Article 84p. 84

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

(dd) "Lifeline Rate" refers to the subsidized rate given to

low-income captive market end-users who cannot afford

to pay at full cost;

(ee) "National Electrification Administration" or "NEA"

refers

to

the

government

agency

created

under

Presidential Decree No. 269, as amended, and whose

additional mandate is further set forth herein;

(ff) "National Power Corporation" or "NPC" refers to the

government corporation created under Republic Act No.

6395, as amended;

(gg) "National Transmission Corporation" or "TRANSCO"

refers to the corporation organized to acquire all the

transmission assets of the NPC pursuant to this Act;

(hh) "Open Access" refers to the provision of allowing any

qualified

user

the

use

of

transmission,

and/or

distribution system and associated facilities subject to

the payment of transmission and/or distribution retail

wheeling rates duly approved by the ERC;

(ii) "Philippine Energy Plan" or "PEP" refers to the overall

energy program formulated and updated yearly by the

DOE for submission to Congress pursuant to Republic

Act No. 7638;

(jj) "Power Development Program" or "PDP" refers to the

indicative plan for managing electricity demand through

energy-efficient

programs

and

for

the

upgrading,

expansion, rehabilitation, repair and maintenance of

power generation and transmission facilities, formulated

and updated yearly by the DOE in coordination with the

generation, transmission and electric utility companies;

(kk) "Power Sector Assets and Liabilities Management

Corporation" or "PSALM Corp." refers to the corporation

organized pursuant to Section 49 hereof;

(ll) "Privatization" refers to the sale, disposition, change

and transfer of ownership and control of assets and IPP

contracts

from

the

Government

or

a

government

corporation to a private person or entity;

(mm) "Renewable Energy Resources" refers to energy

resources that do not have an upper limit on the total

quantity to be used. Such resources are renewable on a

regular basis and the renewable rate is rapid enough to

consider

availability

over

an

indefinite

time.

These

include, among others, biomass, solar, wind, hydro and

ocean energy;

(nn) "Restructuring" refers to the process of reorganizing

the electric power industry in order to introduce higher

efficiency, greater innovation and end-user choice. It

shall be understood as covering a range of alternatives

enhancing

exposure

of the industry to competitive

market forces;

(oo) "Small Power Utilities Group" or "SPUG" refers to the

functional unit of NPC created to pursue missionary

electrification function;

(pp) "Stranded contract costs of NPC or distribution

utility" refer to the excess of the contracted cost of

electricity under eligible contracts over the actual selling

price of such contracts in the market. Such contracts

shall have been accredited by the DOE or NPC and

approved by the ERB as of the effectivity of this Act;

(qq)

"Stranded

Debts of NPC" refer to any unpaid

financial

obligations

of

NPC

which

have not been

liquidated by the proceeds from sales and privatization

of NPC assets;

(rr) "Subtransmission Assets" refer to the facilities related

to the power delivery service below the transmission

voltages and defined as facilities based on the functional

assignment

of assets including, but not limited to,

step-down transformers solely used by load customers,

associated switchyard/substation, control and protective

equipment,

reactive

compensation

equipment

to

improve customer power factor, overhead lines, and the

land where such facilities/equipment are located, where

applicable.

These

include

NPC

assets

linking

the

transmission system and the distribution system which

are neither classified as generation nor transmission;

(ss) "Supplier" refers to any person or entity authorized

by the ERC to sell, broker, market or aggregate electricity

to the end-users;

(tt) "Supply Charge" refers to the charge imposed by

electricity

suppliers

for

the

sale

of

electricity

to

end-users,

excluding

the

charges

for

generation,

transmission and distribution wheeling;

(uu) "Supply of Electricity" means the sale of electricity

by persons or entities authorized pursuant to this Act;

(vv) "Transmission Charge" refers to the regulated cost or

charges for the use of a transmission system which may

include the availment of ancillary services

(ww) "Transmission Development Plan" or "TDP" refers to

the program for managing the transmission system

through efficient planning for the expansion, upgrading,

rehabilitation, repair and maintenance, to be formulated

by DOE and implemented by the TRANSCO pursuant to

this Act;

(xx) "Transmission of Electricity" refers to the conveyance

of electricity through the high voltage backbone system;

and

(yy) "Universal Charge" refers to the charge, if any,

imposed for the recovery of the stranded cost and other

purposes.

CHAPTER II Organization and Operation of

the Electric Power Industry

Section 5. Organization. - The electric power industry

shall be divided into four (4) sectors, namely: generation;

transmission; distribution and supply.

Section 6. Generation Sector. - Generation of electric

power shall be competitive and open.

Upon the effectivity of this Act, any new generation

company shall, before it operates, secure from the

Energy

Regulatory

Commission

a

certificate

of

compliance pursuant to the standards set forth in this

Act,

as

well

as

health,

safety

and

environmental

clearances from the appropriate government agencies

under existing laws.

Any

law

to

the

contrary

notwithstanding,

power

generation

shall

not

be

considered a public utility

operation.

For

this

purpose,

any

person

or

entity

engaged or which shall engage in power generation and

supply of electricity shall not be required to secure a

local or national franchise.

Upon implementation of retail competition and open

access, the prices charged by a generation company for

supply of electricity shall not be subject to regulation by

the ERC except as otherwise provided in this Act

Pursuant to the objective of lowering electricity rates to

end-users,

sales

of

generated power by generation

companies shall be value added tax zero-rated.

© 2018 Compiled by RGL

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