, 
FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B. No. 
2846 
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Introduced by Senator Sergio Osmei'ia III 
EXPLANATORY NOTE 
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Electric power is a critical component of economic opportunity and growth, 
and hence political stability. Republic Act No. 9136, also known as the Electric 
Power Industry Reform Act of 2001 (EPIRA), declared the policy objectives of the 
government in restructuring and reforming the electric power industry, which 
include, among other things, ensuring the quality, reliability, security, and 
affordability of the supply of electric power and protecting the public interest as it is 
affected by the rates and services of electric utilities and other providers of electric 
power. 
Today's high energy prices have resulted in repercussions that are evident 
throughout the economy. Yet nowhere do high prices bring consequences as 
swiftly and harshly as in low-income households. For the millions of low-income 
families throughout the country, the dramatically higher prices will intensify the 
impossibility of meeting the costs of basic human needs, while increasing the 
energy burdens that are already far beyond a tolerable level. At the same time, the 
energy crisis threatens low-income access to vital energy and utility services, 
thereby endangering health and safety while creating additional barriers to 
meaningful low-income participation in the economy. In addition to increased 
difficulty in paying energy and utility costs, sustained high energy prices could have 
an impact on the employment rate of low-wage workers. High energy prices cause 
businesses to cut costs by laying off workers. As we all know, those workers on the 
margin are usually the first to go, and if current prices persist, we will likely see a 
sharp increase in unemployment among low-wage workers. 
Section 73 of EPIRA provides for a lifeline rate, which is defined as the 
subsidized rate to low-income captive market end-users who cannot afford to pay 
at full cost. This socialized pricing mechanism to be set by the Energy Regulatory 
Commission (ERC) exempts marginalized end-users from the cross-subsidy 
removal provided for under Section 74 of the EPIRA for a period of ten (10) years, 
unless extended by law. It ensures that these low-income electricity consumers will 
not bear higher power rates brought about by the removal of cross-subsidies on 
electricity tariffs. Residential customers consuming more than the lifeline threshold 
as well as commercial and industrial users subsidize the lifeline consumers. 
As the implementation of the lifeline rate will end on June 26, 2011, unless 
the ten (10) year period is extended by law, there is a need to pass an amendatory 
law extending the implementation of the lifeline rate to continue to provide reduced 
electricity costs and lessen the impact of increases in electricity rates to the 
poorest of the poor, brought about by spiraling prices of oil and other inputs to 
production. 


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In view of the foregoing, the immediate approval of this bill is earnestly 
sought. 
~.~~ 
SERGIO OSMENA III 
Senator 
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, 
FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B. No. 
2846 
) 
) 
) 
Introduced by Senator Sergio Osmena '" 
AN ACT 
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EXTENDING THE IMPLEMENTATION OF THE LIFELINE RATE, AMENDING 
FOR THE PURPOSE SECTION 73 OF THE REPUBLIC ACT NUMBERED 
NINETY ONE THIRTY SIX, OTHERWISE KNOWN AS THE "ELECTRIC POWER 
INDUSTRY REFORM ACT OF 2001" 
Be it enacted by the Senate and the House of Representatives of the Republic of 
the Philippines in Congress assembled: 
SECTION 1. Section 73 of Republic Act 9136, otherwise known as 
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the "Electric Power Industry Reform Act of 2001" is hereby amended to read as 
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follows: 
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Sec. 73. Lifeline Rate. -
A socialized 
pricing mechanism called a lifeline rate for the 
marginalized end-users shall be set by the ERC, which 
shall be exempted from the cross subsidy phase-out 
under this Act for a period of [ten (10)] TWENTY (20) 
years, unless OTHERWISE extended by law. The level 
of consumption and the rate shall be determined by the 
ERC after due notice and hearing. AS USED IN THIS 
ACT, "MARGINALIZED END-USERS" SHALL REFER 
TO END-USERS WHOSE ELECTRICAL LOADS ARE 
LIMITED ONLY FOR BASIC LIGHTING, COOLING 
(ELECTRIC FAN), RADIO AND TELEVISION." 
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SECTION 2. Separability Clause. -
If for any reason, any 
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provision of this Act or any part thereof shall be held unconstitutional and 
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invalid, the other parts or provisions of this Act, which are not affected 
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thereby, shall remain in full force and effect. 
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SECTION 3. Repealing Clause. - All laws, decrees, orders, rules 
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and regulations or parts thereof, inconsistent with any of the provisions of this 
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Act are hereby repealed, amended or modified accordingly. 
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SECTION 4. Effectivity Clause. - This Act shall take effect fifteen 
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(15) days after its complete publication in at least two (2) newspapers of general 
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circulation. 
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Approved, 
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