PGMA lauds the promulgation of the Performance-Based Rate Making Methodology

The Energy Regulatory Commission (ERC) promulgates on May 29, 2003, the Performance Based Rate (PBR) Making Methodology of the Transmission Sector. The signing of this important document was witnessed by Her Excellency President Gloria Macapagal-Arroyo, at the Malacanang Palace. President Arroyo lauded the Commission for its effort in coming up with this milestone document, which is relevant in the restructuring of the Philippine Electric Power Industry. The Performance Based Rate Making regime departs from the traditional Return on Rate Base Methodology which has been used in the Philippines for the past 80 years. ERC Chairman Manuel R. Sanchez and Commissioners Oliver B. Butalid, Carlos R. Alindada, Leticia V. Ibay, and Mary Anne B. Colayco signed this important document to benefit both investors and consumers by improving efficiency of utility operations, and ultimately bringing about long-term benefits to consumers in terms of providing more affordable electricity rates and greater quality and reliable electric service.

According to Chairman Sanchez, the issuance of the Transmission Wheeling Rate Guidelines “will set the tone for predictability and stability of our regulatory policies”. The document clearly outlines the ratemaking principles and methodology in a clear and transparent manner. The paradigm shift in rate making is well-timed as the government is now focusing on the privatization of the transmission sector. A stable regulatory environment will encourage more investments into this sector and accelerate the modernization of the transmission and distribution sectors.

Downloadable files:

1.) ERC Resolution No. 4, Series of 2003. Adopting an alternative rate setting methodology for the TRANSCO and any future concessionaire thereof.

Resolution No. 04, Series of 2003

2.) ERC Resolution No. 4, Series of 2003. Annex "A".

Resolution No. 04, Series of 2003. ANNEX A

May 29, 2003