NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE
S.B. No. 487
of tli - S t r'tiX'j
•22 JUL 13 A10 S9
RlvCEiV'-'j SiV.
Introduced by Senator WIN GATCHALIAN
AN ACT ENHANCING THE GOVERNANCE STRUCTURE OF THE ENERGY
REGULATORY COMMISSION
EXPLANATORY NOTE
The enactment of Republic Act No. 9136, otherwise known as the Electric Power 
Industry Reform Act of 2001, carried with it the unbundling of the power sector. 
Generation, transmission, distribution, and supply were privatized. Nevertheless, 
distribution and transmission were declared public utilities. Their regulation, which 
Includes performance, recoverable costs, and allowable margins, fell upon the Energy 
Regulatory Commission (ERC).1
The ERC, as a regulator, plays an Important role in ensuring that the interests of 
consumers are protected.2 As such. Its governance structure should foster 
independence, transparency, and accountability. However, an evaluation of ERCs 
governance structure using the country's Code of Coroorate Governance for Publicly 
Listed Companies shows areas for improvement. An example is the separation of the 
Chairperson and Chief Executive Officer (CEO) functions, which is necessary to "foster 
an appropriate balance of power, increased accountability, and better capacity for 
independent decision-making."3 Similarly, ERC's existing governance structure lacks 
a clear delineation of powers and duties between the Chairperson as the CEO and the
1 Sec. 43 of Republic Act No. 9136 or the Electric Power Industry Reform Act (2001)
2 Sec. 20), Id.
3 SEC Memorandum Circular No. 19, Series of 2016. Code of Corporate Governance for Publicly-Listed Companies. (22 November 
2016)


Commission En BancW\\h respect to important decisions such as the appointment of 
ERC Directors, the procurement of services and equipment, and the preparation of the 
budget of the ERC.4 The ambiguity between roles and functions of ERC's key officials 
has been attributed to cause regulatory delays in the past.5 This is in contrast to other 
jurisdictions, such as the member countries of the Organization for Economic 
Cooperation and Development (OECD), which established sufficiently defined 
regulatory powers and functions to achieve a regulator's objectives.6
This measure aims to strengthen the governance structure of the ERC through the 
following: First, additional qualifications and requirements for ERC Commissioners to 
ensure board diversity; Second, prohibitions and disqualifications for ERC 
Commissioners and their relatives to prevent conflicts of interest; Third, separation of 
the Chairperson and CEO functions to ensure a balance of power; Fourth, defined 
duties and responsibilities of the Chairperson, the Commission, and the Executive 
Director to increase individual and board accountability; Fifth, open meetings of the 
Commission to guarantee public transparency; and Sixth, access to information to 
enhance knowledge and education on regulatory matters affecting public welfare.
The OECD recommends that countries "develop a consistent policy covering the role 
of functions of regulatory agencies in order to provide greater confidence that 
regulatory decisions are made on an objective, impartial and consistent basis, without 
conflict of interest, bias or Improper influence."7 It is the hope of the author that these 
objectives be fulfilled with the enactment of this bill Into law.
Given the foregoing, the immediate passage of this measure is sought.
4 Transcript of Hearing of the Senate Committee on Energy Joint with the Committees on Civil Service, Government Reorganization 
and Professional Regulation; and Cooperatives. (14 February 2018) Pages 40 to 52
5 Transcript of Hearing of the Senate Committee on Energy Joint with the Committees on Civil Service, Government Reorganization 
and Professional Regulation; and Cooperatives. (16 January 2018) Pages 51 to 56
6 Organization for Economic Cooperation and Development (OECD): Principles for Role Clarity, Recommendation of the Council 
on Regulatory Policy and Governance (2012)
7 Organization for Economic Cooperation and Development (OECD): Recommendation of the Council on Regulatory Policy and 
Governance (2012)




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NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
First Regular Session 
)
SENATE
Senate Bill No. 4o7
of rlje ^«n-?rrin)
22 J(J|_ 13 A10 59
Ri:cFiv?:aB
Introduced by Sen. Win Gatchalian
AN ACT
ENHANCING THE GOVERNANCE STRUCTURE OF THE 
ENERGY REGULATORY COMMISSION
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
CHAPTER I
GENERAL PROVISIONS
Section 1. Title. - This Act shall be known as the "Energy Regulatory 
Commission Governance Act."
Sec. 2. Declaration of Policy. - The State recognizes the significant role of the 
Energy Regulatory Commission (ERC) in ensuring transparent and reasonable prices 
of electricity in a regime of free and fair competition and full public accountability to 
achieve greater operational and economic efficiency. Likewise, public Interest 
demands the protection of consumers as they are affected by the rates and services 
of generation companies, electric utilities, and other electric power stakeholders. 
Towards this end, the State shall:
a) Establish a strong, independent, transparent, and accountable regulatory body; 
and
b) Institutionalize a system to ensure the efficient and effective performance of 
the functions and mandates of the regulatory body to enhance competitiveness 
in the electric power industry.


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Sec. 3. Scope. - This Act shall enhance the existing governance mechanisms of 
the ERC to foster independence, transparency, and accountability.
Sec. 4. Definition of Terms. - As used in this Act, the following words or term s 
shall have the following meaning, unless provided otherwise:
a) Career Executive Service Eligibility refers to the eligibility conferred to a person 
who passes the four-stage Career Executive Service (CES) Eligibility 
Examination process and meets the other requirements prescribed by the 
Career Executive Service Board;
b) Career Executive Service Officer (CESO) refers to a person with CES Eligibility 
appointed by the President to a CES rank upon the recommendation by the 
Career Executive Service Board;
c) Commission refers to the decision-making body of the ERC under Republic Act 
No. 9136, otherwise kno'vn as the Electric Power Industry Reform Act of 2001, 
composed of one (1) Chairperson and four (4) Commissioners;
d) Consumer refers to ail captive and contestable customers who buy electricity 
either from a distribution utility (DU), a retail electricity supplier (RES), or a 
generation company (Genco);
e) Deliberation refers to a communication between or among members of the 
Commission in a meeting: Provided, That a quorum exists;
f) 
Electric power industry participant refers to any person or entity engaged in 
the generation, transmission, distribution, or supply of electricity;
g) Key ERC personnel refers to employees who hold executive or managerial 
positions in the ERC;
h) Meeting refers to a deliberation of the Commission with respect to any case, 
issue, or matter within Its jurisdiction; and
i) Public hearing refers to an official proceeding of a government agency during 
which the public Is accorded the right to express its position on the subject 
matter at hand.
CHAPTER II
COMPOSITION OF THE COMMISSION


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Sec. 5. The Commission. - The Commission shall be the sole governing body of
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the ERC, and shall formulate its policies and direct its affairs.
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All executive functions of the ERC shall rest on the Commission: Provided, That 
such executive functions shall be limited to the duties and responsibilities enumerated 
in Section 11 of this Act.
Sec. 6. Quaiifications. - All members of the Commission shall be:
a) Natural-born citizens and residents of the Philippines;
b) At least thirty-five (35) years of age;
c) Of good moral character;
d) Of recognized probity and independence; and
e) Of distinguished competence in any of the following fields: energy, law, 
economics, finance, commerce, engineering, or other experience relevant to 
the energy sector with at least ten (10) years of active practice in their 
respective fields of expertise.
No member shall have been a candidate for any elective national or local office 
in the immediate preceding elections, whether regular or special: Provided further, 
That one (1) shall be a lawyer, one (1) shall be an economist, one (1) shall be an 
engineer, and one (1) shall be a certified public accountant or have a background in 
finance
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Sec. 7. Requirements. - The members of the Commission shall, upon assumption
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of office:
a) Publicly disclose any employment, consultancy, or any connection with, and 
any pecuniary interest in an electric power industry participant;
b) Publicly disclose if his or her spouse, partner, and any relative by 
consanguinity or affinity within the fourth civil degree is employed or has a 
consultancy or any connection with, or has any pecuniary interest in an electric 
power industry participant;
c) Divest through sale or legal disposition any and all interests in an electric 
power industry participant; and


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d) Terminate employment or consultancy with any electric power industry
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participant.
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Sec. 8. Prohibited Acts. — The members of the Commission, within the duration
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of their term, are prohibited from:
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a) Taking up any employment or consultancy arrangement with any electric 
power industry participant;
b) Holding any connection to and any pecuniary interest in an electric power 
industry participant;
c) Holding any other office or employment; and
d) Directly or indirectly practicing any profession, participating in any business, 
or be financially interested in any contract with, or any franchise, or special 
privileges granted by the government or any subdivision, agency, or 
instrumentality thereof, including government owned and controlled 
corporations or their subsidiaries.
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The members of the Commission, after the cessation of their service, arc
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prohibited from:
a) Running for office in the election immediately succeeding their cessation from 
office; and
b) Personally appearing or practicing as counsel or agent on any matter pending 
before the Commission for two (2) years following the cessation of their 
service.
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Any spouse, partner, and relative by consanguinity or affinity within the fourth
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civil degree of the members of the Commission are prohibited from:
a) Taking up any employment or consultancy arrangement with an electric power 
industry participant during the incumbency of the member of the Commission 
to whom the spouse, partner, and relative concerned is related to;
b) Holding any connection to and pecuniary interest in any electric power 
industry participant during the incumbency of the member of the Commission 
to whom the spouse, partner, and relative concerned is related to;


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c) Appearing as counsel or agent on any matter pending before the Commission 
or transacting business directly or indirectly therein during the incumbency of 
the member of the Commission to whom the spouse, partner, and relative 
concerned is related to, and within two (2) years from cessation of their 
service.
Sec. 9. The Chairperson. - The Chairperson shall be from any of the fields of 
energy, law, economics, finance, commerce, or engineering with at least ten (10) 
years of experience in energy and/or public utility regulation: Provided, That the 
qualifications and requirements in Sections 6 and 7 of this Act are complied with.
Sec. 10. Duties and Responsibilities of the Chairperson. - The Chairperson shall:
a) Provide leadership direction for the Commission in matters such as but not 
limited to development and determination of strategies and policies in order 
to effectively comply with its mandate under Republic Act No. 9136;
b) Ascertain that the strategies and policies agreed upon by the Commission are 
effectively implemented by the Executive Director;
c) Promote collaborative relationships and open communication between and 
among members of the Commission;
d) Set, in consultation with other members of the Commission, the Executive 
Director, and the Secretariat, the Commission's meeting schedule and agenda 
to take full account of the important issues facing the Commission and the 
concerns of management, and ensure that adequate time is available for 
thorough discussion of each;
e) Ensure that the members of the Commission undergo capacity building 
programs to continuously enhance technical competence, are properly briefed 
on issues pending before the Commission, and receive, in a timely manner, 
adequate, accurate, clear, complete, and reliable information to fulfil their 
duties;
f) Preside over meetings of the Commission: Provided, That the Chairperson has 
the right to vote on matters pending before the Commission;
g) Ascertain that all key and appropriate issues are discussed, deliberated upon, 
and resolved by the Commission in a timely manner;
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h) Create an environment that allows constructive discourse during open 
meetings, executive sessions, and public hearings;
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Ensure that the Commission's decisions are in furtherance of its mandate 
under Republic Act No. 9136;
j) Secure that the Commission avoids acts which unduly Influence, impede, or 
hamper the Executive Director or any ERC employee from effectively fulfilling 
his or her duties and responsibilities; and
k) Establish good corporate governance practices and procedures and promote 
the highest standards of independence, transparency, integrity, and probity.
Sec. 11. Duties and Responsibilities of the Members of the Commission. - In
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addition to the functions enumerated in Republic Act No. 9136, the members of the
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Commission shall:
a) Regularly attend and actively participate in the meetings of the Commission 
where any case, issue, or matter within its jurisdiction is under consideration;
b) Recommend to the Chairperson the inclusion in the agenda of any case, issue, 
or matter deemed appropriate in the performance of the Commission's 
functions;
c) Be properly informed about and thoroughly analyze cases, issues, and matters 
pending before the Commission;
d) Take part in continuous education and capacity building programs of the 
Commission to enhance technical competence;
e) Abstain from acts which unduly influence, impede, or hamper the Executive 
Director or any ERC employee from effectively fulfilling his or her duties and 
responsibilities;
f) Appoint the Executive Director of the ERC: Provided, That the requirements, 
prohibited acts, qualifications, and duties and responsibilities stated in 
Sections 7, 8, 12, and 13 of this Act are complied with;
g) Act on the selection and appointment of Key ERG Personnel: Provided That 
the selection process for Key ERC Personnel must be in accordance with ERC's 
Enhanced Merit Selection Plan and /or other plans related to personnel 
selection duly approved by the Commission;


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h) Review and act on the endorsement of the proposed ERC budget: Provided, 
That such endorsement must come from the Executive Director and must be 
substantiated with supporting documents;
i) Initiate, motu proprio or upon formal complaint, investigations against the 
Executive Director and act upon these investigations: Provided, That such 
investigation is without prejudice to the filing of administrative or criminal 
cases against the Executive Director; and
j) Perform in good faith and to the best of its ability, the functions stated in 
Republic Act No. 9136 and the duties and responsibilities specified in this Act.
CHAPTER III 
ERC OPERATIONS
Sec. 12. The Executive Director. - The Commission, acting collectively, shall 
appoint an Executive Director who shall act as the Chief Executive Officer of ERC until 
resignation, retirement, or unless terminated earlier for cause. The Executive Director 
who shall be a CESO of the ERC, shall have relevant experience in any of the fields of 
law, economics, commerce, management, finance, or engineering for at least ten (10) 
years, and shall be subject to the same requirements and prohibitions as indicated in 
Sections 7 and 8 of this Act.
When an Executive Director who has rendered at least ten (10) years of service 
in such capacity retires, such Executive Director shall receive retirement benefits 
equivalent to the last salary plus representation and other allowances until the 
concerned Executive Director's death.
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Sec. 13. Duties and Responsibilities of the Executive Director. - The duties and
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responsibilities of the Executive Director shall include but shall not be limited to:
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a) Developing and proposing, for the Commission's approval, the 
operationalization of the strategies and policies agreed upon by the 
Commission;
b) Effectively executing the approved operationalization of the strategies and 
policies agreed upon by the Commission;


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c) Leading the management of the daily operations of ERC in accordance with 
the plans and within the budget approved by the Commission;
d) Assuming full responsibility for the overall supervision and control of all 
divisions, units, and services of the ERC;
e) Assigning to each division, unit, and service of the ERC such duties that are 
considered necessary or expedient;
f) Coordinating the workings of the divisions, units, and services of the ERC;
g) Establishing a mechanism for capacity building for all employees of the ERC 
to continuously enhance technical competence: Provided, That such 
mechanism will based on the principle of meritocracy;
h) Ensuring compliance with the ERC's Enhanced Merit Selection Plan and/er 
other plans related to personnel selection duly approved by the Commission 
when it comes to the hiring and promotion of employees;
i) Leading the management to ensure effective working relationships with the 
Commission by regularly communicating with the Chairperson to review key 
developments, issues, opportunities, and concerns;
j) Ensuring that the management gives priority to providing documents and 
reports which contain relevant, accurate, timely, and clear information 
necessary for the Commission to fulfill its duties;
k) Maintaining regular dialogue with the Commission while ensuring that the 
Commission, especially the Chairperson, is alerted to forthcoming complex, 
contentious, sensitive, or strategic Issues facing the ERC;
l) Advising the Commission on any matter referred to the Executive Director;
m) Managing the affairs of the ERC in accordance with good corporate 
governance practices and procedures while promoting the highest standards 
of independence, transparency, integrity, and probity;
n) Initiating investigations and recommending administrative sanctions against 
erring employees, without prejudice to the filing of any criminal action against 
the concerned employee;
o) Regularly submitting to the Commission updates on the operations of ERC; 
and
p) Performing such other duties as the Commission may assign.


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All decisions of the Executive Director involving budgeting and disbursement of
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funds shall be subject to the approval of the Commission.
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CHAPTER IV
TRANSPARENCY AND ACCOUNTABILITY
Sec. 14. Open Meeting. - All meetings of the Commission shall be open to the 
public: Provided, That the public may only participate during public hearings: Provided 
further, That a live web streaming or any related technology of the open meeting shall 
be posted: Provided finaiiy. That the transcript of stenographic notes and minutes of 
the open meeting shall be made available to the public, whether on the website or 
any other platform, within one (1) week from the date of the open meeting.
The Commission, upon a majority vote, may decide to meet in an executive 
session: Provided, That before going into an executive session, the Commission must 
convene in an open meeting, identify the reason for the executive session while stating 
all the subjects that may be revealed without compromising the purpose for which the 
executive session was called, declare whether the Commission will reconvene in an 
open meeting at the end of the executive session, and take a roll call vote to enter 
into executive session.
Executive sessions may be called for the following reasons:
a) To discuss the discipline or dismissal of or complaints or charges brought 
against a public officer, employee, or staff of ERC; and
b) To discuss trade secrets, confidential, competitively-sensitive, or other 
proprietary information.
Sec. 15. Pubiic Notice of Open Meetings. — The Commission shall provide the 
public with notice of its meeting and the agenda at least seven (7) working days before 
the scheduled date of the meeting: Provided, That for emergency meetings, the notice 
may be posted within a reasonable time prior to the meeting: Provided further. That 
public notices shall be posted in a manner easily accessible to the public such as but 
not limited to actual and web posting.


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Sec. 16. Orders, Decisions, and Resoiutions. - All orders, decisions, and
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resolutions shall undergo deliberations and once approved by the required number of
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votes during open meetings, shall forthwith be promulgated within thirty (30) days
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from date of the open meeting and published online in accordance with Section 18
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hereof.
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Sec. 17. Support Desk. - A support desk shall be made available to the public
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which will supply assistance to consumers for a better understanding of all proceedings
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and issuances of the Commission as weil as any and all matters which affect the
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electricity rates charged to consumers: Provided, That the matter shall not be
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confidential information.
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A new office may be created for this Support Desk should the Commission deem
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it necessary.
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Sec. 18. Oniine Pubiication. - All petitions, applications, and reportorial
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requirements of electric power industry participants Electric Power Industry
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Participants, including all annexes thereto, except for those considered as confidential
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information, as well as orders, decisions, and resolutions of the Commission, shall be
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posted on the ERC website within five (5) days from submission in the case of petitions,
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applications, and reportorial requirements, or promulgation in the case of orders,
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decisions, and resolutions.
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Sec. 19. Access to Information. - Every consumer has a right to information and
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shall, on request, be given access to any information of public concern under the
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control of the Commission: Provided, That the access to information shall not be
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granted if:
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a) The information is considered confidential information under the ERC Rules of
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Practice and Procedure;
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b) The information consists of minutes or records of advice given, or of opinions
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expressed during decision-making or policy formulation in the course of
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executive sessions;
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c) The information requested consists of drafts of orders, resolutions, decisions,
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or memoranda of the Commission in the exercise of its regulatory function;
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and
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d) The information requested pertains to trade secrets, competitively sensitive,
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or other proprietary information, whenever the revelation thereof would
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prejudice the interests of a natural or juridical person in trade, industrial,
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financial, or commercial competition.
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Sec. 20. Procedure of Access. - Any person who desires to obtain information
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shall submit, free of charge, a request to the Commission personally, by mail, or
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through electronic means. Within fifteen (15) working days from the receipt thereof
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or as soon as practicable, the Commission shall comply with the request: Provided,
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That the period may be extended if a fortuitous event occurred, the information
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requested requires a search of the Commission's field offices or an examination of
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voluminous records, or other analogous cases.
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Sec. 21. Access and Processing Fees. - The Commission may charge a reasonable
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fee which shall in no case exceed the actual cost of reproduction, copying, or
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transcription of the information requested: Provided, That the Commission may waive
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the fees whenever it Is satisfied that the person who requested is indigent or that the
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cost of reproduction is negligible.
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Sec. 22. Exemption from Compliance. - The Commission is excused from
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complying with a subsequent identical or substantially similar request from the same
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requesting party: Provided, That it has previously complied with a similar request for
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information unless a reasonable interval has lapsed between compliance with the
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previous request and the making of the current request.
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Sec. 23. Administrative Offenses and Penalties. - Any ERC official or employee
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who refuses to comply with Section 14 of this Act shall be suspended from service for
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six (6) months and one (1) day to one (1) year without pay on the first offense, and
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shall be dismissed from service and be perpetually disqualified from re-employment in
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any government agency or instrumentality on the second offense.
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Any ERC official or employee who refuses to comply with, or fails to perform the
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acts required within the specified period of time in Sections 15, 16, and 18, shall be
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reprimanded on the first offense, shall be suspended from service for one (1) to thirty
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(30) days on the second offense, and shall be dismissed from service and be
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perpetually disqualified from re-employment in any government agency or
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instrumentality on the third offense.
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Any ERC official or emplo/ee who refuses to comply with, or fails to act on a
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request for information pursuant to Sections 19 and 20 of this Act shall be suspended
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from service for six (6) months and one (1) day to one (1) year without pay on the
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first offense, and shall be dismissed from service and be perpetually disqualified from
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re-employment in any government agency or instrumentality on the second offense.
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Sec. 24. Criminal Offenses and Penalties. - The penalty of imprisonment of not
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less than one (1) month but not more than six (6) months and a fine ranging from ten
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thousand pesos (Phpl0,000.00) to one hundred thousand pesos (Phpl00,000.00)
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shall be imposed upon any ERC official or employee who:
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1) Falsely denies or conceals the existence of information that is a proper subject
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for disclosure under Section 19 of this Act;
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2) Destroys, or causes to be destroyed, information or documents being
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requested that is a proper subject of disclosui e under Section 19 under this
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Act for the purposes of hindering the requesting party's access thereto;
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3) Divulges or releases information covered by confidentiality under Sections 14
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and 19 of this Act;
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4) Divulges or releases information that is altered, tampered, or modified to the
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extent that the released information materially differs from the original
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contents of the document: Provided, That altering or modifying a document
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for the purpose of redacting exempt information from non-exempt information
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in a document shall not be punishable under this Section.
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If the violation committed in this Act is induced by or assisted by a private
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individual or corporation, partnership, or any kind of juridical entity, the penalty
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provided herein shall be imposed on its executive officer or other officials responsible:
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Provided, That the private individual or juridical entity shall suffer, in addition to the
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penalties provided herein, the automatic revocation of its license to operate.
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CHAPTER IV
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GENERAL PROVISIONS
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Sec. 25. Transitory Provision. - The current members of the Commission shall
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continue to serve in such capacity until the completion of their term.
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The qualifications, requirements, and prohibitions stated in Sections 6, 7, and 8
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of this Act shall apply to new members of the Commission.
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The current Chairperson shall immediately divest himself of his role and powers
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as the Chief Executive Officer of the Commission upon the effectivity of this Act.
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The current Executive Director shall assume the duties and responsibilities laid
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out in Section 13 of this Act upon the effectivity of this Act: Provided, That upon such
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assumption, the current Executive Director shall immediately comply with the
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requirements and prohibitions stated in Sections 7 and 8 of this Act: Provided further,
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That the current Executive Director shell serve as such until his resignation, retirement
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or termination for cause.
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Sec. 26. Oversight Committee. - Upon the effectivity of this Act, the Joint
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Congressional Energy Commission established under Republic Act No. 9136 and
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renamed under Republic Act No. 11285, otherwise known as the Energy Efficiency and
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Conservation Act, shall exercise oversight powers over the implementation of this Act.
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Sec. 27. Separabiiity Cause. - If for any reason, any provision of this Act is
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declared unconstitutional or invalid, the other parts or provisions hereof which are not
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affected thereby shall continue to be in full force and in effect.
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Sec. 28. Repeaiing Cause. - All laws, decrees, orders, rules and regulations or
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parts thereof which are inconsistent with or contrary to the provisions of this Act are
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hereby repealed, am ended or modified accordingly.
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Sec. 29. Effectivity. - This Act shall take effect fifteen (15) days after its
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publication in the Officiai Gazette or in a newspaper of general circulation
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Approved
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