Article 99p. 99

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

quality and quantity of electricity still available to the

distribution utility from NPC.

Section 68. Power Supply Agreement. - It shall be a

condition of the privatization of NPC that PSALM Corp.

shall

diligently

seek

reasonable mitigating steps to

correct onerous provisions on its generating contracts,

guaranteed

by

government

specially

independent

power producers, where NPC is experiencing substantial

losses

as

a

result

of

excessive

price,

chronic

underutilization, inappropriate fee structure, or buy-out

provisions that exceed levels needed for fair return on

investment.

The NPC shall sell electricity only from undisposed

generation assets and IPP contracts and shall not incur

any new obligations to purchase power through bilateral

contracts with generation companies or other suppliers.

NPC shall act as the administrator of IPP contracts.

Section 69. Renegotiation of Power Purchase and Energy

Conversion Agreements between Government Entities. -

Within three (3) months from the effectivity of this Act,

all power purchase and energy conversion agreements

between the PNOC-Energy Development Corporation

(PNOC-EDC) and NPC, including but not limited to the

Palimpinon,

Tongonan

and

Mt.

Apo

Geothermal

complexes, shall be reviewed by the ERC and the terms

thereof

amended

to

remove

any

hidden

costs

or

extraordinary mark-ups in the cost of power or steam

above their true costs. All amended contracts shall be

submitted to the Joint Congressional Power Commission

for approval. The ERC shall ensure that all savings

realized from the reduction of said mark-ups shall be

passed on to all end-users.

Section 70. Missionary Electrification. - Notwithstanding

the divestment and/or privatization of NPC assets, IPP

contracts and spun-off corporations, NPC shall remain as

a

National

Government-owned

and

-controlled

corporation to perform the missionary electrification

function through the Small Power Utilities Group (SPUG)

and shall be responsible for providing power generation

and its associated power delivery systems in areas that

are not connected to the transmission system. The

missionary electrification function shall be funded from

the revenues from sales in missionary areas and from

the universal charge to be collected from all electricity

end-users as determined by the ERC.

Section 71. Electric Power Crisis Provision - Upon the

determination by the President of the Philippines of an

imminent shortage of the supply of electricity, Congress

may

authorize,

thhrough

a

joint

resolution,

the

establishment of additional generating capacity under

such terms and conditions as it may approve.

Section

72.

Mandated

Rate

Reduction.

- Upon the

effectivity of this Act, residential end-users shall be

granted

a

rate reduction from NPC rates of thirty

centavos per kilowatt-hour (P0.30/kWh). Such reduction

shall be reflected as a separate item in the consumer

billing statement.

Section

73.

Lifeline

Rate.

—

A

socialized

pricing

mechanism called a lifeline rate for the marginalized

end-users shall be set by the ERC, which shall be

exempted from the cross subsidy phase-out under this

Act for a period of twenty (20) years, unless otherwise

extended by law. The level of consumption and the rate

shall be determined by the ERC after due notice and

hearing. (Extending the Implementation of the Lifeline

Rate, Amending R.A. No. 9136 (Electric Power Industry

Reform Act of 2001), Republic Act No. 10150, [June 21,

2011])

Section 74. Cross Subsidies. - Cross subsidies within a

grid, between grids and/or classes of customers shall be

phased out in a period not exceeding three (3) years

from the establishment by the ERC of a universal charge

which shall be collected from all electricity end-users.

Such level of cross subsidies shall be made transparent

and

identified

separately

in

the

billing

statements

provided to end-users by the suppliers or by the DOE as

the case may be.

The ERC may extend the period for the removal of cross

subsidies for a maximum period of one (1) year upon

finding that cessation of such mechanism would have a

material

adverse

effect

upon

the

public

interest,

particularly the residential end-user; or would have an

immediate, irreparable, and adverse financial effect on

distribution utility.

CHAPTER IX Final Provisions

Section 75. Statutory Construction. - This Act shall, unless

the context indicates otherwise, be construed in favor of

the

establishment,

promotion,

preservation

of

competition

and people empowerment so that the

widest participation of the people, whether direct or

indirect, is ensured.

Section 76. Education and Protection of End Users. - End

users shall be educated about the implementation of

retail access and its impact on end-users and on the

proper

use

of electric power. Such education shall

include, but not limited to, the existence of competitive

electricity suppliers, choice of competitive electricity

services,

regulated

transmission

and

distribution

services,

systems

reliability,

aggregation,

market,

itemized

billing,

stranded

cost,

uniform

disclosure

requirements,

low-income

bill

payment,

energy

conservation

and

safety

measures.

The

DOE,

in

coordination with the NPC, NEA, ERC and the Office of

the

Press

Secretary-Philippine

Information

Agency

(OPS-PIA), shall undertake an information campaign to

educate the public on the restructuring of the electric

power industry and privatization of NPC.

Section 77. Implementing Rules and Regulations. - The

DOE

shall,

in

consultation

with

the electric power

industry participants and end-users, promulgate the

Implementing Rules and Regulations (IRR) of this Act

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

subject to the approval by the Power Commission.

Section 78. Injunction and Restraining Order. - The

implementation of the provisions of this Act shall not be

restrained or enjoined except by an order issued by the

Supreme Court of the Philippines.

Section 79. Separability Clause. - If for any reason, any

provision of this Act is declared unconstitutional or

invalid, the other parts or provisions hereof which are not

affected thereby shall continue to be in full force and

effect.

Section 80. Applicability and Repealing Clause. - The

applicability provisions of Commonwealth Act No. 146, as

amended, otherwise known as the "Public Services Act";

Republic Act 6395, as amended, revising the charter of

NPC; Presidential Decree 269, as amended, referred to as

the NEA decree; Republic Act 7638, otherwise known as

the "Department of Energy Act of 1992"; Executive Order

172, as amended, creating the ERB; Republic Act 7832

otherwise known as the "Anti-Electricity and Electric

Transmission Lines/Materials Pilferage Act of 1994", shall

continue to have full force and effect except in so far as

inconsistent with this Act.

Presidential Decree No. 40 and all laws, decrees, rules

and regulations, or portions thereof, inconsistent with

this Act are hereby repealed or modified accordingly.

© 2018 Compiled by RGL

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