The Risks of Non-Compliance and Piercing the Corporate Veil
The incentives of Republic Act No. 9513 or the Renewable Energy Act come with severe enforcement mechanisms. For C-suite executives, understanding the penal provisions of this law is critical, because the statute expressly pierces the corporate veil to hold individuals criminally liable for corporate misdeeds.
Prohibited Acts
The Renewable Energy Act explicitly prohibits several actions to protect the integrity of the RE market and the government’s tax base. Prohibited acts include:
- Non-compliance or violation of the Renewable Portfolio Standards (RPS) rules (Republic Act No. 9513, Section 35).
- Willful refusal, without justifiable reason, by a distribution utility to enter into net-metering agreements with qualified end-users (Republic Act No. 9513, Section 35).
- Falsification or misrepresentation of documents to secure the certifications and tax incentives provided under the Act (Republic Act No. 9513, Section 35).
Executive Liability and Penalties
The penalties for committing a prohibited act are severe. Upon conviction, the penalty is imprisonment ranging from one (1) year to five (5) years, or a fine ranging from a minimum of One Hundred Thousand Pesos (P100,000.00) to One Hundred Million Pesos (P100,000,000.00) (Republic Act No. 9513, Section 36). Alternatively, the court may impose a fine equal to twice the amount of damages caused or costs avoided for non-compliance, whichever is higher, or both imprisonment and a fine (Republic Act No. 9513, Section 36).
Crucially, Section 36 of the law specifically states that in the case of a corporation, the penalty shall be imposed on the partner, president, chief operating officer, chief executive officer, directors, or officers responsible for the violation (Republic Act No. 9513, Section 36).
Typical Scenario: A distribution utility deliberately stalls and refuses to execute net-metering agreements with local commercial businesses to protect its own conventional generation revenue.
Practical Advice for CEOs and General Counsel: Executives of distribution utilities or RE development companies must institute rigorous, independent compliance audits. Because the law holds the “president, chief operating officer, chief executive officer, directors or officers” directly liable for corporate violations (Republic Act No. 9513, Section 36), the Board of Directors must ensure that no operational mandates (such as delaying net-metering connections to boost utility profits) run afoul of Section 35. Ignorance of operational practices will not shield the C-Suite from potential imprisonment if the acts are deemed a willful violation of the statute.
20 June 2026
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