Sixteenth Congress
First Regular Session

HOUSE BILL NO. 4763

Introduced by Hon, Henry S. Oaminal

EXPLANATORY NOTE

This bill seeks to address the lingering power crisis by amending certain
provisions of Republic Act (RA) No. 9136, otherwise known as the “Electric
Power Industry Reform Act of 2001” (EPIRA).

RA 9136 otherwise known as the EPIRA Law is designed to ensure and
accelerate the total electrification of the country, ensure the quality, reliability,
security and affordability of the supply of electric power, ensure transparent and
reasonable prices of electricity in a regime of free and fair competition and full
public accountability.

However, in more than a decade after the EPIRA Law’s enactment , this
Law has failed to ordain reforms in the electric power industry. Instead, higher
electricity rates (estimated as one of the highest in Asia) and lingering power
outages, especially in Mindanao, have become a burden to the detriment of the
consumers and the country’s economy, The high cost of electricity hinders the
flow of investments to the country which we severely need to generate more job
opportunities,

One of the issues that needs to be addressed is the lingering power crisis
in Mindanao. Unless the EPIRA Law is amended, this problem will always
continue to haunt the people of Mindanao. One possible amendment is to
exclude the Agus and Pulangui hydropower complexes, all existing IPP
contracts of NPC and other power plants owned and operated by the
Government in Mindanao from privatization. The Government should retain
control of these facilities because they supply half of Mindanao’s energy needs.
It should also endeavour to rehabilitate, maintain and develop these power

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plants as hydropower is still the cheapest. The continuous ownership by the
government of these facilities will help in establishing a reliable, efficient,
transparent and competitive market for bulk supply of electricity in Mindanao
Further, it will keep the price of electricity at affordable levels as a means of
ensuring a more efficient delivery of electricity supply in Southern Philippines.

Another amendment is to exclude the existing IPP contracts of NPC
from privatization so that it could continue to provide cheaper electricity to the
consumers under the supervision of NPC

Thirdly, Section 47(j) of the same Law which only allows the NPC to
generate power from “undisposed generating assets and IPP contracts of
PSALM Corp.”, shall likewise be amended by authorizing the “President of the
Philippines during in times of extreme necessity to engage in contracts for
additional generating capacity to address the power supply deficiency in the
affected area” .

Lastly, to complement the amendment in Section 47(j), Section 71 of the
same Law on electric power crisis provision is hereby deleted in order to
authorize the President of the Philippines during emergency situation to engage
in contracts for additional generating capacity without Congress approval. It
will take time for the establishment of additional generating capacity if the
President needs the authorization of Congress because we have to contend with
the practice of having approvals, deliberations, debates in Congress just to come
up with a policy as Law to solve the problem. The President should be given
this power because the timeframe to make decisions during emergency
situations is very short. Hence, this bill.

In view of the foregoing, immediate passage’ ill is earnestly sought.



Sixteenth Congress
First Regular Session

HOUSE BILL NO. 4763

Introduced by Honorable Henry S. Oaminal

AN ACT
ADDRESSING THE LINGERING POWER CRISIS, AMENDING FOR
THE PURPOSE REPUBLIC ACT NO. 9136, OTHERWISE KNOWN AS
THE “ELECTRIC POWER INDUSTRY REFORM ACT OF 2001”

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SE

‘TION 1. SECTION 47 of the same Act is hereby amended to
read as follows:
“SEC. 47. NPC Privatization. — Except for the assets of
SPUG, THE AGUS AND PULANGUI COMPLEXES, ALL
EXISTING IPP CONTRACTS OF NPC AND OTHER POWER
PLANTS OWNED AND OPERATED BY THE GOVERNMENT IN
MINDANAO, the generation assets, real estate, and other disposable
assets [as well as IPP contracts of NPC] shall be privatized in

accordance with this Act. Within six (6) months fiom the effectivity


of this Act, the PSALM Corp. shall submit a plan for the endorsement
by the Joint Congressional Power Commission and the approval of the
President of the Philippines, on the total privatization of the
generation assets, real estate, AND other disposable assets [as well as
existing IPP contracts of NPC Jand thereafter, implement the same in
accordance with the following guidelines, except as provided for in
Paragraph (f) herein
(a) The privatization value to the National Government
of the NPC generation assets, real estate, AND other disposable
assets [as well as IPP contracts] shall be optimized;
(b) xxx
xx axe Xxx;
( The Agus and the Pulangui complexes, ALL
EXISTING IPP CONTRACTS OF NPC AND OTHER
EXISTING POWER PLANTS OWNED AND OPERATED
BY THE GOVERNMENT IN MINDANAO shall be excluded
fiom [among] the generation [companies] ASSETS OF NPC
that will be [initially] privatized. Their ownership shall be
transferred to the PSALM Corp. and both COMPLEXES AND
SUCH POWER PLANTS IN MINDANAO. ‘shall continue to

be operated, MAINTAINED AND REHABILITATED — by


PSALM THRU the NPC. [Said complexes may be privatized
not earlier than ten (10) years from the effectivity of this Act,
and,] [e] Except for Agus Ill, THE AGUS AND THE
PULANGUI COMPLEXES, ALL EXISTING — IPP
CONTRACTS OF NPC AND OTHER POWER PLANTS
OWNED AND OPERATED BY THE GOVERNMENT IN
MINDANAO shall not be subject to Build-Operate-Transfer
(BOT), Build-Rehabilitate-Operate-Transfer (B-R-O-T) and
other variations thereof pursuant to Republic Act No. 6957, as
amended by Republic Act No. 7718. [The privatization of Agus
and Pulangui complexes shall be left to the discretion of
PSALM Corp. in consultation with Congress:]
(g) xxx
XxX XXX Ai

(j) NPC may generate and sell electricity only from the undis-
posed generating assets and IPP contracts of PSALM Corp
HOWEVER, DURING IN TIME OF EXTREME NECESSITY, THE
PRESIDENT OF THE PHILIPPINES SHALL BE AUTHORIZED

TO ENGAGE IN CONTRACTS FOR ADDITIONAL.

GENERATING CAPACITY TO ADDRE = POWER SUPPLY

DEFICIENCY IN THE AFFECTED AREA, and shall not incur any

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new obligations to purchase power through bilateral contracts with

generation companies or other suppliers.]”

SEC. 2. Section 71 of the same Act shall is hereby deleted to read as
follows:

“[SEC. 71. Electric Power Crisis Provision. — Upon the
determination by the President of an imminent shortage of the supply of
electricity, Congress may authorize, through a joint resolution , the
establishment of additional generating capacity under the terms and

conditions as it may approve.]”

SEC. 3. Sections 72, 73, 74, 75, 76, 77, 78, 79, 80, and 81 of the same Act are
hereby renumbered accordingly

SEC

4. This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in two (2) national newspapers of general circulation.

Approved,