EPIRA LAW OF

THE PHILIPPINES
 What is EPIRA LAW of 2001?

Republic Act No.9136 also known as the Electric Power

Industry Reform Act (EPIRA) of 2001. The Electric Power
Industry Reform Act (EPIRA) was enacted in 2001 with the
intention of ensuring affordable and reliable electricity to all
power consumers in the Philippines.
 EPIRA LAW

The amendment of Republic Act 9136, otherwise known as the EPIRA Law of
2001, was proposed by Reps. Rufus Rodriguez (2nd District, Cagayan de Oro
City) and his younger brother Maximo Rodriguez (Party-list, Abante Mindanao) in
House Bill 4422.
The Electric Power Industry Reform Act (EPIRA) mandates the Energy
Regulatory Commission (Commission) to promote competition, encourage
market development, ensure consumer choice, and penalize abuse of market
power in the restructured electricity industry.
 EPIRA LAW

The Electric Power Industry Reform Act (EPIRA) is a law in the Philippines that
was enacted in 2001 with the aim of reforming the country's electric power
industry. The main purpose of EPIRA is to create a competitive market for
electricity in the Philippines, which would lead to lower electricity rates, improved
service quality, and greater efficiency in the industry.
The law seeks to achieve this by privatizing the state-owned National Power
Corporation (NPC) and encouraging the entry of new players in the industry, such
as independent power producers (IPPs) and electric cooperatives. EPIRA also
established the Energy Regulatory Commission (ERC) to oversee the
implementation of the law and regulate the activities of power industry players.
In summary, the main purpose of EPIRA is to promote competition and improve
the efficiency of the electric power industry in the Philippines, with the goal of
providing consumers with reliable and affordable electricity.
RULES
PART 1-37
EPIRA LAW OF THE
PHILIPPINES
RULES
1-6
 RULE 01: Title and Scope
The Electric Power Industry Reform Act (EPIRA) of the Philippines, also known as Republic
Act No. 9136, has several sections and rules. However, there is no specific "Rule Number 1"
in the EPIRA law.
The law's title and scope can be found in Section 1, which states that the EPIRA law aims to
reform the electric power industry in the Philippines. It seeks to provide a reliable and
affordable supply of electric power to the end-users, promote competition and encourage
private sector participation in the power sector, and protect the public interest as well as the
environment.
Overall, the EPIRA law seeks to establish a competitive and efficient electric power industry
that can provide adequate and reliable electricity supply to the Filipino people at reasonable
rates, promote the use of indigenous and renewable sources of energy, and encourage the
participation of private sector entities in the development and operation of the power
industry.
 RULE 02: Declaration of Policy

Section 2 of the EPIRA law states the declaration of policy for the electric power industry reform, which includes the
following:
Encouraging the development of a competitive and transparent electricity market that will provide consumers with a
choice of suppliers and services, and promote efficiency and innovation in the industry.
Promoting the use of indigenous and renewable sources of energy to reduce the country's dependence on imported
fuels, and to promote sustainable development and environmental protection.
Providing universal access to electricity at a reasonable price, especially for the marginalized and underserved areas, as
well as for the micro, small and medium enterprises (MSMEs) that play a vital role in the economy.
Encouraging private sector participation in the power sector, including the generation, transmission, and distribution of
electricity, as well as the establishment of independent power producers, retail electricity suppliers, and other related
businesses.
Ensuring the reliable and efficient supply of electricity, by promoting the development of new power generation
facilities, upgrading existing facilities, and improving the transmission and distribution systems.
 RULE 03: Responsibilities of DOE, ERC, NPC, NEA, AND PSALM

These responsibilities are outlined in various sections of the EPIRA law, and include:
Department of Energy (DOE) - responsible for the policy and planning functions of the
electric power industry, including the promotion of renewable energy, energy efficiency, and
the development of a competitive and transparent electricity market.
Energy Regulatory Commission (ERC) - responsible for regulating the rates, fees, and other
charges of the electric power industry, including the generation, transmission, and
distribution of electricity, to ensure that they are just and reasonable, and do not
discriminate against any class of customers.
National Power Corporation (NPC) - responsible for the generation of electricity from
hydroelectric, geothermal, and other renewable energy sources, as well as the transmission
and distribution of electricity to missionary and other areas where private sector
participation is not viable.
 RULE 04: Definition of terms
The definition of terms under Rule 4 includes the following:
1. "Act" refers to the Electric Power Industry Reform Act of 2001.
2. "Aggregator" refers to an entity that combines multiple loads and purchases electricity
from the Wholesale Electricity Spot Market (WESM) or Retail Electricity Suppliers (RES) for
the purpose of selling to end-users.
3. "Captive market" refers to a group of customers who are required by law or contract to
source their electricity from a specific generator or supplier.
4. "Distribution utility" refers to an entity authorized by law to distribute electricity to end-
users within a defined geographic area.
5. "Electric power industry" refers to the generation, transmission, distribution, and supply of
electric power.
6. "Generation company" refers to an entity authorized by law to operate and maintain
facilities for the generation of electricity.
 RULE 04: Definition of terms
The definition of terms under Rule 4 includes the following:
7. "Grid" refers to the interconnected network of transmission and distribution lines and
related facilities for the transmission and distribution of electricity.
8. "National Grid Corporation of the Philippines" refers to the entity responsible for the
operation, maintenance, and development of the high-voltage transmission system in the
Philippines.
9. "Power exchange" refers to a facility that enables the trading of electricity among market
participants.
10. "Retail electricity supplier" refers to an entity authorized by law to sell electricity to end-
users.
11. "Transmission company" refers to an entity authorized by law to operate and maintain
facilities for the transmission of electricity.
12. "Wholesale Electricity Spot Market" refers to a market platform that enables the trading of
electricity among generators, suppliers, and other market participants.
 RULE 05: Generation Sector
The main provisions of Rule 5 are as follows:
1. Generation Companies (GenCos) shall be responsible for the planning, construction, and
operation of generation facilities, subject to the guidelines and regulations of the
Department of Energy (DOE).
2. The National Transmission Corporation (TransCo) shall be responsible for the planning and
construction of transmission facilities necessary to connect new generation facilities to the
grid.
3. The Department of Energy (DOE) shall ensure the competitiveness of the generation sector
by promoting competition, open access, and transparency in the market.
4. The DOE shall develop policies and regulations that promote the use of renewable energy
sources in the generation of electricity.
5. The DOE shall establish a system of incentives to encourage the construction of new
generation facilities, particularly those that use renewable energy sources.
6. The DOE shall monitor the performance of GenCos to ensure compliance with the
requirements of the EPIRA and its implementing rules.
 RULE 05: Generation Sector

The main provisions of Rule 5 are as follows:

7. The Energy Regulatory Commission (ERC) shall regulate the rates charged by GenCos for the
sale of electricity to Distribution Utilities (DUs) and Retail Electricity Suppliers (RES).
8. The ERC shall ensure that rates are just and reasonable and are based on a transparent and
competitive market.
9. The ERC shall establish a system of penalties for GenCos that violate the provisions of the
EPIRA and its implementing rules.
10.The ERC shall encourage the entry of new players in the generation sector to promote
competition and ensure a reliable supply of electricity to consumers.
 RULE 06: Transmission Sector
Rule 6 of the Implementing Rules and Regulations (IRR) of the Electric Power Industry Reform Act (EPIRA) of the
Philippines pertains to the Transmission Sector.
The main provisions of Rule 6 are as follows:
1. The National Transmission Corporation (TransCo) shall be responsible for the planning, construction, and operation of
the transmission system, subject to the guidelines and regulations of the Department of Energy (DOE).
2. The transmission system shall be operated and maintained by the National Grid Corporation of the Philippines
(NGCP), a private corporation created to take over the transmission assets of TransCo.
3. The NGCP shall operate the transmission system in accordance with the rules and regulations of the Philippine Grid
Code, which sets the technical standards and requirements for the operation of the grid.
4. The NGCP shall develop and implement a transmission expansion plan to ensure the reliability and adequacy of the
transmission system.
5. The NGCP shall establish and maintain an open access transmission system (OATS) to enable non-discriminatory
access to the transmission system by all users.
6. The NGCP shall be regulated by the Energy Regulatory Commission (ERC), which shall ensure that the rates charged
by the NGCP for the use of the transmission system are just and reasonable.
 RULE 06: Transmission Sector
Rule 6 of the Implementing Rules and Regulations (IRR) of the Electric Power Industry Reform
Act (EPIRA) of the Philippines pertains to the Transmission Sector.
The main provisions of Rule 6 are as follows:
7. The ERC shall also ensure that the NGCP complies with the requirements of the EPIRA and
its implementing rules.
8. The NGCP shall be required to submit periodic reports to the DOE and the ERC on its
operations and financial performance.
9. The DOE shall develop policies and regulations that promote the development and
expansion of the transmission system, taking into consideration the long-term needs of the
electric power industry.
10. The DOE shall also promote the use of advanced technologies and systems in the operation
and maintenance of the transmission system, in order to enhance its reliability, efficiency, and
security.
RULES
7-12
 Rule 7: Distribution Sector
Rule Number 7 of the Electric Power Industry Reform Act (EPIRA) of the Philippines pertains to the
"Distribution Sector".
This rule provides guidelines for the organization, operations, and regulation of distribution utilities
(DUs) that are responsible for the distribution of electricity to end-users. The rule covers various
aspects of the distribution sector, including the following:
• Scope and coverage of the rule
• Requirements for the grant of a distribution franchise
• Criteria for determining the boundaries of a franchise area
• Standards for service quality and reliability
• Provisions for the protection of consumer rights
• Rules on the setting of distribution rates
• Mechanisms for the resolution of disputes and complaints
• Obligations and responsibilities of DUs
• Penalties for non-compliance

Rule Number 7 aims to promote fair competition, consumer protection, and efficient operations in the
distribution sector, in line with the broader goals of the EPIRA to reform and modernize the electric
power industry in the Philippines.
 Rule 8: Supply Sector
Rule 8 of the Electric Power Industry Reform Act (EPIRA) of the Philippines pertains to the
supply sector of the electric power industry. The objective of this rule is to promote
competition and ensure that consumers have access to reliable, affordable, and high-
quality electricity services.
The supply sector refers to the segment of the electric power industry that is responsible
for generating and supplying electricity to consumers. Some of the key provisions of Rule 8
include:
• Open Access to Transmission and Distribution Systems
• Retail Competition and Open Access
• Promotion of Renewable Energy
• Consumer Protection
Rule 8 of the EPIRA law promotes competition and consumer protection in the electric
power industry by ensuring open access to transmission and distribution systems,
promoting retail competition and open access, and encouraging the use of renewable
energy sources. By promoting competition and protecting consumer interests, the rule aims
to increase efficiency, lower prices, and improve the quality of electricity services in the
Philippines.
 Rule 9: Wholesale Electricity Spot Market (WESM)
Rule number 9 of the Electric Power Industry Reform Act (EPIRA) of the
Philippines pertains to the Wholesale Electricity Spot Market (WESM), which is
the marketplace where electricity is bought and sold in the country. The main
objective of Rule 9 is to promote fair and transparent competition in the electricity
market by establishing a platform where buyers and sellers can trade electricity
at market-determined prices. Some of the key provisions of Rule 9 include:
• Establishment of the WESM
• Market Design and Operations
• Market Monitoring and Enforcement
• Governance Structure
Rule 9 of the EPIRA law provides the legal framework for the establishment and
operation of the Wholesale Electricity Spot Market in the Philippines, which is a
critical component of the country's electricity industry. By promoting fair and
transparent competition in the market, Rule 9 aims to increase efficiency, reduce
prices, and improve the quality of electricity services for consumers.
 Rule 10: Structural and functional unbundling of electric power
industry participants
The objective of this rule is to prevent anti-competitive behavior and promote
fair competition in the industry.
The unbundling of industry participants involves separating the ownership and
operation of power generation, transmission, and distribution facilities to
ensure that there is no vertical integration or cross-subsidization between the
different segments of the industry. The main provisions of Rule 10 include:
• Unbundling of Participants
• Corporate Structure
• Asset Valuation and Transfer
• Prohibition of Cross-Subsidies
Rule 10 of the EPIRA law aims to promote competition in the electric power
industry by preventing anti-competitive behavior and ensuring fair and
transparent competition between the different segments of the industry. By
unbundling industry participants and prohibiting cross-subsidies, the rule
promotes efficiency, innovation, and the provision of high-quality electricity
services for consumers.
 Rule 11: Cross Ownership, Market Abuse and Anti-competitive
Behavior
Cross-ownership refers to the situation where a company owns or controls multiple firms in the
same industry. In the Philippines, some of the country's largest power companies are owned by
the same families or groups of individuals, leading to concerns about collusion and market
manipulation. Critics argue that the EPIRA law has allowed for this consolidation of power in the
industry, which has resulted in higher prices for consumers and reduced competition.

Market abuse is a broad term that refers to any behavior that distorts or manipulates the market
in order to gain an unfair advantage. In the Philippine power industry, there have been
allegations of market abuse by some of the country's largest power companies. For example,
some companies have been accused of manipulating prices by withholding supply, while others
have been accused of engaging in anti-competitive behavior by using their market power to
exclude smaller competitors.

Anti-competitive behavior refers to any actions taken by companies to limit or eliminate

competition in the market. The EPIRA law was intended to promote competition in the Philippine
power industry, but some critics argue that it has had the opposite effect. For example, some
companies have been accused of using their market power to prevent new entrants from
entering the market, which has limited competition and resulted in higher prices for consumers.
 Rule 12: Retail Competition and Open Access
Rule 12 of the Electric Power Industry Reform Act (EPIRA) of the Philippines
pertains to the retail competition and open access (RCOA) system in the country's
electric power industry. The objective of this rule is to promote competition and provide
consumers with greater choice in selecting their electricity supplier.
The RCOA system allows consumers to choose their electricity supplier based on price,
quality, and other factors. This system promotes competition by allowing new market
entrants to compete with incumbent suppliers, and it provides consumers with access to
a wider range of electricity services.
Some of the key provisions of Rule 12 include:
• Customer Choice
• Retail Competition
• Open Access
• Retail Competition and Market Monitoring
Rule 12 of the EPIRA law promotes competition and consumer choice in the electric
power industry by establishing a retail competition and open access system. By
providing consumers with greater choice and promoting competition, the rule aims to
increase efficiency, lower prices, and improve the quality of electricity services in the
Philippines.
RULES
13-17
 RULE 13
MISSIONARY
ELECTRIFICATION
The 2016-2020 Missionary Electrification Development Plan covers the
development plans and programs of the government to increase access to
sustainable energy in off-grid areas in the country and improve the efficiency in the
use of energy.

In the particular, This MEDP addresses the pressing conditions and needed
policies pertaining to the:

A. Improvement of the Private Sector Participation Program (PSP)

B. Improvement of the Operations and Service in the Missionary Areas
C. The rationalization of Universal Charge for Missionary Electrification
(UCME)
 RULE 14
PROVISION OF ELECTRICITY BY
QUALIFIED THIRD PARTIES
This rule is applied to third parties qualified and authorized by ERC in accordance
with the Act to undertake the provision of electric service in remote an unviable areas
that a distribution utility is unable to serve.

Rights and Obligation of Qualified Third Parties

A. Any Distribution Utility that fails to provide electricity shall enter a contract in
the qualified third party to provide electric service to Unviable Areas.
B. Qualified Third Party shall comply with all applicable provisions of the
Distribution Code.
C. Qualified Third Party shall charge rates to Unviable Areas according to ERC.
D. Qualified Third Party shall report annually to DOE the rate of electrification of its
coverage areas.
 RULE 15
UNBUNDLING OF RATES
This Rule shall apply to all Electric Power Industry Participants that are currently
engaged or will be engaged in any of the business activities as stated in Section 15 of
the Act.

Parameters for Unbundling Rates and Cost of Service

A. Electric Power Industry Participant shall identify, separate and unbundle its
rates, charges an cost in accordance with Rule 10.
B. In the determination of eligible cost of service to be charge, the ERC shall
establish minimum efficiency standards covering technical, financial and customer
service performance.
C. The rate of any Distribution Utility shall exclude management inefficiencies.
D. Any Distribution Utilities may directly o indirectly engaged any related
business which maximizes the utilization of their assets.
 RULE 16
REMOVAL OF CROSS SUBSIDIES
.
Pursuant to Section to Section 74 of the Act, cross subsides within Grid, between Grid
and /or classes of customer shall phased out in a period not exceeding 3 years from the
establishment by ERC of the Universal Cross Subsides shall be made transparent and
identified separately in the billing statements provide to End-User Suppliers.

This Rule shall apply to NPC, TRANSCO or Buyer or Concessionaire, Distribution

Utilities and PSALM.

Calculation of Cross Subsidies

-may extend the period of removal of cross subsidies for maximum period of 1 year upon
finding that cessation of such mechanism would have a material adverse effect
upon the public interest.
-the cross subsidy between grids in the rates of NPC shall be calculated on net basis for
each grid between.
- the cross subsidy between customer classes within each Distribution Utility.
 RULE 16
REMOVAL OF CROSS SUBSIDIES
.
Procedures in Handling Cross Subsidies

A. Pending the Complete Removal of Cross Subsidies

B. The ERC shall establish a cross subsidy charge to account for all forms
of cross subsidies that remain during the phase out period.

Exemption from Cross Subsidy Removal for Distribution Utilities

The threshold consumption levels and Lifeline Rates determined by ERC
shall be exempted from the prohibition on cross subsidies between classes of
customers of a Distribution Utility for a period of 10 years unless extended by
law.
 RULE 17
STRANDED DEBTS AND CONTRACT COST
. RECOVERY
Pursuant to Section 32 and 33 of the Act, there are 3 types of stranded cost recoverable
through the Universal Charge:
A. Stranded Depths
B. Stranded Contract Costs of NPC
C. Stranded Contract Costs of Eligible Contracts of Distribution Facilities

This Rule shall apply to NPC, PSALM and Distribution Utilities with IPP contracts
approved by the ERB as of 31 of December 2000.

Procedure and Methodology for Stranded Cost Determination

A. Any Distribution Utilities has an eligible contract shall file with ERC their respective
petitions for cost recovery under the Universal Charge and include there methodology in
determining stranded cost.
B. At the end of the first year of implementation of stranded cost recovery and every year
thereafter, the ERC shall conduct a review to determine whether there is under or over
recovery and adjust on the information submitted by the PSALM and Distribution Utility.
RULES
18-22
 RULE 18: The Universal Charge

Rule number 18 of The Electric Power Industry Reform Act (EPIRA) of

The Philippines pertains to the “Universal Charge”. This rule provides
guidelines for the imposition and collection of the universal charge,
which is a fee imposed on all electricity end-users in the country to fund
various programs and initiatives aimed at ensuring the reliability, quality,
and affordability of electricity supply. The Universal Charge is also used
to support the Government’s social and environmental programs related
to power industry.
 RULE 18: The Universal Charge

The Universal Charge is divided into several components, including:

1.)Universal Charge for Missionary Electrification (UCME)
2.)Universal Charge for Environmental Charge (UC-E)
3.) Universal Charge for Indigenous Energy (UC-IE)
4.) Universal Charge for Stranded Debts and Contracts (UC-SDC
Rule 18 sets out the procedures for the collection, remittance, and utilization of
the Universal Charge, as well as the mechanisms for monitoring and reporting on
its implementation. It also provides for penalties for non-compliance with the
rules and regulations related to the Universal Charge.
 RULE 19:Mandated Residential Rebate

Rule number 19 of The Electric Power Industry Reform Act (EPIRA) of the Philippines is known
as the “Mandated Residential Rebate”. This rule mandates a monthly subsidy to be given to
residential customers of electric utilities that have been privatized. Specifically, the rules
requires that a rebate equivalent to the value-added tax (VAT) paid by residential customers on
their monthly electricity consumption be given to them. This rebate is intended to help ease the
burden of higher electricity rates resulting from the privatization of the electric utilities. The
rebate should be reflected as a credit on the electricity bill of the residential customers. The rule
also mandates that electric utilities submit reports to the energy regulatory commission (ERC)
detailing compliance with the rebate requirement. It is worth noting that the EPIRA LAW was
enacted in 2001 and has undergone several amendments since then. It is possible that the
specifics of rule 19 may have been updated or revised in the years since its original enactment.
 RULE 20: Lifeline Rate

Rule number 20 of the electric power industry reform act (EPIRA) of the Philippines is known as
the "lifeline rate". This rule mandates a subsidized rate for low-income residential customers of
electric utilities that have been privatized. Under the rule, electric utilities are required to offer a
"lifeline rate" to low-income residential customers, defined as those who consume 100 kilowatt-
hours or less of electricity per month. The lifeline rate should be lower than the normal
residential rate, and the specific discount or subsidy should be determined by the energy
regulatory commission (ERC). The purpose of the lifeline rate is to ensure that low-income
households have access to affordable electricity, and to protect them from being unfairly
burdened by higher electricity rates resulting from the privatization of electric utilities. Like the
mandated residential rebate (rule 19), the lifeline rate (rule 20) is a provision of the EPIRA law
that was enacted in 2001 and has undergone several amendments since then. The specifics of
the lifeline rate, including the discount or subsidy amount, may have been updated or revised in
the years since its original enactment.
 RULE 21: Power Sector Assets And Liabilities Management
Corporation (PSALM)

Rule number 21 of the electric power industry reform act (EPIRA) of the Philippines pertains to
the creation and functions of the power sector assets and liabilities management corporation
(psalm). psalm is a government-owned and controlled corporation tasked with managing and
disposing of the assets and liabilities of the national power corporation (NPC), which was the
state-owned entity responsible for the generation, transmission, and distribution of electricity
prior to the privatization of the power sector. Under rule 21, psalm is responsible for several key
functions, including:
• Asset management
• Debt management
• Contract management
• Privatization
Psalm plays a critical role in the ongoing privatization and restructuring of the Philippine power
sector, and is instrumental in ensuring the financial stability and sustainability of the power
industry.
 RULE 22: National Transmission Corporation (TRANSCO)

Rule number 22 of the electric power industry reform act (EPIRA) of the Philippines
pertains to the creation and functions of the national transmission corporation (TRANSCO).
Transco is a government-owned and controlled corporation tasked with owning, operating, and
maintaining the high voltage transmission system in the Philippines. Prior to the privatization of
the power sector, the transmission system was owned and operated by the national power
corporation (NPC).
 RULE 22: National Transmission Corporation (TRANSCO)

UNDER RULE 22, TRANSCO IS RESPONSIBLE FOR SEVERAL KEY FUNCTIONS,

INCLUDING:
• ASSET OWNERSHIP
• GRID MANAGEMENT
• EXPANSION AND DEVELOPMENT
• ANCILLARY SERVICES

Overall, TRANSCO plays a critical role in the operation and development of the Philippine
power system, and is instrumental in ensuring the reliable and efficient transmission of
electricity throughout the country
RULES
23-27
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

Section 1. Guiding Principle.

Consistent with Section 47 of the Act, the PSALM shall privatize the assets transferred to it from NPC in
accordance with these Rules. Within one hundred eighty (180) days from the effectivity of the Act, PSALM
shall submit a Privatization plan for the endorsement by the Power Commission a nd the approval of the President
of the Philippines. This plan shall cover the total Privatization of the transmission and generation assets, real estate,
an d other disposable assets as well as the existing IPP contracts of NPC, except for assets of SPUG. Upon
approval of the Privatization plan, PSALM shall implement the same.

The participation by Filipino citizens an d corporations in the purchase of NPC assets shall be encouraged.

Section 2. Scope of Privatization.

(i) all generation assets a nd all generation-related machineries and equipment;
(ii) all real estate an d the improvements made thereto; and
(iii) disposable assets s uch as facilities, properties, equipment and other assets not essential to the operation of
NPC.
To provide for a n orderly disposition of these assets, NPC shall provide PSALM a n inventory of all these assets
within one hundred and twenty (120) days from the effectivity of the Act.
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

(b) NPC Transmission, Sub transmission, Interconnection and Ancillary Assets.

The transmission, sub transmission, interconnection and ancillary assets of NPC, as

defined in Section 8 of the Act and further detailed in Rule 6 on Transmission Sector and
Rule 22 on TRANSCO, shall be transferred by NPC directly to TRANSCO. For this purpose,
NPC shall submit a list of these assets to PSALM and TRANSCO within one hundred
and twenty (120) days from the effectivity of the Act.
(c) IPP Contracts of NPC.

Consistent with Section 8 of this Rule, IPP Contracts of NPC shall refer to generation
capacities developed pursuant to Republic Act No. 6957 (BOT Law), as amended by
Republic Act No. 7718, and any such generation asset whose construction was not
financed by NPC but whose output is bought by NPC under Purchase Power Agreements
(PPAs), Energy Conversion Agreements (ECAs) or any other similar contractual
relationship.
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC
Section 3. Privatization Objectives.

The Privatization of the NPC assets intends to achieve the following objectives:

(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
(f) 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; and
(i) To ensure consumer protection and enhance the competitive operation of the electricity
market.
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

Section 4. Privatization Guidelines.

(a) The Privatization value to the National Government of the NPC generation assets, real estate, other
disposable assets as well as IPP contracts shall be optimized.

(b) The participation by Filipino citizens an d corporations in the purchase of NPC assets shall be encouraged.
Equity or similar instruments of participation by End-users or consumers m us t be explored
exhaustively.

In the case of foreign investors, at least seventy-five percent (75%) of the funds used to acquire NPC-
generation assets and IPP contracts shall be inwardly remitted an d registered with the (BSP).

(c) The NPC plants an d / o r its IPP contracts assigned to IPP Administrators, its related assets and assigned
liabilities, if any, shall be grouped in a manner which shall promote the viability of the resulting
Generation Companies, ensure economic efficiency, encourage competition, foster reasonable electricity rates
an d create market appeal to optimize returns to the government from the sale an d disposition of s uch
assets in a manner consistent with the objectives of the Act. In the grouping of the generation assets an d
IPP contracts of NPC, the following criteria shall be considered:
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

(a) A sufficient scale of operation and balance sheet strength to promote the financial viability of the restructured units;

(b) Broad geographical groupings to ensure efficiency of operations but without the formation of regional companies or consolidation of
market power;

(c) Portfolio of plants and IPP contracts to achieve management and operational synergy without dominating any part of the market or of
the load curve; and

(d) Such other factors as may be deemed beneficial to the best interest of the National Government while ensuring
attractiveness to potential investors.

(e) In cases of transfer of possession, Control, operation or Privatization of multi-purpose hydro facilities, safeguards shall be
prescribed to ensure that the National Government may direct water usage in cases of shortage to protect potable water, irrigation, and
all other requirements imbued with public interest. The rights of NPC over such multi-purpose hydro facilities shall be transferred to
PSALM;
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

(f) The Agus and the Pulangui complexes in Mindanao shall be excluded from among the Generation Companies that will be initially
privatized. Their ownership shall be transferred to the PSALM and both shall continue to be operated by the NPC. Said complexes may
be privatized not earlier than ten (10) years from the effectivity of the Act, and, except for Agus III, shall not be subject to BOT, Build-
Rehabilitate-Operate-Transfer (BROT) and other variations thereof pursuant to Republic Act. No. 6957 (BOT Law), as amended by
Republic Act No. 7718. The Privatization of Agus and Pulangui complexes shall be left to the discretion of PSALM in consultation with
Congress. PSALM, out of the earnings in the operation of Agus and Pulangui complexes, shall ensure the availability of adequate funds
intended for the upkeep of facilities to include funds for repairs, maintenance and expansion of existing facilities;

(g) The steam field assets and generation plants of each geothermal complex shall not be sold separately. They shall be combined and
each geothermal complex shall be sold as one package through public bidding. The geothermal complexes covered by this requirement
include, but not limited to, Tiwi-Makban, Leyte A and B, Tongonan, Palinpinon, and Mt. Apo.
(h) The ownership of the Caliraya-Botokan-Kalayaan (CBK) pump storage complex shall be transferred to PSALM and operated by
NPC on behalf of PSALM for a period of ten (10) years.
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

(i) Not later than three (3) years from the effectivity of the Act, and in no case later than the initial implementation
of Open Access, at least seventy percent (70%) of the total capacity of generation assets of NPC and of the total
capacity of the power plants under contract with NPC located in Luzon and Visayas shall have been privatized:
Provided, That any unsold capacity shall be privatized not later than eight (8) years from the effectivity of the Act;

(j) Except as otherwise provided in these Rules, all appropriate existing authorizations, licenses and permits issued
by the National Government, including its departments, bureaus and agencies, and LGUs to NPC shall
automatically transfer to PSALM;
(k) NPC may generate and sell electricity only from the undisposed generation assets and IPP contracts of PSALM
and shall not incur any new obligations to purchase power through bilateral contracts with
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

Section 5. Elements of the Privatization Plan.

The Privatization plan for NPC assets shall contain, among others, the following principal elements:
(a) Structure, sequence, timing and terms of asset disposition;
(b) Employee issues;
(c) Management of debt obligations;
(d) Management of IPP obligations, including appointment of IPP Administrators in accordance with Section 51(c) of the Act;
(e) Options for the sale of other assets; and
(f) Overall timetable and progress milestones.

Section 6. Privatization of Hydroelectric Generation Plants.

(a) Consistent with Section 47(e) of the Act and Section 4(f) of this Rule, the Privatization of hydro facilities of NPC shall cover the
power component including assignable long-term water rights agreements for the use of water, which shall be passed onto and respected
by the buyers of the hydroelectric power plants.
(b) The National Water Resources Board (NWRB) shall ensure that the allocation for irrigation, as indicated by the NIA and
requirements for domestic water supply as provided for by the appropriate Local Water District(s) are recognized and provided for in the
water rights agreements. NPC or PSALM may also impose additional conditions in the shareholding agreement with the winning
bidders to ensure national security, including, but not limited to, the use of water during drought or calamity.
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

(c) Consistent with Section 34(d) of the Act, the NPC shall continue to be responsible for watershed rehabilitation
and management and shall be entitled to the environmental charge equivalent to one-fourth of one centavo per
kilowatt-hour sales (P0.0025/kWh), which shall form part of the Universal Charge. This environmental fund shall
be used solely for watershed rehabilitation and management and shall be managed by NPC under existing
arrangements. NPC shall submit an annual report to the DOE detailing the progress of the watershed rehabilitation
program.

(d) The NPC and PSALM or NIA, as the case may be, shall continue to be responsible for the dam structure and all
other appurtenant structures necessary for the safe and reliable operation of the hydropower plants. The NPC and
PSALM or NIA, as the case may be, shall enter into an operations and maintenance agreement with the private
operator of the power plant to cover the dam structure and all other appurtenant facilities.

Section 7. Undisposed Generation Assets and IPP Contracts of NPC.

(a) NPC shall not incur any new obligations to purchase power through bilateral contracts with Generation
Companies or other Suppliers.
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

Section 8. Privatization of IPP Contracts Assumed by PSALM.

(a) The IPP contracts assumed by PSALM shall be privatized taking into consideration buy out provisions,
Government performance undertakings and possible bilateral renegotiations to minimize the liabilities of NPC and
the National Government.

(b) Consistent with Section 75 of the Act, with respect to IPP-related contracts, nothing in these Rules shall be
construed as:

(i) an implied waiver of any right, action or claim, against any Person or entity, of NPC or the National Government
arising from or relating to any such contracts; or

(ii) a conferment of new or better rights to creditors and IPP contractors in addition to subsisting rights granted by
the NPC or the National Government under existing contracts.

(c) PSALM shall ensure that the Privatization of IPP contracts assumed by it shall not cause an increase in the
stranded costs to be absorbed by the National Government and End-users.
 RULE 23: PRIVATIZATION OF THE ASSETS OF NPC

Section 9. Management and Operation of Agus and Pulangui Complexes.

The Agus and Pulangui complexes shall be managed and operated by NPC for PSALM as
a separate business unit, and shall have its own organization and book of accounts.
 RULE 24: ELECTRIC POWER CRISIS PROVISON

RULE 24. ELECTRIC POWER CRISIS PROVISION

Upon the determination by the President of the Philippines of an imminent shortage of the Supply of Electricity,
Congress may authorize, through a joint resolution, the establishment of additional generation capacity under such
terms and conditions as it may approve.
 RULE 25: REVIEW OF IPP CONTRACTS

RULE 25 An inter-agency committee chaired by the Secretary of DOF, with the Secretary of the DOJ and the
Director General of the NEDA as members thereof is hereby created upon the effectivity of the Act. The Committee
shall immediately undertake a thorough review of all IPP Contracts. In cases where such contracts are found to have
provisions which are grossly disadvantageous, or onerous to the Government, the Committee shall, cause
 RULE 26: RENEGOTIATION OF POWER PURCHASE AND ENERGY
CONVERSION AGREEMENTS BETWEEN NPC AND PNOC-EDC

(a) Pursuant to Section 69 of the Act, all power purchase and energy conversion agreements between the PNOC-
EDC and NPC, including, but not limited to, the Palinpinon, Tongonan and Mt. Apo Geothermal complexes, shall
be reviewed by the ERC within three (3) months from the effectivity of the Act.

(b) The ERC shall amend the terms of the agreements to remove any hidden costs or extraordinary mark-ups in the
cost of power or steam above their true costs.

(c) The ERC shall ensure that all savings realized from the reduction of said mark-ups shall be passed on to all End-
users.

(d) All amended contracts shall be submitted to the Power Commission for approval.
 RULE 27: ROYALTIES, RETURNS [RENTALS] AND TAX
RATES FOR INDIGENOUS ENERGY RESOURCES

The provisions of Section 79 of Commonwealth Act No. 137 (C.A. No. 137) and any law to the contrary
notwithstanding, the President of the Philippines shall reduce the royalties, returns [rentals] and taxes collected for
the exploitation of all indigenous sources of energy, including but not limited to, natural gas and geothermal steam,
so as to effect parity of tax treatment with the existing rates for imported coal, crude oil, bunker fuel and other
imported fuels.

To this end, the DOF shall recommend to the President of the Philippines the issuance of an Executive Order within
thirty (30) calendar days from the effectivity of these Rules.

To ensure lower rates for End-users, the ERC shall forthwith reduce the rates of power from all indigenous sources
of energy.
RULES
28-32
 For all purpose
RULES AND REGULATIONS TO IMPLEMENT
REPUBLIC ACT NO. 9136, ENTITLED
"ELECTRIC POWER INDUSTRY REFORM ACT
OF 2001"

RULE 28 - 32

For Presenration
RULE 28. ENVIRONMENTAL PROTECTION

Pursuant to Section 65 of the Act, Electric Power Industry

Participants in
the generation, distribution and transmission sub-sectors of the
industry shall comply with all environmental laws, rules,
regulations and standards promulgated by the DENR including, in
appropriate cases, the establishment of an environmental guarantee
fund.

2
 RULE 29. BENEFITS TO HOST COMMUNITIES

Pursuant to Section 66 of the Act, the obligations of Generation Companies

and energy resource developers to communities hosting the Generation Facilities and/or
energy resource development projects as defined under

Chapter II, Section 289 to 294 of the Republic Act No. 7160 (Local

Government Code) and Section 5 (i) of Republic Act No.7638 (DOE Law) and their
implementing rules and regulations shall continue: Provided, That the obligations
mandated under Chapter II, Section 291 of Local Government Code, shall apply to
privately-owned corporations or entities utilizing the national wealth of the locality.

3
A. RULES FOR THE BENEFITS TO HOST COMMUNITIES PURSUANT
TO SECTION 5(i) OF REPUBLIC ACT 7638

Section 1. Scope of Application.

This Rule shall apply to Generation Facilities and/or energy resource

development projects located in all barangays, municipalities, cities,
provinces and regions.

Section 2. Obligation to Provide Financial Benefits.

The Generation Facilities and/or energy resource development facilities,
such as but not limited to the following, are required to provide the financial
benefits under Energy Regulations No. 1-94 (E.R. 1-94) of the DOE:

Section 3. Beneficiaries.

Direct benefits shall be provided to the host LGU, especially the community
and people affected while equitable preferential benefits shall be provided to
the host region.

4
 Section 4. Nature of Benefits Provided under E.R. 1-94. Section 7. Administration of Trust Accounts.
The Generation Company and/or energy resource developer shall set
The administration of EF, DLF, RWMHEEF shall be undertaken by
aside one centavo per kilowatt-hour (P 0.01/kWh) of the total
the DOE. All funds administered by NPC with regard to DLF and
electricity sales as financial benefit of the host communities of such
RWMHEEF shall be transferred to DOE for administration within one
Generation Facility
hundred twenty (120) days from the effectivity of these Rules.
Thereafter, all MOA entered into by DOE and NPC on the
Section 5. Establishment of Trust Accounts. establishment of trust accounts shall be amended to reflect transfer of
The DOE shall establish trust accounts specific for EF, DLF, RWMHEEF in responsibilities to NPC-successors, transferees and/or assignees or
the name of the DOE and the Generation Facilities or Generation Company IPPs.
and/or energy resource developer.

Section 6. Project Implementation and Approval. Section 8. Audit of Financial Benefits and Project Monitoring.
The DOE shall review and audit the source of fund, particularly on
The evaluation and approval of project proposals/work programs endorsed
the total electricity sales of the Generation Facility to determine the
by the host LGU and host region through the Generation Company and/or
energy resource developer shall strictly be guided by the following financial benefits due to the host LGUs and host regions.
procedures: Section 9. Other Provisions.
(a) The Generation Company and/or energy resource developer, through
its designated Community Relations Officer (COMREL) shall assist the Any provision in E.R. 1-94, its amendments and other related
host LGU and host region in the preparation of annual work programs/project
issuances and their amendments that are inconsistent with these
proposals qualified by the DOE to be implemented
Rules are hereby superseded, modified or amended accordingly.
in any given year.
(b) All work programs/project proposals for DLF and RWMHEEF shall be
implemented within one (1) year upon receipt of funds. Said work
programs/project proposals shall be implemented, supervised and
administered by the concerned LGU. 5
 B. RULES FOR THE BENEFITS TO HOST COMMUNITIES PURSUANT TO
CHAPTER II, SECTIONS 289 TO 294 OF THE LOCAL GOVERNMENT
CODE

Section 1. Scope of Application.

The LGUs hosting the national wealth shall have an equitable share in the
proceeds derived from the utilization and development of national wealth,
including sharing the same with the inhabitants by way of direct benefits.
Section 2. Amount of Share of Local Government Units.
Any government agency or government-owned or controlled corporation and
private corporation or entities engaged in the utilization and development of
the national wealth are required to provide share to the host LGUs, based
on the preceding fiscal year of the proceeds, based on the following formula,
whichever will produce a share higher for the LGU:
(a) One percent (1%) of the gross sales or receipts of the preceding
calendar year; or (b) Forty percent (40%) of the national wealth taxes, royalties, fees or
charges derived by the government agency or government owned and
controlled corporation and privately-owned corporation or entities.
6
 Section 4. Allocation of Shares.
The amount of share of the LGUs shall be distributed in the following
Section 3. Nature of Benefits. manner:

(a) For energy resource located in the province, share shall be appropriated
Eighty percent (80%) of the proceeds shall be applied as follows:
(i) Host barangay - 35%
solely to lower
(ii) Host component city/municipality - 45%
the cost of electricity either through subsidy or non-
(iii) Host province - 20%
subsidy scheme (b) For energy resource located in a highly urbanized or independent
or combination of both. component city, share shall be appropriated as follows:
(i) Non-subsidy scheme may take the form but not limited (i) Host barangay - 35%
to electrification, technical upgrading and rehabilitation of (ii) Host city - 65%
distribution lines to reduce electricity losses, use of energy (c) For energy resource located in two (2) or more provinces, or in two (2)
saving devices, and support of the infrastructure facilities or more municipalities/cities or two (2) or more barangays, their
servicing the needs of the public which can all redound to respective shares shall be appropriated on the basis of the following:
the reduction of the electricity rate of the area. (i) population - seventy percent (70%); and
(ii) Subsidy scheme will be directly utilized to subsidize (ii) land area- thirty percent (30%) Where the land area is the area of the
host barangays found within the technically delineated energy resource
cost of power used by the consumers. This may be applied
area and where the population refers to the population of host barangays
with or without ceiling or at graduated rates (per kWh per found wholly or partially within the technically delineated energy
level of consumption) in the following form which the resource.
host LGU may choose from.

7
 RULE 30. NPC OFFER OF TRANSITION SUPPLY CONTRACTS
Section 5. Monitoring.
(a) The Department of Interior and Local Government (DILG) shall
monitor the compliance of host LGUs. To assist in the monitoring of Section 1. Guiding Principle.
compliance, all host LGUs of energy projects are required to submit the
following: Pursuant to Section 67 of the Act, NPC shall, within six (6) months from the
(i) The scheme of electricity rate reduction adopted by the host effectivity of the Act, file with the ERC for its approval the transition supply
LGU (with proper documentation) based on the prescription in contracts (TSCs) duly negotiated with the Distribution Utilities.
the DILG-DOE Joint Circular 95-01 dated 31 October 1995 at the start of the
use of fund or upon the amendment of scheme by the respective LGU councils;
and Section 2. Scope of Application.
(ii) Summary of transactions thirty (30) days after end of each quarter.
The DILG shall furnish the DOE the above information within fifteen
This Rule shall apply to all Distribution Utilities.
(15) days from the date of the reporting period.
(b) The COA shall conduct yearly audit of the national wealth proceeds
Section 3. Terms and Conditions of the TSCs.
consistent with its responsibility to examine all accounts pertaining to uses of (a) The TSCs shall contain the terms and conditions of supply and a
funds and property owned or held in trust by the government or any of its corresponding schedule of rates, consistent with the provision of the
agencies as mandated under Section 2 of Presidential Decree No. 1445 of 1976.
Act, including adjustments and/or indexation formulas which shall apply during the
(c) In the event of violation or non-compliance with the provisions of the
term of such contracts.
DILG-DOE Joint Circulars 95-01 and 98-01, and other relevant issuances, the
DILG may, upon prior notice and hearing, order the project proponent the non- (b) The term of the TSCs shall not extend beyond one (1) year from the introduction
remittance of the royalty payment to the host LGU concerned pending of Open Access.
completion of the investigation of the concerned LGU if the project proponent (c) Such contracts shall be based on the projected demand of the Distribution Utilities
is a GOCC; or notify the DBM less any of their currently committed quantities under eligible contracts, if any, as
regarding such violation and order the non-release of the LGU shares defined in Section 33 of the Act.
if the project proponent is a private company. The unremitted funds (d) The total generation capacity of such signed TSCs shall not exceed the
shall be deposited in a government bank under escrow. level of NPC owned, controlled, or committed capacity as of the 8
effectivity of the Act.
(e) The TSCs shall be assignable to the NPC successor Generation Section 5. Recovery of Generation Component by Distribution
Companies. Utility.
(f) Notwithstanding the provisions of Section 25 of the Act, the rates
charged by a Distribution Utility for the generation component of the
Supply of Electricity in the Retail Rate shall, for the term of the TSCs,
Notwithstanding the provisions of Section 25 of the Act, the rates
charged by a Distribution Utility for the generation component of the
not exceed the TSC rates, as updated monthly.
Supply of Electricity in its Retail Rates shall, for the term of the TSC,
(g) The recovery of costs incurred by a Distribution Utility for any
not exceed the generation component of the TSC rates, as updated
generation component in excess of the TSC rates shall be disallowed monthly.
by the ERC except for eligible contracts and mandated purchases (a) Recovery of cost incurred by a Distribution Utility for any
from the WESM. generation component in excess of the TSC rates shall not be allowed,
(h) The limitation on the recovery of generation component costs by a except for eligible contracts approved by the ERC for the recovery of
Distribution Utility shall apply only to the equivalent quality and Stranded Contract Costs of Eligible Contracts of Distribution Utilities
quantity of electricity still available to the Distribution Utility from as provided in Section 33 of the Act and mandated purchases from the
NPC. WESM.
(b) The limitation on the recovery of generation component costs by a
Section 4. TSCs Approval and Monitoring. Distribution Utility shall apply only to the equivalent quality and
quantity of electricity still available to the Distribution Utility from
(a) Within six (6) months from the date of submission of the TSC by the NPC. For purposes of the determination of equivalent quality and
NPC, the ERC shall notify NPC of their approval of the rates contained quantity of electricity, the ERC shall consider, among others, firm and
therein. non-firm capacities, standards specified in the Grid and Distribution
(b) The ERC shall maintain a record of the contract terms and rates Codes, and other similar criteria as may be determined by the ERC.
offered by NPC.
(c) The ERC shall update monthly the rates using the appropriate
adjustment and/or indexation formula. 9
 RULE 31. DEBTS OF ELECTRIC COOPERATIVES (ECs)
Section 1. Guiding Principle.
Pursuant to Section 60 of the Act, all outstanding financial obligations of ECs to NEA and other
government agencies incurred for the purpose of financing the Rural Electrification Program shall be
assumed by the PSALM in accordance with the program approved by the President of the Philippines.

Section 2. Scope.
This Rule shall cover all outstanding financial obligations by the ECs to NEA and other government
agencies, incurred as of 26 June 2001 for the purpose of financing the Rural Electrification Program.
Financial obligation shall refer to the indebtedness, whether through regular or restructured loans,
liabilities, or amounts payable by the ECs to NEA and other government agencies as of 26 June 2001, to
finance their rural electrification projects, subject to the terms and conditions of duly-executed loan and
mortgage contracts between NEA and/or other government agencies, as creditors and the ECs, as
debtors/borrowers.

10
 Section 3. Condonation of Debts of ECs.
From the effectivity of the Act, all outstanding financial obligations of ECs to NEA
and other government agencies incurred for the purpose of financing the Rural
Electrification Program shall be assumed by the PSALM in accordance with the
program approved by the President of the Philippines within one (1) year from the
effectivity of the Act which shall be implemented and completed within three (3)
years from the effectivity of the Act.

Section 4. Assumption of EC Loans by PSALM.

PSALM shall assume all outstanding financial obligations of the ECs to NEA and
other government agencies incurred for the purpose of financing the Rural
Electrification Program; such outstanding financial obligations of the ECs
involving “Rural Electrification Loans” shall be determined in accordance with the
program approved by the President of the Philippines. Correspondingly, having
assumed the ECs’ obligations, the PSALM shall repay NEA and the other
government agencies, in accordance with a prescribed amortization schedule
agreed between the parties.

11
 Section 5. Transfer of Ownership or Control of Assets, Franchise or
Operation.
Within five (5) years from the completed Condonation of debt, any EC which shall transfer ownership or Control of its
assets, franchise or operations
shall repay PSALM the total debts, including accrued interest thereon: Provided, however, That the ECs may enter
into loan or financing agreements to allow flexibility in sourcing funds and improvement and management system for
needed rehabilitation and modernization programs: Provided, further, That it does not involve permanent transfer or
Control of the assets, franchise and operations: Provided, finally, That DOF and NEA shall jointly issue the necessary
guidelines to protect the member-
consumers of the ECs involved.

Section 6. Reduction in ECs’ Rates.

The ERC shall ensure a reduction in the rates of ECs commensurate with the resulting savings due to the
removal of the amortization payments of their loans and for this purpose, NEA shall assist the ECs in their
rate formulation consistent with the program approved by the President of the Philippines.

12
 Section 7. Reporting, Accounting and Audit Procedures.

NEA shall have the responsibility for the accounting of all outstanding financial obligations of
ECs from NEA that will be assumed by PSALM.
Thereafter, NEA shall render reports and submit the same to PSALM.

RULE 32. FISCAL PRUDENCE

(a) Pursuant to Section 64 of the Act, the creation of new positions and the levels
of or increases in salaries and all other emoluments and benefits of TRANSCO
and PSALM personnel shall be subject to the
approval of the President of the Philippines.
(b) Likewise, the compensation and all other emoluments and benefits of the
officials and members of the Board of TRANSCO and PSALM shall be subject
to the approval of the President of the Philippines.

12
RULES
33-37
 RULE 33: Separation Benefits

Separation Benefits of the Electric Power Industry Reform Act (EPIRA) of the Philippines is a
provision that provides for the separation benefits of employees who will be affected by the
restructuring and privatization of the National Power Corporation (NPC) or any of its
subsidiaries.
Under Rule 33, employees who will be separated from service due to the privatization of NPC
or any of its subsidiaries are entitled to separation pay and other benefits in accordance with
the provisions of Republic Act No. 6657 or the Comprehensive Agrarian Reform Law of 1988,
as amended, and other applicable laws.
The separation benefits include, but are not limited to, separation pay equivalent to at least
one month salary for every year of service, cash equivalent of unused vacation and sick leave
credits, retirement benefits, and other benefits provided by law and company policies.
 RULE 34: Education and Protection of End-users

Rule 34 of the Electric Power Industry Reform Act (EPIRA) of the Philippines is the provision
for the Education and Protection of End-Users. This rule is aimed at protecting the interests
of end-users or consumers of electricity by ensuring that they are provided with accurate and
timely information about their rights and responsibilities, as well as the services and rates
offered by electric power industry players.
Electric power industry players are also required to provide end-users with clear and
understandable bills and other documents related to their services.
Rule 34 of EPIRA is aimed at promoting transparency and accountability in the electric power
industry, and ensuring that end-users are empowered to make informed decisions about
their electricity consumption
 RULE 35: Fines and Penalties

Rule 35 of the Electric Power Industry Reform Act (EPIRA) of the Philippines provides for the fines and
penalties for violations of the provisions of EPIRA and its implementing rules and regulations.
Under Rule 35, any person or entity who violates the provisions of EPIRA and its implementing rules and
regulations may be subject to fines and penalties, which include the following:
• Administrative fines
• Suspension or revocation of licenses
• Imprisonment
• Other penalties
It is important to note that the fines and penalties provided for in Rule 35 are meant to deter violations
of EPIRA and its implementing rules and regulations, and to ensure that the electric power industry
operates in a fair and competitive manner for the benefit of consumers and stakeholders.
 RULE 36: Separability Clause
The separability clause provides that if any provision of EPIRA or its implementing rules and
regulations is declared unconstitutional or invalid, the other provisions shall not be affected
and shall continue to be valid and enforceable.
In other words, the invalidity or unconstitutionality of one provision of EPIRA or its
implementing rules and regulations shall not affect the validity and enforceability of the other
provisions. This ensures that the intent and purpose of EPIRA are preserved, even if some of its
provisions are found to be invalid or unconstitutional.
The separability clause is a common provision found in many laws and regulations to ensure
that if one part of the law is challenged, the rest of the law remains in effect, as long as it is still
possible to give effect to the intention of the lawmakers.
Overall, the separability clause in Rule 36 of EPIRA helps to ensure the continuity and
effectiveness of the electric power industry reform efforts in the Philippines, even if some
provisions of EPIRA or its implementing rules and regulations are challenged or invalidated in
the future.
 RULE 37: Effectivity
Under Rule 37, EPIRA shall take effect fifteen (15) days after its complete publication in at least
two (2) newspapers of general circulation. This means that the law becomes enforceable and
effective after the said 15-day period.
EPIRA was signed into law by former Philippine President Gloria Macapagal-Arroyo on June 8,
2001. It was published in the Official Gazette on June 11, 2001, and was subsequently
published in two newspapers of general circulation on June 11 and June 18, 2001.
Therefore, EPIRA became effective on July 3, 2001, which is fifteen (15) days after its complete
publication in at least two newspapers of general circulation, in accordance with the provision
of Rule 37.
Since its enactment, EPIRA has undergone several amendments and revisions to improve and
refine its provisions, particularly in promoting competition, transparency, and consumer
protection in the electric power industry.
Relation and connection of
EPIRA LAW to BSELT
Students.
 Relation and connection of EPIRA LAW to BSELT students.

The Electric Power Industry Reform Act of 2001 (EPIRA Law), officially
known as Republic Act No. 9136, is a significant piece of legislation in
the Philippines that restructured the country's electric power industry. Its
main goal was to promote competition, encourage private investment,
and ensure the efficient supply of electricity to end-users. While it might
not be directly related to electrical technology courses in terms of
technical content, it has important implications for the industry and can
indirectly impact how electrical technology is taught and applied. Here's
the connection and relevance:
 Relation and connection of EPIRA LAW to BSELT students.

Industry Context: The EPIRA Law changed the landscape of

the electric power industry in the Philippines by unbundling its
components—generation, transmission, and distribution—
previously controlled by a single entity. This change influenced
how power systems are designed, operated, and maintained.
In an electrical technology course, students might study these
changes to understand the broader context in which their skills
and knowledge will be applied.
 Relation and connection of EPIRA LAW to BSELT students.

Regulatory Framework: The law established regulations and

guidelines for the industry, including policies on pricing,
competition, and consumer protection. Students studying
electrical technology could benefit from understanding the
regulatory framework, which affects how electrical utilities
operate, how tariffs are determined, and how service quality is
maintained.
 Relation and connection of EPIRA LAW to BSELT students.

Generation Technology: With the introduction of

competition in power generation, different technologies and
companies entered the market. Electrical technology
students might find it useful to learn about the various power
generation technologies, such as fossil fuels, renewables,
and nuclear, and how they relate to the changing energy
landscape due to the EPIRA Law.
 Relation and connection of EPIRA LAW to BSELT students.

Transmission and Distribution: The separation of

transmission and distribution functions led to the
development of specialized companies for each aspect. This
impacts how electricity is transmitted over long distances
and distributed to end-users. Students can gain insight into
the challenges and technical aspects of these functions
through their coursework.
 Relation and connection of EPIRA LAW to BSELT students.

Market Dynamics: The EPIRA Law aimed to create a

competitive electricity market. Studying market dynamics,
supply and demand, and pricing mechanisms could be
relevant for electrical technology students who might work in
roles where understanding market forces is essential.
Relation and connection of EPIRA LAW to BSELT students.

Renewable Energy Integration: The law encouraged

the development and integration of renewable energy
sources. Electrical technology students might explore
topics related to solar, wind, hydro, and other
renewable technologies, as these sources play a
significant role in modern power systems.
 Relation and connection of EPIRA LAW to BSELT students.

Career Opportunities: The restructuring of the industry

brought about new career opportunities in various sectors,
including power generation, transmission, distribution,
regulatory bodies, and more. An understanding of the EPIRA
Law and its effects could help students identify potential
career paths.
Relation and connection of EPIRA LAW to BSELT students.

Policy and Sustainability: Learning about the

EPIRA Law could also spark discussions on energy
policy, sustainability, and the role of government in
shaping the energy sector. This broader perspective
can enrich students' understanding of the real-world
implications of their work.
 Relation and connection of EPIRA LAW to BSELT students.

In summary, while the EPIRA Law itself might not be a core

technical topic in an electrical technology course, it has far-
reaching effects on the industry, its structure, and its
operations. Understanding these effects can provide
students with a more holistic view of their field and how their
skills fit into the broader energy landscape.
QUIZ
1-20
 QUIZ

1.) What does EPIRA stand for?

2.) In which year was the EPIRA law enacted?
3.) What was the main objective of the EPIRA law?
4.)Which components of the electric power industry did the EPIRA law unbundle?
5.)What function of the electric power industry involves the long-distance transport of
electricity?
6.)Which government agency was established by the EPIRA law to oversee and regulate the
electric power industry?
7.) True or False: The EPIRA law aimed to increase the role of government-controlled entities
in the power industry.
8.) Which sector of the power industry involves the final delivery of electricity to consumers?
9.) What did the EPIRA law encourage in terms of power generation?
10.) Which market concept did the EPIRA law introduce to promote competition in the power
industry?
 QUIZ

11.) What type of companies were established to handle the transmission of electricity after
the implementation of the EPIRA law?
12.) True or False: The EPIRA law allowed for the privatization of government-owned power
assets.
13.) What is the primary role of the Energy Regulatory Commission (ERC) established by the
EPIRA law?
14.) How did the EPIRA law impact consumer choice in the power industry?
15.) What environmental goal was associated with the implementation of the EPIRA law?
16.) Which sector of the power industry involves the actual production of electricity from
various sources?
17.) True or False: The EPIRA law aimed to centralize control of the entire power industry
under a single entity.
18.) What is the purpose of the Feed-in Tariff (FiT) under the EPIRA law?
19.) How did the EPIRA law affect the role of the National Power Corporation (Napocor)?
20.) What concept did the EPIRA law introduce to ensure that electricity prices are just and
reasonable?