if - • 
.jG*- -■** - ^ '■
NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
Third Regular Session
SENATE
S.B. No. 294R
Introduced by Senator WIN GATCHALIAN
AN ACT PROHIBITING CROSS OWNERSHIP BETWEEN GENERATION 
COMPANIES AND DISTRIBUTION UTILITIES, AMENDING FOR THE 
PURPOSE SECTION 45 OF REPUBLIC ACT NO. 9136, OTHERWISE KNOWN 
AS THE "ELECTRIC POWER INDUSTRY REFORM ACT OF 2001"
EXPLANATORY NOTE
Republic Act No. (RA) 9136, otherwise known as the Electric Power Industry Reform 
Act of 2001, provides that it is the declared policy of the State to ensure affordability 
of electric of the supply of electric power and to ensure transparent and reasonable 
prices of electricity in a regime of free and fair competition.1 However, almost 20 
years since RA 9136 was passed, the cost of electricity in the country remains high. 
As of 2020, the Philippines has the second highest residental rate among Association 
of Southeast Asian Nations (ASEAN) at Php 9.23 per kilowatt-hour (kWh), which is 
54.44% higher than the ASEAN average at Php 5.98 per kWh.2 According to a study, 
these high prices are attributed, among other factors, to the "country's uncompetitive 
market structures".3
At present, there is no prohibition of cross-ownership between generation companies 
(GenCos) and Distribution Utilities (DUs). As a result, there are allegations that terms 
of references (TORs), in the mandated competitive selection process (CSP) for DUS in
1 Doing Business. Avaiiable a https://www.doingbusiness.org/en/doingbusiness (2021). Accessed on 2 June 2022.
2 Bloomberg New Energy Finance (BNEF)(2021).
3 Renewables may cut Philippines' electricity rates 30%. Asian Power. Available at https://asian-power.com/power- 
utility/news/renewables-may-cut-philippines-electricity-rates-30. Accessed on 19 May 2021.
1


procuring their power supply, are being crafted in a manner more favorable to some 
technologies and/or GenCos.
As such, this bill seeks to level the playing field across all GenCos and to create a more 
competitive environment for the energy industry with ultimate goal of lowering the 
cost of electricity for the benefit of consumers. Specifically, this bill prohibits any 
GenCo or its respective subsidiary or affiliate or its stockholder or official or any of 
their relatives within the fourth civil degree of consanguinity or affinity from holding 
interest from any DU and vice versa. Moreover, the measure prohibits any officer or 
director of a GenCo or its respective subsidiary or affiliate from being an officer or 
director of a DU or its subsidiary or affiliate and vice versa.
Given the foregoing, the immediate passage of this measure is sougjlt.
IN GATC


yvS- ■<;•
NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
Third Regular Session
25 ,I^N 23rP12 35
SENATE
S.B. No. 2946
m - v: ^ ^
Introduced by SEN. WIN GATCHALIAN
AN ACT PROHIBITING CROSS OWNERSHIP BETWEEN GENERATION 
COMPANIES AND DISTRIBUTION UTILITIES, AMENDING FOR THE 
PURPOSE SECTION 45 OF REPUBLIC ACT NO. 9136, OTHERWISE KNOWN 
AS THE "ELECTRIC POWER INDUSTRY REFORM ACT OF 2001"
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled:
1 
SECTION 1. Prohibition on Cross Ownership between Generation Companies and
2 
Distribution Utilities. - Section 45 of Republic Act No. 9136, otherwise known as the
3 
Electric Power Industry Reform Act of 2001, is hereby amended to read as follows:
4
5
6
7
8
9
10
11
12
13
14
"SEC. 45. Cross Ownership, Market Power Abuse and Anti-Competitive Behavior. 
- No participant in the electricity industry or any other person may engage in 
any anti-competitive behavior including, but not limited to, cross-subsidization, 
price or market manipulation, or other unfair trade practices detrimental to the 
encouragement and protection of contestable markets.
NO GENERATION COMPANY OR ITS RESPECTIVE SUBSIDIARY OR 
AFFILIATE OR STOCKHOLDER OR OFFICIAL OF A GENERATION 
COMPANY OR ANY OF THEIR RELATIVES WITHIN THE FOURTH CIVIL 
DEGREE OF CONSANGUINITY OR AFFINITY, SHALL BE ALLOWED TO 
HOLD ANY INTEREST, DIRECTLY OR INDIRECTLY, IN ANY 
DISTRIBUTION UTILITY. LIKEWISE, NO DISTRIBUTION UTILITY OR


ITS RESPECTIVE SUBSIDIARY OR AFFILIATE OR STOCKHOLDER, OR 
OFFICIAL OF A DISTRIBUTION UTILITY OR ANY OF THEIR RELATIVES 
WITHIN THE FOURTH CIVIL DEGREE OF CONSANGUINITY OR 
AFFINITY, SHALL BE ALLOWED TO HOLD ANY INTEREST, DIRECTLY OR 
INDIRECTLY, IN ANY GENERATION COMPANY. NO PERSON WHO IS 
AN OFFICER OR DIRECTOR OF THE GENERATION COMPANY OR ITS 
RESPECTIVE SUBSIDIARY OR AFFILIATE SHALL BE AN OFFICER OR 
DIRECTOR OF ANY DISTRIBUTION UTILITY OR ITS RESPECTIVE 
SUBSIDIARY OR AFFILIATE, AND VICE VERSA.
10
X X X."
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
SECTION 2. Transitory Provision. - Any generation company, or its respective 
subsidiary or affiliate or stockholder or official of a generation company or any of their 
relatives within the fourth civil degree of consanguinity or affinity holding an interest 
in any distribution utility, and vice versa, at the time of the passage of this Act, shall 
be required to divest from the same within three (3) years from the effectivity of this 
Act's implementing rules and regulations.
SECTION 3. Impiementing Rules and Regulations. - The Energy Regulatory 
Commission shall, in consultation with the Department of Energy, other relevant 
government agencies, the electric power industry participants, consumers, and other 
public and private stakeholders, promulgate the Implementing Rules and Regulations 
of the Act within ninety (90) calendar days from its effectivity.
SECTION 4. Separability Clause. - Any portion or provision of this Act, which may be 
declared unconstitutional or invalid shall not have the effect of nullifying other portions 
or provisions hereof.
SECTION 5. Repealing Clause. - All laws, decrees, orders, rules, and regulations or 
parts thereof inconsistent with any of the provisions of this Act are hereby repealed, 
amended, or modified accordingly.


1 
SECTION 6. Effectivity Clause. - This Act shall take effect fifteen (15) days
2 
after its publication in Official Gazette or in one (1) newspaper of general circulation.
Approved,