ERC Presses Power Firms to Go Public

The Energy Regulatory Commission (ERC) is stepping up efforts to compel power companies to comply with a two-decade-old rule requiring them to list at least 15% of their shares on the stock market, as mandated under the Electric Power Industry Reform Act of 2001 (EPIRA).

Only 37 out of 251 generation firms, or just 15%, have met the public listing requirement, according to ERC Chairperson Monalisa Dimalanta.

“We have been trying to enforce it, but over the last 20 years, it has been difficult because you cannot force the market to buy,” Dimalanta said.

To address low compliance, the ERC is partnering with the Securities and Exchange Commission (SEC) through a new initiative called SEC POWERS, aimed at simplifying the registration process and expanding access to capital markets for power firms.

The initiative comes as the Philippines pushes to modernize its energy infrastructure and expand private sector investment in line with the Department of Energy’s (DOE) long-term energy roadmap.

“With a simplified registration statement, we make it easier for power generators and distribution utilities to offer their shares to the public,” said SEC Chairman Emilio Aquino.

Under EPIRA, which restructured the power sector to encourage competition and private investment, generation companies and distribution utilities must publicly offer at least 15% of their outstanding shares.

Non-compliance puts firms at risk of losing their Certificate of Compliance (CoC), which is required to operate legally in the electricity market.

However, Dimalanta acknowledged that strict enforcement is difficult because revoking certificates could lead to massive power disruptions.

“If we revoke all their certificates, we risk losing 14 gigawatts from the grid,” she warned, noting that such a move could destabilize the country’s already strained energy supply.

The ERC said the SEC POWERS program is designed to lower costs and simplify the compliance process, particularly for smaller firms that find listing too complex or expensive.

Dimalanta said the ERC is optimistic that at least 100 more companies will comply within the next year, though the pace of reform will depend on how attractive capital markets become for these firms.

The EPIRA law was enacted in June 2001 to promote reliable and competitively priced electricity by restructuring the power sector and encouraging greater public participation.

Despite the promise of liberalization, critics have long pointed out gaps in enforcement and transparency, including the failure of many firms to meet listing obligations.

The push to enforce EPIRA’s listing requirement aligns with the government’s broader agenda to enhance market transparency and improve public accountability in the power sector, especially as energy demand grows alongside the country’s expanding economy.

The Philippines’ peak electricity demand is projected to hit 54,654 megawatts by 2040, according to the DOE’s Philippine Energy Plan.

For now, ERC officials are banking on SEC POWERS to drive compliance without compromising grid reliability.

“We are confident this collaboration with the SEC will finally bridge the gap between policy and implementation,” Dimalanta said.