Nasecore Petition Gr No. 210255

8/13/2019 Nasecore Petition Gr No. 210255

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Republic of the PhilippinesSUPREME OURTManila

NATIONAL ASSOCIATION OFELECTRICITY CONSUMERSFOR REFORMS (NASECORE),represented by Petronila L.Ilagan, FEDERATION OFVILLAGE ASSOCIATIONS(FOVA), represented bySiegfried a A. Veloso,FEDERATION OF LAS PINASHOMEOWNERS ASSOCIATION(FOLPHA), represented byBonifacio Daza and RODRIGOC. DOMINGO, JR.

Petitioners,1'-1i ~ ] ~ ~ Z:.. _u:.. \;Ji >W. '1JI U

--versus-- G. R. N o . ~ ~ ~ ~

MANILA ELECTRIC COMPANY(MERALCO), ENERGYREGULATORY COMMISSION(ERC) and DEPARTMENT OFENERGY (DOE),Respondents.x-------------------------------xPETITION FOR CERTIORARI

and or PROHIBITIONClass Suit

(Under Rule 65, Revised Rules of Court, withPrayer for a Temporary Restraining Order/

Status Quo Ante Order and Injunction)

~-..o >rnc->0:s-.a f ):.

'.t i ~O


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IPREF TORY ST TEMENT

"The essence of due process s distilled in theimmortal cry of Themistocles to Alcibiades "Strike -but hear me first 1 Italics supplied)

1 The same allegorical and resounding cry washeard by the framers of our present Constitution when theyenshrined in Article III, Section 1 thereof that:

"Section l No person shall be deprived of lifeliberty or property without due process of law, x xx. Italics supplied)2. t is the very same resounding cry which the class

petitioners eloquently repeat in the present petition as theyplead and challenge the validity of the oppressive andexorbitant automatic electricity rate adjustments andincreases imposed by respondent MERALCO to its electricitysubscribers, with the accommodating imprimatur of theEnergy Regulatory Commission ERC), the veryadministrative agency tasked to regulate and ensure thewelfare and protection of the electricity-consuming public.

3. The present Petition squarely rests on and isdelimited by the legal postulate that respondent ERC gravelyabused its discretion, amounting to lack or excess ofjurisdiction, when it allowed the said automatic rateadjustments and increases of MERALCO in its generationcosts, without first requiring publication, notice or hearinginvolving the public who will bear the brunt of suchadjustments or increases in electricity rates, in violation ofthe due process clause of the Philippine Constitution.Consequently, such imposition of MERALCO as regardselectricity rate adjustments and increases madeautomatically are certainly illegal and must be refunded toits electricity-consuming subscribers.


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4. Petitioners come directly to this Honorable Courton account of the fact that the present case seriously andplainly involves public policy and that it is of transcendentalimportance to the public in general and that swift andimmediate redress from the Court is required by thecircumstances.

IIN TURE OF THE PETITION

5 This Petition for Certiorari is a valid recourseunder Rule 65, Sections 1 and 2 of the 1997 Revised Rulesof Civil Procedure availed of to impugn the Resolutions andOrders letters) made by the ERC pertaining to automaticrate adjustments or increases imposed by MERALCO in itsgeneration costs for having been issued with grave abuse ofdiscretion amounting to lack or excess of jurisdiction.

Section 1 Rule 65 of the 1997 Revised Rule on CivilProcedure provides:Section 1 Petition for certiorari. -- When

any tribunal, board or officer exercising judicial orquasi-judicial functions has acted without or inexcess o i ts or his jurisdiction , or with grave abuseo discretion amounting to lack o excess o i tsjur isdict ion, and there is no appeal, or any plain,speedy, and adequate remedy in the ordinary courseo law, a person aggrieved thereby may f i le averif ied petit ion in the proper court, al leging thefacts with certainty and praying that judgment berendered annull ing or modifying the proceedings osuch tr ibunal, board or officer, and grant ing suchincidental reliefs as Jaw and ust ice may require.

x. (Italics and underscoring supplied)


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Section 2. Petition for prohibition. - When theproceedings o any tribunal, corporation, board,officer or person, whether exercising judicial, quasijudicial or ministerial functions, are without or inexcess o i ts or his jurisdiction, or with grave abuseo discretion amounting to lack or excess ojurisdiction, and there is no appeal or any otherplain, speedy, and adequate remedy in the ordinarycourse o law, a person aggrieved thereby may f i le averif ied petition in the proper court, alleging thefacts with certainty and praying that judgment berendered commanding the respondent to desist fromfurther proceedings in the action or matter specif iedtherein, or otherwise granting such incidental reliefsas law and justice m ay require.The petition shall l ikewise be accompanied by acertif ied true copy o the judgment, order orresolution subject thereof, copies o all pleadingsand documents relevant and pertinent thereto, and asworn certif ication o non-forum shopping asprovided in the third paragraph o section 3, Rule46. Italics and underscoring supplied)

IIITIMELINESS OF TH PETITION

6. On December 5, 2013, MERALCO sought thERC s clearance for the staggered implementation of itgeneration costs recovery for the November 2013 supplmonth, by way of an exception to the Automatic GeneratioRate Adjustment (AGRA) Rules.

7. On December 9, 2013, the ERC through itsChairperson, Zenaida G. Cruz-Ducut, and CommissionersAlfredo J. Non and Josefina Patricia A. Magpale-Asirit, sent aletter to MERALCO s Ivanna G. Dela Pena, First VicePresident and Head, Regulatory Management Office,advising the grant of clearance for a sought-staggeredimplementation of its generation cost recovery.


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generation cost recovery for the November 2013 supplymonth. Considering that petitioners came to know of theissuance of the said clearance only on December 12, 2013,then it has until February 10, 2014 within which to file thepresent Petition.

9. The filing of the present Petition on December 20,2013 is, therefore, within the reglementary period.

IV

THE P RTIES

10. Herein petitioners are a class of similarly situatedindividuals who are all subscribers of the respondent utilitycompany MERALCO, with common or general interest tonumerous persons who are also its subscribers andconsumers. Class petitioners may be served with orders,resolutions, decisions and other processes of this HonorableCourt at the given address of the undersigned counsel.

11. Petitioners are an aggrupation of different socio-civic organizations who are collectively promoting andupholding consumer welfare and protection, which are allorganized and existing under and by virtue of the laws of theRepublic of the Philippines. Almost all of its members, if notall, are subscribers or consumers being serviced byrespondent MERALCO.

The following are the enumeration of the differentSecretary s Certificates showing the appointment ordelegation of the following individuals who represent andcan act for and in behalf of their respective petitioner-organizations, to wit:

a. NATIONAL ASSOCIATION OF ELECTRICITYCONSUMERS FOR R FORMS NASECORE),represented by Petronilo Ilagan, as Annex A


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b. FEDERATION OF VILLAGE ASSOCIATIONSFOVA), represented by Siegfriedo Veloso, asAnnex B hereof;

c. FEDERATION OF LAS PINAS HOMEOWNERSASSOCIATION FOLPHA), represented by BonifacioC. Daza, as Annex C hereof.12. Petitioners are suing on the ground that theissues raised herein are matters of public service, policy and

interest, and that respondent MERALCO, being a publicutility company enjoying franchise from the government,had submitted itself to government regulations andsurrendered certain business prerogatives. Petitioners, ascitizens organizations of the Philippines, is therefore invokingthe sovereign police and protective power of the State infiling the instant case2

13. Respondent Department of Energy DOE) is agovernment instrumentality tasked mainly to prepare,integrate, coordinate, supervise and control all plans,programs, projects and activities of the government relativeto energy exploration, development, utilization, distributionand conservation. t is the agency which effected theassailed amendment of Section 4 (e), Rule 3 of the IRREPIRA. t may be served with summons and otherprocesses of this Honorable Court at its principal officelocated at Energy Center, Rizal Drive, Bonifacio Global City,Taguig City 1632.

14. Respondent Energy Regulatory Commission ERC)is, likewise a government instrumentality created underRepublic Act No. 9136, otherwise known as the ElectricPower Industry Reform Act of 2001 EPIRA Law), taskedmainly to regulate electricity power rates and to protectconsumer and subscriber interests.

t may be served with summons and other processes ofthis Honorable Court at Pacific Centre Building, San MiguelAvenue, Pasig City, where i t maintains its principal office.


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b. Declaring all Resolutions, Orders or anyother issuances of the ERC authorizing allowingconfirming sanctioning or clearing the utom ticpower rate adjustments or increases imposed byMERALCO as inherently null and void on theground of grave abuse of discretion amounting tolack or excess of jurisdiction;

c Declaring all electricity rateadjustments or increases utom tic lly imposedor collected by MERALCO from its subscribers andconsumers as inherently and patently null voidand illegal;

d. Prohibiting the ERC from allowingMERALCO to utom tic lly impose and collectelectricity rate adjustments and increases;

e. Ordering the audit and subsequentrefund of all rate adjustments or increases

utom tic lly collected or imposed by MERALCOto all of its consumers or subscribers by virtue ofthe assailed ERC Resolutions, Orders or issuances;f. Ordering the creation of a committeeheaded by the Commission on Audit COA), and

where consumer interests are sufficientlyrepresented that would conduct the audit andsubsequent refund of all utom tic electricityrate adjustments or increases illegally imposedand collected by MERALCO;

g. Ordering the deposit into an escrowaccount of the aggregate amount of refunddetermined by the above-said Committee;

h. Ordering the proportionate distributionof the determined amount of refund to all classmembers;


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VI.

Brief Statement of Material Factsand of the Case

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20. On February 2, 2006, this Honorable Court, in thecase entitled NASECORE et al. vs. ERC and MERALC03 ,issued a Decision of even date, the dispositive portion ofwhich states:

WHEREFORE, premises considered, thepetit ion is GRANTED. The assailed ERC Orderdated June 2, 2004 in ERC Case No. 2004-112 isDECLARED VOID and accordingly SET ASIDE. Italicssupplied

21. On August 16, 2006, this Honorable Court issueda Resolution of even date denying the respective Motions forReconsideration filed by the ERC and MERALCO assailing theabove-quoted Decision, the dispositive portion of whichstates that:

WHEREFORE, the Motion for Reconsiderationdated February 17, 2006 o the ERC and the Motionfor Reconsideration dated February 20, 2006 oMERALCO are DENIED with FINALITY.The Comment-in-Intervent ion dated March 6,2006 o PEPOA and the Intervention dated March 27,

2006 o PIPPA are, likewise, DENIED.Consequently, upon f inal i ty o the Decisiondated February 2, 2006, MERALCOis DIRECTED to REFUND to the affected consumersthe amount o P0.1327 per kWh (representing theunauthorized increase from P3.1886 to P3.3213 perkWh under the nullif ied ERC Order dated June 2,2004) reckoned f rom when the same was chargedand collected f rom the affected consumers. Instead

o an actual refund, MERALCO may correspondinglycredit in favor o the affected customers theappropriate amounts for their future


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22. The above-said case proceeded from the petitionfor certiorari, prohibition and injunction, on the ground ofviolation of due process, filed by NASECORE, FOVA andFOLPHA, seeking to nullify the Order dated June 2, 2004 ofthe Energy Regulation Commission (ERC) in ER Case No.2004-112 approving the increase of respondent MERALCO sgeneration charge from P3 1886 per kWh to P3 3213 perkWh effective immediately, even without complying f irstwith the requisites of publication mandated by Section 4e), Rule 3 of the Implementing Rules and Regulations

(IRR) of the Electric Power Industry Reform Act (EPIRA).Said Section 4 e) of the IRR for EPIRA provides:

(e) Any apolication o r peti t ion for rateadjustment or for any rel ief affect ing the consumersmust be verified, and accompanied with anacknowledgement o f receipt o f a copy thereof by theLGU Legislative Body o f the local i ty where theapplicant or petit ioner princioal ly operates togetherwith the certif ication o f the notice o f publicationthereof in a newspaper o f general circulation in thesame localitv.

The ER may grant provisionally or deny therel ief prayed for not later than seventy-f ive (75)calendar days f rom the f i l ing o f the application orpetit ion, based on the same and the support ingdocuments attached thereto and such comments orpleadings the consumers or the LGU concerned mayhave f i led within th ir ty (30) calendar days f romreceipt o f a copy o f the application or petit ion orf rom the publication thereof as the case may be.

Thereafter, the ER shall conduct a formalhearing on the application or peti t ion, giving propernotices to al l parties concerned, with t least onepublic hearing in the affected locality, and shalldecide the matter on the merits not later than twelve(12) months from the issuance o f theaforementioned provisional order.


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23. In emphasizing the need and the importance tocomply with the publication requirement, this HonorableCourt ratiocinated that:

Indeed, the basic postulate o f due processordains that the consumers be notif ied o f anyapplication, and be apprised o f i ts contents, thatwould result in compounding their economicburden. n this case, the consumers have the r ightto be informed o f the bases o frespondent MERALCO's amended application for theincrease o f i ts generation charge in order to, i f theyso desire, effectively contest the same.x

The requirement o f due process is not somefavor or grace that the ER may dole out on a bout o fwhim or on occasion o f charity. Rather, i t is astatutory r ight to which the consuming public isentitled.

The requirement o f publication in applicationsfor rate adjustment is not without reason orpurpose. t is ancil lary to the due orocessrequirement o f notice and hearing. ts purpose isnot merely to inform the consumers that anapplication for rate adjustment has been f i led by thepublic util ity. t is to adequately inform them thatan application has been made for the adjustment o fthe rates being implemented by the public uti l i ty inorder to afford them the opportunity to be heard andsubmit their stand as to the propriety andreasonableness o f the o f the rates within the periodallowed by the Rule. Without the publication o f theapplication, the consumers are left to second-guessthe substance and merits o f the application.4 Italicsand underscoring supplied)24. The attempt to automatically impose - that is,

without complying with the required publication - anelectricity rate increase or adjustment having been stuntedand struck down by this Honorable Court s above-mentioned


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accommodation in favor of respondent MERALCO andapparently in collusion with respondent ERC subsequentlyissued Amendments to Section 4 (e) o f Rule 3 andSection 7 o f Rule 18 o f the Implementing Rules andRegulations (IRR) o f Republic Act No. 9136 otherwiseknown as the Electric Power Industry Reform Act ,effectively doing away with the requirement of publication incertain rate increase and adjustment applications ofdistribution utilities (referring to MERALCO in the presentcase .

The lone amendment to Section 4 e) of Rule of theIRR EPIRA reads:

(e) Any application or petit ion for rateadjustment or for any rel ief affect ing the consumersmust be verified, and accompanied with anacknowledgement o f receipt o f a copy thereof by theLGU Legislative Body o f the locali ty where theapplicant or petit ioner pr incipally operates togetherwith the certif ication o f the notice o f publicationthereof in a newspaper o f general circulation in thesame locality.

The ERC may grant provisional ly or deny therel ief prayed for not later than seventy-f ive (75)calendar days f rom the f i l ing o f the application orpetit ion, based on the same and the support ingdocuments attached thereto and such comments orpleadings the consumers or the LGU concerned mayhave f i led within th ir ty (30) calendar days fromreceipt o f a copy o f the application or petit ion orf rom the publication thereof as the case may be.Thereafter, the ERC shall conduct a formalhearing on the application or petit ion, giving propernotices to all parties concerned, with t least onepublic hearing in the affected locality, and shalldecide the matter on the merits not later than twelve(12) months from the issuance o f theaforemen tioned provisional order.This Section 4 le} shall not apply to GenerationRate Adjustment Mechanism (GRAM), IncrementalCurrency Exchange Recovery Adjustment (ICERA},


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Franchise Tax Recovery Mechanism, Business TaxRecovery Mechanism, Automatic Generation RateAdjustment Mechanism, VAT Recovery Mechanism,Incremental Generation Cost AdjustmentMechanism, and Recovery o Deferred AccountingAdjustment for Fuel Cost and Power Producers byNPC and NPC-SPUG, Provided that, such adjustmentsshall be subject to subsequent verification by theER to avoid over under recovery o charges.Italics and underscoring supplied)

25. The introduction of the above-quoted amendmentto Section 4 e), Rule 3 of the IRR EPIRA paved the way forthe ERC s introduction of the GUIDELINES FOR THEAUTOMATIC ADJUSTMENT OF GENERATION RA TESAND SYSTEM LOSS RATES BY DISTRIBUTIONUTILITIES. Under the said guidelines, a distribution utilitylike respondent MERALCO may now automatically adjust orincrease not only the system loss rates, but the generationrates as well. This is so because the publication and otherrequirements stated in Section 4 ( e) of the original IRREPIRA had already been effectively amended as statedabove, providing for an Automatic Generation RateAdjustment Mechanism.

Section 2, Article I I I of the above-mentioned Guidelinesprovides for an automatic Generation Rate increase, asfollows:

Section 2. Bil l ing o New Generation Rate - The Distribution Util i t ies shall bi l l their customersthe Generation Rate calculated in accordance withthe immediately preceding Section effective on thetenth (10) day o each month. Italics andunderscoring supplied)

A certified true copy of the GUIDELINES FOR THEAUTOMATIC ADJUSTMENT OF GENERATION RATESAND SYSTEM LOSS RATES BY DISTRIBUTIONUTILITIES is hereto attached and marked as Annex Dhereof.


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GUIDELINES FOR THE AUTOMATIC ADJUSTMENT OFGENERATION RATES AND SYSTEM LOSS RATES BYDISTRIBUTION UTILITIES.

Certified true copies of the said Resolution No. 10-01and Resolution No. 10-04 both Series of 2004 are heretoattached and marked as Annexes E and F hereof.

27. Likewise, Resolution No. 16, Series of 2009entitled A RESOLUTION ADOPTING THE RULESGOVERNING THE AUTOMATIC COST ADJUSTMENT ANDTRUE-UP MECHANISMS AND CORRESPONDINGCONFIRMATION PROCESS FOR DISTRIBUTIONUTILITIES , a certified true copy of which is heretoattached and marked as Annex G hereof.

28. On December 5, 2013 respondent MERALCOsought clearance from respondent ERC for the staggeredcollection of its generation costs for the November 2013supply month. MERALCO proposed to impose a generationcharge of PhP7.90/kWh in its December 2013 billing, insteadof the calculated PhP9.1070/kWh and collect the deferredamount of about PhP3 Billion in its February 2014 billing.

29. Likewise, in a letter dated December 5, 2013petitioner NASECORE wrote the respondent ERC through itsChairperson Zenaida G. Cruz-Ducut urging it toimmediately direct MERALCO not to implement itsreported rate increase this month and .January nextyear as this will be contrary to law , to no avail.

30. On December 9, 2013 the ERC through itsChairperson, Zenaida G. Cruz-Ducut and CommissionersAlfredo J. Non and Josefina Patricia A. Magpale-Asirit, sent aletter to MERALCO s Ivanna G. Dela Pena, First VicePresident and Head, Regulatory Management Office,advising the grant of clearance for the sought staggeredimplementation of its generation cost recovery.


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31. Section 4 e) of Rule 3 of the IRR EPIRA havingbeen amended by doing away with publication, which wasoriginally required, the generation rate adjustment orincrease intended by MER LCO now becomes automaticwithout any mechanism that would apprise or notify thepublic of the reasonableness or justness of such adjustmentor increase.

32. Further, ERC practically and deliberately resortedto a regul tory f ilure on its part when it convenientlysurrendered its functions to MER LCO when it allowed thelatter to automatically determine its rate adjustment orincrease without even complying with the publicationrequirement and conducting the requisite public hearingthereto.

33. In the present Petition, class petitioners are of theposition that the requirement of publication as an essentialelement of due process is inherently indispensable, even inthe light of the amendment made in so far as Section 4 e)of Rule 3 of the EPIRA IRR is concerned. Thus, the relatedissuances of the ERC regarding the automatic electricitygeneration rate adjustment or increase are all null and voidfor being violative of the due process clause of theConstitution and for having been issued with grave abuse ofdiscretion amounting to lack or excess of jurisdiction.

34. Hence, this Petition.

VII

ARGUMENT

RESPONDENT ERC UNDENIABLYACTED WITH GRAVE ABUSE OFDISCRETION AMOUNTING TO LACKOR EXCESS OF JURISDICTIONWHEN IT GAVE CLEARANCE ANDALLOWED RESPONDENT MERALCO


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MANNER, ITS NOVEMBER 2013SUPPLY MONTH GENERATIONCOSTS WITHOUT FIRSTPUBLISHING IT AS REQUIRED BYLAW, AS WELL AS ALL OR ANYOTHER GENERATION COSTSIMPOSED BY RESPONDENTMERALCO WITHOUT DUE PROCESSOF LAW AGAINST ITS CONSUMERSAND SUBSCRIBERS IN OTHERINCLUSIVE SUPPLY MONTHPERIODS WHICH WERE LIKEWISENOT PRIORLY PUBLISHED. ALLACTS BEING CONSTITUTIONALLYINFIRMED.

VI I I

ISSUES

AThe amendment made in

Section 4 e , Rule 3 of the IRREPIRA is i l legal per se for beingviolat ive o f the declared State Policyof EPIRA and due process.

BRate adjustments or increasescannot be done automaticallywithout f i rs t complying with thepublication requirements o f the law.

c

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due process clause when automaticrate adjustments or increases borneout by i ts alleged generation costswere allowed and subsequentlycollected against the electr icityconsuming public.

DThe due process clauseenshrined in the present

Constitution is deemed to bewrit ten in every statute contractregulation or undertaking.

EAutomatic electricity rate

adjustments or increases ofMERALCO are not only violative ofdue process but also amount to aregulatory failure on the part of theERC an abject surrender of i tsregulatory functions in violation ofSection 25 EPIRA.

FThe automatic rateadjustments or increases made andimposed by MERALCO against i tsconsumers and subscribers beinginherently and patently i l legal forbeing violative of due process a

refund of all amounts collected byMERALCO from the peti t ioners is

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IX

Discussions

AThe amendment made inSection 4 e), Rule ofthe IRR EPIRA is i l legalper se for being violativeof the declared StatePolicy of EPIRA and dueprocess.

BRate adjustments orincreases cannot be doneautomatically without firstcomplying with thepublication reguirementsof the law.

cRespondent ERC andrespondent MERALCOviolated the due processclause when automaticrate adjustments orincreases borne out by i tsalleged generation costswere allowed andsubseguently collectedagainst the electricityconsuming public.

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Constitution s ~ m e tobe written n everxstatute contractregulation orundertaking.

35. The above-stated issues being materiallyrelevant with each other, shall be discussed jointly herein.36. Taking cue from the holding of the above-statedResolution of this Honorable Court in the above-said case of

NASECORE, et al. vs. ER nd MERALCO to the effect that[I] t should be made clear that, unless Section 4(e),Rule of the IRR of the EPIRA is amended, theadjustments of rates based on purchased power orfuel adjustment costs shall not or in no case beautomatic , the Department of Energy amended Section4 e), Rule 3 of the IRR EPIRA by exempting certain rateadjustment or increase mechanisms from the publicationrequirement. Thus by doing away with the saidrequirement, it is believed that electricity rate adjustmentsor increases as demonstrated by the herein assailed acts ofrespondents ERC and MERALCO can be made and imposedautomatically.

37. However, it is the firm position of the classpetitioners that, even in the light of the aforesaidamendment introduced in Section 4 e), Rule 3 of the IRREPIRA publication of electricity application for rateadjustments or increases is INDISPENSABLE and that itsimposition cannot be made automatically. In fact, classpetitioners are of the solid position that the amendmentmade is per se illegal for being violative of the intendments,provisions and the declared State Policy behind the EPIRA.

38. Settled is the rule that [A]n implementingrule or regulation must conform to and be consistentwith the provisions of the enabling statute; it cannotamend the law either by abridging or expanding itsscope. 5


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39. More so, in the case of Luis K. Lakin, .Jr. vs.COMELEc6 the Supreme Court held:

The authori ty to make IRRs in order to carryout an express legislative purpose, or to effect theoperation and enforcement o a law is not a powerexclusively legislative in character, but is ratheradministrat ive in nature. The rules and regulationsadooted and promulgated must not, however,subvert o r be contrarv to existing statutes. Thefunction o promulgat ing IRRs may be legit imatelyexercised only for the purpose o carrying out theprovisions o a law. The power o administrat iveagencies is confined to implementing the law orputting i t into effect. Corollary to this is thatadministrat ive regulation cannot extend the law andamend a legislative enactment. t is axiomatic thatthe clear letter o the law is controll ing and cannotbe amended bv a mere administrat ive rule issued fori ts implementation. Indeed, administrat ive orexecutive acts shall be valid onlv when thev are notcontrarv to the laws or the Consti tut ion. Italics andunderscoring supplied)

40. A mere cursory inspection of Section 2 c) of theEPIRA would readily reveal that the publication of electricityrate adjustments or increases is indispensable, and that itsimposition on the consumers and subscribers cannot beeffected automatically.

Section 2 c) of the EPIRA provides:

Section 2. Declaration o Policv. -- t is herebydeclared the policy o the State:

(a) Xx x;(b) Xx x;c) To ensure t ransparent and reasonable prices oelectricitv in a regime o free and fair competit ion and ful lpublic accountabil itv to achieve greater operat ional andeconomic efficiencv and enhance the competitiveness oPhil ippine produc ts in the global market:(d) Xx x;


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h) x xi ) x xj ) x x

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k ) x x. Italics and underscoring supplied)

41. Clearly the amendment in Section 4 e), Rule 3of the IRR EPIRA which effectively dispensed with thepublication requirement of certain electricity rateadjustments or increase mechanisms definitely makes it atotal impossibility to enforce and implement the avowedState Policy of transparency in electricity rate fixingconsidering that rate adjustments and increases can now beeffected automatically, without any way or method ofapprising or informing the affected public as regards itsjustness or reasonableness. Needless to state, publicationof the application for rate adjustments or increases is ameans of ensuring transparent and reasonable pricesof electricity in regime of free and fair competitionand full public accountability to achieve greateroperational and economic efficiency and enhance thecompetitiveness of Philippine products in the globalmarket.

42. Moreover publication likewise is an effective toolin preventing the public from second-guessing the substanceand merits of a particular rate adjustment or increase.Publication notifies and informs the public that a rateadjustment or increase is being applied for as it encouragesparticipative initiatives on the part of the public therebyruling out any arbitrary and oppressive electricity rateadjustments. Publication therefore, is the concretemanifestation of due process which is essential in anyapplication for any rate adjustment or increase.

43. Considering that the amendment on Section 4e), Rule 3 of the IRR EPIRA which dispensed with thepublication requirement, clearly runs afoul with the enabling

law which it is supposed to implement, then suchamendment can only be deemed and treated as illegal.Mere implementing rules and regulations cannot amend,supplement or substitute for the law itself. Indeed, the

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44. The aforesaid amendment made on the IRREPIRA being in itself illegal, all other subsequent issuancesmade on the basis thereof, particularly the ERC ResolutionNo. 10-01 and Resolution No. 10-04, both Series of 2004, aswell as its latest letter dated December 9, 2013 clearing andallowing the staggered but automatic rate adjustment orincrease of MERALCO s generation cost for November 2013supply month, must in similar manner be deemed anddeclared illegal, null and void ab initio.

t must be struck down And soon.45. Incidentally, it bears stressing that no other than

respondent MERALCO committed itself to be transparent andpublic in its rates. Thus, Section 5, R A 9209, otherwisedubbed as the MERALCO Mega Franchise, provides:

Sec. 5. Rates for Services. -- The retail ratesto i ts captive market and charges for the distr ibut iono electric power by the grantee to i ts end-user shallbe regulated by and subject to the approval o theERC

The grantee shall identify and segregate in i tsbi l l to the end-users the components o the retai lrate pursuant to Republic Act No. 9136, unlessotherwise amended. Such rates charged bv thegrantee to the end-users shall be made public andtransparent. The grantee shall implement l i fel inerate to end-users as mandated under Republic ActNo. 9136. (Italics and underscoring supplied)

46. Additionally, MERALCO likewise committed to beresponsible to the public by supplying electricity in the leastcost manner, by charging reasonable, just and competitivepower rates for its services, by not committing actsconstituting abuse of market power, unfair trade practices,monopolistic schemes and other activities that will hindercompetitiveness or business and industries.


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Section 4. Resnonsibility t the Public. - Thegrantee shall supplv electr ic i ty to i ts captive marketin the least cost manner. n the interest o f the publicgood and as far as feasible and whenever requiredby the ERC the grantee shall modify, improve orchange i ts facil ities, poles, lines, systems andequipment for the purpose o f providing eff icient andreliable service and reduced electricity costs. Thegrantee shall charge reasonable, just andcompetit ive power rates for its services to al l tvpeso f consumers within i ts franchised area in order thatbusiness and industries shall be able to compete.The grantee shall have the obligation to provideopen and nondiscriminatory access to i ts distr ibut ionsystem and services for any end-user within i tsfranchise area consistent with Republic Act No.9136, otherwise known as the Electric PowerIndustry Reform Act o f 2001 . The grantee shall notengage in any activi ty that wil l constitute an abuseo f market power such as but not l imited to unfairtrade practices, monopolistic schemes and any otheractivit ies that wi l l hinder competitiveness orbusiness and industr ies. (Italics and underscoringsupplied)

47. Noteworthy is the fact that the above-statedcommitment of MER LCO to the public, as stated in its MegaFranchise, can only be done and realized by notifying thepublic through publication of its application for rateadjustments or increases and by encouraging publicparticipation in the process of its approval, rather thanembedding it automatically, albeit arbitrarily, in each of itsconsumer s monthly billing by reason of an instant rateimposition.

48. Viewed in another context, however, theautomatic rate adjustments and increases promote aviolation of Meralco s Mega Franchise, which is in itself aground for its revocation.

49. Additionally, it must be emphasized that theamendment made on Section 4 (e), Rule 3 of the IRR EPIRAdispensing with the publication requirement of applicationsfor rate adjustments or increases does not divest


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50. Suffice it to state that the public in general,represented by the herein class petitioners, who sha II be atthe receiving end of the burden imposed by rateadjustments or increases, has the right to be notified andinformed thereof, as well as the right to present its side andbe heard. This is in accordance with the due process clauseenshrined in the Constitution, which is deemed written inevery statute, contract, regulation or undertaking. Thus,even if the requirement of publication had been deleted as aresult of the amendment, such requirement, being essentialto due process, is still deemed effectively written in the IRREPIRA.

Thus, in the case of Ruben Serrano vs. NLRc8 theSupreme Court ruled that:

Elementary is the doctrine that constitutionalprovisions are deemed written into every statute,contract or undertaking. Italics and underscoringsupplied)

51. Likewise, due process was simply and plainlydescribed in the case of .Jose R. Catacutan vs. People9 as:

Due process simolv demands an opportunity tobe heard. Due process is satisfied when the partiesare afforded a fair and reasonable oo0ortunitv toexplain their respective sides of the controversv.Italics and underscoring supplied)

52. Given the foregoing disquisition, it is more thanclear that the assailed automatic rate adjustments andincreases allowed by ERC and immediately implemented byMERALCO is violative of the declared State Policy stated inthe EPIRA and of due process.


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EAutomatic electrici ty rateadjustments or increasesof MER LCO are not onlyviolative of due processbut also amount to aregulatory fai lure on thepart of the ERC an abjectsurrender of i ts regulatoryfunctions, in violation ofSection 25, EPIRA.

53. Section 25 of the EPIRA provides:

Page 25 of 35

SEC.25. Retail Rate. - The retai l rates chargedbv distr ibut ion util it ies for the suDDlv o electr icitv intheir captive market shall be subject to regulation bvthe ERC based on the principle o ful l recovery oprudent and reasonable economic costs incurred, orsuch other principles that wil l promote efficiency asmay be determined by the ERC

Every distribution uti l i ty shall identify andsegregate in i ts bil ls to end-users the components othe retai l rate, as defined in this Act. Italics andunderscoring

54. Clear from the above-quoted provision of theEPIRA that no other governm.ent agency or private entity istasked and mandated to regulate the retail rates beingcharged by MERALCO to its captive market. However, whenthe ERC cleared and allowed said MERALCO to automaticallyadjust and increase its rate given the herein assailedResolutions and letter, respondent ERC practically andconveniently surrendered and delegated its regulatoryfunctions and office to MERALCO. Automatic rateadjustment or increase effectively defeated the regulatoryauthority of ERC as mandated by law.


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Page 26 of 35

violative of the above-quoted provision of the EPIRA.Settled is the rule that a delegated authority cannot furtherbe delegated -- potestas delegate non de/egarepotest .

Thus:

The rule is that what has been delegatedcannot be delegated, or as expressed in the Latinmaxim: potestas delegate non delegare potest. Thisrule is based upon the ethical principle that suchdelegated power constitutes not only r ight butduty to be performed by the delegate by theinstrumentali ty o his own judgment act ingimmediately upon the matter o legislation and notthrough the intervening mind o another. Italicsand underscoring supplied

56. Axiomatic in the act of ERC is the invalidity of itsaction.

FThe automatic rateadjustments or increasesmade and imposed byMERALCO against i tsconsumers and subscribersbeing inherently andpatently i l legal for beingviolative of due process, arefund of all amountscollected by MERALCOfrom the petitioners andthe class must be ordered.

57. The amount collected or imposed by MERALCO to


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Page 28 of 35

and i t must be so patent or gross as to amount to anevasion o f a posit ive duty or to a virtual refusal toperform the duty enjoined or to act t al l incontemplation o f law. Italics and underscoringsupplied

62. In the case at bar, respondents clearly acted withgrave abuse of discretion, sufficient to conclude that theyacted in a whimsical, capricious, or arbitrary manner byreason of prejudice amounting to an evasion of a positiveduty or to a virtual refusal to perform the duty enjoined orto act at all in contemplation of law, when:

a. The DOE amended Section 4 e), Rule 3of the IRR EPIRA in violation of the provision anddeclared State Policy of the law;

b. Respondent ERC following and basingon the illegal amendment made by the DOE,issued the herein assailed Resolutions and letterallowing the automatic rate adjustment andincrease in favor of MERALCO, which resulted inthe unlawful imposition of illegal electricity rateadjustment or increase and in clear violation ofdue process of law;

c. The ERC virtually surrendered itsregulatory functions, as an undue advantage, infavor of MERALCO and against the general public.

XI

ALLEGATIONS IN SUPPORT OFTHE APPLICATION OF THE CLASS PLAINTIFFS

FOR A TEMPORARY RESTRAINING ORDER STATUSQUO ANTE ORDER AND INJUNCTION

Class adopt and reiterate


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Page 29 of 35

63. The issuance by respondent ERC of the hereinassailed Resolution and Letter which is immediatelyexecutory on the part of MERALCO to automatically collectand impose electricity rate adjustment and increase leavesclass petitioners without any other plain, speedy, immediateand1 available recourse under the law to prevent theexetution thereof, upon its lapse into finality.

64. The threatened execution of the above-statedResolutions and letter would definitely render nugatory andacademic the relief and remedies herein prayed for, if thesame will not be outrightly restrained and/or enjoined. twould definitely be promotive of the interest of substantialjustice and public policy to restrain and/or enjoin theexecution of the same issuances.

65. In the same manner, not only the classpetitioners, but the public in general based on theperpetration of an injustice, would suffer grave andirreparable injury if the said Resolutions and letter areexecuted or carried out by MERALCO with the concurrence ofDOE and ERC as it would deprive the class petitioners andthe class itself of their rights without due process of law.

66. Class petitioners are meritoriously entitled to therelief and remedies prayed for, and the whole or part of suchrelief and remedies consist in restraining the commission ofthe acts complained of, or the performance of an action oracts, either for a limited period or perpetually.

67. The commission or continuance of the actscomplained of during the litigation or the non-performancethereof would work grave injustice to the herein classpetitioners and the general public.

68. MERALCO, with the concurrence of DOE and ERCis doing, threatening, is about to do or procuring to bedone, some acts in violation of the petitioners and thepublic s rights respecting the subject of the action herein andtending to render the judgment hereof ineffectual.

69. The threatened and actual implementation and


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Page 30 of 35

70. There is a need to place the parties in theirrespective status before the filing of the present case andbefore the issuance of the assailed Resolutions and letter bythe ERC necessitating the issuance of a Status Quo AnteOrder.

71. The immediate issuance of the injunctive andancillary relief of restraining and/or enjoining theimplementation or execution of the afore-mentionedResolutions and letter issued by respondent ERC in favor ofMERALCO is highly in order.

72. Or if the acts complained of have already beencommenced or accomplished, the immediate issuance of theinjunctive and ancillary relief of restraining and/or enjoiningthe implementation or execution of the afore-mentionedResolutions and letter issued by the ERC in favor ofMERALCO is highly in order.

XII

Prayer

WHEREFORE, premises considered, i t is respectfullyprayed of this Honorable Court that:

mmediately upon iling of the Petition

1. A Temporary Restraining Order TRO) or a StatusQuo Ante Order be issued ex parte immediately and withextreme dispatch, restraining and enjoining respondents,their agents, representatives and all other persons, agenciesor instrumentalities who may be acting under their directand incidental control and supervision, from implementing,executing and carrying out the execution of its Resolution


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age3 of35

After Due Notice and or Summary Hearing onthe Issuance of Injunction

2. A Writ of Prohibitory Preliminary Injunction beimmediately issued restraining and enjoining therespondents and all other persons agencies orinstrumentalities who may be acting under their direct andincidental control and supervision from implementing,executing and carrying out Resolution 10-01, Resolution 10-04, both Series of 2004, and the letter dated December 92013, until the final disposition on the merits of the presentpetition;

After Hearing o the Merits

3. The Writ of Prohibitory Preliminary Injunction bedeclared permanent and p e r p ~ t u a l4. Render a Decision declaring the respondents to

have acted with grave abuse of discretion, amounting to lackor excess of jurisdiction, and consequently:

a. Declaring the amendment of Section 4e), Rule 3 of the IRR EPIRA made by the DOE tobe illegal null and void b initio

b. Declaring all resolutions orders or anyother issuances of respondent ERC authorizing,allowing, confirming and implementing theautomatic power rate adjustments or increasesimposed by MER LCO as inherently null and voidon the ground of grave abuse of discretion,amounting to lack or excess of jurisdiction;

c Declaring of all electricity rateadjustments or increases automatically imposedor collected by MERALCO from its subscribers and


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Page 32 of 35

d. Prohibiting the ER from allowingMERALCO to impose and collect automaticallyrates adjustments and increases;

e. Ordering the audit and subsequentrefund of all rate adjustments or increases

utom tic llv collected or imposed byrespondent MERALCO to all of its consumers orsubscribers by virtue of the assailed ERresolutions, orders or issuances with utmostdispatch, reckoned from the year 2004;

f. Ordering the creation of a committeeappointing the Commission on Audit COA) ashead, and where consumer interests aresufficiently represented, that would conductimmediate audit and subsequent refund of all

utom tic electricity rate adjustments orincreases illegally imposed and collected byMERALCO reckoned from the year 2004;

g. Ordering the deposit in an escrowaccount the aggregate amount of refunddetermined by the committee headed Commissionon Audit COA); and

h. Ordering the proportionate distributionof the determined amount of refund to all classmembers;

Other remedies appropriate under the premises arealso prayed for.


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Metro Manila December lta 2013.

Counsel forvPetitioners4045 Bigasan StreetBrgy. Palanan Makati City

IBP Lifetime No. 03214122903PTR No. 3671506-01.02.13-RizalRoll of Attorneys No.19190

Page 33 of 315

M LE Exemption No. 3-001432-6.28.10 Pasig

Counsel for PetitionersSuite 201 Carreon Building

2746 Zenaida StreetBrgy. Poblacion Makati CityPTR No. 3676854-01.08.13-MakatiIBP Lifetime No. 0010-11.15.93Roll of Attorneys No. 23649

M LE Compliance No. V-0001091-11.12.13

Countel for PetitionersNo. 137 Libis Gochuico StreetCircumferential Road 3Caloocan City 1400Tel. No. 3511718Email: [email protected]

IBP NO. 926338; 01-16-13-CalmanaPTR NO. 5534040; 01-14-13-Caloocan City

Roll of Attorneys No. 48536M LE Compliance No. IV - 0018734 April 24 2013


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Copy furnished:

Manila Electric CompanyLopez Building Ortigas AvenuePasig CityEnergy Regulatory CommissionPacific Centre BuildingSan Miguel Avenue Pasig CityDepartment of EnergyEnergy Center Rizal DriveBonifacio CityTaguig City 632

EXPLANATION

age 34 of 35

fiR ;JDt 3r M < ~ fk f , 0~ u f ~ 0

/U f 1.rv1g

r /.t7?13

Copies of the foregoing Petition for Certiorari andProhibition were served by registered mail with return carddue to time constraint and lack of available messengerial toeffect personal service hereof.

R O N ~ O D I L L S


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Page 36of 5

REPUBLIC OF THE PHILIPPINES)Makati City ) SS.x----------------------------------x

VERIFICATION CERTIFICATIONI, RODRIGO C DOMINGO, one of the petitioners in the above

entitled case, of legal age, Filipino citizen, with postal address locatedat 15/F LPL Center, No. 130 L P Leviste St., Salcedo Village, MakatiCity, after having been duly sworn in accordance with law, herebydepose and state: That -1. I am one of the petitioners in the present class action

against respondents;2. I caused the preparation of the foregoing Petition forCertiorari and Prohibition;3. I have read the contents thereof and affirm that the sameare true and correct to the best of my personal knowledge and/or arebased on authentic records;4. Pursuant to and in compliance with Supreme Court

Administrative Circular NO. 04-94, I hereby certify that I have notcommenced any other action or proceeding involving the same issuesin the Supreme Court, the Court of Appeals, or different divisionsthereof, or any other tribunal or agency; to the best of my knowledge,no such action or proceeding is pending with the Supreme Court, theCourt of Appeals, or different divisions thereof, or any other tribunal oragency; and if I should thereafter learn that a similar action orproceeding has been filed or is pending before the above tribunals oragency, I hereby undertake to report that fact within five 5) daystherefrom.

ODRIGO C DOMINGO JR.Petitioner/Affia ntOSCA ID No. 3677issued by Makati Cityon April 27, 2005

nEC 2 o 1 U\3SUBSCRIBED AND SWORN to before me this _ December,

2013, in the City of Makati, the affiant exhibited to me hisgovernment-issued ID as stated above, bearing his photograph, as hiscompetent evidence of his identity.


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.:\~ r

VERIFICATION CERTIFICATION

PETRONILO L. ILAGAN of legal age Filipino, married, with office and postal addressat No. 10 Bayside Court Compound, 680 Quirino Avenue, Tambo, Paranaque City, afterbeing sworn, deposes and states: THAT1. He is the President of the National Association of Electricity Consumersfor Reforms, Inc., who had caused the preparation of the foregoing Petition a copy of

Secretary's Certificate authorizing Mr. Petronila L . Ilagan to file this Petition isattached as Annex A2. He read and fully understood the allegations contained in said Petitionand that all the facts therein contained are true and correct based on his personalknowledge and authentic records.3. He hereby certify that he have not commenced nor caused thecommencement of any other action or proceeding involving the issues raised hereinbefore the Regional Trial Court, the Supreme Court or different Divisions thereof, orany other tribunal or agency, and that to the best of his knowledge, no such action or

proceedings is pending before the Regional Trial Court, the Supreme Court, ordifferent Divisions thereof, or any other tribunal or agency; and that i f he shouldlearn that a similar action or proceeding has been filed or pending before theSupreme Court, or different Divisions thereof, or any other tribunals or agency, heshall notify this Honorable Commission within five (5) days from such notice.

IN WITNESS WHEREOF he has hereunto affixed his signature this 19th day ofDecember 2013 at Paranaque City.

~ ' 4 1 L O c . ILAGANffiant

SUBSCRIBED AND SWORN to before me this day of DEC 2 0 2013 2013 byaffiant who showed me his Drivers License N10-74-012320 issued by LTO - EastAvenue1 ec n J -if'ir j 011 D ~ b u 1, 4Df4.Doc. No.Page No.Book No.

21 l_;IL;w ATT ,~ t f f i t : f cUntil December 31 2013Appt No M-521 Makati City


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I

VERIFICATION & CERTIFICATION

BONIFACIO C. DAZO of legal age Filipino, widower, with office and postal address atMyrna Panlilio St., B.F.Resort Village, Las Pinas City, after being sworn, deposes andstates: THAT

1. He is the President of the Federation of Las Pinas HomeownersAssociation, Inc., who had caused the preparation of the foregoing etition a copy ofSecretary's Certificate authorizing BONIFACIO C DAZO to file this etition isattached as Annex /,2. He read and fully understood the allegations contained in said etitionand that all the facts therein contained are true and correct based on his personalknowledge and authentic records.3. He hereby certify that he have not commenced nor caused thecommencement of any other action or proceeding involving the issues raised hereinbefore the Regional Trial Court, the Supreme Court or different Divisions thereof, orany other tribunal or agency, and that to the best of his knowledge, no such action orproceedings is pending before the Regional Trial Court, the Supreme Court, ordifferent Divisions thereof, or any other tribunal or agency; and that i he shouldlearn that a similar action or proceeding has been filed or pending before theSupreme Court, or different Divisions thereof, or any other tribunals or agency, heshall notify this Honorable Commission within five (5) days from such notice.

IN WITNESS WHEREOF he has hereunto affixed his signature this 16th day ofDecember 2013 at Las Pinas City.

BONIFACIO C. DAZOffiant

SUBSCRIBED AND SWORN to before me this day of DE 2 0 2013 2013, byaffiant who showed me his Community Certificate No. 06133462 issued on February 2,2013 at Las Pinas City. osa ID No ll)Of 43 rE sued ~ 1.- 6 fi; .s. ec 11 C9iV N ~ . 14,wDoc. No. Ji ;Page N o ~Book N o ~ ;Series of 2013

LLUZA ' W r ~ I C

U n ~ t D e c e m b e r 3 1 201J/\pp\ No M-52 \ Makat1 CityIElP 899793. May 22 ~ ~ 0 1 2 H S MP H ~ 3 6 8 5 4 8 ~ i .Jan 16 :wu-MakatiS C Holl No 59597MCLE Compliance No IV-0011330Unit. 6E Cityiand Herrera Tower98 Rufino St. cor Valero St- Salcedo ViilaQe M


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REPUBLIC OF THE PHILIPPINES)MAKATI CITY )S.S.

AFFIDAVIT OF SERVICEJn compliance with Section 12, Rule 13 o he Rules o Court,as amended by Supreme Court Resolution dated April 8, 1997)

I, ALLEN D. BUG-ATAN, Filipino, of legal age, with office address at 15 111Floor, LPL Center, 130 L. P. Leviste Street, Salcedo Village, Makati City, after havingbeen duly sworn in accordance with law, hereby depose and state: That -1 I am a liaison officer of Domingo Dizon Adre Leonardo - A LawPartnership;2. n December 20, 2013, I served by registered mail with return card theforegoing "Petition/or Certiorari and/or Prohibition" dated December 16, 2013, in thecase entitled "National Association o Electricity Consumers for Reforms (NASECORE),

et. al. vs. Manila Electric Compamy, et. al." G. R. No. , Supreme Court,Manila, to:

Manila Electric CompanyLopez Building, Ortigas A venuePasig CityEnergy Regulatory CommissionPacific Centre BuildingSan Miguel A venue, Pasig CityDepartment of EnergyEnergy Center, Rizal DriveBonifacio CityTaguig City 1632

RR# /VOT, JDecember 20, 2013Makati Bel-Air P.O.RR# /{?)1-J

RR# /JVr -JI

3. The above-described documents were placed in a sealed envelopes addressedto the aforementioned addressees, with postage fully prepaid, and with instructions to thepostmaster to return the same to sender after ten (10) days if not delivered.

SUSCRIBED AND SWORN TO before me this 20th day of December 2013 inMakati City, affiant exhibiting to me his Philhealth Card No. 01-051485921-9 with hispicture attached thereon as a competent proofhis identity.Doc. No. _m_;Page No. _Jf}_; A T T Y ~ .. UZ\ .


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TABLE OF ANNEXES

ANNEXES DESCRIPTIONSA Secretary s Certificate of National Association of Electricity

Consumers for Reform {NASECORE) dated December :1.0>2013.B Secretary s Certificate of Federation of Village Associations(FOVA) dated December 18, 2013.C Secretary s Certificate of Federation of Las PifiasHomeowners Associations (FOLPHA) datedD Guidelines for the Automatic Adjustment of Generation

Rates and System Loss Rates by Distribution Utilities.E Certified True Copy of Resolution No. 10-01, Series of

2004 entitled In The Matter of Amending the Guidelines 1for the Automatic Adjustment of Generation Rates and 11System Loss Rates by Distribution Utilities.

F Certified True Copy of Resolution No. 10-04, Series of 12004 entitled In The Matter of amending the Guidelinesfor the Automatic Adjustment of Generation Rates andSystem Loss Rates by Distribution Utilities.

G Resolution No. 16, Series of 2009 entitled A ResolutionAdopting the Rules Governing the Automatic CostAdjustment and True-Up Mechanisms and CorrespondingConfirmation Process for Distribution Utilities.

H Certified True Copy of the letter dated December 9, 2013sent by ERC to MERALCO.


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NNEXANNEX A

SECRETARY S CERTIFICATE

I, RONALD G. GOL:UN, a duly elected, qualified and incumbent CorporateSecretary of National Association of electricity Consumers for Reforms, Inc(NASECORE), a non-stock corporation duly organized and existing under and by virtueof the laws of the Philippines, do hereby certify that:At the special m e e ~ i n g of the Board of Directors of the NASECORE dulyconvened and held on December 13, 2013 at which meeting a quorum was present,acted throughout and voted, the following resolutions were approved:

IRESOLVED, that the Board of Directors of NASECORE approve, as i t herebyapproves, the filing of tile Petition with the Supreme Court of the Philippines.RESOLVED, that Mr. Petronila L. Ilagan, President of NASECORE wasempowered, and is hereby empowered to sign, execute, verify and deliver on behalf

of NASECORE the said Petition any papers and instruments that he may deemappropriate and necessary, for the furtherance of NASECORE's interest.WITNESS THE SIGNATURE of the undersigned as such officer of theAssociation and its corporate seal hereunto affixed on this 13th day of Decembf2013

at Parafiaque City.

S U B S C R I B E ' . . ~ AND SWORN to before me this d of 2013, affiantexhibiting to me his Driver's License No. N03-01.-3082 16 issued at LTO - East A v e n u e . ~e-yplr&Nlj N ~ b 1 ' - o .2. 013 Doc. No. _ a _ _Page No . _ f L _Book No. [ j

Series of 2013 T T Y ~Until December 31 2'0'13 Appl No M-521 M


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NNFX BSECRETARY S CERTIFICATE

I MELANIE S. ROSAS, a duly elected, qualified and incumbent Corporate Secretary ofFederation of Village Associations (FOVA), a non-stock corporation duly organized and existingunder and by virtue of the laws of the Philippines, do hereby certify that:At the regular meeting of the Board of Directors of FOV A duly convened and held onOctober 12, 2013 at which meeting a quorum was present, acted throughout and voted, thefollowing resolutions were approved.RESOLVED, that the Board of Directors of FOVA approve, as it hereby approves, thefiling of the Petition with the Supreme court of the Philippines.

RESOLVED, that Engr. Siegfriedo A. Veloso, Director for External Affairs of FOVAwas empowered, and is hereby empowered to sign, execute, verify and deliver on behalf ofFOVA the said Petition any papers and instruments that he may deem appropriate andnecessary, for the furtherance ofFOVA s interest.

WITNESS THE SIGNATURE of the undersigned as such officer offlie Asiation andits corporate seal hereunto affixed on this 17th day ofDecember 2013 at Muqf n l ~ City.

SUBSCRIBED AND SWORN to before me this ~ y of December 2013, affiant exhibitingto me her Community Tax Certificate No. 07889794 issued at Muntinlupa City on February 12013.

\

D o c N o ~Page No. .. :Book No. Series of 201


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/(ANNEXANNEX A

SECRETARY'S CERTIFICATEI, EDWARD COLOBONG , a duly elected, qualified and incumbent CorporateSecretary of the FEDERATION OF LAS PINAS HOMEOWNERS ASSOCIATION (FOLPHA), anon-stock corporation duly organized and existing under and by virtue of the laws of

the Philippines, do hereby certify that:At the special meeting of the Board of Directors of the FOLPHA dulyconvened and held on December 14, 2013 at which meeting a quorum was present,

acted throughout and voted, the following resolutions were approved:"RESOLVED, that the Board of Directors of FOLPHA approve, as i t herebyapproves, the filing of the Petition with the Supreme Court of the Philippines.RESOLVED, that BONIFACIO C. DAZO, President of FOLPHA was empowered,and is hereby empowered to sign, execute, verify and deliver on behalf of FOLPHA thesaid Petition any papers and instruments that he may deem appropriate andnecessary, for the furtherance of FOLPHA's interest.

WITNESS THE SIGNATURE of the undersigned as such officer of theAssociation and its corporate seal hereunto affixed on this l6th day of December 2013at Las Pinas City.

E D \ V R ~ O L O B O N Gorporate Secretary

OE C 2 O 20131SUBSCRIBED AND SWORN to before me this di: }' of 2013, affiantexhibiting to me his Driver s License No. 1 1 1 1 9 1 0 1 ~ 1 1 1 _ . . ~ t1 lotli a ftDoc. No. _J J_P a g eN o . J _Book No. _IB __/_

Series of 2013

ll.fpit"Vnj Ott J'1 . : J t J l ~ l f A T I Y - 4 1 ~ 1 ~ LLUZN C / ( R Y ~ I CUn 1 December : ~ 1 2013Appl lfo ~ ; 1 - S ? 1 Makal1 CityIBP G 9 ~ l i ~ J May 2:'. , () 12'-RSMPTR #Jbf; ;.,105 .Inn Vi 2013 Makati

') C f


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,..//

~ ~NNEX

Republic of the PhilippinesENERGY REGULATORY COMMISSION

San Miguel Avenue, Pasig City

GUIDELINES FOR THE AUTOMATIC ADJUSTMENTOFG E ~ E R A T I O N RATES AND SYSTEM LOSS RATES YDISTRIBUTION UTILITIESPursuant to Section 43 (f) of Republic Act No. 9136 or the Act, Rule 7 ofits Implementing Rules and Regulations (IRR) and Section 10 of Republic ActNo. 7832, the Energy Regulatory Commission (ERC) hereby adopts and

promulgates these Guidelines to establish a process for the automaticadjustment of Generation Rates and System Loss Rates by Distribution Utilities.

ARTICLE IGENERAL PROVISIONS

These Guidelines shall have the following objectives:a} To ensure and maintain the quality, reliability, security and affordabilityof the supply of electric power;b) To ensure transparent and reasonable prices of electric power servicein a regime of free and fair competition and to achieve greateroperational and economic efficiency;c) To ensure full recovery of all allowable Generation Costs and othercosts associated with the System Loss Caps in an efficient and timelymanner; andd) To protect the public interest as it is affected by the rates and services

of Distribution Utilities

.


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ARTICLE IISCOPE AND DEFINITION OF TERMS

Section 1. Scope - These Guidelines shall apply to all Distribution Utilities.Section 2. Definition of Terms - As used in these Guidelines, thefollowing terms shall have the following respective meanings:a) Act unless otherwise stated, shall refer to Republic Act No. 9136,otherwise known as the Electric Power Industry Reforrn Act of 2001 .b) Average Transmission Rate (AlR) shall mean the transmission. costs approved per unbundling divided by the annualized kWh salesper unbundling.c) Deferred Accounting Adjustment (DAA) shall mean thecomponent of the generation rate, calculated in accordance with theGeneration Rate Adjustment Mechanism (GRAM), intenda.:f to recoverthe deferred accounting balance.d) Distribution Util ity (DU) shall refer to any electric cooperative,private corporation, government-owned utility or existing localgovernment unit which has an exclusive franchise to operate adistribution system in accordance with the Act.e) Energy Regulatory Commission or ERC shall refer to theregulatory agency created by Section 38 of the Act.f) Generation Cost shall mean costs associated with the acquisition ofpurchased power. Generation costs include only those costs that arereasonable, prudently incurred, and are eligible for recovery inaccordance with the current practice of the ERC.

_ ..g) Generation Rate shall mean the cost of power generated and soldto the distribution utility by the National Power Corporation (NPC) aswell as the Independent Power Producers (IPPs). which shall bepassed on to the DU's customers, as calculated in the formulaprescribed in these Guidelines.

h) Ineligible Supply Contracts shall mean power supply agreementsentered into by the DUs with the IPPs, which were not approved by thethen Energy Regulatory Board or by the ERC

Page 2 of. lT'-:i1r-:r..17 v.I.J CER i\h Iv__ , 1 1 1 : : . ' l ' ~ ' l 1 ;

N/;


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i) Other Generation Rate Adjustments (OGA) shall refer tounder(over)-recoveries in generation costs, recoveries from violation ofcontracts and other pilferages, as well as other adjustments deemednecessary by the ERC, subject to the provisions of these guidelines.The OGA shall not be subject to any carrying charge. .

j) Prompt Payment Discount ( ~ P D ) shall mean the three percent(3%) discount that electric distribution utilities get from NPC for payingtheir power bills on or before the tenth (10th) day of the month followingthe billing period.k) System Loss shall mean the difference between (kilowatt-hour)kWh purchased and/or generated and kWh sold by a Distribution Utilityexpressed as a percentage of kWh purchased and/or generated.I) System Loss Cap shall mean the level of System Loss recoverablefrom customers as established by the ERG in accordance with Section

43 f) of the Act.m) System Loss Rate shall mean the rate determined in accordancewith the formula set forth in Article IV hereof. Individual System LossRates may be calculated for different customer classes if theDistribution Utility maintains records on the individual customer classSystem Loss.

ARTICLE IllMONTHLY ADJUSTMENT OF THE GENERATION RATE ..

Section 1. Adjustment Formula - On the tenth (10) day of eachcalendar month, Distribution Utilities shall calculate new Generation Rates basedc;in the following formula:

GR=AGC+OGAWhera:

GR Generation Rate to be charged per kWhAGC = Adjusted Generation Cost, automatically computed without need

of prior ERG verification and confirmation, as follows:[(GC; + GC + ..... + GGn) - (PPD * 50%)= TP

Page of7


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ATR = Average Transmission Rate based on the most recentunbundling decision in Peso per kWh, computed asTransmission Costs per unbundling divided by theAnnualized Sales in kWh per unbundling

U =Gross Up Factor=( System Loss I [1- System Loss])The System Loss is based on the actual System Loss or the SystemLoss cap whichever is lower plus actual company use or the company use cap of1 whichever is lower. The actual System Loss and company use are based. onthe preVious month figures to be submitted by the DU. Actual System Loss can

be calculated on an individual customer class level if the Distribution Utiljty hasthe requisite information to support individual System Loss Rates.Section 2. Billing of System Loss Rate - The Distribution Utilities shall

bill their customers on the tenth (10) day of each month the System Loss Ratescalculated in accordance with the immediately preceding Section.

ARTICLE VVERIFICATION PROCESS

Section 1. Monthly Reporting Requirements - On or before thetwentieth (20th) day of each month, the Distribution Utilities shall provide theERC with all calculations related to Articles Ill and IV along with supportingdocumentations, which shall include, but not limited to, the following:

Invoices from power suppliers; Sample bills to end-users; Official receipts of payment of power supplier invoices ERC Forms-M-001 & M-002; and Other documents deemed relevant by the ERC.

Section 2. Post Verification - At least every six (6) months, the ERCshall verify the recovery of Generation Costs by comparing the actual allowablecosts incurred for the period with the actual revenues for the same periodgenerated by the Generation Rates and the portion of the Systems Loss Ratesattributable to Generation Costs.Should the ERC fail to verify the Generation Rate (including the OGA) and

System Loss Rate within six (6) months from the submission of calculation and_supporting documentations in accordance with the immediately precedingSection, the rates shall be deemed final and confirmed.

age of7


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Upon completion of the semi-annual verification process, the ERC shallissue an Order establishing the adjustments to be included in the OG resultingfrom said semi-annual verification. These adjustments shall be implemented inthe succeeding six (6) month period to reflect any over or under recovery.

Section 3. Prior Verification of Other Generation Rate djustments(OGA). OG other than those included in Article V, Section 2 shall be verifiedand confirmed by the ERC within forty five (45) days from date of its filing andonly thereafter shall they be recoverable.

RTICLE VIFIN L FILING UNDER THE GENERATION R TE ADJUSTMENTMECHANISMSection 1 Effectivity of the Generation Rate djustment Mechanism(GRAM) - Upon the effectivity of these Guidelines, the GR M shall no longer beapplicable to Distribution Utilities.Section 2. Final filing under GRAM - Distribution Utilities that are usingthe GR M to recover Generation Costs shall file their final GRAM applicationswithin sixty (60) days from the effectivity of these Guidelines. Tfte'"fi'rn t'GRAMfiling shall include the period from their last approved GRAM filing to theeffectivity of these Guidelines for purposes of calculating the final DeferredAccounting Ad justment (DAA).

ARTICLE VIISection 1. Fines and Penalties. Violation of any provision of theseGuidelines shall be subject to the imposition of fines and penalties in accordancewith the Guidelines to Govern the Imposition of Administrative Sanctions in theForm of Fines and Penalties Pursuant to Section 46 of Republic ct No. 9136promulgated by the ERC on May 17, 2002.

RTICLE VIIIFIN L PROVISIONS

Section 1. Exception Clause. Where good cause appears, the ERCmay allow an exception from any provisions of these Guidelines, if such

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exception is found to be in the public interest and is not contrary to law orany other related rules and regulations.Section 2. Separabil ity Clause If for any reason, any part or sectionof these Guidelines is declared unconstitutional or invalid, the other partsor sections hereof which are not affected thereby shall continue to be in fullforce and effect.Section 3. Effectivity These Guidelines shall take effect on thefifteenth 15th) day following its publication in t\vo 2) newspapers ofgeneral circulation.Pasig City, October 13, 2004.

,-

On Official Travel)OLIVER B. BUTALIDCommissioner /~ { ; ~

Commissioner

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ANNEXERepublic of the PhilippinesENERGY REGULAT< lRY COMMISSIONSan Miguel Avenue, Pasig City

RESOLUTION No.10-01 Series o 2004IN THE MATTER OF AMENDING THE GUIDELINES FORTHE AUTOMATIC ADJUSTMENT OF GENERATION RATESAND SYSTEM LOSS RATES BY DISTRIBUTION UTILITIES

This is to AMEND Sections 1 and 2 of Articles Ill and IV of theGUIDELINES FOR THE AUTOMATIC ADJUSTMENT OF GENERATIONRATES AND SYSTEM LOSS RATES. BY DISTRIBUTION UTILITIES(uGuidelines ) approved on 3 October 2004 which read as follows:.ARTICLE Ill

MONTHLY ADJUSTMENT OF THE GENERATION RATESection 1 Adjustment Formula - On the tenth (10) day ofeach calendar month, Distribution Utilities shall calculate newGeneration Rates based on the following formula:

Section 2. Billing of New Generation Rate The DistributionUtilities shall bill their customers the Generation Rates calculated . naccordance with the immediately preceding Section effective on the tenth(10) day of each month.

ARTICLE IVMONTHLY ADJUSTMENT OF THE SYSTEM LOSS RATE

. Section 1 Adjustment Formula - On the tenth (10) day ofeach calendar month, Distribution utilities shall calculate newSystem Loss Rates based on the following formula:xxx

Section 2 Billing of System Loss Rate - The DistributionUtiiities shall bill their customers on the tenth (10) day of eachmonth the System Loss Rates calculated in accordance with theimmediately preceding Section.

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The Commission, after due deliberation, RESOLVED, as it herebyRESOLVES, to amend the above-quoted portion of the Guidelines, to now readas follows:

I

ARTICLE Ill

MONTHLY ADJUSTMENT OF THE GENERATION RATE

Section 1. djustment Formula - On or. before the tenth{ O day of each calendar month, Distribution Utilities shallcalculate new Generation Rates based on the following formula:

Section 2. Billing of New Generation Rate - The DistributionUtilities shall bill their customers the Generation Rates calculated inaccordance with the immediately preceding Section effective on or beforethe tenth 10) day of each m o n t h ~

ARTICLE IV

MONTHLY ADJUSTMENT O THE SYSTEM LOSS RATE

Section 1. djustment Formula - On or before the tenth{10) day of each calendar month, Distribution Utilities shallcalculate new System Loss Rates based on the following formula:xxx xxx xxxSection 2. Billing of System Loss Rate - The Distribution Utilities

shall bill their customers on or before the tenth (10) day of each month theSystem Loss Rates calculated in accordance with the immediatelypreceding Section.

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This Resolution shall take effect on the eighth 8th) day following itspublication in two 2) daily newspapers o general circulation in the Philippines.

Pasig City, October 20, 2004.

On OfficialRODOLFO B A

RAtJ: A TANCommissioner

J SUS N ALCORDOCommissioner

Commissioner


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Republic of the Philippines N RGY REGUL TORY COMMISSIONSan Miguel Avenue, Pasig City

AN.NEX fRESOLUTION NO. 10-04, Series of 2004. : : s 1 g ~ ~ IN THE MATIER OF AMENDING THE GUIDELINES FORTHE AUTOMATIC ADJUSTMENT OF GENERATION RATESAND SYSTEM LOSS RATES BY DISTRIBUTION UTILITIES

. ~ ~ ~ :

This is to AMEND Section 1 of Article IV of the GUIDELINES FOR THEAUTOMATIC ADJUSTMENT OF GENERATION RATES AND SYSTEM LOSS. . .. RATES BY DISTRIBUTION UTILITIES ("Guidelines") approved on 13 October

- ~ : : : : : : ; ~ : : . . : : ~ : : : : : : : : : . 2004 which read as follows:

"ARTICLE IVMONTHLY ADJUSTMENT OF THE SYSTEM LOSS RATE

Section 1. Adjustment Formula On the tenth (10) day of eachcalendar month, Distribution Utilities shall calculate new System Loss Ratesbased on the following formula:SLR= (GR* U) + (ATR * U)

here_SLR =System Loss RateGR = Generation Rate calculated in accordance with Article Ill

ATR =Average TranSJ" lission Rate based on the most recentunbundling decision in Peso per kWh, computed asTransmission Costs per unbundling divided by theAnnualized Sales in kWh per unbundlingU =Gross Up Factor=( System Loss I [1- %System Loss])

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The System Loss is based on the actual System Loss or the SystemLoss cap whichever is lower plus actual company use or the company use cap of 1 w h i c h ~ v e r is lower. The actual System Loss and company use are based on-, tii:the previous month figures to be submitted by the OU. Actual System Loss can _ : ~ : ; ~ ~ .be calculated on an individual customer class level if the Distribution Utility has = - ~ - the requisite information to support individual System Loss Rates: - - : - ~ ~ _ .

The Commission, after due deliberation, RESOLVED, as it hereby RESOLVES, to amend the b o v e ~ u o t e d portion of the Guidelines, to now read as follows:UARTICLE IV

MONTHLY ADJUSTMENT OF THE SYSTEM LOSS RATESection 1. Adjustment Fonnula On or betore the tenth (1O} day ofeach calendar month, Distribution Utilities shall calculate new System Loss Ratesbased on the following formula:

SLR= GR U) + (ATR * U)Where

SLR =System Loss RateGR= Generation Rate calculated in accordance with Article IllATR =Average Transmission Rate based on the-most recentunt>undling decision in Peso per kWh, computed asTransmission Costs per unbundling divided by theAnnualized Sales in kWh per unbundling

U = Gross Up Factor= ( System Loss I [1- System Loss]}The System Loss is based on tne actual System Loss or the SystemLoss cap whichever is lower plus actual company use or the company Yse cap of1 whichever is lower; The actual System Loss and company use are based onthe average of the most recent twelve (12) month period for which information isavailable. Actual System Loss can be calculated on an individual customer classlevel if the Distribution Utility has the requisite information to support individualSystem Loss Rates.

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WHEREAS on November 22 and 25, 2008, the ERC conductedpublic consultations for the adoption of the proposed Rules Governing theAutomatic Cost Adjustment and True-up Mechanisms and CorrespondingConfirmation Process for Distribution Utilities;NOW THEREFORE the ERC, after considering the various viewsand comments submitted y all interested parties, hereby RESOLVES asit is hereby RESOLVED t APPROVE and ADOPT the Rules Governingthe Automatic Cost Adjustment and Troe up Mechanisms andCorresponding Confirmation Process for Distribution Utilities hereinattached as Annex A and made an integral part of this Resolution.This Resolution shall take effect fifteen (15) days following itspublication in a newspaper of general circulation in the country.Pasig City, July 13 2009.

MARIA T ~ C . 1 1 1 1 :


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2.4 Lifeline Subsidy; and2.5 Local Franchise and Business Taxes.

Section 3. Definition of TermsUnless the context otherwise provides, the following words and termsused herein shall have the following meanings:

3.1 Act unless otherwise stated, shall refer to Republic Act No. 9136,otherwise known as the Electric Power Industry Reform Act of 2001 .3.2 Business Tax shall refer to the tax levied by the cities andmunicipalities pursuant to Sections 143 and 151 of the LocalGovernment Code of 1991.3.3 Captive Market shall refer to electricity end-users who do not have thechoice of a Supplier of electricity, as may be determined by the RG inaccordance with the Act.3.4 Commission shall refer to the Energy Regulatory Commissioncreated under Section 38 of Republic Act No. 9136.3.5 Company Use shall refer to the Energy used by the Distribution Utilityin the proper operation of the Distribution System (e.g. substation serviceand Distribution Utility's offices, warehouses, workshops and other

essential electrical Loads).3.6 Distribution Charges shall refer to the distribution, supply, meteringand other related charges/adjustments.3.7 Distribution Utility (DU) shall refer to any electr ic cooperative, privatecorporation, government-owned utility or existing local government unitwhich has an exclusive franchise to operate a distribution system inaccordance with the Act.3.8 Electric Cooperative (EC) shall refer to a Distribution Utility organizedand incorporated pursuant to Presidential Decree No. 269, as amended

by Presidential Decree No. 1645 and Republic Act No. 6938, otherwiseknown as the Cooperative Code of the Philippines.

3.9 Franchise Tax shall refer to the tax levied by the province and citieson businesses enjoying a franchise pursuant to Sections 137 and 5 ofRepublic Act No. 7160, otherwise known as the Local Government Codeof 1991.

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3.10 Generation Rate (GR) shall refer to the rate associated with thepurchase of power from power supplierfs and distribution utility-ownedgeneration facility as incorporated in the approved unbundled rates or assubsequently authorized by the Commission.

3.11 Gross Sales or Receipts shall, as defined in Section 131(n) of theLocal Government Code of 1991, include the total amount of money orits equivalent representing the contract price, compensation or servicefee, including the amount charged or materials supplied with the servicesand deposits or advance payments actually or constructively receivedduring the taxable quarter for the services performed or to be performedfor another person excluding discounts if determinable at the time ofsales, sales return, excise tax and value-added tax (VAT).3.12 Ineligible Supply Contracts shall refer to power supply agreementsentered into by the DUs with the IPPs or other DUs, which were notapproved by the then Energy Regulatory Board or by the Commission.3.13 Lifeline Subsidy Rate (LSR) shall refer to the rate charged to nonlifeline customers to cover the lifeline discount provided tomarginalized/low income captive market end-users.3.14 Marginalized End-Users shall refer to low-income captive, householdelectricity consumers who cannot afford to pay at full cost and havelevels of electricity consumption below a threshold level as determinedby the Commission.3.15 National Grid Corporation of the Phil ippines (NGCP) shall refer to

the private consortium which had been awarded the concession toassume the power transmission functions of the National TransmissionCorporation (TRANSCO). 3.16 National Power Corporation (NPC) shall refer to the governmentcorporation created under Republic Act No. 6395, as amended.3.17 National Transmission Corporation (TRANSCO) shall refer toCorporation organized pursuant to the Act which assumed the electricaltransmission function of the NPC.3.18 Net Sett lement Surplus (NSS) shall refer to the settlement surplusremaining after all market transactions have been accounted for,

including the assignment of transmission line rentals to Network ServiceProviders. This remainder is assumed to be attributed to economicrentals arising from other binding constraints, and accounted for inaccordance with clause 3.13.16 of the WESM Rules.

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3.19 Philippine Electricity Market Corporation (PEMC) shall refer to theentity responsible for the operations of the spot market, governed by thePhilippine Electricity Market (PEM) Board in accordance with clause 1.4of the WESM Rules.

3.20 Pilferage Cost Recoveries (PCR) shall refer to costs recovered fromillegal tapping, tampering of meter, use of jumper, and other means ofillicit usage of electricity.3.21 Power Factor Discount (PFD) shall refer to the discount extended toDUs having maintained their power factor above the set threshold whichmaximizes the capacity of TRANSCO's facilities thereby resulting to realsavings in power costs, improvement of voltage regulation and release insystem capacity.3.22 Prompt Payment Discount (PPD) shall refer to the discount that DUsget from power supplier/s for paying their bills within the discount period.3.23 Power Supplier/s shall refer to an entity/ies selling power to a DUwhich may include the following: a National Power Corporation (NPC);b) Independent Power Producers (IPPs), either through bilateral powersupply contracts or through the Wholesale Electricity Spot Market; and cOther DUs.3.24 Recovery Period shall generally refer to the period when the costadjustments are implemented.3.25 System Loss shall refer to the difference between kilowatt-hour (kWh)

purchased and/or generated and kWh sold plus company use.3.26 System Loss Cap shall refer to the level of System Loss recoverablefrom customers, as provided for under Republic Act No. 7832 or the Antielectricity and Electric Transmission Lines/Materials Pilferage Act of1994, until a different cap is determined, as established by theCommission in accordance with Section 43 f) of the Act.3.27 System Loss Rate (SLR) shall refer to the rate determined inaccordance with the formula set forth in Article II hereof. For DUs wheredifferent system loss charges were granted for each of their respectivecustomer classes in the Unbundling Decisions, SLR shall be calculatedbased on an individual customer class level with the requisite reliableinformation to support individual System Loss Rates.3.28 Transmission Rate (TR) shall refer to the rate associated with thecost incurred in the transmission of electricity from the generators to thedistribution utilities' system.

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3.29 Wholesale Electricity Spot Market (WESM} shall refer to the marketwhere trading of electricity is made, established pursuant to Section 30of R.A. 9136.

ARTICLE 2CALCULATION OF THE ADJUSTEDRETAIL RATES

Section 1 Generation Rate. The Generation Rate (GR) of the DU shall bedetermined as follows:1.1. For a DU sourcing 100% of its power requirement from NPC:

1.1.1. For TOU customers, the GR shall be the NPC TOU ratesplus adjustments on GRAM, ICERA and Franchise andBenefits to Host Communities as approved by theCommission;1.1.2. For customers under special programs of the DU, the GRshall be based on their contracts: and1 1 3 For other customers, the GR shall be computed using theformula provided under Section 2 hereof.

1.2. For a DU sourcing its power requirement from sources other thanNPC:1.2.1 For TOU customers, the GR shall be the DU's TOU rates asapproved by the Commission:1.2.2. For customers under special programs of the DU, theGR shall be based on their contracts:1.2.3. For customers of a Buying DU under a Sale for ResaleAgreement, if the customers being supplied are notconnected with the main distribution grid and the cost isdifferent from those for other regular customers, the GRshall include the Generation, Transmission, System Loss,

Distribution, Supply and Metering Charges of the SellingDU; and1.2.4. For other customers, the GR shall be computed using theformula provided under Section 2 hereof.

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Section 2 Generation Rate Formula The GR applicable to customersreferred to in Sections 1 1 3 and 1.2.4 shall be calculated and billed eachcalendar month by the DU using the following formula:

FORMULA 1

GR AGR OGAWhere:

GR =GR =

Generation Rate expressed in Peso/kWh;Adjusted Generation Rate calculated, as follows:GR TGCTPG R

\Nhere:TGC =[ GC; +GC,, ++ GC.)-50 PPD, + PPD ++ PPD. - PCR]Where:

GCi to n = The Generation Costs in Pesos from source of poweri through source of power n for the previous monthcoming from Transition Supply Contracts (excludingMandated Rate Reduction and penalties), PowerSupply Agreements, WESM purchases, anddistribution utility-owned generation facility, asincorporated in the approved unbundled rates or assubsequently

Nasecore Petition Gr No. 210255

Documents

Transcript of Nasecore Petition Gr No. 210255