A comparison of the electric power industry structure before and after the passage of the EPIRA.

Be
sure to highlight the new features/changes that were introduced by the privatization of the electric
power industry.

Prior to the passage of Republic Act 9136, known as the Electric Power Industry Reform Act
(EPIRA), on June 8, 2001, the Philippine electric power industry was dominated by the National Power
Corporation (NPC), created under Commonwealth Law Act 120 in 1936,1 that had assumed the
monopoly power over generation and transmission since 1972.2 At that time, practically all power-
generating plants were owned by NPC.3
In 1992, with the continuous growth in population and the need for more energy, electricity
demand quickly exceeded NPC’s capacity to supply, particularly, the unmet demand was close to fifty
(50) percent, thus contributing to power shortages lasting up to twelve (12) hours a day in some areas
in the Philippines.4 To aggravate the situation, according to a study in 1993, the economic cost of power
shortages amounted to US$1.6 billion.5
To address the problem, the Build-Operate-Transfer (BOT) of 1990 and the Electric Power
Crisis Act of 1993 were enacted to increase investment in power generation plants by private owners
of IPPs and allowed the IPPs to directly coordinate their power generation investments with electricity
distribution companies without interference from NPC.6 However, these events eventually contributed
negatively to the national debt since the contracts with the IPPs turned out to be too burdensome because
of the provision that guaranteed the purchase by government of up to eighty (80) percent of their
production and by 1994, the Philippines had more IPP contracts than the rest of the developing world
combined.7
By December 2000, the NPC had amassed debts of P900 billion, which is almost half of the
then government’s P2.179-trillion national debt.8 For the government, its only option was to privatize
the power industry.9
Then came the EPIRA law which sought to change the existing monopoly by classifying the
power industry into different privatized segments10 with the NPC breaking up its vertically integrated
structure into smaller generation, transmission and distribution structures.11
The law envisioned to transform the industry into a competitive, market-driven environment,
by restructuring, deregulating, and privatizing the industry by: the separation of generation from
transmission and distribution; competing generating companies bidding into a power pool; transmission
and distribution companies providing access to all network users on nondiscriminatory terms;
establishment of an independent regulatory body, and all or part of the retail market open to
competition.12 From an extensively publicly owned utility business, the industry was to be deregulated
into its main components with an effective privatized generation and supply sectors.13 The EPIRA law,
however, maintained the transmission and distribution as natural monopolies and public utilities, subject
to the regulation of the Energy Regulatory Commission (ERC).14 The privatization allows the
participation of any competitive technology, including renewables, to enter into the Philippine energy
industry to compete amongst other energy producers to sell their products.15
1 Epictetus E. Patalinghug, An Analysis of the Philippine Electric Power Industry, UNIVERSITY OF THE PHILIPPINES DILIMAN, Oct
2003, at 3.
2 Andrea Santiago & Fernando Roxas, Understanding Electricity Market Reforms and the Case of Philippine Deregulation, 23

THE ELECTRICITY JOURNAL 48, at 51 (2010).

3 Id.
4 Commercial Economics Consulting, The Philippine Energy Industry and EPIRA, available at http://www.comeccon.com/the-

philippine-energy-industry-and-epira/ (last accessed April 15, 2016).

5 Id.
6 Id.
7 Iris Gonzales, What’s wrong with EPIRA?, THE PHILIPPINE STAR, January 14, 2014, available at
http://www.philstar.com/headlines/2014/01/14/1 278583/special-report-whats-wrong-epira (last accessed April 15, 2016).
8 Id.
9 Id.
10 Id.
11 World Resources Institute, Electric Power Industry Reform Act, available at http://projects.wri.org/sd-pams-

database/phillipines/electric-power-industry-reform-act (last accessed April 15, 2016).

12 Maria Fe Villamejor-Mendoza, Bringing Electricity Reform to the Philippines, 21 THE ELECTRICITY JOURNAL 42, at 43 (2008).
13 Helena Agnes S. Valderrama & Carlos C. Bautista, Efficiency Analysis of Electric Cooperatives in the Philippines, 19 PHILIPPINE

MANAGEMENT REVIEW 1, at 1 (2010).

14 Villamejor-Mendoza, supra note 12, at 43.
15 World Resources Institute, supra note 11.

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 The purpose of the law can be appreciated from its declaration of policies16 and with regard to
the privatization of the electric power industry, there will be competition between and among generating
companies where prices will be market-driven and competitive and a spot market, the wholesale
electricity spot market (WESM), where the trading of electricity between buyers and sellers will be
undertaken.17
Another feature was the privatization of the NPC which involved the sale of the state-owned
power firm's generation and transmission assets (e.g., power plants and transmission facilities) to private
investors.18 According to the Department of Energy:
The privatization or sale of NPC's generating power plants to several companies will
trigger competition, on the generation side. In addition, its privatization will allow
government to shift the burden of ensuring continuous financing for the construction,
operation and maintenance of hugely capital-intensive power generating plants to the
private sector.19
To carry out the privatization of the NPC to determine the manner and mode by which assets
will be sold shall be determined by the Power Sector Assets and Liabilities Management (PSALM)
Corporation, a GOCC that will take over the ownership of all of NPC's assets with the objective of
liquidating all of NPC's financial obligations in the best way possible.20

16 See An act ordaining reforms in the electric power industry, amending for the purpose certain laws and for other purposes,
[Electric Power Industry Reform Act of 2001 (EPIRA)], Republic Act No. 9136, (2010)
SECTION 2. Declaration of Policy. – It is hereby declared the policy of the State:
(a) To ensure and accelerate the total electrification of the country;
(b) To ensure the quality, reliability, security and affordability of the supply of electric power;
(c) To ensure 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 and enhance the competitiveness of Philippine products in the global
market;
(d) To enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and
distribution sectors;
(e) To ensure fair and non-discriminatory treatment of public and private sector entities in the process of restructuring the electric
power industry;
(f) To protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power;
(g) To assure socially and environmentally compatible energy sources and infrastructure; (h) To promote the utilization of
indigenous and new and renewable energy resources in power generation in order to reduce dependence on imported energy;
(i) To provide for an orderly and transparent privatization of the assets and liabilities of the National Power Corporation (NPC);
(j) To establish a strong and purely independent regulatory body and system to ensure consumer protection and enhance the
competitive operation of the electricity market; and
(k) To encourage the efficient use of energy and other modalities of demand side management.
17 Department of Energy, EPIRA FACTS, available at http://www.doe.gov.ph/electric-power-statistics/199-energy-faqs/faqs-

epira-ra9136/755-faqs-epira-ra9136 (last accessed April 15, 2016).

18 Id.
19 Id.
20 Id.

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A description of the current state of the electric power industry, particularly describing and explaining
the problems/challenges that plague the power industry.

For the author, the most prevalent problems are: high electricity prices, energy sufficiency and security,
poor access to electricity, and the lifeline provision of the EPIRA.

High Electricity Prices

According to a 2013 MERALCO survey on average prices on electricity around the world, the
Philippines ranks highest in southeast Asia and fifth in the world at 25 US cents per kilowatt hour
(kwh).21 Further, in 2015, MERALCO said that the average of electricity prices in the Philippines ranges
from P10.51 to P10.7222 or roughly twenty two (22) to twenty three (23) US cents per kwh, which is
still considerably higher than our Asian counterparts as well as our Western neighbors.2324 The high
price of electricity not only affects the typical Filipino household,25 but local business and foreign
investments as well.26 According to Manila Bulletin, the increasing cost of electricity is now the main
deterrent to investing in the country, and foreign investors see the problem as a persuasive reason to
invest elsewhere.27
The reasons for the high prices are complex28 and often varies29 from increasing price of raw
materials such as petroleum price, coal, and natural gas, political turmoil in petroleum producing
countries like the Middle East,30 to upward adjustment in the generation charge, and increases in
transmission charges, taxes and other charges.3132 One study claims that the main reason for the high
price is related to mismanagement, citing the US$2 billion Bataan Nuclear Power Plant that was
“mothballed”.33

Unstable energy security and poor access to electricity

The increasing population coupled with an increase in demand for energy has made a staggering
impact on the Philippine electric industry.34 The recurring Malampaya natural gas facility shutdown
also made the supply of electricity reach critical levels35 inevitably making a steady supply of electricity
more difficult to maintain. Particularly in the rural areas, the myriad of typhoons that hit the country

21 Rigoberto Tiglao, High electricity costs root of our backwardness, THE MANILA TIMES, January 9, 2014 available at
http://www.manilatimes.net/ high-electricity-costs-root-of-our-backwardness/66574/ (last accessed April 15, 2016).
22 Iris Gonzales, Power rates up this month, THE PHILIPPINE STAR, February 11, 2015, available at
http://www.philstar.com/headlines/2015/02/11/1 422440/power-rates-month (last accessed April 15, 2016).
23 Statista, Global electricity prices by select countries in 2015 (in U.S. dollar cents per kilowatt hour) available at

http://www.statista.com/statistics /263492/electricity-prices-in-selected-countries/ (last accessed April 15, 2016).

24 World Atlas, Electricity Rates Around The World available at www.worldatlas.com/articles/electricity-rates-around-the-

world.html (last accessed April 15, 2016).

25 See Gonzales, supra note 22. According to PhilStar, a typical household consuming 200 kwh will pay an increase of P168.
26 Power struggles in the Philippines; high cost cited, MANILA BULLETIN, February 25, 2014 available at
//www.mb.com.ph/power-struggles-in-the-philippines-high-cost-cited/ (last accessed April 15, 2016).
27 Id.
28 Lala Rimando & Emil Mercado, Why electricity rates in Philippines are high, RAPPLER, December 12, 2013, available at

www.rappler.com/busin ess/features/8985-rappler-animate-why-electricity-rates-in-philippines-are-high (last accessed April

15, 2016).
29 Gerardo P. Sicat, Why electricity price is high: A historical explanation, THE PHILIPPINE STAR, April 18, 2012, available at

www.philstar.com/bu siness/797681/why-electricity-price-high-historical-explanation (last accessed April 15, 2016).

30 Id.
31 See Gonzales, supra note 22. According to PhilStar, in addition to the generation charge, the transmission charge of the National

Grid Corp. of the Philippines (NGCP) also went up by P0.12 per kwh due to an increase in both the wheeling and ancillary charge
components of NGCP’s billing. Taxes went up by around P0.08 per kwh, while other charges (system loss charge and lifeline
subsidy) increased by P0.08 per kwh.
32 See Enerdata, Philippines high electricity price is keeping foreign investors away, available at
http://www.enerdata.net/enerdatauk/press-and-publication/energy-news-001/philippines-high-electricity-price-keeping-
foreign-investors-away_26287.html (last accessed April 15, 2016). According to EnerData, the transmission charge of the
National Grid Corp. of the Philippines (NGCP) also went up by P0.12 per kwh due to an increase in both the wheeling and ancillary
charge components of NGCP’s billing. Taxes went up by around P0.08 per kwh, while other charges (system loss charge and
lifeline subsidy) increased by P0.08 per kwh.
33 Asian Development Bank, Sector Assistance Program Evaluation of Asian Development Bank Assistance to Philippines Power

Sector, available at www.adb.org/sites/default/files/evaluation-document/35400/files/sap-phi-2005-09.pdf (last accessed April

15, 2016).
34 Commercial Economics Consulting, supra note 4.
35 Iris Gonzales, Luzon grid nears critical power reserves level, THE PHILIPPINE STAR, May 13, 2015, available at

http://www.philstar.com/business/2015/05/13/1454048/luzon-grid-nears-critical-power-reserves-level (last accessed April 15,

2016).

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also makes it very difficult for electricity posts to stay erect.36 To top it off, electricity distributors like
MERALCO have to deal with constant pilferage of electricity, their transmission lines and illegal
tapping.37 Even now, the summer of 2015, hydropower is reduced due to the seasonal dry spell.38
Finally, being an archipelago, it is too costly to make electricity, transmit it and distribute electricity in
our country.39 All of these factors contribute to the unreliable supply of electricity and inept access to
steady electricity particularly in the rural areas.

Lifeline Subsidy
Section 73 of the EPIRA4041 is practically a dole-out aimed primarily to help the poor and
marginalized end-users to have access to electricity.42 End users who cannot afford to pay or those who
cannot pay at full price are subsidized by non-lifeline users.4344 A study by Mouton elucidates that the
current provision of the lifeline subsidy found in EPIRA cannot exclusively target, with accuracy, its
intended target, which is the marginalized end-users, for three reasons: First,45 wealthy families often
have more than one (1) residence which they seldom use thus it also benefits from the lifeline rates.
Second,46 the size of a household is not taken into account by the law, and therefore a family with ten
(10) members living under house will consume more than a couple with no children living with them.
Lastly,47 house appliances used by the target marginalized end-users tend to be old and not energy
efficient.
According to Moluton, some of MERALCO’s executives deem as unfair the lifeline provision
since it unduly favors the end-users who do not pay on time and who steal electricity.48 Further, Moulton
argued that the lifeline provision was primarily utilized as a political tool to gain voters from the masses
who are in need of the discount in electricity. In an interview conducted by the same author with
MERALCO, it said that
Meralco was willing to remove the lifeline rate provision, because it is not fair to other
consumers. When it was renewed for another ten years, we were not happy about that.
The decision was very political, it was adopted during the time of Gloria Macapagal,
when she needed to win the voices of the masses – and at that time the clamour was for
lower electricity rates.49

36 Typhoon power woes in Philippines as death toll hits 38, THE NATIONAL, July 17, 2014, available at
www.thenational.ae/world/southeast-asia/typhoon-power-woes-in-philippines-as-death-toll-hits-38 (last accessed April 15,
2016).
37 Morgan Mouton, The Philippine electricity sector reform and the urban question: How metro Manila's utility is tackling urban

poverty, 78 ENERGY POLICY 225, at 230 (2014)

38 Steven Rood, Energy Crisis in the Philippines: An Electricity or Presidential Power Shortage?, THE ASIA FOUNDATION, March

18, 2015, available at asiafoundation.org/in-asia/2015/03/18/energy-crisis-in-the-philippines-an-electricity-or-presidential-

power-shortage/ (last accessed April 15, 2016).
39 Katherine Visconti, Philippine electricity prices to stay high, RAPPLER, August 20, 2012, available at
www.rappler.com/business/10737-electricity-prices-in-ph-likely-to-stay-high-in-the-short-term (last accessed April 15, 2016).
40 See EPIRA LAW, 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 often (10) years,
unless extended by law. The level of consumption and the rate shall be determined by the ERC after due notice and hearing.
41 See Kimberly Tan, Senate OKs 10-year extension of lifeline rate, GMA NEWS ONLINE, June 8, 2011 available at

www.gmanetwork.com/news/story/222843/money/senate-oks-10-year-extension-of-lifeline-rate (last accessed April 15, 2016).

The lifeline provision was extended another ten (10) years from June 26, 2011, its original period.
42 Amy Remo, Subsidized power rates to benefit 2.02 million poor households, INQUIRER, June 22, 2011 available at

newsinfo.inquirer.net/17144/subsidized-power-rates-to-benefit-2-02-million-poor-households (last accessed April 15, 2016).

43 Solons push for amendment in EPIRA, THE VISAYAN DAILY STARMay 25, 2011, available at
www.visayandailystar.com/2011/May/25/businessnews3.htm (last accessed April 15, 2016).
44 See Remo, supra note 42. Under the lifeline structure of MEALCO, end-users using up to twenty (20) kwh a month are free of

charge, those using 21-50 kwh are enjoying a fifty (50) percent discount in rates; 51-70 kwh users are getting a discount of thirty
five (35) percent; and twenty (20) percent for 71-100 kwh consumers.
45 Mouton, supra note 37, at 228.
46 Id.
47 Id.
48 Id. at 230.
49 Id.

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A detailed solution to each one of the problems that you identified in the previous number.

High Electricity Prices

First, the government must provide more tax incentives to the power industry, either by
lessening the tax levied on suppliers or generators or relieve the burden on the end user for paying
value-added tax (VAT).50 The end-users will benefit from this tax measure and hopefully promote more
economic activity in our country. An alternative to this is if the government, through budgeting, can
enable itself to subsidize a portion of the cost of electricity.51
Second, to combat mismanagement and its cousin, corruption, in the ERC,52 strict measures
have to be made to secure a more transparent regulatory body. The author would like to highlight the
existence of the Joint Congressional Power Commission (JCPC)53 and its mandate to ensure
transparency within the government agencies concerned with the energy industry.54 The JCPC must
advice legislators in creating strict regulations that would discourage mismanagement and corruption
within the ERC. An example of such regulation is a strict merits-only approach to ensure that the
persons employed by the ERC possess the sufficient knowledge and is familiar with the technicalities
of the industry, or a strict reportorial requirement with regard to ERC’s activities.
Finally, the government must make investing in the power industry a profitable venture. Like
any other business model, competition would inevitably result to lower pricing. According to Manuel
M. Orig, first vice-president of Aboitiz Power Corp for Mindanao, government needs to introduce
policy and infrastructure program changes to make energy investments more viable.55

Unstable energy security and poor access to electricity

As mentioned earlier, theft of MERALCO devices also contribute to the unstable energy
security. Currently, to secure the physical integrity of the light posts, meters, and other devices from
tampering, theft and pilferage, MERALCO has equipped its devices with alarms that detect electricity
tampering, and shuts off electricity when triggered.56 Through this method, MERALCO aims create a
system of incentives in order to reduce tampering and pilferage, as well as instill a sense of
responsibility to the perpetrators since they will be liable to the community who will suffer the power
shut down.57 For the author, this is a good strategy and must be continued and improved to reduce
needless wastes.
Another long term solution is the creation of power plants. According to Former Secretary
Petilla, to match the demand for energy, the private sector must be able to produce more power plants.58
This is intertwined with, as mentioned earlier, government regulation that encourages the creation of
these plants and infrastructure to complement the increase in investment by the private sector.
Finally, rural electric cooperatives (ECs) must be encouraged and protected primarily by the
National Electrification Administration. The laudable purpose of electric cooperatives is the total

50 Marichu Villanueva, Overtaxed Power Industry, THE PHILIPPINE STAR, January 3, 2014, available at
www.philstar.com/opinion/2014/01/03/1274564/overtaxed-power-industry (last accessed April 15, 2016).
51 Rimando & Mercado, supra note 28.
52 Gil C. Cabacungan, ERC failed to protect consumers, says COA, INQUIRER, September 8, 2014, available at

newsinfo.inquirer.net/635952/erc-failed-to-protect-consumers-says-coa (last accessed April 15, 2016).

53 EPIRA LAW, sec. 62. Joint Congressional Power Commission…

(a) Set the guidelines and overall framework to monitor and ensure the proper implementation of this Act;
xxx
(c) To ensure transparency, require the submission of reports from government agencies concerned on the conduct of public
bidding procedures regarding privatization of NPC generation and transmission assets;
xxx
(g) Determine inherent weaknesses in the law and recommend necessary remedial legislation or executive measures;
54 Id.
55 Marifi S. Jara & Carmelito Q. Francisco, Competition in energy sector needed for efficient supply, BUSINESS WORLD, September

2, 2014, available at bworldonline.com/content.php?section=Economy&title=competition-in-energy-sector-needed-for-

efficient-supply&id=93879 (last accessed April 15, 2016).
56 Mouton, supra note 37, at 231.
57 Id.
58 Iris Gonzales, Solving Phl energy woes? More power plants – DOE, THE PHILIPPINE STAR, March 23, 2014 available at

www.philstar.com/headlines/2014/03/23/1304049/solving-phl-energy-woes-more-power-plants-doe last accessed April 15,

2016).

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electrification of the Philippines which specially caters to rural areas.59 According to the world bank,
the majority of households in rural areas, rely upon ECs for power.60 Unfortunately, the effectivity of
ECs are hampered by politics, particularly, leadership in ECs are plagued with political interference.61
Thus, the proper remedy would be leadership reforms and create a mechanism to isolate political
partisan activities from the ECs. 62

Lifeline Subsidy
Without a doubt, the purpose of the lifeline provision in the EPIRA is for benefit of the
marginalized sector, a laudable purpose which must be upheld. To combat the problems earlier
mentioned, two (2) remedies can be utilized. First, there must be clear rules on eligibility requirements
to avail of the discount63 so as to avoid giving the wealthy families an advantage not intended for them.
Second, reforms must be had on the current contribution method, that is, there must be guidelines on
who is to pay for the discount given to lifeline end-users and not an all-encompassing rule that all non-
lifeline users have to contribute or at least, consider the contributions as deductible on taxes paid as a
form of donation to the national government or as a form of income tax deduction. Another would be
to consider if the government itself would be willing to subsidize a portion of the discount.

59 An act declaring a national policy objective for the total electrification of the Philippines on an area coverage service basis,
providing for the organization of the national electrification administration, the organization, promotion and development of
electric cooperatives to attain the objective, prescribing terms and conditions for their operation, the repeal of R.A. no. 2717, and
for other purposes, [NATIONAL ELECTRIFICATION ADMINISTRATION ACT], Republic Act No. 6038, sec. 2 (1969) Declaration of
National Policy. The total electrification of the Philippines on an area coverage basis being vital to the welfare of its people and
the sound development of the Nation, it is hereby declared to be the policy of the State to pursue and foster, in an orderly and
vigorous manner, the attainment of this objective.
60 The World Bank, Assessing the Corporate Governance Electric Cooperatives in the Philippines, available at

web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/0,,contentMDK:22401712~pagePK:146736~
piPK:146830~theSitePK:226301,00.html (last accessed April 15, 2016).
61 Id.
62 Id.
63 Will Rinehart & Caleb Watney, Five Reforms To Modernize The Lifeline Subsidy Program, available at

www.americanactionforum.org/research/five-reforms-to-modernize-the-lifeline-subsidy-program/ (last accessed April 15,

2016).

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An identification of at least two (2) laws related to the electric power industry that need to be revised,
amended, or repealed. Give your reasons why each law should be revised, amended, or repealed and
provide an amendment or an alternative to said laws.

R.A. 10667: Philippine Competition Act of 2015

Section 55 (c) of R.A. 1066764 expressly annuls a vital provision of the EPIRA law, namely
Section 43 (u) which provides that the ERC shall have the original and exclusive jurisdiction over all
cases contesting rates, fees, fines and penalties imposed by the ERC in the exercise of its powers,
functions and responsibilities as listed in Section 43 of the EPIRA law.65 Instead, the Philippine
Competition Commission (PCC) shall take-over the responsibilities of the ERC on this score as stated
in Section 32 of R.A. 10667.66 At first glance, there seems to be no problem with the assumption of
quasi-judicial functions by the PCC from the ERC, especially since the ERC has been flooded with
accusations of corruption as mentioned earlier. In fact, this can be seen as a continuous effort to
strengthen the regulatory framework to entice investors to invest in power plants and ultimately, for the
goal of EPIRA to work, which is to provide a steady supply of electricity at the lowest price possible.
However, according to an expert in Energy Law, Atty. Cyril del Callar, this express repeal is
actually very problematic.67 For one thing, according to del Callar, it is difficult enough to educate a
group of lawyers on the technicalities of the energy industry.68 To train them to exercise quasi-judicial
functions and rule on very technical matters would be an even greater challenge. Thus, it can be
appreciated that the express repeal is a very unproductive move; it is a step backward rather than
forward. At the end of the day, it is all a matter of expertise and effectivity in enforcing the EPIRA law,
something which the PCC cannot handle at the moment.
As an alternative, it is suggested that an amendment to remove Section 55 (c) of the Philippine
Competition Act is necessary, particularly, all anti-competition related issues from the energy sector
vested by R.A. 10667 to the PCC must be revert back to the jurisdiction of the ERC.

The Cross-ownership provision in the EPIRA

Section 45 of the EPIRA law69 allows for cross-ownership between a distribution company and a
generation company up to 30% of the installed generation capacity of a grid and up to 25% of the
national installed generating capacity.70 A study said that Section 45 opens the possibility for a
distribution company to enter into supply contracts with its generation subsidiaries and create hidden
profits.71 The capacity for cross-ownership creates a looming threat of collusion between a distribution

64 An act providing for a national competition policy prohibiting anti-competitive agreements, abuse of dominant position and
anti-competitive mergers and acquisitions, establishing the Philippine competition commission and appropriating funds therefor,
[PHILIPPINE COMPETITION ACT], Republic Act No. 10667, sec. 55 (2015) Repealing Clause. – The following laws, and all other laws,
decrees, executive orders and regulations, or part or parts thereof inconsistent with any provision of this Act, are hereby repealed,
amended or otherwise modified accordingly:
Xxx
(c) Section 43(u) on Functions of the ERC of Republic Act No. 9136, entitled "An Act Ordaining Reforms in the Electric Power
Industry, Amending for the Purpose Certain Laws and for Other Purposes", otherwise known as the "Electric Power Industry
Reform Act of2001", insofar as the provision thereof is inconsistent with this Act;
Xxx
65 EPIRA LAW, sec. 43
66 See PHILIPPINE COMPETITION ACT, sec. 32 Relationship With Sector Regulators. – The Commission shall have original and

primary jurisdiction in the enforcement and regulation of all competition-related issues. The Commission shall still have
jurisdiction if the issue involves both competition and noncompetition issues, but the concerned sector regulator shall be
consulted and afforded reasonable opportunity to submit its own opinion and recommendation on the matter before the
Commission makes a decision on any case. Where appropriate, the Commission and the sector regulators shall work together to
issue rules and regulations to promote competition, protect consumers, and prevent abuse of market power by dominant players
within their respective sectors.
67 Class Lesson
68 Class Lesson
69 See EPIRA LAW, sec. 45. Cross Ownership, Market Power Abuse and Anti-Competitive Behavior.

xxx
(a) No company or related group can own, operate or control more than thirty percent (30%) of the installed generating capacity
of a grid and/or twenty-five percent (25%) of the national installed generating capacity. “Related group” includes a person’s
business interests, including its subsidiaries, affiliates, directors or officers or any of their relatives by consanguinity or affinity,
legitimate or common law, within the fourth civil degree;
xxx
70 Patalinghug, supra note 1, at 15.
71 Id.

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and a generation company, which is inimical to the public policy of fostering true competition in an de-
monopolized industry.72
As a proposed amendment, the cross-ownership provision found in the EPIRA law between
distribution utilities and power generators should be absolutely prohibited73 so as to be consistent with
its avowed policy to foster a true and genuine competitive electric industry.

72 An Act Amending R.A. 9136, otherwise known as the "Electric Power Industry Reform Act of 2001" (2014), available at
http://www.congress. gov.ph/download/basic_16/HB03676.pdf (last accessed April 15, 2016).
73 Id.

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