ERC responds to IPP concerns on the mandated public offering

The Energy Regulatory Commission (ERC), on its own initiative, promulgated the implementing rules on public offering requirement as per Resolution No. 18, Series of 2005. Recent clamor of generation companies (GCs) (for ERC to issue guidelines on how this requirement shall be complied with) necessitated the ERC to seek opinion from the Joint Congressional Power Commission (JCPC), particularly on the public offering requirement of not less than fifteen percent (15%) of their common shares of stocks under Section 43 (t) of Republic Act No. 9136.

“The ERC deemed it necessary to seek guidance from the JCPC considering the complexity of the issues which require an examination of the legislative intent behind the imposition of said requirement,” ERC Chairman and CEO Rodolfo B. Albano, Jr. said. “Further study on the matter and proper coordination with the relevant government offices, such as the Philippine Stock Exchange (PSE) and the Securities and Exchange Commission (SEC) are also required before coming up with the guidelines,” Chairman Albano added.

In its 18 July 2006 letter to the JCPC, the ERC conveyed the concerns of the electric industry stakeholders, particularly: (1) Whether or not the five-year period of compliance under the law is mandatory; (2) Whether or not the public offering requirement can be complied with only by listing with the PSE; (3) Whether or not the GCs under a Build Operate and Transfer (BOT) scheme are in compliance with the public offering requirement; and (4) Whether or not GCs organized as partnership are covered by the public offering requirement notwithstanding that they have no common shares of stocks to sell.

“This is still work in progress involving novel legal questions. We ask all concerned to bear with us. Rest assured that the ERC, in consultation with the JCPC, will soon address these issues,” Chairman Albano concluded.