Regulatory Framework and Franchise Considerations
The approval of the Energy Regulatory Commission (ERC) of the revised implementing rules governing transmission development marks a significant policy shift in the Philippine power sector. The new framework permits other entities besides the National Grid Corporation of the Philippines (NGCP) to fund and construct specific transmission assets that are needed to connect new generation capacity to the grid.[1] Allowing such broader participation in the transmission-related infrastructure aims to address bottlenecks in the grid expansion to further facilitate the additional generation capacity to the country’s power system.
This regulatory development is particularly noteworthy because Republic Act No. 9511, otherwise known as the National Grid Corporation of the Philippines (NGCP) Franchise Act, grants NGCP a 50 year franchise to operate, manage, and maintain the nationwide transmission system which includes the transmission, substations, and other related facilities. Under the franchise, it is the NGCP’s responsibility to ensure that there is an orderly and proper operation of the transmission lines and grid facilities throughout the country. While there is a grant of 50 year franchise, the revised rules still needs to follow the previous NGCP’s statutory mandate in order to maintain the integrity and reliability of the transmission network. [2]
Under the new framework, qualified generation companies may undertake Department of Energy-identified Associated Transmission Projects (ATPs), while the National Transmission Corporation (TransCo) may directly implement Priority Projects or engage government agencies, government-owned and controlled corporations, or qualified private entities to carry out construction on its behalf. These projects generally consists of transmission lines, substations, switchyards, and other facilities needed to accommodate additional power generation capacity.[3] With this rules would promote a more coordinated approach to infrastructure development to ensure that the newly constructed power plants can distribute electricity without unnecessary delays.
Energy Security and Consumer Protection
The revised framework is a response to a persistent issue present in the Philippine energy sector which is the mismatch between the development of power generation facilities and the availability of the transmission infrastructure necessary to deliver electricity to end-users. In many instances, while there is a project completed and capable of producing electricity, their full operational capacity cannot be utilized due to the delays in the construction of the transmission facilities. By allowing more entities to participate in the development of the transmission assets, the new rules aim to reduce these bottlenecks to ensure the orderly supply of the country’s energy system.
Ultimately, the new rules show a policy shift from a transmission-network-provider-centered model to a more coordinated approach that involves the ERC, Department of Energy (DOE), TransCo, NGCP, and generation companies. If this is properly implemented, the policy could accelerate the power project integration and strengthen energy security. The ABO law firm is well-positioned to assists individuals and corporations in navigating these developments through its legal and regulatory services. If effectively implemented, the revised rules may serve as a catalyst for the proper implementation and protection of the national transmission framework in the Philippine industries, thereby significantly allowing faster construction to the country, without compromising the grid reliability or impose unreasonable costs on the consumers.
Written by: Atty. Christine C. Tiamzon
[1] Daily Tribune, “NGCP studying move to open grid projects to third parties” (19 June 2026); Daily Tribune, “ERC opens transmission projects to non-NGCP builders” (19 June 2026).
[2] An Act Granting the National Grid Corporation of the Philippines a Franchise to Engage in the Business of Conveying or Transmitting Electricity, Republic Act No. 9511, secs. 1-2 (01 December 2008).
[3] Energy Regulatory Commission, ERC Resolution No. 18, Series of 2026; Department of Energy, Department Circular No. DC2026-01-0001, Policy on Allowing Generation Companies to Finance and Construct Associated Transmission Projects (12 January 2026).
