STRONG LEGISLATIVE SUPPORT FOR ERCâ€™S BUDGET IN FY 2024
17 August 2023 / ERC-Planning and Public Information Service
QUEZON CITY - The Energy Regulatory Commission (ERC) under the leadership of Chairperson and CEO Monalisa C. Dimalanta demonstrated its commitment to fulfilling its mandate as it presented its proposed budget for Fiscal Year (FY) 2024 to the House of Representatives Committee on Appropriations during a budget hearing held on 16 August 2023.
"I would like to commend the ERC for a job well done primarily on the fourth regulatory reset," stated Santa Rosa City District Representative Dan S. Fernandez during the budget hearing.
"The ERC will finally complete the reset for the transmission side for the 4th regulatory Period by the 3rd Quarter of this year, and will subsequently complete the reset of the distribution side. Through the reset, we will able to determine the fairness of transmission and distribution rates," Chairperson Dimalanta pointed out.
In her report to the House Committee on Appropriations, Chairperson and CEO Dimalanta highlighted ERCâ€™s accomplishments in FY 2022 and the first semester of 2023, focusing on pursuing affordability, increasing transparency, reinforcing accountability, establishing and implementing energy democracy programs, and completing reforms as mandated in the EPIRA and other related laws.
"The ERC suspended the FIT-All collection and this allowed savings of almost Php 0.04 per kWh for the consumers nationwide. We have also adopted a liniency program in the Commission for the first time. We have adopted this for the meter shop renewal of distribution utilities. We have also started to develop with the National Economic Development Authority (NEDA) a study to create an affordability index for power prices," Chair Dimalanta said.
"I would like to thank the ERC for the suspension of the three percent (3%) franchise tax," Association of Philippine Electric Cooperatives (APEC) Partylist Representative Sergio C. Dagooc said. Congressman Dagooc manifested his support for the restoration of the proposed budget of ERC.
Chairperson Dimalanta outlined ERCâ€™s strategic direction for FY 2024, including the drafting of new regulatory frameworks. The completion of the performance-based regulation (PBR) rate-setting process will improve the affordability of electricity prices. The ERC also reinforces its commitment to accountability through its consumer empowerment campaign and ERCâ€™s re-empowerment.
Committee on Appropriations Vice Chairperson Arnie B. Fuentebella acknowledged the tangible accomplishments of the energy family. "As we continue pivoting toward digitalization, an investment in energy is an investment in the future of the Philippines. As time change, so does the energy landscape. It is important for us to maintain our momentum and remain committed to a sustainable and inclusive development which necessarily includes a focus on the energy sector," Representative Fuentebella expressed in his opening remarks.
The strong support for the programs and projects of the energy family is best described in the words of Cagayan de Oro District Representative Rufus B. Rodriguez "Let us look at what are the needs of DOE, and the ERC and then increase the budget."
During the Committee hearing, the ERC was joined by members of the energy family consisting of the Department of Energy (DOE), National Transmission Corporation (TransCo), National Electrification Administration (NEA), National Power Corporation (NPC), Power Sector Assets and Liabilities Management Corporation (PSALM), and Philippine National Oil Company (PNOC). ##
ERC SUSPENDS EFFECTIVITY OF RESOLUTION NO. 07, SERIES OF 2011
10 August 2023
PASIG CITY â€“ The Energy Regulatory Commission (ERC) has unanimously resolved, in a Special Commission Meeting on 08 August 2023, to suspend the effectivity of ERC Resolution No. 07, Series of 2011 on the inclusion of the three percent (3%) franchise tax of the National Grid Corporation of the Philippines (NGCP) in the monthly transmission costs billed to Distribution Utilities (DUs).
NGCP was granted a franchise through Republic Act No. 9511, otherwise known as â€œAn Act Granting the National Grid Corporation of the Philippines a Franchise to Engage in the Business of Conveying or Transmitting Electricity Through High Voltage Back-Bone System of Interconnected Transmission Lines, Substations and Related Facilities, and for Other Purposesâ€ (R.A. No. 9511). Section 9 of R.A. No. 9511 requires NGCP to pay a franchise tax equivalent to three percent (3%) of all gross receipts derived by NGCP from its operation under its franchise. Because of R.A. No. 9511, the Commission issued ERC Resolution No. 07, Series of 2011, allowing the inclusion of this three percent (3%) franchise tax in the monthly billing of DUs.
The Commission continuously examines its existing rules and regulations to determine whether the mandates under the Electric Power Industry Reform Act of 2001 are faithfully fulfilled. With the consumersâ€™ interests in mind, as well as upholding the rule of law, the Commission resolved to suspend ERC Resolution No. 07, Series of 2011, by unanimous vote.
The Commission will formalize its directive in a Resolution to be issued on this matter. Once effective, the NGCP franchise tax can no longer be passed on to consumers on the following billing month.
ERC SIGNS AGREEMENT WITH ILOILO CITY AND MORE POWER FOR GREATER RE PROGRAM
3 August 2023 / ERC-Planning and Public Information Service
(Left photo) The Energy Regulatory Commission (ERC) signs the tripartite agreement with Iloilo City Local Government Unit (LGU) and MORE Electric and Power Corporation (MORE POWER). (Right photo, left to right) City Government of Iloilo Executive Assistant Francis T. Cruz, MORE POWER President and CEO Roel Z. Castro, Iloilo City Mayor Jerry P. TreÃ±as, ERC Chairperson and CEO Monalisa C. Dimalanta, ERC Market Operations Service Director Sharon O. MontaÃ±er, and MORE POWER Corporate Energy Sourcing and Regulatory Vice President Niel V. Parcon.
ILOILO CITY â€“ In its efforts to make the advantages of the Net-Metering Program and Distributed Energy Resources (DER) more accessible to the people of Iloilo, the Energy Regulatory Commission (ERC) entered into a tripartite agreement with the Iloilo City and MORE Electric and Power Corporation (MORE POWER) on 3 August 2023 at the City Mayorâ€™s office.
â€œWith this partnership, we aim to promote green practices, aligning with the national government's targets. In Iloilo, our efforts include solar panels at the national high school, city hall, dialysis centers, and eye care facilities,â€ Mayor Jerry P. TreÃ±as stressed.
The partnership aims to facilitate collaboration opportunities to encourage the use of renewable energy in the locality, advance renewable energy development and deployment, and share best practices, knowledge, and information on the programs and policies that can help the consumers of Iloilo City pursue renewable energy sources. RE technologies like the Net-Metering and DER can help manage electricity costs, mitigate greenhouse gas emissions, and promote economic progress, benefiting not only Iloilo City but also the entire nation.
â€œOne of the obligations under the agreement is to have a one-stop shop where applicants and interested parties can come. Our collaboration with the city has been active for the past three years, and we warmly welcome the involvement of ERC. Being the first in Visayas to enter into this agreement showcases our strong support for the government,â€ MORE POWER President and CEO Roel Z. Castro stated.
The ERC will provide the technical and regulatory expertise to streamline the documentary submissions, installation, payment, and permitting processes of the Net-Metering and DER. The ERC will also be part of the information, education, and communication campaign for the electricity consumers.
â€œThis is the second pilot LGU with the ERC for the Net-Metering and greater RE program. We hope that other LGUs are similarly inspired to partner with national agencies to bring solutions closer to our people.â€ ERC Chairperson and CEO Monalisa C. Dimalanta said.
As of 30 June 2023, the ERC has issued Certificates of Compliance to 72 qualified end-users under the Net-Metering Program in Iloilo City with a total capacity of 985.37 kilowatt-peak.
NGCP PRESENTS PROPOSED TDP TO THE ERC
2 August 2023 / ERC-Planning and Public Information Service
Energy Regulatory Commission (ERC) Chairperson and CEO Monalisa C. Dimalanta (center, upper left photo) joined by Commissioner Catherine P. Maceda (fifth from left, upper left photo) and officials from the National Grid Corporation of the Philippines (NGCP) during the NGCPâ€™s presentation of the proposed Transmission Development Plan (TDP). NGCP Vice President and Head of Operations and Maintenance Cesar V. Sanchez (right photo) presents before the ERC.
PASIG CITY â€“ Last Tuesday, 1 August 2023, the National Grid Corporation of the Philippines (NGCP) presented the proposed Transmission Development Plan (TDP) for the years 2023-2040 to the Energy Regulatory Commission (ERC). The TDP is a strategic plan formulated to address the countryâ€™s transmission infrastructure needs, and outlines the necessary expansion and upgrade of the transmission system, in order to ensure the reliable and efficient delivery of electricity across the country.
One of the highlights during the presentation was NGCPâ€™s roadmap to achieve the countryâ€™s generation targets, which is notably driven by renewable energy sources. These generation targets align with the target of the Philippine Energy Plan (PEP), which seeks to increase renewable energy generation to 35% by 2030 and 50% by 2040. Implementing the PEP will require updating transmission lines to efficiently transmit additional supply to distribution utilities.
The NGCP also discussed the developments in the Luzon, Visayas and Mindanao grids, such as the status of the Mariveles-Balsik San Jose 500kV transmission time project, the Cebu-Negros-Panay 230kV backbone project, and efforts in deploying new power plants in the Zamboanga area and CARAGA region.
ERC EXTENDS THE SUSPENSION OF FIT-ALL COLLECTION
22 August 2023 / ERC-Planning and Public Information Service
PASIG CITY - The Energy Regulatory Commission (ERC) announces the extension of the suspension of the Feed-in Tariff Allowance (FIT-All) collection for September 2023 until otherwise lifted by the Commission. This decision introduces remedies to ease the financial burden on consumers at the midst of escalating costs of electricity.
This is the third (3rd) suspension in a row issued by the ERC to provide relief through reduced power cost in the amount of PhP0.0364/kWh. It can be recalled that the collection of FIT-ALL was earlier suspended by the ERC in November 2022. With the said ERC issuance, the consumers enjoy the benefit of reduced power cost for almost a year now. This move comes at a crucial time when inflation and the cost of living have been affecting numerous Filipino households.
The FIT-All charge is a standardized fee applied to all on-grid electricity consumers. It forms a critical component of the electricity bill, facilitating the development and promotion of renewable energy sources in the Philippines.
ERC PHOTO RELEASE: ERC MEETS US DOE ON CLEAN ENERGY COOPERATION
27 August 2023 / ERC-Planning and Public Information Service
PASIG CITY - Deputy Secretary of Energy David Turk, with other representatives of the United States Department of Energy (US DOE), paid a courtesy visit to the Energy Regulatory Commission (ERC) on 23 August 2023. The meeting featured discussions on accomplishments and challenges in energy regulation, with a view to advancing U.S.-Philippines collaboration.
ERC GRANTS MERALCO AND PEDC'S PLEA FOR PRICE ADJUSTMENT AND CONTRACT TERMINATION
31 August 2023 / ERC-Planning and Public Information Service
PASIG CITY - In a Decision dated 8 March 2023 and released on 29 August 2023, the Energy Regulatory Commission (ERC) granted the Joint Motion for Contract Price Adjustment with Motion for Confidential Treatment of Information (Price Adjustment Motion) filed by the Manila Electric Company (MERALCO) and the Panay Energy Development Corporation (PEDC) in ERC Case No. 2022-001 RC, as well as the Joint Urgent Motion for the Termination of the Power Supply Agreement (PSA) (Termination Motion), via a vote of 3-2, with Chairperson and CEO Monalisa C. Dimalanta issuing a separate opinion and Commissioner Catherine P. Maceda issuing a dissenting opinion.
The Price Adjustment Motion was filed by MERALCO and PEDC on 20 January 2022, citing the â€œChange in Circumstanceâ€ provisions in their PSA. MERALCO and PEDC argued that the significant increase in global cost of coal or the fuel prices for 2022 have led to PEDC suffering losses in the amount of Php 962,240,261.00 as of September 2022. Upon verification of document submitted by the parties, the ERC computed an actual loss of Php 884,545,417.00 as of said date.
Subsequently, on 23 June 2022, MERALCO and PEDC filed the Termination Motion, citing PEDCâ€™s inability to meet its contractual obligations by virtue of the losses abovementioned.
In granting the Price Adjustment Motion, the Commission was unanimous in the finding that the PSA in this case allowed for price adjustments in case of â€œextraordinary eventâ€¦that results in an increase of actual fuel costs from the fuel prices at the time of bid submissionâ€¦â€, under certain conditions. In its evaluation, the majority of the Commission ruled that such conditions specifically defined by the â€œChange in Circumstanceâ€ provisions found in the PSA were present in this instance.
The majority of the Commission, in granting the Termination Motion, also found that there was basis to terminate the PSA on the basis of mutual agreement of the parties. MERALCO and PEDC stipulated in the PSA that the parties had the option to terminate at the instance of a â€œChange in Circumstanceâ€, as in this case.
For her part, Chairperson Dimalanta noted in her Separate Opinion that, by filing the Termination Motion before the Commission decided on the Price Adjustment Motion, the parties are deemed to have abandoned their request for price adjustment and, hence, it can no longer be acted upon by the Commission. Moreover, while there is substantive basis to allow the termination of the PSA, the parties should be penalized for failing to observe the procedural requirements provided in the PSA itself to effect such termination.
In her separate Dissenting Opinion, Commissioner Maceda voted to deny the Termination Motion, Price Adjustment Motion, and prayer for recovery of PEDC's alleged fuel losses, principally for failure of the parties to observe the conditions and processes required under the PSA that they executed. While the PSA indeed contained a provision allowing for price adjustment in case of extraordinary increase in fuel cost (Fuel Price CIC), equally important, according to her, is the parties' strict compliance with provisions of the contract, particularly the conditions and processes required under Articles 11.3, 11.4, and 14.5.4 thereof, all of which provide for the need of good faith negotiation and clear mechanism for termination.
ERC Statement on the Issuance of the Competitive Selection Process (CSP) Guidelines
31 August 2023 / ERC-Planning and Public Information Service
Pursuant to Department of Energy (DOE) Department Circular No. DC2023-06-0021, entitled â€œPrescribing the Policy for the Mandatory Conduct of the Competitive Selection Process by the Distribution Utilities for the Procurement of Power Supply for their Captive Marketâ€ (2023 CSP Policy), the Energy Regulatory Commission (ERC) posted and published on 14 August 2023 the draft IMPLEMENTING GUIDELINES FOR THE PROCUREMENT, EXECUTION, AND EVALUATION OF POWER SUPPLY AGREEMENTS ENTERED INTO BY DISTRIBUTION UTILITIES FOR THE SUPPLY OF ELECTRICITY TO THEIR CAPTIVE MARKET (Draft CSP Guidelines). In the course of preparing the draft, the Commission actually conducted focus group discussions with various stakeholder groups from 26 July 2023 to 28 July 2023. After the posting of the Draft CSP Guidelines, the Commission solicited comments, and public consultations were held on 22 August 2023. Comments were also received by the Commission on various dates as recently as Tuesday, 29 August 2023.
Given the nature of the comments and the intention of the Commission to give due weight to the same, the Commission is compelled to conduct a thorough review and revision of the Draft CSP Guidelines. In this regard, the Commission will issue a revised draft of the CSP Guidelines that will then be subjected to another round of public consultation before finalizing the guidelines.
We have duly notified the Department of Energy (DOE) on Friday, 25 August 2023, of the necessity to consider the comments of stakeholders and the need to revise the Draft CSP Guidelines further.
ERC Grants Interim Relief on the PDM for Reserve Market
31 August 2023 / ERC-Planning and Public Information Service
The Energy Regulatory Commission (ERC) granted an Interim Relief (IR) on ERC Case No. 2023-002 RC entitled "Application for the Issuance of Rules on the Price Determination Methodology (PDM) for the Implementation of the Co-Optimized Energy and Reserve Market in the Wholesale Electricity Spot Market (WESM)" on 24 August 2023.
The co-optimization of energy and reserve is a PDM enhancement in the WESM that will allow the Market Trading Participants to offer their energy and reserve capacity simultaneously in a specific day and dispatch interval in the market.
This market development aims to ensure reliability and sufficient supply of power at reasonable costs as part of ERC's mandate.
Further, the Commission notes that the Trial Operations Program (TOP), which is critical in determining whether co-optimized energy and reserve is implementable, has yet to be completed based on the initial review of the documents submitted by the Applicants.
The granting of IR on the proposed amendments to the WESM Manual on the PDM paves the way for the full implementation of a co-optimized energy and reserves market in the WESM on 26 September 2023. This is consistent with the Department of Energy's (DOE) pronouncement on the target commercial operation of the Reserve Market.
ERC Sets FIT Rate for ROR Hydro for the Third Round
21 September 2023/ERC-Planning and Public Information Service
PASIG CITY - The Energy Regulatory Commission (ERC) issued today, 21 September 2023, Resolution No. 14, series of 2023, dated 15 August 2023, that sets the Feed-in Tariff (FIT) for run-of-river (ROR) hydro for the third round (FIT3).
The ERC approved the ROR FIT of PhP6.1110/kWh from 01 January 2020 to 31 December 2021, and thereafter an annual degression of 0.5% until full subscription of the 250 MW installation target.
The ERC, in the first round, set the FIT Rate (FIT1) for ROR Hydro at Php5.90/kWh, with a degression rate of 0.5% after year 2 from the effectivity of FIT on 1 January 2015. ROR Hydroâ€™s degressed rate was at Php5.8705/kWh and is applicable for 2017 entrants. Only six (6) plants were subscribed for this first round, for a total capacity of 43.1 MW.
For the second round, the Commission adopted the degressed rate for eligible plants entering 1 January 2018 until 31 December 2019. Another eight (8) plants came in with a total capacity of 102.901MW.
This third round of FIT for ROR Hydropower is for the remaining balance in the installation target which is 103.999MW for those eligible plants coming in starting January 2020 until its full subscription. As of 30 June 2023, the remaining unsubscribed target is 77.217MW.
ROR Hydropower is defined as the generation of electricity utilizing the kinetic energy of falling or running water, where the facilities match water inflows to the reservoirs as closely as is reasonably possible so that fluctuations in water outflows are not substantially more extreme or more frequent than would otherwise occur naturally.
The FIT is a policy mechanism to accelerate investments and hasten the deployment of renewable energy as a key strategy toward achieving energy security and self-reliance.###