NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
)
S E N JV_T 
S. No.
igi ^enatt
of tljf *,T'Ttnrp
23 JUL25 PI :48
RHCEfVED BY.
Introduced by: Senator RaffyT. Tulfo
AN ACT
STRENGTHENING FURTHER THE ELECTRIC POWER INDUSTRY AMENDING 
FOR THE PURPOSE SECTIONS 1, 3, 5, 6, 7f 8, 9, 20, 21, 22, 23, 26, 28, 29, 
30, 34, 35, 36, 37, 43, 45, 46, 47, 57, 60, 61, 62, 63, 70, AND 71 OF 
REPUBLIC ACT NO. 9136, OTHERWISE KNOWN AS THE ELECTRIC POWER
INDUSTRY REFORM ACT OF 2001
EXPLANATORY NOTE
Ensuring a reliable, secure, and affordable supply of electric power is of 
paramount importance to the State, as it directly impacts the recovery, development, 
and sustainability of the economy, while safeguarding the public interest.
Currently, the Philippines' energy sector faces challenges due to its large 
population and rapidly growing economy. Although the country relies primarily on 
indigenous energy sources, such as oil and coal imports, its self-sufficiency ratio 
remains at 50%, indicating a need to address the gaps in meeting energy demands. 
Despite the passage of the Electric Power Industry Reform Act of 2001 (Republic Act 
No. 9136), it is now crucial to revisit and enhance this legislation to bridge the energy 
requirements of the economy and consumers.
This bill aims to achieve several objectives, including expanding energy sources, 
attracting investments in the power industry, modernizing the distribution sector, and 
ultimately increasing energy supply while lowering electricity prices in the Philippines. 
The key provisions of the bill are as follows:


1. Inclusion and classification of Energy Storage Systems in the Electric Power 
Industry based on their primary purpose.
2. Zero-rating value-added tax on sales of power generated by generation 
companies to lower electricity rates for end-users.
3. Restructuring of the Electric Power Industry to involve the State in the 
generation sector.
4. Alignment of the transmission sector with the provisions of the Public Service 
Act.
5. Strengthening and expanding the powers and responsibility of the National 
Transmission Corporation (TRANSCO) and the Energy Regulatory Commission 
(ERC).
6. Clarifying and harmonizing the roles of the ERC and the Philippine Competition 
Commission with respect to competition issues in the energy sector.
7. Increasing fines and penalties for violations and non-compliance with the law.
8. Encouraging the National Power Corporation (NPC) to adopt cost-effective and 
alternative technologies to discontinue the provision of Universal Charge for 
Missionary Electrification (UC-ME).
9. Providing guidelines for the graduation of Off-Grid Areas from UC-ME.
10. Granting the President the authority to declare an electric power crisis in cases 
of critically low electricity supply or unusually high electricity prices, 
empowering the government to make appropriate actions to resolve such 
power crisis.
In view of the foregoing, the passage of this bill Is earnestly sought.


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
)
SENATE
s. No. 2348
of iiiC €■■ (I
23 JUL25 PI -48
RECEIVED BY;
Introduced by: Senator Raffy T. Tulfo
AN ACT
STRENGTHENING FURTHER THE ELECTRIC POWER INDUSTRY AMENDING 
FOR THE PURPOSE SECTIONS 1, 3, 5, 6, 7f 8, 9f 20, 21, 22, 23, 26, 28, 29, 
30, 34, 35, 36, 37, 43, 45, 46, 47, 57, 60, 61, 62, 63, 70, AND 71 OF 
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:
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Section 1. Section 1 of Republic Act No. 9136, otherwise known as the Electric
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Power Industry Reform Act of2001" is hereby amended to read as follows:
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"Section 1. Title. — This Act shall be known as the nNew Electric Power
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Industry Reform Act [of2001]."
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Sec. 2. Section 2 of Republic Act No. 9136 is hereby amended to read as
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follows:
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"Sec. 2. Declaration of Policy. —It Is hereby declared the policy of the
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State:
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(a)xxx;
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XXX
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(i) To provide for an orderly and transparent privatization of the
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NON-CRITICAL assets and ALL liabilities of the National
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Power Corporation (NPC);
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XXX"
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Sec 3. Section 4 of Republic Act No. 9136 is hereby amended to read as follows:


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"Sec. 4. Definition of Terms. -
XXX
(xx) "Supplier" refers to any person or entity LICENSED 
[authorized] by the ERC to sell, broker, market or 
aggregate electricity to the end-users;
XXX
(zz) "Supply of Electricity" means the sale of electricity TO
THE CONTESTABLE MARKET by a SUPPLIER [party 
other than a generator or a distributor] in the
franchise area of a distribution utility using the wires of 
the distribution utility concerned;
XXX
(bbb) "Transmission Development Plan" or "TDP" refers to 
the PLANS AND program for managing AND 
OPERATING the transmission system NETWORK 
through efficient planning AND IMPLEMENTATION 
for the expansion, upgrading, rehabilitation, repair and 
maintenance OF SUCH NETWORK AND FACILITIES 
[7-to bo formulated by DOE and implomonted by
the TRANSCO pursuant to this Act];
X X x"
Sec 4. Section 5 of Republic Act No. 9136 is hereby amended to read as follows: 
"Sec. 5. Organization. -J\\e electric power industry shall be 
divided into four (4) sectors, namely: generation, 
transmission, distribution, and supply.
THE NATURE OF AN ENERGY STORAGE SYSTEM 
SHALL BE CLASSIFIED BASED ON ITS PRIMARY 
PURPOSE, SUBJECT TO THE RULES AND 
REGULATIONS TO BE ISSUED BY THE DOE IN 
ACCORDANCE WITH THE PROVISIONS OF THIS 
ACT."


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Sec 5. Section 6 of Republic Act No. 9136 is hereby amended to read as
follows:
"Sec. 6. Generation Sector. - Generation of electric power,
a SECTOR [business] IMBUED [affected] with public 
interest, shall be competitive AMONG THE PRIVATE 
SECTOR, and open TO ALL ENTITIES AND THE STATE.
THE STATE MAY CONSTRUCT, ACQUIRE, OWN, 
OPERATE, EXPAND, INSTALL, AND MAINTAIN 
GENERATING FACILITIES TO ENSURE THE 
RELIABILITY, AFFORDABILITY AND SUPPLY OF 
ELECTRIC POWER.
XXX
Pursuant to the objective of lowering electricity rates 
to end-users, sales of generated power by generation 
companies shall be value-added tax zero-rated.
The ERC shall, in determining the existence of market power 
abuse or anti-competitive behavior, require from generation 
companies the submission of their financial statements AND 
ANY OTHER RELEVANT DOCUMENT AS MAY BE 
DEEMED NECESSARY IN THE EXERCISE OF SUCH 
FUNCTION."
Sec 6. Section 7 of Republic Act No. 9136 is hereby amended to read as follows: 
"Sec. 7. Transmission Sector. - The transmission of electric 
power shall be A REGULATED PUBLIC UTILITY, AS 
DEFINED UNDER RA NO. 11659 OR THE PUBLIC 
SERVICE ACT AS AMENDED [common Qloctriciby 
carries buskicssy] subject to the RELEVANT POLICIES 
ISSUED BY THE DOE AND THE [ratomaking-] RATE­
SETTING powers of the ERC.
PURSUANT TO THE OBJECTIVE OF LOWERING 
ELECTRICITY RATES TO END-USERS, TRANSMISSION 
CHARGES BY THE TRANSMISSION SYSTEM OPERATORS


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AND NETWORK PROVIDERS OR ITS CONCESSIONAIRE 
SHALL BE VALUE-ADDED TAX ZERO-RATED.
PROVIDED, THAT AN ENTITY CONTROLLED BY 
OR ACTING ON BEHALF OF THE FOREIGN 
GOVERNMENT OR FOREIGN STATE-OWNED 
ENTERPRISES SHALL BE PROHIBITED FROM 
OWNING CAPITAL IN ANY ENTITY ENGAGED IN THE 
TRANSMISSION OF ELECTRICITY.
FOREIGN STATE-OWNED ENTERPRISES 
WHICH OWN CAPITAL PRIOR TO THE EFFECTIVITY 
OF THIS LAW ARE PROHIBITED FROM INVESTING 
IN ADDITIONAL CAPITAL UPON THE EFFECTIVITY 
OF THIS ACT AND SHALL DIVEST ITS INVESTMENT 
WITHIN TEN (10) YEARS FROM THE DATE OF THE 
EFFECTIVITY OF THIS ACT.
IN THE INTEREST OF NATIONAL SECURITY,
AN ENTITY CONTROLLED BY OR ACTING ON BEHALF 
OF THE FOREIGN GOVERNMENT OR FOREIGN- 
OWNED ENTERPRISES SHALL NOT MAKE ANY DATE 
OR INFORMATION DISCLOSURE, NOR EXTEND 
ASSISTANCE, SUPPORT OR COOPERATION TO ANY 
FOREIGN GOVERNMENT, INSTRUMENTALITIES OR 
AGENTS.
The ERC shall set the standards of the voltage 
transmission that shall distinguish the transmission from the 
subtransmission assets.
X X X"
Sec 7. Section 8 of Republic Act No. 9136 is hereby amended to read as follows: 
"Sec. 8. Creation of the National Transmission [Company] 
CORPORATION. -
XXX


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The sub-transmission functions and assets,
FACILITIES, AND LIABILITIES, IF ANY, shall be 
segregated from the transmission functions, assets, 
FACILITIES, and liabilities for transparency and disposal: 
Provided, That the sub-transmission FUNCTIONS, assets, 
AND FACILITIES shall be PERFORMED, operated and 
maintained by TRANSCO, OR ITS CONCESSIONAIRE, 
until SUCH FUNCTIONS, ASSETS, AND FACILITIES 
ARE SOLD OR OTHERWISE DISPOSED AND 
TRANSFERRED to qualified distribution utilities which are 
in a position to take over the responsibility for operating, 
maintaining, upgrading, and expanding said assets. All 
transmission and sub-transmission-related liabilities of NPC 
shall be transferred to and SHALL BE assumed by the 
PSALM Corp.
[The TRANSCO may oxorciso the power of 
ominont domain subject to the roquiromcnts of the
Constitution and exteting- laws. Except as providod
herein, no person, company or entity other than the
TRANSCO shall own any transmission facilities-.]
THE TRANSCO AND ITS CONCESSIONAIRE, ON 
BEHALF OF TRANSCO, MAY EXERCISE THE POWER 
OF EMINENT DOMAIN SUBJECT TO THE 
REQUIREMENTS OF THE CONSTITUTION AND 
EXISTING LAWS. PROVIDED, THAT THE EXERCISE 
OF THE RIGHT OF EMINENT DOMAIN SHALL BE 
NECESSARY FOR THE CONSTRUCTION, EXPANSION, 
AND EFFICIENT MAINTENANCE AND OPERATION OF 
THE TRANSMISSION SYSTEM AND GRID, AS WELL 
AS THE EFFICIENT OPERATION AND MAINTENANCE 
OF THE SUBTRANSMISSION SYSTEMS. PROVIDED 
FURTHER, THAT TRANSCO AND ITS


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CONCESSIONAIRE MAY ACQUIRE SUCH PRIVATE
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PROPERTIES 
NECESSARY FOR 
THE GRID
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DEVELOPMENT OF THE COUNTRY.
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EXCEPT AS PROVIDED IN THIS ACT AND ANY OTHER
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LAWS, NO PERSON, COMPANY, OR ENTITY OTHER
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THAN THE 
TRANSCO SHALL 
OWN 
ANY
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TRANSMISSION FACILITIES.
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CONSIDERING THAT TRANSMISSION
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SYSTEMS ARE PROJECTS OF NATIONAL
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SIGNIFICANCE, THE LOCAL GOVERNMENT UNITS,
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COURTS OF LAW AND OTHER RELEVANT
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GOVERNMENT AGENCIES SHALL IMMEDIATELY
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PROCESS AND APPROVE THE PERMITS, LICENSES,
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AND OTHER REQUIREMENTS NECESSARY FOR THE
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IMPLEMENTATION OF THIS SECTION.
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THE DOE, WITHIN SIXTY (60) DAYS UPON THE
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EFFECTIVITY OF THIS ACT, SHALL ISSUE THE
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IMPLEMENTING RULES AND REGULATIONS FOR THE
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IMPLEMENTATION OF THIS SECTION."
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Sec. 8. Section 9 of Republic Act No. 9136 is hereby amended to read as
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follows:
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"Sec. 9. Functions and Responsibilities. - x x x
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(a) XXX
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XXX
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(c) Ensure and maintain the reliability, adequacy, security,
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stability and integrity of the nationwide electrical grid in
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accordance with the performance standards for the
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operations and maintenance of the grid, as set forth in
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THE PHILIPPINE [a] Grid Code to be adopted[,]
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[and] promulgated AND AMENDED by the ERC, IN
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COORDINATION WITH THE DOE, within six (6)
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months from the effectivity of this Act;


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(d) Improve and expand its transmission faciiities,
consistent with the Grid Code and DOE APPROVED 
Transmission Development Plan (TDP) to be 
[promulgatod] PUBLISHED pursuant to this Act, to 
adequately serve generation companies, distribution 
utilities and suppliers requiring transmission service 
and/or ancillary services through the transmission 
system: 
Provided, That TRANSCO OR ITS
CONCESSIONAIRE shali submit any plan for 
expansion or improvement of its facilities for approval by 
the ERC;
(e) X X X
(f) X X X
(g) ACT AS THE SMALL GRID SYSTEM OPERATOR IN 
SPECIFIC OFF-GRID AREAS AS DETERMINED BY 
THE DOE AND, UPON APPROVAL OF THE DOE, 
MAY ENTER INTO CONCESSION AGREEMENTS 
FOR THIS PURPOSE.
[In the preparation of the TDP, TRANSCO shall
consult the othor-paiticipants of the olectric power-
industiy—such—as—the—generation—companies7
distribution utilities, and the electricity end-users?
The TDP shall—be submitted- to the—DOE for
integration with the Power Dovdopmont Program
and the Philippine Energy Plan, provided for in
Republic Act No. 7638 otherwise known- as "the
Department of Energy Act of 1992.]
THE PREPARATION AND FORMULATION OF
THE TDP SHALL BE UNDERTAKEN BY TRANSCO
AND/OR ITS CONCESSIONAIRE IN CONSULTATION
WITH OTHER PARTICIPANTS OF THE ELECTRIC


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POWER INDUSTRY: PROVIDED, THAT THE TRANSCO 
MAY TRANSFER OR ASSIGN TO, OR BE 
SUBSTITUTED BY ITS CONCESSIONAIRE IN THE 
PREPARATION AND FORMULATION OF THE TDP: 
PROVIDED FURTHER, THAT THE TDP SHALL BE 
SUBJECT TO THE REVIEW AND APPROVAL OF THE 
DOE: PROVIDEDFINALLY,1\\M UPON SUBMISSION 
OF THE TDP, THE DOE MAY SEEK THE ASSISTANCE 
OF TRANSCO IN THE REVIEW OF THE TDP PRIOR TO 
ITS APPROVAL.
A generation company may develop and own or 
operate dedicated point-to-point limited transmission 
facilities that are consistent with the TDP: x x x."
Sec. 9. Section 20 of Republic Act No. 9136 is hereby amended to read as
follows:
"Sec. 20. TRANSCO Related Businesses. - TRANSCO OR
ITS SUCCESSOR-IN-INTEREST may engage in any 
related business which maximizes utilization of its assets: 
Provided, That a portion of the net income derived from 
such undertaking utilizing assets which form part of the rate 
base shall be used to reduce transmission wheeling rates as 
determined by the ERC. [Such portion of not incomo 
used to roduco the transmission whooling rates shall
not oxcood fifty percent (50%) of tho not income
derived from such undertaking.] A MINIMUM OF 
FIFTY PERCENT (50%) OF THE NET INCOME 
DERIVED FROM SUCH UNDERTAKING SHALL BE 
USED TO REDUCE THE TRANSMISSION WHEELING 
RATES.
Separate accounts shall be maintained for each 
business undertaking to ensure that the transmission 
business shall neither subsidize in any way such business
8


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undertaking nor encounter its transmission assets in any
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way to support such business."
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Sec. 10. Section 21 of Republic Act No. 9136 is hereby amended to read
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as follows:
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"Sec. 21. TRANSCO Privatization. - Within six (6) months
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from the effectivity of this Act, x x x.
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In any case, the awardee shall comply with the Grid
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code and the TDP as approved, x x x"
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TRANSCO AND ITS CONCESSIONAIRE SHALL
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STRICTLY COMPLY WITH THE APPROVED TDP AND
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SHALL NOT CHANGE THE TDP WITHOUT PRIOR
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APPROVAL OF THE DOE. FAILURE TO COMPLETE THE
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ERC-APPROVED PROJECTS WITHIN THE TIMELINE
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PRESCRIBED IN THE TDP SHALL BE DEEMED NON-
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COMPLIANCE THEREOF, SUBJECT TO FINES AND
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PENALTIES PRESCRIBED IN THIS ACT.
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IN THE EVENT OF NON-COMPLIANCE OF THE
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TDP, THE DOE SHALL RECOMMEND TO THE
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PRESIDENT OF THE PHILIPPINES THE ASSIGNMENT
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OR DELEGATION OF SUCH ERC-APPROVED PROJECT
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TO A COMPETENT AND QUALIFIED ENTITY
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THROUGH AN EXECUTIVE ORDER. ANY RIGHTS OR
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RESPONSIBILITIES OF THE ASSIGNEE SHALL BE
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LIMITED TO THE TRANSMISSION PROJECT
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ASSIGNED. UPON ITS COMPLETION, THE ASSIGNEE
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SHALL BE ENTITLED TO RECOVERY OR JUST
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COMPENSATION, SUBJECT TO THE TERMS AND
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CONDITIONS INDICATED IN THE EXECUTIVE
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ORDER. THEREAFTER, THE PROJECT SHALL BE
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TRANSFERRED TO THE TRANSCO OR ITS
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CONCESSIONAIRE, AS PART OF ITS TRANSMISSION
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ASSETS.


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THE DOE AND ERG SHALL ISSUE THE 
NECESSARY GUIDELINES FOR THE 
IMPLEMENTATION OF THIS PROVISION.
The awardee shall be financially and technically 
capable, with proven domestic and/or international 
experience and expertise as a leading transmission system 
operator. Such experience must be with a transmission 
system of comparable capacity and coverage as the 
Philippines."
Sec. 11. Section 22 of Republic Act No. 9136 is hereby amended to read as
follows:
"Sec. 22. Distribution Sector. - The distribution of electricity 
to end-users IS A PUBLIC UTILITY OPERATION, AS 
DEFINED UNDER RA NO. 11659 OR THE PUBLIC 
SERVICE ACT, AS AMENDED, [shall bo a regulate# 
common—carrior—business] WHICH REQUIRES 
[requiring] a national franchise. Distribution of electric 
power to all end-users may be undertaken by private 
distribution utilities, cooperatives, local government units 
presently undertaking this function and other duly 
authorized entities, subject to regulation by the ERC."
Sec. 12. Section 23 of Republic Act No. 9136 is hereby amended to read as
follows:
"Sec. 23. Functions of Distribution Utiiities. - A distribution 
utility shall have the obligation to provide distribution 
services and connections to its system for any end-user 
within its franchise area consistent with THE TECHNICAL, 
FINANCIAL, INSTITUTIONAL AND ALL OTHER 
STANDARDS SET BY the PHILIPPINE [d]Distribution 
[€]Code AND PHILIPPINE GRID CODE.
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Any entity engaged IN THE DISTRIBUTION OF 
ELECTRICITY [therein] shall provide open and non- 
discriminatory access to its distribution system to all users.
Any distribution utility shall be entitled to impose and 
collect distribution wheeling charges and connection fees 
from such end-users as approved by the ERC.
DISTRIBUTION UTILITIES SHALL ENDEAVOR 
TO HAVE A FULLY AUTOMATED DISTRIBUTION 
NETWORK WITH THE SUPERVISION AND GUIDANCE 
OF THE DOE AND ERC.
A distribution utility shall have the obligation to 
supply REASONABLY PRICED electricity [in the least 
cost monnor] to its captive market, subject to the 
collection of retail rate duly approved by the ERC[t]/
TAKING INTO CONSIDERATION THE QUALITY, 
AFFORDABILITY, SUSTAINABILITY AND 
RELIABILITY OF SUPPLY OF ELECTRIC POWER.
ALL DISTRIBUTION UTILITIES, EXCEPT FOR 
OFF-GRID UTILITIES, SHALL COMPLY WITH GRID 
RELIABILITY AND WESM REQUIREMENTS. 
TOWARDS THIS END, THE DU SHALL MAKE 
AVAILABLE ALL INFORMATION NEEDED BY THE 
SYSTEM OPERATOR AND MARKET OPERATOR TO 
ACHIEVE OPTIMAL DISPATCH AND UTILIZATION OF 
ENERGY IN THE GRID, WHICH MAY INCLUDE REAL­
TIME DATA. NON-COMPLIANCE WITH THIS 
SECTION SHALL BE SUBJECT TO FINES AND 
PENALTIES PRESCRIBED IN THIS ACT.
To achieve economies of scale x x x"
Sec. 13. Section 26 of Republic Act No. 9136 is hereby amended to read as
follows:
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"Sec. 26. Distribution Reiated Businesses. - Distribution
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utilities may, directly or indirectly, engage in any related
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business undertaking which maximizes the utilization of
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their assets: Provided, That a [portion] MINIMUM OF
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FIFTY PERCENT (50%) of the net income derived from
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such undertaking [utilizing assets which form part of
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tho rate base] shall be used to reduce the distribution
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wheeling [charges as dotorminod by the ERC] RATES.
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[Provided/ farther> That such portion of not income
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used to reduce their distribution wheeling charges
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shall not exceed fifty percent (50%) of tho not
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income derived from such undortakingg] Provided,
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[4ma44y?] FURTHER, That separate accounts are
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maintained for each business undertaking to ensure that the
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distribution business shall neither subsidize In any way such
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business undertaking nor encumber its distribution assets in
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any way to support such business."
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Sec. 14. Section 29 of Republic Act No. 9136 is hereby amended to read
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as follows:
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"Sec. 29. Suppiy Sector. - The supply sector is a business affected
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with public interest. [Excopt--for distribution utilities and
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electric—cooperatives—with—respect to their—existing
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franchise areas,] ALL [all] suppliers of electricity to the
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contestable market shall require a license from the ERC.
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XXX
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Electricity suppliers shall be subject to the rules and regulations
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concerning abuse of market power, cartelization, and other anti-
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competitive or discriminatory behavior to be promulgated by the
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ERC. In its billings to end-users, every supplier shall Identify and
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segregate the components of its supplier's charge, as defined
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herein."
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Sec. 15. Section 30 of Republic Act No. 9136 is hereby amended to read
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as follows:
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"Sec. 30. Wholesale Electricity Spot Market - With! n one (1) yea r
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from the effectivity of this Act, x x x"
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ALL GOODS SOLD THROUGH THE MARKET OPERATOR
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SHALL BE VALUE-ADDED TAX ZERO-RATED. PROVIDED THAT
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ALL SERVICES RENDERED BY THE MARKET OPERATOR IN THE
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EXERCISE OF ITS FUNCTIONS UNDER THIS ACT SHALL
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LIKEWISE BE VALUE-ADDED TAX ZERO-RATED.
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AFTER CONSULTATION [^letntly] with the electric power
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industry participants, x x x
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The wholesale electricity spot market shall be implemented
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by a market operator in accordance with the wholesale electricity
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spot market rules. AS AUTHORIZED TO BE ESTABLISHED
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UNDER THIS ACT, THE WHOLESALE ELECTRICITY SPOT
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MARKET SHALL CONTINUE ITS INDEPENDENT AND
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PRIVATE NATURE. THE DOE, IN CONSULTATION WITH
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THE STAKEHOLDERS, SHALL DETERMINE THE
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ORGANIZATIONAL STRUCTURE OF THE WHOLESALE
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ELECTRICITY SPOT MARKET, AND THE INSTITUTION OF
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OTHER ENERGY-RELATED MARKETS. The market operator
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shall be an autonomous AND PRIVATE group, to be constituted
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by DOE, with equitable representation from electric power industry
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participants, initially under the administrative supervision of the
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TRANSCO. The market operator shall undertake the preparatory
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work and initial operation of the wholesale electricity spot market.
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Not later than one (1) year from the implementation of the
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wholesale electricity spot market, an independent AND PRIVATE
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entity shall be formed, and the functions, assets, and liabilities of
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the market operator shall be transferred to such entity with the
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joint endorsement of the DOE and the electric power industry
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participants. Thereafter, the administrative supervision of the
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TRANSCO over such entity shall cease. THE DOE SHALL ENSURE
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THE INDEPENDENCE AND PRIVATE NATURE OF THE
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MARKET OPERATOR BY INSTITUTING MEASURES THAT
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WILL MINIMIZE OR PREVENT UNNECESSARY
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GOVERNMENT AND ELECTRIC POWER INDUSTRY
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PARTICIPANT INTERVENTION IN THE MARKET
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OPERATIONS AND GOVERNANCE FUNCTIONS.
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SUBJECT TO DOE EVALUATION, THE WHOLESALE
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ELECTRICITY SPOT MARKET MAY ADOPT A SEPARATE
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WESM GOVERNANCE BODY AND MARKET OPERATOR,
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PROVIDED THAT BOTH ENTITIES REMAIN INDEPENDENT
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FROM ELECTRIC POWER INDUSTRY PARTICIPANTS.
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PROVIDED FURTHER, THAT THE ELECTRIC POWER
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INDUSTRY PARTICIPANTS SHALL CONTINUE TO PROVIDE
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ADVISORY FUNCTIONS ON WESM GOVERNANCE,
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OPERATIONS AND RULEMAKING.
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Subject to the compliance with the membership criteria, all
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generating companies, distribution utilities, suppliers, bulk
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consumers/end-users and other similar entities authorized by the
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ERC shall be eligible to become members of the wholesale
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electricity spot market.
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The ERC may authorize other similar entitles to become
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eligible as members, either directly or indirectly, of the wholesale
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electricity spot market, x x x"
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Sec. 16. Section 34 of Republic Act No. 9136 is hereby amended to read
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as follows:
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"Sec. 34. Universal Charge. - [The univorsai charge shall bo
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non-bypassablo charge which shall bo passed on and
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coltected from aH ond-users on a monthly basis by the
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distribution—utilities.—Collectiens—by the—distribution
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utilities and tho Transco in any given month shall bo
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remitted to tho psalm corp. On or before tho fifteenth
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(15th) of tho succcoding months -net ef-any omount due to
the distribution utility.] THE UNIVERSAL CHARGE (UC) 
SHALL BE A NON-BYPASSABLE CHARGE TO BE 
DETERMINED BY THE ERC WHICH SHALL BE PASSED ON 
AND COLLECTED FROM ALL END-USERS ON A MONTHLY 
BASIS BY THE DISTRIBUTION UTILITIES, AND FROM 
DIRECTLY CONNECTED CUSTOMERS BY TRANSCO OR ITS 
SUCCESSOR-IN-INTEREST. Any end-user 
[ef—self-
generating entity] not connected to a distribution utility shall 
remit its corresponding universal charge directly to the TRANSCO. 
THE UNIVERSAL CHARGE SHALL BE FOR THE FOLLOWING 
PURPOSES:
(a) Payment for the stranded debts and stranded contract costs of 
NPC in excess of the amount assumed by the National 
Government, PURSUANT TO SECTION 32 OF THE EPIRA, 
and as well as qualified stranded contract costs of distribution 
utilities resulting from the restructuring of the industry;
(b) PAYMENT FOR THE STRANDED DEBTS AND STRANDED 
CONTRACT COSTS OF NPC IN EXCESS OF THE AMOUNT 
ASSUMED BY THE NATIONAL GOVERNMENT, 
PURSUANT TO MURANGKURYENTEACT)
(c) Missionary electrification;
(d) The equalization of the taxes and royalties applied to 
indigenous or renewable sources of energy vis-a-vis imported 
energy fuels;
(e) An environmental charge equivalent to one-fourth of one 
centavo per kilowatt-hour (P0.0025/kWh), which shall accrue 
to an environmental fund to be used solely for watershed 
rehabilitation and management. Said fund shall be managed by 
NPC under existing arrangements; and
(f) A charge to account for all forms of cross-subsidies for a period 
not exceeding three (3) years.
15


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THE UC COLLECTIONS FOR STRANDED DEBTS AND 
THE STRANDED CONTRACT COSTS OF NPC (UC-SD AND 
SCC) SHALL BE COLLECTED BY THE DISTRIBUTION 
UTILITIES AND THE TRANSCO OR ITS SUCCESSOR-IN- 
INTERST IN ANY GIVEN MONTH AND SHALL BE REMITTED 
TO THE PSALM CORP. OR ITS SUCCESSOR-IN-INTEREST 
BEFORE THE FIFTEENTH (15TH) OF THE SUCCEEDING 
MONTH, NET OF ANY AMOUNT DUE TO THE DISTRIBUTION 
UTILITY.
THE AMOUNT COLLECTED FOR MISSIONARY 
ELECTRIFICATION (UC-ME) AND ENVIRONMENTAL 
CHARGE (UC-EC) BY DISTRIBUTION UTILITIES AND 
TRANSCO OR ITS SUCCESSOR-IN-INTEREST IN ANY 
GIVEN MONTH SHALL BE REMITTED TO THE NPC BEFORE 
THE FIFTEENTH (15TH) OF THE SUCCEEDING MONTH, NET 
OF ANY AMOUNT DUE TO THE DISTRIBUTION UTILITY.
THE NPC SHALL BE THE ADMINISTRATOR OF THE 
UC-ME AND UC-EC FUND, INCLUDING THE CASH 
INCENTIVE FUND FOR RENEWABLE ENERGY DEVELOPERS 
IN THE MISSIONARY AREAS PURSUANT TO SECTION 15 
(H) OF REPUBLIC ACT NO. 9513 OTHERWISE KNOWN AS 
THE RENEWABLE ACT OF 2008. AS ADMINISTRATOR OF 
THE FUND, THE NPC SHALL CREATE A SPECIAL TRUST 
FUND WHICH SHALL BE DISBURSED ONLY FOR THE 
PURPOSES SPECIFIED HEREIN IN AN OPEN AND 
TRANSPARENT MANNER.
The PSALM Corp. OR ITS SUCCESSOR-IN-INTEREST, as
administrator of the fund FROM UC-SC AND SDD 
COLLECTIONS, shall create a Special Trust Fund which shall be 
disbursed only for the purposes specified herein in an open and 
transparent manner.
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All amounts collected for the universal charge shall be 
distributed to the respective beneficiaries within a reasonable 
period to be provided by the ERC."
RELEVANT RECORDS PERTAINING TO THE UC-ME 
AND EC SHALL BE TRANSFERRED BY PSALM TO THE NPC 
WITHIN SIX (6) MONTHS FROM THE EFFECTIVITY OF THE 
IMPLEMENTING RULES AND REGULATIONS."
Sec. 17. Section 35 of Republic Act No. 9136 is hereby amended to read as
follows:
"Sec. 35. Royalties, Returns and Tax Rates for Indigenous Energy 
Resources. -
[The provisions of Section 79 of Commonwoolth Act Noa
437——He?—437)—and—any—law to—the—contrary
notwithstanding^ thopresklen4ef the Philippines may shatf
reduce temporarily suspend or reduce^ for a period of less
than six (6) months^ the imposition of the royalties/
returns and taxes coiiected for the exploitation of ail
indigenous sources of energy^ including-but not limited to,
natural gas and geothermai steam/ so as to effect parity of
tax treatment with the existing-rates for imported coal/
crude o\[, bunker fuel and other imported fuels. To ensure
lower rates for end-users.f the ERC shall forthwith reduce
the rates of power from all indigenous sources of energy.]
UPON RECOMMENDATION OF THE DOE AND NEDA, 
THE PRESIDENT OF THE PHILIPPINES MAY TEMPORARILY 
SUSPEND OR REDUCE, FOR A PERIOD OF LESS THAN SIX 
(6) MONTHS, THE IMPOSITION OF THE ROYALTIES, 
RETURNS AND TAXES COLLECTED FOR THE 
EXPLOITATION OF ALL INDIGENOUS SOURCES OF 
ENERGY TO ENSURE LOWER RATES FOR END-USERS.
X X x"
17


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Sec. 18. Section 36 of Republic Act No. 9136 is hereby amended to read as
2 
follows: 
"Sec. 36. Unbundling of Rates and Functions. - x x x
3 
Any electric power Industry participant shall functionally and
4 
structurally unbundle its business activities and rates in accordance
5 
with the sectors as identified in Section 5 hereof. The ERC shall
6 
ensure full compliance with this provision.
7 
FOR THIS PURPOSE, THE DISTRIBUTION UTILITY
8 
SHALL PUBLISH ONLINE AND/ OR ANY CONSPICUOUS
9 
PLACE, ITS MONTHLY UNBUNDLED RATES, INCLUDING
10 
THE COST OF EACH GENERATION SUPPLY."
11 
Sec. 19. Section 37 of Republic Act No. 9136 is hereby amended to read
12 
as follows:
13 
"Sec. 37. Powers and Functions of the DOE. - In addition to its existing
14 
powers and functions, the DOE is hereby mandated to supervise the
15 
restructuring of the electricity industry. In pursuance thereof, Section
16 
5 of RA 7638 otherwise known as "The Department of Energy Act of
17 
1992" is hereby amended to read as follows:
18 
(a)xxx
19 
(b) Develop [and update annually] ONCE EVERY THREE (3)
20 
YEARS AND UPDATED ANNUALLY the existing Philippine
21 
Energy Plan, hereinafter referred to as The Plan', which shall
22 
provide for an Integrated and comprehensive exploration,
23 
development, utilization, distribution, and conservation of
24 
energy resources, with preferential bias for environment-
25 
friendly, indigenous, and low-cost sources of energy. The plan
26 
shall include a policy direction towards the privatization of
27 
government agencies related to energy, deregulation of the
28 
power and energy industry, and reduction of dependency on
29 
oil-fired plants. Said Plan shall be submitted to Congress [«et
30 
later than the fifteenth -day of Septomber and ovory
31 
year thereafter] WITHIN THIRTY (30) DAYS FROM ITS
32 
APPROVAL;
18


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(c) X X X
(d) x X X
(e) Following the restructuring of the electricity sector, the DOE
shail, among others:
(i) Encourage AND SUPERVISE private sector investments 
in the electricity sector and promote development of 
indigenous and renewable energy sources;
XXX
(h) Exercise supervision and control over all government 
AND PRIVATE activities relative to energy projects In 
order to attain the goals embodied in Section 2 of RA 
7638;
XXX
(l) Formulate and implement a program for the accelerated 
development of non-conventional OR RENEWABLE energy 
systems and the promotion and commercialization of its 
applications;
(m) 
XXX
(n) 
XXX
(o) Encourage AND INCENTIVIZE private enterprises 
engaged in energy projects, including corporations, 
cooperatives, and similar collective organizations, to 
broaden the base of their ownership and thereby encourage 
the widest public ownership of energy-oriented 
corporations;
(p) COORDINATE WITH THE ERC IN THE 
PROMULGATION AND AMENDMENT OF THE 
PHILIPPINE GRID CODE AND PHILIPPINE 
DISTRIBUTION CODE;
(q) RECOMMEND THE IMPOSITION OF FINES AND 
PENALTIES TO THE ERC FOR ANY VIOLATION OF THE 
EPIRA BY ANY ELECTRIC POWER INDUSTRY
19


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PARTICIPANTS IN THE GENERATION,
2 
TRANSMISSION, 
DISTRIBUTION AND RETAIL
3 
SUPPLY SECTOR;
4 
(0 [(P)] Formulate such rules and regulations as may be
5 
necessary to implement the objectives of this Act; and
6 
(s) [(p)] Exercise such other powers as may be necessary or
7 
incidental to attain the objectives of this Act.
8 
Sec. 20. Expansion of the Energy Regulatory Commission. — The present
9 
organizational structure of the ERC shall be expanded in the following manner:
10 
(1) From the present seven (7) services of the ERC, there shall be at least
11 
fourteen (14) services;
12 
(2) The four services shall be divided into operations services and support
13 
services;
14 
(3)The Operation Services shall be composed of the following:
15 
(a) Transmission Operations Service;
16 
(b) Distribution Operations Service;
17 
(c) Generation Operations Service;
18 
(d) Standards And Compliance Monitoring Service;
19 
(e) Investigation And Enforcement Service;
20 
(f) Market Operations Service;
21 
(g) Licensing And Registration Service;
22 
(h) Legal Service;
23 
(i) Consumer Affairs Service; and
24 
(j) Natural Gas Service;
25 
(4)The Support Services shall be composed of the following:
26 
(a) Finance and Administration Service;
27 
(b) Office of the General Counsel And Secretariat;
28 
(c) Planning and Public Information Service; and
29 
(d) Information Technology and Management Services.
30 
(5) Each Operation Service shall consist of at least four (4) divisions. Each
31 
division shall consist of at least ten (10) personnel. The number of
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divisions and personnel per division may be increased upon 
determination of the commission.
(6) Each of the Support Service shall be composed of not less than two (2) 
divisions. The number of divisions and personnel per division may be 
increased upon determination of the commission.
(7) The Commission may later on increase the number of services if 
necessary after Its assessment of its workload, power and functions.
The Commission may choose either to keep an existing personnel of 
the ERC in his/her current position, or transfer them to any position 
depending on the Commission's assessment of such personnel's capacity 
and performance; Provided, That the new position to which he/she was 
transferred to will be of the same rank and salary from its previous position 
without the necessity of reappointment.
The ERC shall submit to the Department of Budget and Management 
(DBM) the proposed organizational expansion provided herein within three 
(3) months from the effectivity of this Act.
The DBM shall approve the submitted proposed organizational 
expansion within one month from its receipt. The DBM shall not approve 
less than the minimum required in this Act.
Every after five (5) years from the effectivity of this Act, the ERC shall 
reassess its then organizational structure to determine if there Is a need for 
further expansion or reorganization, which may include additional services, 
divisions or personnel per division. The DBM shall approve any proposed 
organizational expansion or restructuring within one month from its receipt 
thereof.
Sec. 21. Section 43 of Republic Act No. 9136 is hereby amended to read as
follows:
"Sec. 43. Functions of the ERC. - The ERC shall promote 
competition, encourage market development, ensure customer 
choice and INVESTIGATE [ponolizc] abuse of market power in 
the restructured electricity industry. In appropriate cases, the ERC 
is authorized to issue cease and desist order after due notice and
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hearing. Towards this end, it shall be responsible for the following 
key functions in the restructured industry:
(a) X X X
(b) Within six (6) months from the effectivity of this Act, 
promulgate OR AMEND, IN COORDINATION WITH THE DOE, 
and enforce, in accordance with law, THE [a] PHILIPPINE 
[Natienat] Grid Code and THE PHILIPPINE [a] Distribution 
Code which shall include, but not limited to, the following:
XXX
(k) [MeniteF] ENDORSE THE FINDINGS, BASED ON ITS 
INVESTIGATION, TO THE PHILIPPINE COMPETITION 
COMMISSION [, and take moasurcs in accordance with 
this-AeMo penanze] WITH REGARD TO ANY ACTS OF abuse 
of market power, cartelization, and anti-competitive or 
discriminatory behavior by any electric power industry participant;
XXX
(r) In the exercise of its investigative and quasi-judicial powers, act 
against any participant or player in the energy sector for violations 
of any law, rule and regulation governing the same, including the 
rules on cross-ownership, anti-competitive practices, abuse of 
market positions and similar or related acts by any participant in 
the energy sector or by any person, as may be provided by law, 
and require any person or entity to submit any report or data 
relative to any investigation or hearing conducted pursuant to this 
Act;
(s) Inspect, on its own or through duly authorized representatives, the 
premises, books of accounts and records of any person or entity at 
any time, in the exercise of its INVESTIGATORY [quasi- 
judieiat] power, UPON DETERMINATION OF A PROBABLE 
CAUSE THAT AN ACT OR SERIES OF ACTS OF [for purposes 
of dotormining the cxistonco of] anti-competitive behavior 
and/or market power abuse and any violation of THE EPIRA,
22


1 
THIS ACT, AND OTHER PERTINENT LAWS, rules and
2 
regulations [issued by tho ERC] HAS BEEN COMMITTED;
3 
X X x"
4 
Sec. 22. Section 45 of Republic Act No. 9136 is hereby amended to read as
5 
follows:
6 
"Sec. 45. Cross Ownership, Market Power Abuse and Anti-
7 
Competitive Behavior. - No participant in the electricity industry or
8 
any other person may engage in any anti-competitive behavior
9 
including, but not limited to, cross-subsidization, price or market
10 
manipulation, or other unfair trade practices detrimental to the
11 
encouragement and protection of contestable markets.
12 
THE ENERGY REGULATORY COMMISSION SHALL
13 
INVESTIGATE ANY POSSIBLE VIOLATION OR NON-
14 
COMPLIANCE OF THIS SECTION. BASED ON THE FINDINGS
15 
AND RECOMMENDATIONS OF THE ENERGY REGULATORY
16 
COMMISSION, THE PHILIPPINE COMPETITION
17 
COMMISSION SHALL DETERMINE WHETHER SUCH
18 
VIOLATION OR NON-COMPLIANCE WAS COMMITTED AND
19 
IMPOSE THE CORRESPONDING FINES AND PENALTIES.
20 
To promote true market competition and prevent harmful
21 
monopoly and market power abuse, the ERC shall enforce the
22 
following safeguards:
23 
(a) No company or related group can own, operate or control
24 
more than TWENTY [thirty] percent (f3]20%) of the
25 
Installed generating capacity of a grid and/or FIFTEEN
26 
[twonty-fivo] percent ([35] 15%) of the national installed
27 
generating capacity. "Related group" includes a person's
28 
business interests, including its subsidiaries, affiliates,
29 
directors or officers or any of their relatives by consanguinity
30 
or affinity, legitimate or common law, within the fourth civil
31 
degree;
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(b) Distribution utilities may enter into bilateral power supply 
contracts subject to review by the ERC: Provided, That such 
review shall only be required for distribution utilities whose 
markets have not reached household demand level. For the 
purpose of preventing market power abuse between 
associated firms engaged in generation and distribution, no 
distribution utility shall be allowed to source from bilateral 
power supply contracts more than THIRTY [fifty] percent 
([S]30%) of its total demand from an associated firm 
engaged in generation but such limitation, however, shall 
not prejudice contracts entered into prior to the effectivlty 
of this Act. An associated firm with respect to another entity 
refers to any person which, alone or together with any other 
person, directly or indirectly, through one or more 
intermediaries, controls, is controlled by, or is under 
common control with, such entity; [an#]
(C) NO DISTRIBUTION UTILITY SHALL BE ALLOWED TO 
HOLD ANY INTEREST, DIRECTLY OR INDIRECTLY, 
IN SUPPLY OF ELECTRICITY. LIKEWISE, THE 
SUPPLIER SHALL NOT HOLD ANY INTEREST, 
WHETHER DIRECTLY OR INDIRECTLY, IN ANY 
DISTRIBUTION UTILITY.
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THE ABOVE PROHIBITION SHALL EXTEND TO ANY 
OF THE DISTRIBUTION UTILITY'S STOCKHOLDERS OR 
OFFICIALS OR ANY OF THEIR RELATIVES WITHIN THE 
FOURTH CIVIL DEGREE OF CONSANGUINITY OR 
AFFINITY, AND THAT OF A DISTRIBUTION UTILITY'S, 
AGENTS AND SUBSIDIARIES.
29
30
A RETAIL ELECTRICITY SUPPLIER (RES) SHALL NOT 
BE ALLOWED TO HOLD ANY SHARES OF STOCK IN
24


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TRANSCO OR ITS CONCESSIONAIRE OR SUCCESSOR- 
IN-INTEREST.
THIS PROHIBITION ON CROSS-OWNERSHIP SHALL 
NOT APPLY TO:
(A) A RELATIVE OF ANY STOCKHOLDER, DIRECTOR OR 
OFFICER OF TRANSCO OR ITS CONCESSIONAIRE OR 
SUCCESSOR-IN-INTEREST WHO HAS NO 
PROFESSIONAL ENGAGEMENT OR OTHER ECONOMIC 
RELATIONSHIP OR INTEREST IN TRANSCO OR ITS 
SUCCESSOR-IN-INTEREST, AND VICE-VERSA; AND
(B) OWNERSHIP OF SHARES OF STOCK IN A COMPANY 
LISTED IN THE PHILIPPINE STOCK EXCHANGE (PSE) 
EVEN IF SUCH LISTED COMPANY IS A RES, SUBJECT TO 
THE CAP THAT THE ERC SHALL DETERMINE; AND
(d) [{€)] For the first five (5) years from the establishment of the 
wholesale electricity spot market, no distribution utility shall source 
more than ninety percent (90%) of its total demand from bilateral 
power supply contracts.
ANY GENERATION COMPANY, DISTRIBUTION 
UTILITY OR SUPPLIER OF ELECTRICITY THAT HAS 
EXCEEDED THESE LIMITATIONS UPON THE EFFECTIVITY 
OF THIS ACT SHALL HAVE FIVE (5) YEARS FROM THE 
PROMULGATION OF THE IMPLEMENTING RULES AND 
REGULATIONS OF THIS ACT TO COMPLY WITH THE 
SAFEGUARDS MENTIONED IN THIS SECTION.
XXX
The ERC, IN COORDINATION WITH THE PHILIPPINE 
COMPETITION COMMISSION, shall, within one (1) year from the 
effectivity of this Act, promulgate rules and regulations to ensure and 
promote competition, encourage market development and customer
25


1 
choice and discourage/penalize abuse of market power, cartelization
2 
and any anti-competitive or discriminatory behavior, in order to further
3 
the intent of this Act and protect the public interest. Such rules and
4 
regulations shall define the following:
5 
(a) the relevant markets for purposes of establishing abuse or misuse
6 
of monopoly or market position;
7 
(b) areas of isolated grids; and
8 
(c) the periodic reportorial requirements of electric power industry
9 
participants as may be necessary to enforce the provisions of this
10 
Section.
11 
The ERC shall, motu proprio, monitor [and penalize] any
12 
market power abuse or anti-competitive or discriminatory act or
13 
behavior by any participant in the electric power industry. Upon finding
14 
BY THE ERC that a market participant has engaged in ANY ANTI-
15 
COMPETITIVE [su€h] act or behavior, the ERC shall stop and
16 
redress the same AND SUBMIT ITS FINDINGS TO THE PCC. Such
17 
remedies shall, without limitation, include the imposition of price
18 
controls, issuance of injunctions, requirement of divestment or
19 
disgorgement of excess profits and imposition of fines and penalties
20 
pursuant to this Act."
21 
Sec. 23. Section 46 of Republic Act No. 9136 is hereby amended to read
22 
as follows:
23 
"Sec. 46. Fines and Penalties. — THE FOLLOWING fines and penalties
24 
[Uiat] shall be imposed [by the ERC] for any violation of or non-
25 
compliance with this Act or the IRR:
26
27 
A. BY ANY JURIDICAL ENTITIES ENGAGED IN THE
28 
GENERATION, TRANSMISSION, DISTRIBUTION 
AND
29 
SUPPLY OF ELECTRICITY, THE FINE shall range from a
30 
minimum of FIVE HUNDRED [fifty] thousand 
pesos
31 
(P500,000.00)—[(P50,00Q.00)] to a maximum of FIVE
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HUNDRED [fifty] 
[(PSO.OOO.OOO-OO)].
million pesos (P500f000,000.00)
ANY MONETARY FINE AND PENALTY ADJUDGED BY THE ERG 
BY VIRTUE OF THIS PROVISION SHALL BE IMMEDIATELY 
APPLIED BY THE REGULATED ENTITY TO REDUCE THE RATES 
OF ITS END-USERS.
B. BY ANY PERSON, A FINE OF NOT LESS THAN FIFTY 
THOUSAND PESOS (P50,000.00) BUT NOT MORE THAN 
FIFTY MILLION PESOS (P50,000,000.00), OR BY 
IMPRISONMENT OF NOT LOWER THAN SIX (6) YEARS AND 
ONE (1) DAY AND NOT HIGHER THAN TWELVE (12) YEARS,
OR BOTH, AT THE DISCRETION OF THE COURT.
WHEN THE ENTITIES INVOLVED ARE JURIDICAL PERSONS,
THE PENALTY OF IMPRISONMENT SHALL BE IMPOSED ON ITS 
OFFICERS, DIRECTORS, OR EMPLOYEES HOLDING MANAGERIAL 
POSITIONS, WHO ARE KNOWINGLY AND WILLFULLY 
RESPONSIBLE FOR SUCH VIOLATION.
THE FINES AND PENALTIES MAY BE ADJUSTED TO ITS 
PRESENT VALUE EVERY FIVE (5) YEARS USING THE CONSUMER 
PRICE INDEX (CPI) AS PUBLISHED BY THE PHILIPPINE 
STATISTICS AUTHORITY.
XXX
Sec. 24. Sec. 47 of Republic Act No. 9136 is hereby amended to read as follows: 
"Sec. 47. NPCPrivatization. - Except for the assets of SPUG AND 
THOSE THAT ARE CRITICAL FOR THE RELIABLE, 
ECONOMICAL AND SUSTAINABLE OPERATION OF THE GRID 
OR NETWORK, 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 from the effectivity 
of this Act, the PSALM Corp shall submit a plan for the endorsement
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by the Joint Congressional Power Commission and the approval of 
the President of the Philippines, on the [%e^] privatization of the 
NON-CRITICAL generation assets, real estate, other disposable 
assets as well as existing IPP contracts of NPC and 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 NON-CRITICAL generation assets, real estate, other 
disposable assets as well as IPP contracts shall be optimized
XXX
(f) The Agus and the Pulangui complexes in Mindanao shall be 
excluded from among the generation companies that will be 
initially privatized. Their ownership shall be transferred to 
the PSALM Corp. and both shall continue to be operated by 
the NPC OR ANY QUALIFIED THIRD-PARTY AS MAY 
BE DETERMINED BY PSALM CORP. OR ITS 
SUCCESSOR-IN-INTEREST. Said complexes may be 
privatized not earlier than ten (10) years from the effectivity 
of this Act, and except for Agus III, shall not be subject to 
Build-Operate-Transfer (B-O-T), 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 DOE [Congress];
XXX
(j) NPC may generate and sell electricity [enly] from the 
undisposed generating assets and IPP contracts of PSALM 
Corp., AMONG OTHER GENERATING FACILITIES, NPC 
MAY [sholi not] incur [any] new obligations to purchase 
power through bilateral contracts with generation 
companies or other suppliers AND SELL POWER
28


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THROUGH SUPPLY AGREEMENTS WITH 
DISTRIBUTION UTILITIES, EXCEPT FOR 
PROVIDING POWER GENERATION AND ITS 
ASSOCIATED POWER DELIVERY SYSTEMS IN AREAS 
THAT ARE NOT CONNECTED TO THE TRANSMISSION 
SYSTEM;
XXX
Sec. 25. Section 57 of Republic Act No. 9136 is hereby amended to read as
follows:
"Sec. 57. Conversion of Electric Cooperatives. - Electric 
cooperatives are hereby given the option to convert into either 
stock cooperative under the Cooperatives Development Act or 
stock corporation under the REVISED Corporation Code. Nothing 
contained in this Act shall deprive electric cooperatives of any 
privilege or right granted to them under Presidential Decree No. 
269, as amended, and other existing laws.
THE DOE, IN CONSULTATION WITH THE NEA, THE 
COOPERATIVE DEVELOPMENT AUTHORITY, AND THE 
SECURITIES AND EXCHANGE COMMISSION, SHALL ISSUE 
THE GUIDELINES FOR THE CREATION OF AN EFFICIENT, 
STREAMLINED AND EXPEDITIOUS MECHANISM FOR THE 
CONVERSION OF ELECTRIC COOPERATIVES. THE NEA, 
CDA OR THE SEC, AS THE CASE MAY BE, SHALL 
SUFFICIENTLY INFORM THE ELECTRIC COOPERATIVE OF 
THE PRIVILEGES, RIGHTS, BENEFITS AND OBLIGATIONS 
RELATIVE TO ITS DESIRED CONVERSION.
THE ECS MAY ENTER INTO MERGER, 
CONSOLIDATION, OR ANY OTHER INVESTMENT 
AGREEMENT WITH OTHER ECS AND/OR PRIVATE 
ENTITIES FOR THE PURPOSE OF IMPROVING THE 
SERVICE OF THE FRANCHISE AREA. THE DOE, IN 
CONSULTATION WITH NEA AND ERC, SHALL ISSUE
29


1 
GUIDELINES FOR THE IMPLEMENTATION OF THIS
2 
SECTION, INCLUDING THE RULES ON BUSINESS
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SEPARATION AND UNBUNDLING/'
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Sec. 26. Section 60 of Republic Act No. 9136 is hereby amended to read as
5 
follows:
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"Sec. 60. Debts of Electric Cooperatives. - x x x
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XXX
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IN CASE THE ELECTRIC COOPERATIVE IS UNABLE TO
9 
FULFILL ITS OBLIGATIONS TO ITS CREDITORS DUE TO
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INSOLVENCY OR BANKRUPTCY, SUCH ELECTRIC
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COOPERATIVE OR ANY INTERESTED PARTY MAY APPLY
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FOR ANY REMEDIES IT MAY DEEM APPROPRIATE
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PURSUANT TO RA NO. 10142, OTHERWISE KNOWN AS THE
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'FINANCIAL REHABILITA TION AND INSOL VENCY ACT OF
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2010r
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Sec. 27. Section 61 of Republic Act No. 9136 is hereby amended to read as
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follows:
18 
"Sec. 61. Reportoriai Requirements. - The DOE shall take the
19 
necessary measures to ensure that the provisions of this Act are
20 
properly implemented and shall submit to the JOINT
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CONGRESSIONAL ENERGY [Power] Commission a semi-
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annual report on the implementation of this Act, on or before the
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last week of April and October of each year."
24 
Sec. 28. Section 62 of Republic Act No. 9136 Is hereby amended to read as
25 
follows:
26 
"Sec. 62. Joint Congressional ENERGY [-Power] Commission. -
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[Upon the offectivity of this Act,—a] THIS congressional
28 
commission, hereinafter referred to as the "3CEC [Power
29 
Commission]", RENAMED PURSUANT TO REPUBLIC ACT
30 
NO. 11285 AND FURTHERAMENDED BY REPUBLIC ACT NO.
31 
11571 [is horoby constituted. Tho Powor Commission]
32 
shall be composed of fourteen (14) members the chairmen of the
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Committee on Energy of the Senate and the House of 
Representatives and six (6) additional members from each House, 
to be designated by the Senate President and the Speaker of the 
House of Representatives, respectively. The minority shall be 
entitled to pro rata representation but shall have at least one (1) 
representative in the [Power] ENERGY Commission. The 
Commission shall, in aid of legislation, perform the-[following] 
functions, IN ADDITION TO THOSE PROVIDED BY RA NO. 
11571, among others:
XXX
(c) To ensure transparency, require the submission of reports from 
government agencies concerned on the conduct of public bidding 
procedures regarding privatization of NPC NON-CRITICAL 
generation and transmission assets;"
XXX
(g) X X x; [an4]
(h) TO ENSURE THE SOUND, SUSTAINABLE AND EFFICIENT 
EXECUTION OF THE PLANS, PROGRAMS AND PROJECTS IN 
THE CONSTRUCTION, ACQUISITION, OWNERSHIP, 
OPERATION, EXPANSION, INSTALLATION AND 
MAINTENANCE OF THE GENERATING ASSETS AND 
FACILITIES OF THE STATE; AND
(i) (h) Perform such other duties and functions as may be necessary 
to attain its objectives.
X X x"
Sec. 29. Section 63 of Republic Act No. 9136 is hereby amended to read as
follows:
"Sec. 63. Separation Benefits of Officials and Employees of Affected 
Agencies. - National government employees displaced or 
separated from the service as a result of the restructuring of the
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electricity industry, [AND] privatization of NPC assets, OR THE 
END OF THE CORPORATE EXISTENCE OF ANY AFFECTED 
AGENCY CREATED pursuant to this Act, shall be entitled to either 
a separation pay and other benefits in accordance with existing 
laws, rules or regulations or be entitled to avail of the privileges 
provided under a separation plan which shall be one and one-half 
month salary for every year of service in the government: Provided, 
however. That those who avail of such privilege shall start their 
government service anew if absorbed by any government-owned 
successor company. In no case shall there be any diminution of 
benefits under the separation plan until the full implementation of 
the restructuring and privatization.
XXX
Sec. 30. Section 70 of Republic Act No. 9136 is hereby amended to read 
as follows:
"Sec. 70. Missionary Electrification. - x x x
THE NPC IN PERFORMING THIS MANDATE SHALL 
ADOPT ALTERNATIVE AND COST-EFFECTIVE 
TECHNOLOGIES, INCLUDING RENEWABLE ENERGY, 
TOWARDS THE CESSATION OF SUBSIDY FOR 
MISSIONARY ELECTRIFICATION. FURTHER, THE 
DOE AND NPC SHALL ISSUE THE NECESSARY 
POLICIES FOR THE GRADUATION OF AN OFF-GRID 
AREA FROM THE UC-ME, WITH DUE 
CONSIDERATION OF THE COMMERCIAL VIABILITY 
AND/OR INTERCONNECTION TO THE GRID OF SUCH 
AREA IN A SOCIALLY ACCEPTABLE MANNER.
COMMERCIAL VIABILITY SHALL REFER TO A 
SITUATION WHEN THE TRUE COST OF GENERATION 
RATE IS EQUAL OR LESS THAN THE SUBSIDIZED 
APPROVED GENERATION RATE OF SUCH OFF-GRID 
AREA."
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Sec. 31. Section 71 of Republic Act No. 9136 is hereby amended to read as
follows:
"Sec. 71. Electric Power Crisis Provision. - Upon the 
determination by the President of the Philippines of an 
imminent shortage of the supply of electricity, Congress 
may authorize, through a joint resolution, the establishment 
of additional generating capacity under such terms and 
conditions as it may approve.
IN TIMES OF CRITICALLY LOW ELECTRICITY 
SUPPLY 
OR UNUSUALLY 
HIGH ELECTRICITY
PRICES, 
THE PRESIDENT MAY, 
UPON THE
RECOMMENDATION OF THE DOE AND FOR A PERIOD 
NOT EXCEEDING SIX (6) MONTHS, PLACE THE 
WHOLE PHILIPPINES OR ANY PART THEREOF 
UNDER A STATE OF ELECTRIC POWER CRISIS. 
DURING 
AN ELECTRIC POWER 
CRISIS, THE
PRESIDENT IS EMPOWERED TO:
(A) 
ISSUE TEMPORARY MEASURES TO
MITIGATE THE IMPACT ON 
THE
CONSUMERS;
(B) 
INITIATE THE EFFICIENT ALLOCATION 
AND CONSERVATION OF ENERGY; AND
(C) 
WHEN THE PUBLIC INTEREST SO 
REQUIRES, TEMPORARILY TAKE OVER 
THE OWNERSHIP AND/OR DIRECT THE 
OPERATIONS OF ESSENTIAL 
GENERATION, TRANSMISSION OR 
DISTRIBUTION ASSETS AND 
FACILITIES, DURING THE ELECTRIC 
POWER CRISIS AND UNDER 
REASONABLE TERMS PRESCRIBED BY 
THE PRESIDENT; AND/OR
33


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(D) ANY OTHER NECESSARY AND
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APPROPRIATE ACTIONS TO RESOLVE
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THE ELECTRIC POWER CRISIS.
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PROVIDED, THAT THE EFFECTIVITY OF SUCH
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ISSUANCES SHALL CONTINUE UNTIL THE LIFTING OF THE
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DECLARATION OF THE STATE OF ELECTRIC POWER CRISIS
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BY THE PRESIDENT.
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WITHIN SEVEN (7) DAYS FROM THE DECLARATION
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OF THE ELECTRIC POWER CRISIS, THE PRESIDENT SHALL
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SUBMIT A REPORT TO THE JCEC. THE JCEC MAY REVOKE
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SUCH PROCLAMATION OR SUSPENSION, WHICH
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REVOCATION SHALL NOT BE SET ASIDE BY THE
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PRESIDENT. UPON RECOMMENDATION OF THE DOE, THE
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JCEC MAY EXTEND SUCH DECLARATION FOR A PERIOD TO
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BE DETERMINED BY THE JCEC, IF THE ELECTRIC POWER
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CRISIS SHALL PERSIST AND PUBLIC INTEREST REQUIRES
17 
IT."
18 
Sec. 32. Section 78 of Republic Act No. 9136 is hereby amended to read as
19 
follows:
20 
"Sec. 78. Injunction and Restraining Order. - The Implementation
21 
Of the provisions of the Act, INCLUDING THE IMPOSITION OF
22 
THE FINES AND PENALTIES PRESCRIBED IN THIS ACT,
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shall not be restrained or enjoined except by an order issued by
24 
the Supreme Court of the Philippines."
25 
Sec. 33. Transitory Cause. - All Retail Supply Contracts existing during
26 
the effectivity of this Act shall be recognized until their expiration. All RES shall
27 
renew their licenses based on the guidelines to be issued by the ERC pursuant
28 
to this Act.
29 
Sec. 34. Repealing Cause. - Sections 28 and 72 of the EPIRA are hereby
30 
repealed.
31 
All laws, decrees, rules and regulations, or portion thereof, inconsistent with
32 
this Act are hereby repealed or modified accordingly.
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Sec. 35. Implementing Rules and Regulations. -The DOE shall, in consultation
2 
with relevant government agencies and all stakeholders, promulgate the
3 
Implementing Rules and Regulation (IRR) of the Act within six (6) months from the
4 
effectivity of this Act.
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Sec. 36. Effectivity. - This Act shall take effect fifteen (15) days after its
6 
publication In the Official Gazette ox in a newspaper of general circulation.
Approved,
35