manager and each of the officers thereof who 
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shall have knowingly permitted, failed to prevent or was otherwise 
24 
responsible for the commission of the offense. 
35 


J 
FINAL PROVISIONS 
SEC. 45. Implementing Rules and Regulations. - The DOE shall, in 
consultation with relevant government agencies, the Natural Gas Industry 
participants, non-government organizations and end-users, promulgate 
Implementing Rules and Regulations of this Act within six (6) months from 
its date of effectivity. 
SEC. 46. Separability Clause. - If for any reason, any provision of 
!> 
10 
this Act is declared unconstitutional or invalid, the other parts or provisions 
hereof which are not affected thereby shall continue to be in full force and 
11 
effect. 
1 2 
SEC. 47. Non-Retroactivity AppZicabiZ2ty.J and Repealing Clause. - 
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The provisions of Republic Act No. 387, otherwise known as the Petroleum 
Act of 1949, as amended, insofar as said provisions relate to the 
Transmission and Distribution of Natural Gas by pipeline concessionaires or 
other concessionaires, as such terms are defined in the Petroleum Act of 
1949, Section 1 l(b) thereof obligating the Philippine government to grant 
pipeline concessions for the Transmission and Distribution of Natural Gas 
under specified circumstances, are hereby repealed or amended. The 
provisions of Presidential Decree No. 87, as amended, insofar as the 
provisions thereof relate to the Transmission and Distribution of Natural 
Gas by Service Contractors, as such term is defined in Presidential Decree 
No. 87, as amended, are hereby amended. All other laws, decrees, executive 
orders, rules and regulations, circulars or other governmental issuances 


c 
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referring to the Transmission, Distribution, or Supply of Natural Gas, or 
2 
otherwise authorizing any governmental or other entity to issue licenses, 
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permits, certificates or other authorizations for the Transmission, 
4 
Distribution, or Supply of Natural Gas, are hereby repealed or amended 
:5 
accordingly. Further, all other laws, decrees, executive orders, rules, 
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regulations, circulars or other governmental issuances defining the term 
“Natural Gas” are hereby amended such that the definition of Natural Gas in 
this Act shall be deemed the definition of “Natural Gas” for purposes of the 
said laws, decrees, executive orders, rules, regulations, circulars or other 
governmental issuances. Notwithstanding the foregoing, nothing in this Act 
shall be deemed to revoke or otherwise modify any existing concession 
granted under the Petroleum Act of 1949, as amended, certificate of public 
convenience or certificate of public convenience and necessity granted 
pursuant to the Public Service Law, as :mended, specific congressional 
Franchise for the Transmission, Distribution or Supply of Natural Gas or 
other administrative or regulatory permit or contract, with concession, 
certificate, Franchise, permit or contract shall be allowed to its full term but 
may not be renewed except pursuant to the provisions of this Act. 
SEC. 48. Effectivity Clause. - This Act shall take effect on the 
20 
fifteenth (15th) day following its publication in at least two (2) national 
21 
newspapers of general circulation. 
22 
Approved, 
37