The Energy Regulatory Commission asked the Joint Congressional Energy Commission to suspend the public offering requirement for generation firms owning and operating renewable energy facilities and those not part of a portfolio of generation companies under a parent company.
ERC chairperson Monalisa Dimalanta said 51 percent or 118 of 143 generation companies failed to comply with the requirement. She said of the 118 that were not-compliant, 65 are RE companies, including 24 small firms.
“This is just our repeated plea to the JCEC. We have a pending request on this matter involving the public offer requirement or the public listing requirement that’s in Section 43 of EPIRA,” she said.
Secition 43 of the Electric Power Industry Reform Act of 2001 requires generation companies to publicly offer or sell not less than 15 percent of their common shares of stock.
“When EPIRA was passed, the RE act was not yet enacted. The RE Act was enacted in 2008, so EPIRA could not have contemplated the emergence of small RE companies with 1-MW solar plant for example,” Dimalanta said.
She expressed hope the committee would consider the suspension of the requirement for small RE facilities and those stand-alone or single-asset owners.
Dimalanta said the permanent solution is an amendment to the EPIRA law. She said if this could be done quickly, “we hope that the committee can consider the suspension.”
The Securities and Exchange Commission is set to issue guidelines to encourage at least 150 power generators and distributors to comply with the required IPO.
These firms are required to hold stock offering five years from the effectively of the law or as early as 2006. However, several energy companies had delayed compliance with the IPO requirement, citing volatile market conditions.
The ERC issued a resolution in 2019 clarifying the mode of public offering to comply with the EPIRA mandate for gencos and distribution firms.
Under Resolution 4 Series of 2019, the ERC listed the modes offer of common shares of stock for sale to the public that are deemed as public offering.
These include the listing of the generation companies and distribution utilities in the Philippine Stock Exchange and listing of the shares of stock in any accredited stock exchange or direct offer of a portion of registered enterprises’ capital stock to the public and/or their employees, when deemed feasible and desirable by the Board of Investments.
The ERC, however, said the offer of the common shares of stock through an employee stock option plan or any other plan analogous should not be deemed as public offering as the offer is limited only to the employees of the generation companies and the distribution utilities.
It said generation firms under the Build Operate and Transfer scheme should not also be deemed in compliance with the public offering requirement given that the privatization provisions of the EPIRA has the effect of transferring the ownership of the privatized BOT projects to the new owners.