Law Summary
Regulatory Functions of the Energy Regulatory Commission (ERC)
- Under Section 43(t) of RA 9136, the ERC is mandated to perform regulatory functions necessary for successful industry restructuring and modernization.
- ERC must set rules for generation companies (GCs) and distribution utilities (DUs) not publicly listed to offer and sell at least 15% of common shares to the public.
- Companies already listed in the Philippine Stock Exchange (PSE) are deemed compliant.
- Implementation deadline for existing companies is within five years from effectivity date of the Act (June 26, 2001).
- New companies must comply within five years from issuance of their Certificate of Compliance.
Echoing of Regulatory Functions in Implementing Rules and Regulations (IRR)
- Rule 3, Section 4(m) of the IRR reiterates ERC’s role to enforce public offering requirements.
- Generation and distribution companies, not publicly listed, must offer at least 15% of common shares to the public.
- Exempts companies or holding firms already listed in the PSE.
- Deadlines remain consistent with the original law—from effectivity or issuance of Certificate of Compliance depending on company status.
Mandatory Public Offering Requirements
- All Generation Companies (GCs) and Distribution Utilities (DUs) not listed in the PSE are required to sell a minimum of 15% of their common shares to the public.
- Deadlines set as follows:
- Existing companies and their holding firms: within five years from June 26, 2001.
- New GCs and holding companies: within five years from issuance of the Certificate of Compliance.
Governance of Public Offering Process
- Public offerings must comply with:
- Omnibus Investment Code of 1987 (as amended) and its Implementing Rules and Regulations.
- Securities Regulation Code (RA 8799).
- Rules and regulations of the Philippine Stock Exchange.
- Other applicable laws and regulations.
Reporting and Compliance Monitoring
- Covered GCs and DUs must submit reports within thirty (30) days after public offering.
- Reports to include:
- Extent of compliance with public offering requirements.
- Certifications from the PSE confirming number of shares listed, names of shareholders, and other relevant data.
- This reporting facilitates ERC’s monitoring and verification.
Immediate Effectivity
- The ERC Resolution took effect immediately upon adoption on August 17, 2005.
This resolution operationalizes Section 43(t) of RA 9136 and relevant provisions of the IRR, ensuring increased public ownership and capital infusion into the electric power industry through mandated public offerings by non-listed generation and distribution companies.