Regulatory timeframe allays fears of TransCo

“We would like to allay the fear of the National Transmission Corporation (TransCo) that the setting of the Maximum Annual Revenue (MAR) cap will delay the privatization of the TransCo”, Chairman Rodolfo B. Albano, Jr. said in the light of the reports on the October 11, 2005 dailies. Based on the timelines sent to TrasCo, the final MAR will be set on April 30, 2006, not August 30, 2005 as alleged by TransCo.

The ERC is currently in the process of setting the MAR for the Second Regulatory Period covering January 2006 to December 2010 (5 years), as provided for in the Transmission Wheeling Rates Guidelines (TWRG) promulgated on May 29, 2003.

The TWRG sets out the methodology to be used in setting the transmission wheeling rates under the MAR cap that may be charged during the First, Second and the Subsequent Regulatory Periods.

For the Second Regulatory Period, the October and November 2005 public hearings and consultations are scheduled to finally set the price determination for TransCo and any future concessionaire thereof on April 30, 2006 (detailed timeline shown on the table below). This is pursuant to Section 43(f) of the Electric Power Industry Reform Act (EPIRA) which authorizes the Energy Regulatory Commission to adopt alternative forms of internationally-accepted rate-setting methodology as it may deem appropriate. The said methodology must ensure a reasonable price of electricity and shall be non-discriminatory.

Activity	Timelines
Conduct of Hearings (TransCo Exposition)	October 17, 2005 – Mindanao Area (ERC Davao Field Office) October 18, 2005 – Luzon Area (ERC Hearing Room – Manila) October 20, 2005 – Visayas Area (ERC Cebu Field Office)
Conduct of Hearings (Presentation of Evidence and Witnesses)	November 8, 2005 – Mindanao Area (ERC Davao Field Office) November 10, 2005 – Visayas Area (ERC Cebu Field Office) November 11, 2005 – Luzon Area (ERC Hearing Room – Manila)
Deadline of Submission of Written Comments/Opposition to the Application	November 18, 2005
ERC to Issue Draft Determination	December 16, 2005
Deadline for Submission of Comments on the Draft Determination	January 20, 2006
Conduct of Public Hearings (Responses to Draft Determination)	February 2-3, 2006 – Visayas Area (ERC Cebu Field Office) February 9-10, 2006 – Mindanao Area (Davao Field Office) February 16-17, 2006 – Luzon Area (ERC Hearing Room – Manila)
Final Price Determination	April 30, 2006

“The ERC recognizes the fact that the success of EPIRA lies not only on a reliable regulation but also with concerted effort of the power industry stakeholders and consuming public as well to prove to the countries around us that the Philippines is a place that is worth their investments”, Chairman Albano added.

October 25, 2005