Decision, ERC Case No. 2009-002RMERC resolves issue on mandated rate reduction & privatized NPC plants
The Energy Regulatory Commission (ERC) issued Resolution No. 13, Series of 2009 entitled A Resolution Amending Resolution No. 16, Series of 2008 that clarified that the Mandatory Rate Reduction (MRR) of thirty-centavos per kilowatt-hour (PhP0.30/kWh) granted under Section 72 of the EPIRA (R.A. No. 9136 or the Electric Power Industry Reform Act of 2001) shall continue to be enjoyed by residential customers even if their distribution utilities (DUs) are sourcing their power from Successor Generating Companies (SGCs) or those buyers of National Power Corporation (NPC) plants under Transition Supply Contracts (TSCs) assigned and transferred to these SGCs.
The said ERC Resolution is an offshoot to the petition (docketed as ERC Case No. 2009-002 RM) filed by Masinloc Power Partners Co., Ltd. (MPPCL) to initiate Rule Making in relation to ERC Resolution No. 16, Series of 2008 (entitled A Resolution Adopting Policies To Govern the Transition Supply Contracts Which Have Been Assigned and Transferred to National Power Corporation Successor Generating Companies) specifically on the issue of the MRR.
Section 72 of the Electric Power Industry Reform Act (EPIRA) provides that upon effectivity of the EPIRA, residential end-users shall be granted a rate reduction from NPC rates of thirty-centavos per kilowatt-hour (PhP0.30/kWh). Such reduction shall be reflected as a separate item in the consumer billing statement.
Transition Supply Contracts (TSCs) are supply agreements between NPC and its DU customers mandated by the EPIRA, which can be assigned to buyers of NPC plants or the SGCs.
Under the Resolution, the cost of implementing the MRR for the duration of the term of the assigned TSC shall be borne by NPC and/or PSALM (National Power Corporation and/or Power Sector Assets and Liabilities Management Corporation). However, the SGC may, by a written instrument, assume this obligation. On the other hand, in cases where an SGC shall continue to supply the requirements of the affected distribution utility (DU) under an extension as allowed by the ERC of the assigned TSC’s term, the obligation to provide the MRR shall cease, unless otherwise stipulated upon by the SGC and the affected DU. In such case, the cost of implementing the MRR shall be borne by the SGC.
Decision, ERC Case No. 2009-002RM
July 7, 2009