MANILA, Philippines - Power generation companies and distribution utilities (DUs) are now required to list on the local stock market as the Energy Regulatory Commission (ERC) has approved the rules on the public offering of at least 15 percent of their shares to the public.
The ERC said the new rules are consistent with the mandate of the Electric Power Industry Reform Act (EPIRA) and the rules of the Philippine Stock Exchange (PSE) and the Securities and Exchange Commission (SEC). These will take effect 15 days after publication in newspapers of general circulation.
The ERC, the power sector regulator, has been trying to impose these rules but has been encountering opposition from industry players.
The commission said these rules aim to enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors.
According to the ERC, this move will also protect public interest as it is affected by rates and services of the DUs and other providers of electric power.
Moreso, these rules will provide the public offering process and requirements of the applicable provisions of Executive Order 226, otherwise known as the Omnibus Investment Code of 1987, Republic Act 8799 or the Securities Regulation Code, the PSE’s rules and regulations, and all other applicable laws, rules and regulations.
The ERC cited that the EPIRA provides that it is the policy of the government to enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors.
The ERC said these rules apply to generation companies; DUs; electric cooperatives; privately-owned DUs; and local government unit (LGU) owned-and-operated distribution systems.
It will also be applicable to generation companies’ and DUs’ respective holding companies.
The new rules said “if the holding company is already listed with the PSE, the generation company or the DU need not comply with the requirement since the listing of the holding company is deemed already as compliance with the EPIRA. This does not require the holding company to undergo public offering.”
These new rules will not apply to entities engaged in electric generation and distribution business as partnerships which do not list partnership interests.