Amending R.A. No. 9136, Electric Power Industry Reform Act of 2001

Saltate Offire of the Secretarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 26 MAY -5 P4:33 First Regular Session ) SENATE 2109 Senate Bill No. . Introduced by Senator JOEL VILLANUEVA AN ACT AMENDING REPUBLIC ACT NO. 9136, OTHERWISE KNOWN AS THE ELECTIC POWER INDUSTRY REFORM ACT OF 2001 EXPLANATORY NOTE Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA), was enacted to restructure the Philippine power sector, promote competition, and ultimately deliver reliable and affordable electricity to consumers. More than two decades since its passage, however, persistent concerns over high electricity costs, market concentration, and perceived regulatory capture continue to burden Filipino households and businesses. At a time when global energy volatility, driven by geopolitical tensions and supply disruptions, continues to exert upward pressure on electricity prices, the need to revisit and strengthen EPIRA has become both urgent and necessary. High electricity costs have a direct and cascading impact on the economy-raising the cost of transportation, food, and basic goods, straining micro, small, and medium enterprises (MSMEs), and reducing the purchasing power of Filipino families. This bill seeks to introduce targeted yet decisive reforms to restore public trust, enhance competition, and strengthen regulatory independence in the power sector. First, it lowers the allowable ownership cap in distribution utilities from twenty- five percent (25%) to fifteen percent (15%) to promote broader ownership dispersal and prevent excessive market concentration, consistent with the constitutional policy against monopolies. Complementing this reform, the bill mandates stock exchange listing requirements for controlling interests to enhance transparency and public accountability.

Second, the measure strengthens the independence, integrity, and competence of the Energy Regulatory Commission (ERC) by imposing stricter qualifications, reinforcing conflict-of-interest safeguards, and introducing transparency mechanisms such as open meetings and public access to proceedings. These reforms aim to ensure that regulatory decisions are insulated from undue influence and are firmly anchored on technical expertise and the public interest. Third, the bill reinforces consumer protection by institutionalizing a consumer support desk and expanding access to information, thereby empowering electricity consumers to better understand rate-setting processes and regulatory decisions that directly affect them. Fourth, it imposes a stricter prohibition on cross-ownership between generation companies and distribution utilities to eliminate structural conflicts of interest and curb anti-competitive practices that distort electricity pricing and undermine fair competition. Finally, recognizing the evolving energy landscape and the country's need to transition toward sustainable energy, the bill authorizes government participation in the generation and sale of electricity from renewable energy sources under the Renewable Energy Act of 2008. This provides the State with greater flexibility to ensure energy security while accelerating the shift to cleaner and more affordable power sources. In sum, this measure seeks to rebalance the power sector in favor of transparency, accountability, competition, and consumer welfare. It is anchored on a clear and urgent objective: to ensure that the benefits of reform are felt by the Filipino people through more reliable, fairly priced, and sustainable electricity. In view of the foregoing, the immediate passage of this bill is earnestly sought. JOEL VILLANUEVACY

Senate Offier of the Secretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) 26 MAY -5 P4:33 First Regular Session ) SENATE 2109 Senate Bill No. Introduced by Senator JOEL VILLANUEVA AN ACT AMENDING REPUBLIC ACT NO. 9136, OTHERWISE KNOWN AS THE ELECTIC POWER INDUSTRY REFORM ACT OF 2001 Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Decrease in Holdings Cap. - Section 28 of Republic Act

2 No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001, is hereby amended to read as follows: "SEC. 28. De-Monopolization and Shareholding Dispersal. - In compliance with the constitutional mandate for dispersal of ownership and de-monopolization of public utilities, the holdings of persons, natural or juridical, including directors, officers, stockholders, and related interests, in a distribution utility and their respective holding companies shall not exceed [twenty five percent (25%)] FIFTEEN PERCENT (15%) of the voting shares of stock unless the utility or the company holding the shares or its controlling stockholders are already listed in the Philippine Stock Exchange (PSE): Provided, That controlling stockholders of small distribution utilities are hereby required to list in the PSE within five (5) years from the enactment of this Act if they already own the stocks. New controlling stockholders shall undertake such listing within five (5) years from the time they

acquire ownership and control. A small distribution company is one whose peak demand is equal to or less than ten megawatts (10MW). The ERC shall, within sixty (60) days from the effectivity of this Act, promulgate the rules and regulations to implement and effect this provision. This section shall not apply to electric cooperatives."

SEC. 2. The Energy Regulatory Commission. - Section 38 of the

EPIRA is hereby amended to read as follows: "SEC. 38. Creation of the Energy Regulatory Commission. - There is hereby created an independent, quasi-judicial regulatory body to be named the Energy Regulatory Commission (ERC). For this purpose, the existing Energy Regulatory Board (ERB) created under Executive Order No. 172, as amended, is hereby abolished. The Commission shall be composed of a [Chairman] CHAIRPERSON and four (4) members to be appointed by the President of the Philippines. The [Chairman] CHAIRPERSON and the members of the Commission shall be natural-born citizens and residents of the Philippines, persons of good moral character, at least thirty-five (35) years of age, OF RECOGNIZED PROBITY AND INDEPENDENCE, and of [recognized] DISTINGUISHED competence in any of the following fields: energy, law, economics, finance, commerce, [or] engineering, OR OTHER EXPERIENCE RELEVANT TO THE ENERGY SECTOR, with at least [three (3)] TEN (10) years OF ACTIVE [actuat] and distinguished experience in their respective fields of expertise: Provided, THAT 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 out of the four (4) members of the Commission, [at least] one (1) shall be a member of the Philippine Bar [with at least ten (10) years of experience in the active practice of law], 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 [with at least ten (10) years of experience in active practice]. XXX Members of the Commission shall enjoy security of tenure and shall not be suspended or removed from office except for just cause as specified by law. MEMBERS OF THE COMMISSION, WITHIN THE DURATION OF THEIR TERM, ARE PROHIBITED FROM: 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 (GOCCS) OR THEIR SUBSIDIARIES. AFTER THE CESSATION OF THEIR SERVICE, MEMBERS OF THE COMMISSION ARE 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.

The Chairman and members of the Commission or any of their SPOUSE, PARTNER, AND relative within the fourth civil degree of consanguinity or affinity, legitimate or common law, shall be prohibited from (1) holding any interest whatsoever, either as invested, 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 sale or legal disposition of any and all interests in the energy sector upon assumption of office; (2) 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, OR RELATIVE CONCERNED IS RELATED; AND (3) APPEARING AS COUNSEL OR AGENT ON ANY MATTER PENDING BEFORE THE COMMISION 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, AND WITHIN TWO (2) YEARS FROM THE CESSATION OF THEIR SERVICE. The presence of at least three (3) members of the Commission shall constitute a quorum and the majority vote of two (2) members in a meeting where a quorum is present shall be necessary for the adoption of any rule, ruling, order, resolution, decision, or other act of the Commission in the exercise of its quasi-judicial functions: Provided, That in fixing rates and tariffs, an affirmative vote of three (3) members shall be required. 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, FINALLY, 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/OR B. TO DISCUSS TRADE SECRETS, CONFIDENTIAL, COMPETITIVELY SENSITIVE, OR OTHER PROPRIETARY INFORMATION."

SEC. 3. Enhanced Promotion of Consumer Interests. - Section 41

of the EPIRA is hereby amended to read as follows: "SEC. 41. Promotion of Consumer Interests. - The ERC shall handle consumer complaints and ensure the adequate promotion of consumer interests. A SUPPORT DESK SHALL BE MADE AVAILABLE TO THE PUBLIC WHICH WILL SUPPLY ASSISTANCE TO CONSUMERS

FOR A BETTER UNDERSTANDING OF ALL PROCEEDINGS AND ISSUANCES OF THE COMMISSION, AS WELL AS ANY AND ALL MATTERS WHICH AFFECT THE ELECTRICITY RATES CHARGED TO CONSUMERS: PROVIDED, THAT THE INFORMATION IS NOT CONFIDENTIAL IN NATURE. EVERY CONSUMER HAS THE RIGHT TO INFORMATION AND SHALL, ON REQUEST, BE GIVEN ACCESS TO SUCH INFORMATION OF PUBLIC CONCERN AND WITHIN THE CONTROL OF THE COMMISSION: PROVIDED, THAT ACCESS TO INFORMATION SHALL NOT BE GRANTED IF: A. THE INFORMATION IS CONSIDERED CONFIDENTIAL UNDER THE ERC RULES OF PRACTICE AND PROCEDURE; B. THE INFORMATION CONSISTS OF MINUTES OR RECORDS OF ADVICE GIVEN, OR OF OPINIONS EXPRESSED DURING DECISION-MAKING OR POLICY FORMULATION IN THE COURSE OF EXECUTIVE SESSIONS; C. THE INFORMATION REQUESTED CONSISTS OF DRAFTS OR ORDERS, RESOLUTIONS, DECISIONS, OR MEMORANDA OF THE COMMISSION IN THE EXERCISE OF ITS REGULATORY FUNCTION; OR D. THE INFORMATION REQUESTED PERTAINS TO TRADE SECRETS, COMPETITIVELY SENSITIVE, OR OTHER PROPRIETARY INFORMATION, WHENEVER THE REVELATION THEREOF WOULD PREJUDICE THE INTERESTS OF A NATURAL OR JURIDICAL PERSON IN TRADE, INDUSTRIAL, FINANCIAL, OR COMMERCIAL COMPETITION."

SEC. 4. Prohibition on Cross Ownership between Generation

Companies and Distribution Utilities. - Section 45 of the EPIRA is hereby amended to read as follows: "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. xxX"

SEC. 5. Generation and Sale of Power/Electricity from

Renewable Resources. - Section 47 (j) of the EPIRA is hereby amended to read as follows: "SEC. 47. NPC Privatization. - Except for the assets of the SPUG, 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 by the Joint Congressional Power Commission and the approval of the President of the Philippines, on the total privatization of the 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: XXX (j) [NPC may generate and sell electricity only from the undisposed generating assets and IPP contracts of PSALM Corp. and shall not incur any new obligations to purchase power through bilaterat contracts with generation companies or other suppliers] THE GOVERNMENT, THROUGH THE NPC OR ANY OTHER GOVERNMENT -OWNED OR -CONTROLLED CORPORATION, IS HEREBY AUTHORIZED TO GENERATE AND SELL POWER/ELECTRICITY FROM RENEWABLE ENERGY SOURCES, AS DEFINED IN REPUBLIC ACT NO. 9513, OR THE "RENEWABLE ENERGY ACT OF 2008," AND TO INCUR NEW OBLIGATIONS TO PURCHASE POWER THROUGH BILATERAL CONTRACTS WITH GENERATION COMPANIES OR OTHER SUPPLIERS."

SEC. 6. 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.

SEC. 7. Implementing Rules and Regulations. - The rules and

regulations necessary for the effective and efficient enforcement of the provisions of this Act shall be formulated by the Energy Regulatory Commission (ERC) in consultation with the Department of Energy (DOE) and other relevant government agencies, LGUs, the private sector, and other stakeholders, and shall be implemented within ninety (90) days from the effectivity of this Act. Unjustified or willful failure or refusal of the concerned government agencies to promulgate the implementing rules and regulations (IRR) within

the specified period shall subject the heads of these government agencies to administrative penalties under applicable civil service laws. Should the IRR contain provisions that are contrary to this Act, the heads of the government agencies responsible for such provision, when done in bad faith or with gross negligence, shall be held administratively liable.

SEC. 8. Separability Clause. - If any portion or provision of this Act is

7 declared unconstitutional, the remainder hereof or any provisions not affected thereby shall remain in force and effect.

SEC. 9. Repealing Clause. - Any law, presidential decree or issuance,

10 executive order, letter of instruction, rule, or regulation inconsistent with the provisions of this Act is hereby repealed or modified accordingly.

SEC. 10. Effectivity. - This Act shall take effect fifteen (15) days after

its complete publication in the Official Gazette or in a newspaper of general circulation. Approved,