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Republic of the Philippines
FEB 13 wo

HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

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SEVENTEENTH CONGRESS.
First Regular Session

HOUSE BILL No, 5020 _

Introduced by
REPRESENTATIVE PANTALEON D. ALVAREZ

EXPLANATORY NOTE

On the night of 9 November 2017, Energy Regulatory Commission
(ERC) Director Francisco Jose Villa Jr. took his own life. News reports
indicate that he left letters which allege corruption within the ERC
specifically in regard to shady deals and improper procurement practices.

The suspicions raised against the integrity of the ERC, which is
primarily entrusted with regulating the country’s electric industry and
promoting competition in the electricity market, cannot be ignored. In the
spirit of accountability, calls were made for the resignation of the
Chairman and the members of the ERC, which were unceremoniously
refused.

Hence, in order to create a system of effective accountability, this
bill proposes to abolish the ERC and replace it with the creation of the
Board of Energy, which shall be an attached agency of the Department of
Energy. This will ensure that the newly created board shall be explicitly
within the regulatory arm of the government and, specifically, within the
direct control and supervision of the President.

In view of the foregoing, the Ce, Bill s earnestly sought.

PANTALEON DP) ALVAREZ

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

¢
HOUSE BILL NO. . 5020

~ Introduced by
REPRESENTATIVE PANTALEON D. ALVAREZ

AN ACT
ABOLISHING THE ENERGY REGULATORY COMMISSION,
CREATING FOR THE PURPOSE THE BOARD OF ENERGY AS
AN ATTACHED AGENCY OF THE DEPARTMENT OF ENERGY

Be it enacted by the Senate and House of Representatives of the Philippines

in Congress assembled:

SECTION 1. Declaration of Policy. - \t is hereby declared the
policy of the State to promote simplicity, economy and efficiency in
the government to enable it to pursue programs consistent with the
national goals for accelerated social and economic development to
improve the services in the transaction of the businesses by the public
in the executive departments, bureaus, offices, commissions, boards,

agencies and instrumentalities of the government.


In addition, the State shall endeavor to promote consumer
protection by establishing a fair, open and transparent regulatory

body for the electric power industry.

SEC. 2. Creation of the Board of Energy. - There is hereby created
a quasi-judicial regulatory body to be named as the Board of Energy,
hereinafter referred to as the Board. The Board shall be under the
supervision and control of the Department of Energy, and shall be
composed of a Chairperson and two (2) members to be appointed by
the President upon the recommendation of the Secretary of Energy.
It shall be assisted by such technical and supportive staff as the
Chairperson may appoint for the effective, efficient and economical
discharge of its powers and functions.

The existing Energy Regulatory Commission (ERC) created
under Republic Act No. 9136, otherwise known as the “Electric Power
Industry Reform Act of 2001,” is hereby abolished.

The Board shall perform the functions of the ERC insofar as they

are not inconsistent with the provisions of this Act.

SEC. 3. Qualification. - The Chairperson and members of the

Board shall be natural born citizens and residents of the Philippines,
of good moral character and at least thirty-five (35) years old, and of
recognized competence in any of the following fields: energy, law,
economics, finance, commerce, or engineering, with at least three (3)
years of actual and distinguished experience in their respective fields

of expertise: Provided, That out of the two (2) members of the Board,


one (1) shall be a member of the Philippine Bar with at least ten (10)
years experience in the active practice of law, and one (1) shall be a
certified public accountant with at least ten (10) years experience in
active practice.

The Chairperson and members of the Board or any of their
relatives within the fourth civil degree of consanguinity or affinity,
legitimate or common law, shall be prohibited from holding any
interest whatsoever, either as investor, stockholder, officer or
director, in any company or entity engaged in the business of
transmitting, generating, supplying or distributing any form of
energy and must, therefore, divest through the sale or legal
disposition of any and all interests in the energy sector upon
assumption of office.

No person who has worked within three (3) years immediately
prior to the appointment, or is working in any private firm engaged
in the petroleum or electric industry or any other entity whose main
business is directly related to or connected with any such firm, shall

be appointed to the Board.

SEC. 4. Term of Office. - The term of office of the Chairperson
and members of the Board shall be at the pleasure of the President,
but the first Chairperson appointed shall hold office for five (5) years
and the first of two (2) members shall hold office for a term of four
(4) years, and the other for a term of three (3) years. Unless the
President decides otherwise, no person shall be appointed to serve

more than two (2) successive terms in the Board.


SEC. 5. Organizational Structure. - The DOE Secretary shall,
within six (6) months from the effectivity of this Act, submit to the
President of the Republic of the Philippines a proposed new
organizational structure to effectively carry out the additional
powers and functions of the Board.

The President shall, within a month from receipt of the proposed
organizational structure of the Board, approve the same for

implementation of the DOE.

SEC. 6. Transitory Provision. - The Chairperson and the
members of the ERC, including the existing personnel, shall continue
to perform and exercise their powers and functions, and their duties
and responsibilities, until the Board of Energy shall have been
approved by the President.

In the filling in of positions created, preference shall be given to
the personnel of the ERC. If such employees possess the same

qualifications, seniority shall be given priority.

SEC. 7. Separation from Service. - Employees

separated from the
service as a result of this reorganization shall, within six (6) months
from their separation from the service, receive the retirement benefits
to which they may be entitled under existing laws, rules and

regulations.


SEC. 8. Appropriations. - The budgetary requirements for the
effective exercise of the functions herein transferred shall be taken
from the existing budget of the ERC. The succeeding budget of the
newly created Board of Energy shall be included in the annual

General Appropriations Act,

SEC. 9. Implementing Rules and Regulations. - The DOE shall,
in consultation with relevant government agencies, the electric
power industry participants, non-governmental organizations and
end-users, promulgate the implementing rules and regulations of

this Act within six (6) months from the effectivity of this Act.

SEC. 10. Separability Clause. ~ If for any reason, any provision
of this Act is declared unconstitutional or invalid, the other parts or
provisions hereof which are not affected thereby shall continue to be

in full force and effect.

SEC. 11. Repealing Clause. - Sections 38 and 39 of Republic Act
No. 9136, are hereby repealed. All other references to “ERC” in
Republic Act No. 9136 are hereby amended to read as the “Board of
Energy.” All laws, orders and decrees including rules and
regulations not inconsistent with this Act shall continue to have full

force and effect.


SEC. 12. Effectivity. - This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in a newspaper of

general circulation.

Approved,