ERC tells gencos, DUs: Comply with Epira public offering clause

by Lenie LecturaJuly 6, 2016

from Business Mirror

THE Energy Regulatory Commission (ERC) is mandating all power-generation companies (gencos) and distribution utilities (DUs) that are not publicly listed to sell a portion of their shares by June next year.

The ERC said this in pursuant to Section 43 of the Electric Power Industry Reform Act (Epira), which “provides that it is the policy of the State to enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors.”

Section 43 of the Epira and Rule 3 of its implementing rules and regulations (IRR) state that the ERC shall perform such other regulatory functions in order to ensure the successful restructuring and modernization of the power industry.

The ERC said gencos and DUs, or their respective holding companies that are already listed in the stock exchange, are deemed in compliance.

ERC Resolution 18, Series of 2016, extends for a year, or until June 29, 2017, a 2011 resolution that requires gencos and DUs to offer and sell to the public a portion of not less than 15 percent of their common shares of stocks.

“The commission, in order to afford all affected parties the opportunity to comply with the requirement, has resolved, in lieu of suspending the effectivity of Resolution 9, Series of 2011, to extend for another one year the compliance period in said resolution pending final resolution of the petition,” the new ERC resolution stated.

The ERC, in August 2005, promulgated Resolution 18 directing the gencos and DUs, which are not publicly listed in the stock exchange, to offer and sell to the public a portion of not less than 15 percent of their common shares of stocks. They are also required to submit within 30 days from public offering reports to the ERC, on the extent of their compliance together with their certifications from the exchange that show the number of shares listed, names of shareholders presently owning said shares and other relevant information.

A year after, the ERC, through Resolution 21, suspended Resolution 18, pending the conduct and termination of public hearings.

In May 2011 Resolution 9 was issued. This resolution provides a period of five years from its effectivity for all gencos and DUs to offer and sell to the public a portion of not less than 15 percent of their common shares of stocks. This became effective on June 29, 2011. The five-year period will end on June 29, 2016.

“Now, therefore, the commission hereby resolves, as it is hereby resolved, to extend for a period of one year, or until June 29,2017, for all gencos and Dus to offer and sell to the public a portion of not less than 15 percent of their common shares of stocks,” the five-man commission ordered.