er nese \,
eas

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House BiLLNo, 3336

AN ACT
AMENDING REPUBLIC ACT 7394 ENTITLED
THE CONSUMER ACT OF THE PHILIPPINES OF 1992,
CREATING THE OFFICE FOR THE PROTECTION
OF ELECTRICITY CONSUMERS AND APPROPRIATING FUNDS
THEREFOR AND FOR OTHER PURPOSES

Introduced by REP. HENEDINA RAZON- ABAD

EXPLANATORY NOTE
The foundation of a ratepayers’ advocate office is consumer protection.

In the Philippines, the Office of the People's Counsel created under Republic Act
No. 178 way back in 1950 had the duty to protect consumers from unjust, unreasonable
and discriminatory rates and charges for public services. However, it was abolished in
1951 when the government was reorganized by virtue of Executive Order No. 392

Under the current state of the Philippine Electric Power Industry, neither the
EPIRA nor any other law has provided for an office to protect the interest of the
consumers.

Arratepayers’ advocate office will ensure that consumers’ rights are properly and
timely protected by promoting transparency of the ERC proceedings and hold it as well
as the utilities, accountable to all the stakeholders in the electric power industry.

As an attached office under the Department of Trade and Industry, the Office for
the Protection of Electricity Consumers (OPEC) will allow the government to deliver
and implement its mandate of providing affordable, reasonable, as well as reliable
power rates of electricity to drive economic growth and progress.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

HENEDI r ph ABAD


10

uw

12

13

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILLNO.__ 3336

Introduced by Rep. Henedina Razon-Abad

AN ACT
AMENDING REPUBLIC ACT 7394 ENTITLED
THE CONSUMER ACT OF THE PHILIPPINES OF 1992,
CREATING THE OFFICE FOR THE PROTECTION
OF ELECTRICITY CONSUMERS AND APPROPRIATING FUNDS
THEREFOR AND FOR OTHER PURPOSES

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

SEC. 1. ARTICLE 2 ON DECLARATION OF BASIC POLICY OF REPUBLIC ACT 7394,
IS HEREBY AMENDED AS FOLLOWS: - [Article 2. Declaration of Basic Policy. - It is the
policy of the State to protect the interests of the consumer, promote his general welfare
and to establish standards of conduct for business and industry. Towards this end, the
State shall implement measures to achieve the following objectives:

a) protection against hazards to health and safety;

b) protection against deceptive, unfair and unconscionable sales acts and

practices;

©) provision of information and education to facilitate sound choice and the

proper exercise of rights by the consumer;

d) provision of adequate rights and means of redress; and

e) involvement of consumer representatives in the formulation of social and

economic policies.)


10

1

12

13

14

15

16

wv

18

20

21

22

23

24

25

IT IS THE POLICY OF THE STATE TO PROTECT PUBLIC INTEREST AS IT IS
AFFECTED BY THE RATES FOR ELECTRIC POWER AND SERVICES OF ELECTRIC
UTILITIES AND OTHER PROVIDERS OF ELECTRIC POWER AND TO ESTABLISH A
STRONG AND PURELY INDEPENDENT ADVOCATE BODY AND SYSTEM TO ENSURE
CONSUMER PROTECTION AND ENHANCE THE COMPETITIVE OPERATION OF THE
ELECTRICITY MARKET. THERE IS A NEED FOR GOVERNMENT TO INSTITUTIONALIZE
ELECTRICITY CONSUMER PROTECTION THROUGH THE CREATION OF AN OFFICE OR
AGENCY TO ACT AS THE CONSUMERS’ REPRESENTATIVE IN ALL PETITIONS AND.
APPLICATIONS OF ELECTRICITY POWER SECTORS PARTICULARLY IN THE AREAS OF
TARIFF AND RATE SETTING AND ELECTRICITY SERVICE AND PERFORMANCE.
STANDARDS BEFORE THE ENERGY REGULATORY COMMISSION AND SUCH OTHER
AGENCIES AND BODIES REQUIRING ELECTRICITY CONSUMER PROTECTION.
ACCORDINGLY, IT SHALL BE THE RIGHT OF ELECTRICITY CONSUMERS TO:

a) BE CHARGED ONLY FAIR AND REASONABLE GENERATION,

TRANSMISSION, SUPPLY AND DISTRIBUTION RATES AFTER AN OPEN,
TRANSPARENT AND PUBLIC HEARING WITH THE PRESENCE OF A

CONSUMER ADVOCATE;

b) A STABLE AND RELIABLE ELECTRIC POWER SERVICE OPERATED IN
ACCORDANCE WITH GOOD INDUSTRY PRACTICE AND STANDARDS OF
SERVICE ESTABLISHED AFTER AN OPEN, TRANSPARENT AND PUBLIC
HEARING WITH THE PRESENCE OF A CONSUMER ADVOCATE; AND

©) APPEAL OR CONTEST ANY DECISION OR RESOLUTION ISSUED BY THE
ENERGY REGULATORY COMMISSION UNDER ITS ADJUDICATIVE OR RULE
MAKING POWERS TO THE COURT OF APPEALS OR THE SUPREME COURT

IN ACCORDANCE WITH APPLICABLE RULES OF PROCEDURE.


2

3

4

10

1

12

13

14

15

16

ci

18

19

20

2a

22

23

24

25

26

SEC. 2. A NEW CHAPTER ENTITLED AND NUMBERED CHAPTER IV

ELECTRICITY CONSUMPTION, RATES, COMPLAINTS AND OTHER MATTERS, SHALL BE.
INSERTED AFTER ARTICLE 166. THE REST OF THE ARTICLES SHALL BE

RENUMBERED APPROPRIATELY. CHAPTER IV SHALL READ AS FOLLOWS:

“Article 167. OFFICE FOR THE PROTECTION OF ELECTRICITY
CONSUMERS (OPEC). - THERE IS HEREBY CREATED AN OFFICE FOR THE
PROTECTION OF ELECTRICITY CONSUMERS, HEREINAFTER REFERRED TO AS
OPEC, WHICH SHALL BE AN INDEPENDENT BODY ATTACHED TO THE
DEPARTMENT OF TRADE AND INDUSTRY FOR PURPOSES OF COGNATE
EXPERTISE, AVAILABLE DATA BASE, SPECIAL AND DEDICATED MANPOWER
SERVICES, AND EASE OF TRANSITION.”

“ARTICLE 168. COMPOSITION. - THE OFFICE FOR THE PROTECTION OF
ELECTRICITY CONSUMERS SHALL BE HEADED BY AN EXECUTIVE DIRECTOR
WITH THE RANK OF AN UNDERSECRETARY, WHO SHALL HAVE THE
AUTHORITY TO CREATE SUCH POSITIONS NECESSARY FOR THE ATTAINMENT
OF THE PURPOSES THIS ACT. PROVIDED THAT, THERE SHOULD BE AN
ELECTRICITY PRICING AND RATE DESIGN DIVISION, AS WELL AS AN
ELECTRICITY SERVICE AND STANDARDS DIVISION, FOR THE GENERATION,
TRANSMISSION, DISTRIBUTION, AND SUPPLY SECTORS.”

ARTICLE 169. APPOINTMENTS, TENURE AND QUALIFICATIONS. - THE
EXECUTIVE DIRECTOR SHALL BE APPOINTED BY THE PRESIDENT OF THE
PHILIPPINES. THE EXECUTIVE DIRECTOR SHALL HAVE A TERM OF 6 YEARS,
UNLESS OTHERWISE REMOVED FROM OFFICE FOR CAUSE. ALL OTHER
OFFICERS SHALL BE SELECTED AND APPOINTED BY THE EXECUTIVE
DIRECTOR, PROVIDED THAT THE ELECTRICITY, PRICING AND RATE DESIGN

DIVISION AND THE ELECTRICITY SERVICE AND STANDARDS DIVISION SHALL
3


10

a

12

13

14

15

16

7

18

19

20

21

22

23

24

25

26

EMPLOY AT LEAST ONE ELECTRICAL ENGINEER, ONE CERTIFIED PUBLIC
ACCOUNTANT, ONE ECONOMIST AND ONE MEMBER OF THE PHILIPPINE BAR
ALL WITH SUFFICIENT EXPERIENCE IN THE INDUSTRY.

ARTICLE 170. COMPENSATION. - Th

EXECUTIVE DIRECTOR AS WELL
AS ALL OFFICERS AND EMPLOYEES OF THE OFFICE FOR THE PROTECTION OF
ELECTRICITY CONSUMERS SHALL NOT BE COVERED BY THE SALARY
STANDARDIZATION LAW WITH RESPECT TO THE SALARY CAP BUT SHALL
COMPLY WITH THE BENEFITS AND EMOLUMENTS AS MAY BE PROVIDED BY
CIVIL SERVICE LAWS.

ARTICLE 171. POWERS AND FUNCTIONS. - THE OPEC SHALL HAVE THE
FOLLOWING POWERS AND FUNCTIONS:

a) IT SHALL BE THE DEFAULT INTERVENOR AND OPPOSITOR ON
BEHALF OF THE ELECTRICITY CONSUMERS IN ANY AND ALL
PETITIONS AND APPLICATIONS AFFECTING THE ELECTRICITY
RATES TO BE CHARGED TO ELECTRICITY CONSUMERS. THE OPEC
SHALL ENSURE THAT IT COMPLIES WITH THE REQUIREMENTS OF
THE RULES OF PRACTICE AND PROCEDURE OF THE ENERGY
REGULATORY COMMISSION IN ENTERING ITS APPEARANCE AS
PARTY-INTERVENOR OR OPPOSITOR;

b) IN ADVOCATING IN BEHALF OF THE CONSUMERS, THE OPEC
SHALL ENSURE THE LOWEST POSSIBLE RATES IN ANY AND ALL
ERC PROCEEDINGS INVOLVING PETITIONS AND APPLICATIONS BY
ALL ELECTRICITY PROVIDERS FOR RATE RECOVERY, RATE FIXING,
CAPEX APPLICATIONS, OR ANY OTHER FILINGS WHICH WILL
IMPACT ON THE FINAL RETAIL RATE TO BE CHARGED TO THE

ELECTRICITY END USER;


20

2a

22

23

24

25

26

3)

qd)

e)

IT SHALL CONDUCT AN INDEPENDENT TECHNICAL REVIEW OF
UTILITY PETITIONS AND APPLICATIONS FOR RATE REVISIONS TO
ENSURE PROTECTION OF CONSUMER RIGHTS TO RECEIVE
SERVICES CONSISTENT WITH REQUIRED LEVELS OF SERVICE
QUALITY, SAFETY AND RELIABILITY; PRESENT FINDINGS AND
EXPERT TESTIMONIES IN ERC HEARINGS; OUTSIDE ERC,

REPRESENT CONSUMER _ INTE!

EST IN ANY AND ALL
PROCEEDINGS; AND ADVOCATE IN POLICY MAKING TO INCREASE
ENERGY EFFICIENCY, SYSTEM RELIABILITY AND USE OF
RENEWABLE ENERGY IN WAYS THAT DO NOT UNNECESSARILY
BURDEN THE END USERS;

IT SHALL HAVE THE AUTHORITY TO ENGAGE THE SERVICES OF
CONSULTANTS AND EXPERTS IN CONNECTION WITH THE
EVALUATION AND ANALYSIS OF PETITIONS OR APPLICATIONS
FILED BEFORE THE ERC AND TO FIX AND APPROVE THE

COMPENSATION OF THES!

E CONSULTANTS IN ACCORDANCE WITH
INDUSTRY PRACTICE AND SUBJECT TO EXISTING GOVERNMENTAL
GUIDELINES IN THE ENGAGEMENT OF CONSULTANTS;

TO INVESTIGATE THE SERVICE GIVEN BY, THE RATES CHARGED
BY, AND THE VALUATION OF THE PROPERTIES OF, THE
ELECTRICITY PROVIDERS UNDER THE JURISDICTION OF THE
COMMISSION, AND SUCH OTHER MATTERS AS AFFECT THE
INTERESTS OF THE ELECTRICITY CONSUMERS, AND TO TAKE ALL
THE STEPS NECESSARY FOR THE PROTECTION OF THE INTERESTS
OF THE ELECTRICITY CONSUMERS. IN CONNECTION WITH ANY

INVESTIGATION CONDUCTED PURSUANT UNDER THE PROVISIONS
5


10

a

12

13

14

15

16

7

18

19

20

a1

2

23

24

26

8)

h)

OF THIS ACT, THE OFFICE SHALL HAVE THE POWER TO ISSUE
SUBPOENA AD TESTIFICANDUM OR SUBPOENA DUCES TECUM.

TO INSTITUTE PROCEEDINGS BEFORE THE ENERGY REGULATORY
COMMISSION, IN BEHALF OF THE PUBLIC, FOR THE PURPOSE OF

FIXING JUST AND REASONABLE RATES OR CHARGES BY

ELECTRICITY PROVIDERS, WHENEVER IT HAS REASON TO
BELIEVE THAT THE EXISTING RATES OR CHARGES ARE UNJUST
AND UNREASONABLE OR UNJUSTLY DISCRIMINATORY;

TO PROVIDE RELIABLE AND TRUSTWORTHY INFORMATION BY
UNDERTAKING EXTENSIVE RESEARCH, ANALYSIS AND
VALIDATION OF RATE DESIGN AND MECHANISMS; AS WELL AS TO
ACT AS RESOURCE PERSONS FOR DECISION MAKERS IN
LEGISLATIVE AND OVERSIGHT COMMITTEE PROCEEDINGS,

IT SHALL, FROM TIME TO TIME, CONDUCT ITS OWN PUBLIC
CONSULTATIONS ON ELECTRIC REGULATORY ISSUES AFFECTING
CONSUMERS AS WELL AS ACTING AS CONDUIT FOR CONSUMERS

TO PRESENT THEIR POSITIONS ON PENDING PETITIONS AND

APPLICATIONS;

TO APPEAL OR CONTEST BEFORE HIGHER COURTS THE DECISIONS.
OF THE ERC UNDER ITS QUASI-JUDICIAL OR RULE-MAKING POWER
IF NECESSARY; AND

TO PERFORM SUCH OTHER FUNCTIONS NECESSARY AND

ESSENTIAL TO ACCOMPLISH ITS PURPOSE

ARTICLE 172. FUNDING. - THERE IS HEREBY APPROPRIATED THE

AMOUNT OF FIFTY MILLION PESOS (P50,000,000) PER ANNUM TO BE TAKEN

FROM THE MALAMPAYA FUND, AND RELEASED BY THE DEPARTMENT OF

6


1 BUDGET AND MANAGEMENT IN ACCORDANCE WITH SUCH REQUIREMENTS

2 AND PROCEDURES, INCLUDING CERTIFICATION FOR THE AVAILABILITY OF
3 FUNDS FROM THE APPROPRIATE GOVERNMENT AGENCY OR AUTHORITY. THE
4 OPEC MAY REQUEST FOR SUCH ADDITIONAL OR SUPPLEMENTAL FUNDING
5 FROM CONGRESS, AS MAY BE NECESSARY, TO ENSURE THE IMPLEMENTATION
6 OF THE OBJECTIVES OF THIS ACT.

Zi ARTICLE 173. ASSISTANCE FROM OTHER GOVERNMENT AGENCIES AND
8 INSTRUMENTALITIES. - THE OPEC IS AUTHORIZED TO CALL UPON AND
9 OBTAIN SUCH ASSISTANCE AS IT MAY DEEM NECESSARY IN THE
10 PERFORMANCE OF ITS DUTIES FROM ANY OFFICER OR EMPLOYEE OF ANY
11 DEPARTMENT, BUREAU, OFFICE, AGENCY, OR INSTRUMENTALITY OF THE
12 GOVERNMENT, INCLUDING CORPORATIONS OWNED, CONTROLLED OR
13 OPERATED BY THE GOVERNMENT. IN THIS REGARD, ALL GOVERNMENT
14 AGENCIES AND INSTRUMENTALITIES, UPON WRITTEN REQUEST OF THE OPEC,
15 SHALL PROVIDE ANY AND ALL ASSISTANCE AS WELL AS ANY AND ALL
16 NECESSARY INFORMATION TO ENABLE THE OPEC TO PERFORM ITS
Ww FUNCTIONS AND RESPONSIBILITIES PROVIDED IN THIS ACT.

18 ARTICLE 174. AUTHORITY TO APPEAL OR FILE PETITIONS FOR
19 REVIEW. - THE OPEC SHALL HAVE THE AUTHORITY TO APPEAR, PARTICIPATE,
20 APPEAL AND CONTEST RATE AND RULE-MAKING DECISIONS OR RESOLUTIONS
21 OF THE ERC IN ACCORDANCE WITH THE PROVISIONS OF THE RULES OF COURT
22 AND APPLICABLE LAWS.

23 SEC. 3. SEPARABILITY CLAUSE. - IF ANY SECTION OR PROVISION OF THIS LAW

24 SHALL BE DECLARED UNCONSTITUTIONAL OR INVALID, THE OTHER SECTIONS OR

25 PROVISIONS NOT AFFECTED THEREBY SHALL REMAIN IN FULL FORCE AND EFFECT.


SEC. 4. REPEALING CLAUSE. - ALL STATUTES, EXECUTIVE ISSUANCES, ORDERS,
RULES AND REGULATIONS OR PARTS THEREOF INCONSISTENT WITH THE
PROVISIONS OF THIS ACT ARE HEREBY REPEALED OR MODIFIED ACCORDINGLY.

SEC. 5. EFFECTIVITY. - THIS ACT SHALL TAKE EFFECT FIFTEEN (15) DAYS
AFTER ITS PUBLICATION IN A NEWSPAPER OF GENERAL CIRCULATION IN THE.
COUNTRY.

APPROVED.