Article 93p. 93

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

service,

delivery

voltage

and

other

technical

considerations

it

may

promulgate.

The

ERC

shall

determine such form of rate-setting methodology, which

shall

promote

efficiency.

In

case

the

rate

setting

methodology used is RORB, it shall be subject to the

following guidelines:

(i) For purposes of determining the rate base, TRANSCO

or any distribution utility may be allowed to revalue its

eligible assets not more than once every three (3) years

by

an

independent

appraisal

company:

Provided,

however, That ERC may give an exemption in case of

unusual devaluation: Provided, further, That the ERC

shall exert efforts to minimize price shocks in order to

protect the consumers;

(ii) Interest expenses are not allowable deductions from

permissible return on rate base;

(iii) In determining eligible cost of services that will be

passed on to the end-users, the ERC shall establish

minimum

efficiency

performance

standards

for

TRANSCO and distribution utilities including systems

losses,

interruption

frequency

rates,

and

collection

efficiency;

(iv) Further, in determining rate base, TRANSCO or any

distribution

utility

shall

not

be

allowed

to

include

management inefficiencies like cost of project delays

not excused by force majeure, penalties and related

interest

during

construction

applicable

to

these

unexcused delays; and

(v)

Any

significant

operating

costs

or

project

investments of TRANSCO and distribution utilities which

shall become part of the rate base shall be subject to the

verification of the ERC to ensure that the contracting

and procurement of the equipment, assets and services

have

been

subjected

to

transparent

and

accepted

industry

procurement

and

purchasing

practices

to

protect the public interest.

(h) Three (3) years after the imposition of the universal

charge, ensure that the charges of the TRANSCO or any

distribution utility shall bear no cross subsidies between

grids, within grids, or between classes of customers,

except as provided herein;

(i) Review and approve any changes on the terms and

conditions of service of the TRANSCO or any distribution

utility;

(j) Allow TRANSCO to charge user fees for ancillary

services to all electric power industry participants or

self-generating entities connected to the grid. Such fees

shall be fixed by the ERC after due notice and public

hearing;

(k) Set a lifeline rate for the marginalized end-users;

(l) Monitor and take remedial measures to penalize

abuse

of

market

power,

cartelization,

and

anti-competitive

or

discriminatory

behavior

by

any

electric power industry participant;

(m) Impose fines or penalties for any non-compliance

with or breach of this Act, the IRR of this Act and the

rules

and

regulations

which

it

promulgates

or

administers;

(n) Take any other action delegated to it pursuant to this

Act;

(o) Before the end of April of each year, submit to the

Office of the President of the Philippines and Congress,

copy furnished the DOE, an annual report containing

such matters or cases which have been filed before or

referred to it during the preceding year, the actions and

proceedings undertaken and its decision or resolution in

each case. The ERC shall make copies of such reports

available to any interested party upon payment of a

charge which reflects the printing costs. The ERC shall

publish

all

its

decisions

involving

rates

and

anti-competitive cases in at least one (1) newspaper of

general

circulation,

and/or

post

electronically

and

circulate

to

all

interested

electric

power

industry

participants copies of its resolutions to ensure fair and

impartial treatment;

(p) Monitor the activities of the generation and supply of

the electric power industry with the end in view of

promoting free market competition and ensuring that

the allocation or pass through of bulk purchase cost by

distributors is transparent, non-discriminatory and that

any existing subsidies shall be divided pro-rata among

all retail suppliers;

(q) Act on applications for or modifications of certificates

of

public

convenience

and/or

necessity,

licenses

or

permits of franchised electric utilities in accordance with

law and revoke, review and modify such certificates,

licenses or permits in appropriate cases, such as in cases

of violations of the Grid Code, Distribution Code and

other

rules

and

regulations

issued

by

the

ERC in

accordance with law;

(r) Act on applications for cost recovery and return on

demand side management projects;

(s) In the exercise of its investigative and quasi-judicial

powers,

act

on

any

complaint

by

or

against

any

participant or player in the energy sector for violations of

any laws, rules and regulations governing the same,

including the rules on cross-ownership, anti-competitive

practices and other acts of abuse of market positions by

any participant or player in the energy sector, as may be

provided by law, and require any person or entity to

submit any report or data relative to any investigation or

hearing conducted in accordance with this Act;

(t)

Inspect, on its own or through duly authorized

representatives, the premises, books of accounts and

records of any person or entity at any time, in the

exercise

of

its

quasi-judicial power for purposes of

determining

the

existence

of

any

anti-competitive

behavior and/or market power abuse and any violation of

rules and regulations issued by the ERC;

(u)

Perform such other regulatory functions as are

appropriate

in

order

to

ensure

the

successful

restructuring and modernization of the electric power

industry, such as, but not limited to, the rules and

guidelines

under

which

generation

companies,

distribution utilities which are not publicly listed shall

offer and sell to the public a portion not less than fifteen

percent

(15%)

of

their

common

shares

of

stocks:

Provided,

however,

That

generation

companies,

distribution

utilities

or

their

respective

holding

companies that are already listed in the PSE are deemed

in

compliance.

For existing companies, such public

offering shall be implemented not later than five (5)

years from the effectivity of this Act. New companies

shall implement their respective public offerings not

later than five (5) years from the issuance of their

certificate of compliance.

(v)

The

ERC

shall

have

the

original

and

exclusive

jurisdiction over all cases contesting rates, fees, fines and

penalties imposed by the ERC in the exercise of the

abovementioned powers, functions and responsibilities

and

over all cases involving disputes between and

among participants or players in the energy sector. All

notices of hearings to be conducted by the ERC for the

purpose of fixing rates or fees shall be published at least

twice for two successive weeks in two (2) newspapers of

nationwide circulation.

© 2018 Compiled by RGL

93 of 244