Republic of the Philippines
ENERGY REGULATORY COMMISSIO!
San Miguel Avenue, Pasig City
14
RESOLUTION NO. , Series of 2018
A RESOLUTION EXTENDING THE COMPLIANCE PERIOD
UNDER RESOLUTION NO. 09, SERIES OF 2011, FOR
GENERATION COMPANIES AND DISTRIBUTION
UTILITIES WHICH ARE NOT PUBLICLY LISTED TO
OFFER AND SELL TO THE PUBLIC A PORTION OF NOT
LESS THAN FIFTEEN PERCENT (15%) OF THEIR COMMON.
SHARES OF STOCK, PURSUANT TO SECTION 43(t) OF
REPUBLIC ACT 9136 AND RULE 3, SECTION 4 (nm) OF ITS
IMPLEMENTING RULES AND REGULATIONS (RR)
WHEREAS, Section 2 (d) of Republic Act No. 9136, otherwise
known as the Electric Power Industry Reform Act of 2001 (EPIRA)
provides that it is the policy of the State to enhance the inflow of
‘private capital and broaden the ownership base of the power
generation, transmission and distribution sectors;
WHEREAS, Section 43 (t) of the EPIRA and Rule 3, Section 4
(m) of its IRR provide that the Energy Regulatory Commission (the
“Commission” or “ERC”) shall perform such’ other regulatory
functions as are appropriate and necessary in order to ensure the
successful restructuring and’ modernization of the electric power
industry, such as, but not limited to, the rules and guidelines under
which generation companies and DUS which are not publicly listed
shall offer and sell to the public a portion of not less than fifteen
percent (15%) of their common shares of stock: Provided, however,
That generation companies, DUs or their respective holding
companies that are already listed in the PSE are deemed in
compliance. For existing companies, such public offering shall be
implemented not later than five (5) years from the effectivity of this
Act. New companies shall implement their respective public offerings
not later than five (5) years from the certificate of
compliance; ma at eines
WHEREAS, on August 17, 2005, the Commission
promulgated Resolution No. 18, Series of 2005, entitled
“Implementing Section 43 (t) of Republic Act No. 9136 and
Rule 3, Section 4 (m) of the Implementing Rules and
Regulations (IRR) of the said Act” directing the generation
companies and DUs which are not publicly listed in the PSE, to offerResolution No. , Series of 2018
A RESOLUTION EXTENDING THE COMPLIANCE PERIOD UNDER RESOLUTION
NO. 09, SERSES OF 2011, FOR GENERATION COMPANIES AND DISTRIBUTION
UTILITIES WHICH ARE NOT PUBLICLY LISTED TO OFFER AND SELL TO THE,
PUBLIC A PORTION OF NOT LESS THAN FIFTEEN PERCENT (15%) OF THEIR
COMMON SHARES OF STOCK, PURSUANT TO SECTION 43(t) OF REPUBLIC ACT
9136 AND RULE 3, SECTION 4 (m) OF ITS IMPLEMENTING RULES AND
REGULATIONS (IRR)
Page 2.0f6
and sell to the public a portion of not less than fifteen percent (15%)
of their common shares of stocks, and to submit, within thirty (30)
days from public offering, reports to the Commission on the extent of
their compliance therewith together with Certifications from the PSE
showing the number of shares listed, names of the shareholders
presently owning said shares and other relevant information for
monitoring and verification;
WHEREAS, on May 10, 2006, Resolution No. 21, Series
of 2006, entitled “A Resolution Suspending the Effectivity
and Implementation of Certain Rules Issued by the Energy
Regulatory Commission” was promulgated whereby the
Commission suspended the effectivity and implementation of
Resolution No. 18, Series of 2005, pending the conduct and
termination of public hearings thereon;
WHEREAS, after publishing notices to solicit comments from
interested parties and. after holding a public consultation, the
Commission, considering all the comments received from various
interested parties, formulated the Rules on public offering and on
May 23, 2011, issued Resolution No. 9, Series of 2011, entitled
“A Resolution Adopting the Rules Requiring Generation
Companies and Distribution Utilities which are Not
Publicly Listed to Offer and Sell to the Public a Portion of
Not Less Than Fifteen Percent (15%) of their Common
Shares of Stock Pursuant to Section 43 (t) of Republic Act
No. 9136 and Rule 3, Section 4 (m) of Its Implementing
Rules and Regulations (IRR)”;
WHEREAS, Section 2.3 of Article II of Resolution No. 9,
Series of 2011, provided as follows:
ARTICLE IT
PUBLIC OFFERING PROVISIONS
XxX
2.3 Modes of Public Offering
The EPIRA mandates that generation companies
and DUs which are not publicly listed shall offer and sellResolution No. _, Series of 2018
A RESOLUTION EXTENDING THE COMPLIANCE PERIOD UNDER RESOLUTION
NO. 09, SERIES OF 2011, FOR GENERATION COMPANIES AND DISTRIBUTION
UTILITIES WHICH ARE NOT PUBLICLY LISTED TO OFFER AND SELL TO THE
PUBLIC A PORTION OF NOT LESS THAN FIFTEEN PERCENT (15%) OF THEIR
COMMON SHARES OF STOCK, PURSUANT TO SECTION 43(t) OF REPUBLIC ACT
9136 AND RULE 3, SECTION 4 (m) OF ITS IMPLEMENTING RULES AND
REGULATIONS (IRR)
Page 3 of 6
to the public a portion of not less than fifteen percent
(15%) of their common shares of stocks. Any offer of
common shares of stocks for sale to the public through
any of the following modes shall be deemed as public
offering:
a. Listing of the generation companies and DUs
in the PSE; and
b. __ Listing of the shares of stock in any accredited
stock exchange or direct offer of a portion of
registered enterprises’ capital stock to the
public and/or their employees, when deemed
feasible and desirable by the Board of
Investments.
However, the offer of the common shares of stock
through an Employee Stock Option Plan (ESOP) or any
other plan analogous thereto shall not be deemed as
public offering since the offer is limited only to the
employees of the generation companies and DUs, as
against the general public to whom the offer is to be
made. Said offer and sale of shares of stock, through
ESOP, is considered as public offering only when the
generation company or DU is a “registered enterprise”
under the Omnibus Investment Code.
Generation companies under the Build Operate and
Transfer (BOT) scheme shall not be deemed in
compliance with the public offering requirement given
that the privatization provisions of the EPIRA has the
effect of transferring the ownership of the privatized BOT
projects to the new owners. Thus, the new owners shall
comply with the public offering requirement.
‘WHEREAS, the Private Electric Power Operators Association
(PEPOA) sought clarification from the Commission, through a letter
filed on July 4, 2011, whether registration of common shares at the
Securities and Exchange Commission (SEC) was inadvertently
omitted as a mode of public offering;Resolution No. Series of 2018
A RESOLUTION EXTENDING THE COMPLIANCE PERIOD UNDER RESOLUTION
NO. 09, ES OF 2011, FOR GENERATION COMPANIES AND DISTRIBUTION
Uritities WHICH ARE NOT PUBLICLY LISTED TO OFFER AND SELL TO THE
PUBLIC A PORTION OF NOT LESS THAN FIFTEEN PERCENT (15%) OF THEIR
COMMON SHARES OF STOCK, PURSUANT TO SECTION 43(t) OF REPUBLIC ACT
9336 AND RULE 3, SECTION 4 (m) OF ITS IMPLEMENTING RULES AND
REGULATIONS (IRR)
Page 4 of 6
WHEREAS, on October 13, 2015, a Petition was filed before
the Commission praying that the registration in the SEC (under
Section 8 of Republic Act No. 8799 or the Securities Regulation
Code) be included among the modes of public offering allowed by the
Commission, and to hold in abeyance the implementation of ERC
Resolution No. 9, Series of 2011, pending the final resolution on the
Petition;
WHEREAS, on February 24, 2016, a letter was filed with the
Commission seeking confirmation whether the implementation of
ERC Resolution No. 9, Series of 2011, will be held in abeyance
pending final resolution of the Petition;
WHEREAS, the Commission, in order to afford all affected
parties the opportunity to comply with the requirement, has resolved,
in lieu of suspending the effectivity of Resolution No. 9, Series of
2011, to extend for one (1)-year the compliance period provided in
said Resolution pending final resolution on the Petition;
WHEREAS, on March 8, 2016, Resolution No. 18, Series
of 2016, entitled “A Resolution Extending the Compliance
Period Under Resolution No. 09, Series of 2011, for
Generation Companies and Distribution Utilities which
are Not Publicly Listed to Offer and Sell to the Public a
Portion of Not Less Than Fifteen Percent (15%) of their
Common Shares of Stock, Pursuant to Section 43 (0 of
Republic Act No. 9136 and Rule 3, Section 4 (m) of its
Implementing Rules and Regulations (IRR)” was
promulgated whereby the Commission extended the period of
compliance, which was set to end on June 29, 2016, for a period of
one (1) year, or until June 29, 2017;
WHEREAS, the Commission while in the process of
completing the required public consultation on the petition, a
fortuitous event occurred as Martial Law was declared for the whole
Mindanao Island thereby interrupting the conduct of hearings
prescribed under the ERC Rules of Practice;
WHEREAS, on June 1, 2017, Petitioners under ERC Case No.
2015-006 RM filed an Omnibus Motion praying among others thatResolution No. , Series of 2018
A RESOLUTION EXTENDING THE COMPLIANCE PERIOD UNDER RESOLUTION
NO. 09, SERIES OF 2011, FOR GENERATION COMPANIES AND DISTRIBUTION
UTILITIES WHICH ARE NOT PUBLICLY LISTED TO OFFER AND SELL TO THE
PUBLIC A PORTION OF NOT LESS THAN FIFTEEN PERCENT (15%) OF THEIR
COMMON SHARES OF STOCK, PURSUANT TO SECTION 43(t) OF REPUBLIC ACT
9136 AND RULE 3, SECTION 4 (m) OF ITS IMPLEMENTING RULES AND
REGULATIONS (RR)
Page 5 of 6
the deadline for compliance of ERC Resolution No. 9, Series of 2011
be extended further for another year from June 29, 2017, or until
June 29, 2018 or that the implementation of said ERC resolution be
suspended until the final resolution of the subject petition;
WHEREAS, on June 27, 2017, Resolution No. 10, Series
of 2017 entitled “A Resolution Extending the Compliance
Period Under Resolution No. 09, Series of 2011, for
Generation Companies and Distribution utilities which are
Not Publicly Listed to Offer and Sell to the Public a Portion
of Not Less Than Fifteen Percent (15%) of their Common
Shares of Stock, Pursuant to Section 43 (t) of Republic Act
No. 9136 and Rule 3, Section 4 (m) of its Implementing
Rules and Regulations (IRR)” was promulgated whereby the
Commission extended the period of compliance for one (1) year or
until the resolution of the petition whichever is earlier;
WHEREAS, Public Consultations were conducted on the
following dates:
22 May 201 Pasig City Luzon Stakeholders
25 May 2017 Cebu City Visayas Stakeholders _
11 August 2017 Davao City Mindanao Stakeholders
04 May 2018 Pasig City Comments of Mr. Borja
WHEREAS, the Commission is still in the process of
evaluating the petition in ERC Case No. 2015-006 RM;
WHEREAS, the Commission sought clarification from SEC
dated 13 June 2014 on the issue of allowed Modes of Public Offering
under existing laws and rules in relation to Section 43 (t) of RA 9136
(EPIRA) on Public Offering. In a letter dated 19 June 2018, the
Commission again sought for updated opinion on the same subject
matter;
WHEREAS, the Commission is awaiting the response of SEC;Resolution No. __, Series of 2018
A RESOLUTION EXTENDING THE COMPLIANCE PERIOD UNDER RESOLUTION
NO. 09, SERIES OF 2011, FOR GENERATION COMPANIES AND DISTRIBUTION
UTILITIES WHICH ARE NOT PUBLICLY LISTED TO OFFER AND SELL TO THE
PUBLIC A PORTION OF NOT LESS THAN FIFTEEN PERCENT (15%) OF THEIR
COMMON SHARES OF STOCK, PURSUANT TO SECTION 43(t) OF REPUBLIC ACT
9136 AND RULE 3, SECTION 4 (m) OF ITS IMPLEMENTING RULES AND
REGULATIONS (IRR)
Page 6 of 6
NOW THEREFORE, the Commission, after thorough and
due deliberation, RESOLVED, to EXTEND for a period of six
(6) months or until 29 December 2018, for generation companies
and DUs to offer and sell to the public a portion of not less than
fifteen percent (15%) of their common shares of stocks.
This Resolution shall take effect following its publication in a
newspaper of general circulation in the Philippines.
Let copies of this Resolution be furnished the University of the
Philippines Law Center-Office of the National Administrative
Register (UPLC-ONAR), the Department of Energy, and Generation
Companies and Distribution Utilities.
Pasig City, June 21, 2018.
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GLORIA VICTORPYC. YAP-TARUC
Commissioner Commissioner
JOSEFINA PA‘ A. MAGPALE-ASIRIT ERONIMO D. STA. ANA
O issioner Commissioner
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