Article 92p. 92

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

The existing personnel of the ERB, if qualified, shall be

given preference in the filling up of plantilla positions

created in the ERC, subject to existing civil service rules

and regulations. Members of the Commission shall enjoy

security

of

tenure

and

shall

not be suspended or

removed from office except for just cause as specified by

law.

The Chairman and members of the Commission or any

of

their

relatives

within

the

fourth

civil degree of

consanguinity or affinity, legitimate or common law,

shall

be

prohibited

from

holding

any

interest

whatsoever, either as investor, stockholder, officer or

director, in any company or entity engaged in the

business

of

transmitting,

generating,

supplying

or

distributing any form of energy and must, therefore,

divest through sale or legal disposition of any and all

interests in the energy sector upon assumption of office.

The presence of at least three (3) members of the

Commission shall constitute a quorum and the majority

vote of two (2) members in a meeting where a quorum is

present shall be necessary for the adoption of any rule,

ruling, order, resolution, decision or other act of the

Commission in the exercise of its quasi-judicial functions:

Provided, That in fixing rates and tariffs of transmission,

and distribution retail wheeling charges and tariffs of

franchise electric utilities and all electric power rates, an

affirmative vote of three (3) members shall be required.

Section 39. Compensation and Other Emoluments for

ERC

Personnel.

-

The

compensation

and

other

emoluments for the Chairman and members of the

Commission and the ERC personnel shall be exempted

from the coverage of Republic Act No. 6758, otherwise

known

as

the

Salary

Standardization

Act.

For

this

purpose, the schedule of compensation of the ERC

personnel,

except

for

the

initial

salaries

and

compensation of the Chairman and members of the

Commission, shall be submitted for approval by the

President

of

the

Philippines.

The

new schedule of

compensation

shall

be

implemented

within

six

(6)

months from the effectivity of this Act and may be

upgraded by the President of the Philippines as the

need arises: Provided, That in no case shall the rate be

upgraded more than once a year.

The Chairman and members of the Commission shall

initially be entitled to the same salaries, allowances and

benefits as those of the Presiding Justice and Associate

Justices

of

the

Supreme

Court,

respectively.

The

Chairman and the members of the Commission, upon

completion of their term or upon becoming eligible for

retirement under existing laws shall be entitled to the

same retirement benefits and privileges provided for the

Presiding Justice and Associate Justices of the Court of

Appeals, respectively.

Section 40. Enhancement of Technical Competence. -

The ERC shall establish rigorous training programs for its

staff

for

the

purpose

of

enhancing

the

technical

competence of the ERC in the following areas: evaluation

of technical performance and monitor compliance with

service and performance standards, performance-based

rate-setting reform, environmental standards and such

other areas as will enable the ERC to adequately perform

its duties and functions.

Section 41. Promotion of Consumer Interests. - The ERC

shall

handle

consumer

complaints

and

ensure

the

adequate promotion of consumer interests.

Section 42. Fiscal Autonomy of the ERC. - The ERC shall

enjoy fiscal autonomy, subject to regular audits by the

Commission on Audit. The amount of One hundred fifty

million pesos (PHP 150,000,000.00) is hereby allocated

from the existing budget of the ERB for the initial

operation of the ERC. Any balance shall initially be

sourced

from

the

Office

of

the

President

of

the

Philippines. Thereafter, the annual budget certified by

the ERC, through its chairman, as necessary to defray its

expenses shall be provided for in the regular or special

appropriations and shall be released automatically and

regularly.

Section 43. Functions of the ERC. - The ERC shall

promote competition, encourage market development,

ensure customer choice and discourage/penalize abuse

of market power in the restructured electricity industry.

Towards this end, it shall be responsible for the following

key functions in the restructured industry:

(a) Enforce the implementing rules and regulations of

this Act;

(b) Within six (6) months from the effectivity of this Act,

promulgate and enforce, in accordance with law, a

National Grid Code and a Distribution Code which shall

include, but not limited to, the following:

(i)

Performance

standards

for

TRANSCO

O

&

M

Concessionaire,

distribution

utilities

and

suppliers:

Provided, That in the establishment of the performance

standards, the nature and function of the entities shall

be considered; and

(c) (ii) In consultation with the DOE and DOF, financial

capability standards for the generating companies, the

TRANSCO, distribution utilities and suppliers: Provided,

That

in

the

formulation

of

the

financial

capability

standards, the nature and function of the entity shall be

considered: Provided, further, That such standards are

set

to

ensure

that

the

electric

power

industry

participants meet the minimum financial standards to

protect the public interest. Determine, fix, and approve,

after

due

notice and public hearings the universal

charge,

to

be

imposed

on

all

electricity end-users

pursuant to Sections 34 hereof;

(d) Enforce the rules and regulations governing the

operations

of

the

electricity

spot

market

and

the

activities

of

the

spot

market

operator

and

other

participants in the spot market, for the purpose of

ensuring

a

greater

supply

and

rational

pricing

of

electricity;

(e) Determine the level of cross subsidies in the existing

retail rate until the same is removed pursuant to Section

73 hereof;

(f) Amend or revoke the authority to operate of any

person or entity which fails to comply with the provisions

hereof, the IRR or any order or resolution of the ERC,

after due notice and hearing. In the event a divestment

is

required, the ERC shall allow the affected party

sufficient time to remedy the infraction or for an orderly

disposal, but shall in no case exceed twelve (12) months

from the issuance of the order;

(g)

In

the

public

interest,

establish

and enforce a

methodology for setting transmission and distribution

wheeling rates and retail rates for the captive market of

a distribution utility, taking into account all relevant

considerations, including the efficiency or inefficiency of

the regulated entities. The rates must be such as to allow

the

recovery

of

just

and

reasonable

costs

and

a

reasonable return on rate base (RORB) to enable the

entity to operate viably. The rate-setting methodology so

adopted and applied must ensure a reasonable price of

electricity.

The

rates

prescribed

shall

be

non-discriminatory. To achieve this objective and to

ensure the complete removal of cross subsidies, the cap

on the recoverable rate of system losses prescribed in

Section 10 of Republic Act No. 7832, is hereby amended

and shall be replaced by caps which shall be determined

by the ERC based on load density, sales mix, cost of

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