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ERC issues new rules for power firms to go public
Power generation firms and distribution utilities have been required to offer at least 15 percent of their common shares of stock to the public, according to rules the Energy Regulatory Commission (ERC) posted on its website Thursday. The ERC said the new rules, approved last May 23, but still for publication in a newspaper of general circulation, “will enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors." Another gain from the policy, the ERC cites is the protection of public interest “as it is affected by rates and services" of distribution utilities and other providers of electric power. http://www.gmanews.tv/story/69530//short-circuited-epira-power-rates-up-100-for-filipino-households Existing power firms have five years to implement the public offering of their common shares while the deadline for new companies is five years from the issuance of their respective certificates of compliance. http://www.gmanews.tv/story/171409/business/san-miguel-energy-corp-to-launch-ipo-in-3-years EPIRA enjoins firms to go public The Electric Power Industry Reform Act (EPIRA) of 2001 required electric power generators and distributors to go public. In August 2005 the ERC tried to implement this provision of the law by issuing a previous set of rules. However, those rules were suspended in May 2006 “pending the conduct and termination of public hearings." The ERC also sought the opinion of the Joint Congressional Power Commission, the body tasked to oversee the implementation of the EPIRA. It was only on Sept. 7, 2010 when the ERC solicited comments from interested parties. There was a public hearing last Oct. 4, five years after the rules on going public were suspended. Then on Dec. 15, the ERC issued yet another call for comments. http://www.gmanews.tv/story/200661/business/erc-readies-rules-on-15-listing-of-power-utilites-shares Salient features The ERC said the rules on going public apply to generation companies, electric cooperatives with common shares, privately-owned distribution utilities, and distribution systems owned and operated by local government units. Exempted are ‘self-generation facilities’ or power producers whose electricity output is for their own needs. The rules also do not apply to generation companies, distributors and their holding firms already listed in the Philippine Stock Exchange. Electric cooperatives that have no common shares of stock are likewise exempted. The rules also do not cover entities engaged in electric generation and distribution business as partnerships which do not list partnership interests. Power firms required to go public can do so in three ways:
- Listing in the PSE or in any accredited stock exchange;
- Direct offer to the public and/or employees of a portion of the common stock of ‘registered enterprises’; and
- Employee Stock Option Plan (ESOP) but only when the generation company or distribution utility is a registered enterprise under the Omnibus Investment Code.
