Power firms get more time to comply with public offering requirement

THE Energy Regulatory Commission (ERC) has revised its rules on the public offering requirement (POR) to give power firms more time to comply, by starting the five-year compliance period only after they meet the prerequisites for a public offering instead of from the issuance of their operating license.

Under Section 43 of Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA), unlisted generation companies and distribution utilities are required to offer and sell to the public at least 15% of their common shares.

Previously, the five-year compliance period was counted from the date the ERC issued a certificate of compliance (CoC), which authorizes a company to operate a power plant or related facility.

The amendment retains the five-year window but adjusts the start of the countdown to give companies sufficient time to complete the prerequisites for a share offering.

ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan said the revision addresses concerns raised by smaller generation firms that found it difficult to meet the requirement within the previous timeframe.

“Counting the compliance period only after a company is ready to conduct a public offering levels the playing field for smaller players,” he said during a briefing on Monday.

He said that larger power companies can easily comply by listing their shares on the Philippine Stock Exchange (PSE), while smaller generators often need additional time to prepare the necessary financial and operational requirements.

The ERC said the amendment also aligns its rules with current PSE listing standards to ensure that energy companies follow a consistent regulatory framework when they decide to go public.

Data from the commission show that only 40 of 264 generation companies have complied with the POR, while 131 remain non-compliant.

The rest are exempt from the requirement. Non-compliant firms represent nearly 14,000 megawatts of generation capacity.

Mr. Juan said the update is intended to promote broader ownership and greater transparency in the power sector by encouraging energy companies to open their shares to the investing public.

“When energy companies offer shares to the public, it allows Filipinos to invest directly in the industry that powers our nation,” he said. — Sheldeen Joy Talavera