republic ofthephilippines energy regulatory commission ... - erc case no. 2013-0… · republic...

15
Republic of the Philippines ENERGY REGULATORY COMMISSION San Miguel Avenue, Pasig City IN THE MATTER OF THE PETITION FOR THE APPROVAL OF THE GUIDELINES AND PROCEDURE GOVERNING AVAILMENT AND DISBURSEMENT OF CASH INCENTIVE TO RENEWABLE ENERGY DEVELOPERS OPERATING IN MISSIONARY ELECTRIFICATION AREAS ERC CASE NO. 2013-006 RM POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION (PSALM), Petitioner. )(- - --- - - --- ------ --- ---- )( ORDER On February 20, 2013, the Power Sector Assets and Liabilities Management Corporation (PSALM) filed a petition for approval of the guidelines and procedure governing the availments and disbursement of cash incentive to Renewable Energy Developers operating in missionary electrification areas. In the said petition, PSALM alleged, among others, the following: 1. Sections 34 of Republic Act No. 9136 (R.A. 9136) or the Electric Power Industry Reform Act (EPIRA) imposes a Universal Charge on all electricity end-users to be determined, fixed and approved by the Commission for the following purposes: a. Payment for the stranded debts in excess of the amount assumed by the National Government and stranded contract costs of NPC and as well as

Upload: others

Post on 18-Oct-2020

5 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

Republic of the PhilippinesENERGY REGULATORY COMMISSION

San Miguel Avenue, Pasig City

IN THE MATTER OF THEPETITION FOR THEAPPROVAL OF THEGUIDELINES ANDPROCEDURE GOVERNINGAVAILMENT ANDDISBURSEMENT OF CASHINCENTIVE TO RENEWABLEENERGY DEVELOPERSOPERATING IN MISSIONARYELECTRIFICATION AREAS

ERC CASE NO. 2013-006 RM

POWER SECTOR ASSETS ANDLIABILITIES MANAGEMENTCORPORATION (PSALM),

Petitioner.)(- - - - - - - - - - - - - - - - - - - - - - - )(

ORDER

On February 20, 2013, the Power Sector Assets andLiabilities Management Corporation (PSALM) filed a petition forapproval of the guidelines and procedure governing the availmentsand disbursement of cash incentive to Renewable EnergyDevelopers operating in missionary electrification areas.

In the said petition, PSALM alleged, among others, thefollowing:

1. Sections 34 of Republic Act No. 9136 (R.A. 9136) or theElectric Power Industry Reform Act (EPIRA) imposesa Universal Charge on all electricity end-users to bedetermined, fixed and approved by the Commission forthe following purposes:

a. Payment for the stranded debts in excess of theamount assumed by the National Government andstranded contract costs of NPC and as well as

Page 2: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMORDER/April 1, 2013

l:>_~..g~..l S>1. ~_ _._ __ .__ __ __ _ _ __ .._ .._ _ __._ _ __.._ __ _ _ __ _ _

qualified stranded contract costs of distributionutilities resulting from the restructuring of theindustry;

b. Missionary electrification;

c. The equalization of the taxes and royalties appliedto indigenous or renewable sources of energy vis-a-vis imported energy fuels;

d. An environmental charge equivalent to one-fourth ofonce centavo per kilowatt-hour PO.0025/kWh),which shall accrue to an environmental fund to beused solely for watershed rehabilitation andmanagement. Said fund shall be managed by NPCunder existing arrangements; and

e. A charge to account for all forms of cross-subsidiesfor a period not exceeding three (3) years.

2. Corollary, Section 70 of the EPIRA provides thatmissionary electrification shall be undertaken by theNational Power Corporation (NPC) through the SmallPower Utilities Group (SPUG) which shall be responsiblefor providing power generation and its associated powerdelivery systems in areas that are not connected to thetransmission system. It further provides that missionaryelectrification function shall be funded from the revenuesfrom sales in missionary areas and from the UniversalCharge (UC) to be collected from all electricity end-usersas determined by the Commission;

3. Pursuant to Section 34 of the EPIRA, the UC shall be anon-bypassable charge which shall be passed on andcollected from all end-users on a monthly basis by thedistribution utilities (DUs). Collections by the DUs andthe National Transmission Corporation (TRANSCO, nowNational Grid Corporation of the Philippines [NGCP]), asthe case may be, shall be remitted to PSALM on orbefore the 15th of the succeeding month, net of anyamount due to the DU. Any end-user or self-generatingentity not connected to a DU shall remit its correspondingUC directly to TRANSCO;

4. Under Section 34 of the EPIRA and Section 6, Rule 18 ofits Implementing Rules and Regulations (IRR), it ismandated to act as Administrator of the funds generated

Page 3: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMORDER/April 1, 2013P ag e 3 of _?. ._.__._ ..__ ..__ _ __ _ _ _ __ _ .___ __ __.__ _.__.._ _._.___ _..__._ _.._

from the UC, and for this purpose shall establish aSpecial Trust Fund (STF) with the Bureau of Treasury(BTr) or in a Government Financing Institution (GFI).The funds are to be disbursed and used only for theintended purposes specified under Section 2, Rule 18 ofthe IRR and Section 34 of the EPIRA in an open andtransparent manner. All amounts collected for the UCshall be distributed to the respective beneficiaries withina reasonable period to be provided by the Commission;

5. On December 20, 2002, the Commission issued anOrder in ERC Case No. 2002-165 (involving NPC'spetition for availments of the Universal Charge-Missionary Electrification [UC-ME] filed on April 15,2002) directing PSALM to submit the procedures andguidelines that shall govern the remittances anddisbursements of the STF, and a quarterly report on theremittances and disbursements against the fund;

6. On February 19, 2003, it submitted the "Guidelines andProcedures Governing Remittances and Disbursementsof the Universal Charge" (UC Guidelines) to theCommission in compliance with the Order datedDecember 20, 2002. During the series of discussion withthe concerned officials of the Commission, new matterswere raised which, among others, involved not only theshare of NPC from the UC for the missionaryelectrification subject of the ERC Case No. 2002-165, butother availments from the UC (i.e. Stranded Debt,Stranded Contract Costs, Environmental Fund, etc.)which do not necessarily fall within the subject matter ofsaid case on (ERC Case No. 2002-165) on missionaryelectrification. Accordingly, the Commission issued anOrder dated April 14, 2003 directing PSALM to addressthese new matters separately from ERC Case No. 2002-165'I

7. On April 30, 2003, it filed a separate petition before theCommission praying for the approval of a morecomprehensive collection and disbursement guidelines,docketed as ERC Case No. 2003-187, pursuant toSection 6 (b), Rule 18 of the EPIRA IRR. TheCommission, after appropriate proceedings, approved onDecember 5, 2003 the "Guidelines and ProceduresGoverning Remittances and Disbursements of theUniversal Charge" which addressed the other availmentsfrom the UC under Section 34 of the EPIRA. The UC

Page 4: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMORDER/April 1, 2013fa.g.~_4.i>~ _ _ _ _. __ _ _ __ _ .._ _ ___ _ __._._ ___ __ _ _ __ .

Guidelines took effect on January 10, 2004 after itspublication in two (2) newspapers of general circulationon December 24 and 26, 2003;

8. Sometime in 2005, or after one (1) year from theimplementation of the UC Guidelines, it submitted forapproval of the Commission in ERC Case No. 2003-187its proposed amendments to the UC Guidelines toaddress the abnormal balance of UC receivables in itsbooks, and to validate the UC billing reports submitted bycollecting entities in the missionary electrification areas.The Commission, after appropriate proceedings,approved on December 7, 2005, the amendmentsproposed by it pertaining to Sections 5.01 (c), Section6.01 (b), and Section 6.05 of the UC Guidelines. The UCGuidelines, as amended, took effect on April 19, 2006after its publication in two (2) newspapers of generalcirculation on April 3 and 4, 2006;

9. On December 16, 2008, Congress passed Republic ActNo. 9513, otherwise known as the "Renewable EnergyAct of 2008" which establishes the framework for theaccelerated development and advancement ofrenewable resources and the development of a strategicprogram to increase its utilization;

10. To encourage investments in the exploration anddevelopment of renewable energy resources, Section 15(h) of R.A. 9513 specifically provides for the cashgeneration-based incentive per kilowatt-hour rategenerated, equivalent to fifty percent (50%) of the UC forpower needed to service missionary areas where itoperates the same, to be chargeable against the UC formissionary electrification;

11. Correspondingly, Section 17 (D), Rule 5 of the IRR ofR.A. 9513 mandated the Commission, in coordinationwith the Department of Energy (DOE), to develop amechanism to implement the provision granting cashincentive to RE Developers operating in missionaryelectrification areas;

12. On August 22, 2011, the Commission issued ResolutionNo. 21, Series of 2011, adopting the "AmendedGuidelines for the Setting and Approval of the ElectricityGeneration Rates and Subsidies for MissionaryElectrification". Under Section 2 of Article IV thereof, it

Page 5: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMORDER/April 1, 2013f_~g_~~~L~ ._.__. ._. . -----.------------------------..--------

was mandated to disburse the approved cash incentivedirectly to the eligible RE Developers within thirty (30)days from receipt of the pertinent data necessary forcalculating the applicable cash incentive for thepreceding month;

13. On July 4, 2012, NPC-SPUG filed an omnibus petitiondocketed as ERC Case no. 2012-085 RC, seeking theapproval of the Commission of the UC-ME Subsidy thatwould sufficiently cover the missionary electrificationestimated requirements for all NPC-SPUG areasincluding Delegated Areas and for the cash incentivepayment to eligible RE Developers for the next calendaryear, among others, with prayer for the issuance of aprovisional authority, pursuant to Section 2, Article V ofthe "Amended Guidelines for the Setting and Approval ofthe Electricity Generation Rates and Subsidies forMissionary Electrification";

14. Pending determination and approval by the Commissionof the omnibus motion of NPC-SPUG in ERC Case No.2012-085 RC, and considering that it administered UC-ME STF (Section 34, EPIRA) shall be the funding sourceof the mandated cash generation-based incentive to REDevelopers operating in missionary electrification areaspursuant to Section 15 (h) of R.A. 9513, which, as perERC Resolution No. 21, Series of 2011, shall bedisbursed directly by PSALM to the eligible REDevelopers, it deems it proper and necessary to draftand propose the guidelines and procedures that shallgovern the availments and disbursements of the cashincentive for the eligible RE Developers operating inmissionary areas and submit the same to theCommission for approval under Rule 21 of theCommission's Rules of Practice and Procedure;

15. In as much as the cash incentive to RE Developersmandated under R.A. 9513 is a newly legislatedincentive affecting as it does the UC-ME fund, itsdisbursement directly to the beneficiary was not coverednor provided under the UC Guidelines. Hence, the needfor said separate guidelines and procedures foravailments and disbursement of cash incentive to REDevelopers operating in missionary areas in time for itsapplication/implementation in the event its allocation isapproved by the Commission in ERC Case No. 2012-085RC. The proposed guidelines shall be known as the

Page 6: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMORDER/April 1, 2013_P~g~~gL~__.._____________________________________.._-------.----.-.---------..--.--.----------

"Guidelines and Procedure Governing theand Disbursement of Cash Incentives toEnergy Developers Operating inElectrification Areas";

AvailmentsRenewableMissionary

16. In formulating the salient features of the proposedguidelines and procedures in accordance with Section 15(h) of RE law, Section 18 of DOE Circular No. DC2009-07-0010 (IRR of RE Law of 2008), Resolution No. 21 aswell as other relevant issuances of the Commission,PSALM conducted prior consultation meetings withstaff/officials of the Commission, DOE, NPC-SPUG,Renewable Energy Management Bureau (REMB),National Renewable Energy Management Board (NREB)and representatives from the existing and potential REDevelopers entitled to cash incentive, documentaryrequirements to avail the cash incentive, plant inspection,and inclusion in the UC-ME petition of forecast cashincentive requirement of RE Developers and true-upadjustment to cover cash incentive shortfalls, amongothers; and

17. It prays that after appropriate proceedings, the"Guidelines and Procedure Governing the Availmentsand Disbursement of Cash Incentives to RenewableEnergy Developers Operating in MissionaryElectrification Areas" be approved by the Commission.

Finding the said petition sufficient in form and in substancewith the required fees having been paid, the same is hereby set forinitial hearing on May 6, 2013 (Monday) at two o'clock in theafternoon (2:00 P.M.) at the ERC Hearing Room, 15th Floor,Pacific Center Building, San Miguel Avenue, Pasig City.

PSALM is hereby directed to cause the publication of theattached Notice of Proposed Rule-Making, at its own expense,once (1x) in a newspaper of general circulation in the Philippines,with the date of the publication to be made not later than ten (10)days before the date of the scheduled hearing. It is also directed toinform all concerned electric cooperatives, by any other meansavailable and appropriate, of the filing of the instant petition andthe scheduled hearing thereon.

Let copies of the petition, this Order, and the attached Noticeof Proposed Rule-Making be furnished all concerned electriccooperatives, the Office of the Solicitor General (OSG), the

Page 7: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMORDER/April 1, 2013Pag~Z_<?f~ .__. . .... ._. .. .....__....__.__._. ...._ .. ...._. ._._.._. .._...__... _

Commission on Audit (COA) and the Committees on Energy ofboth Houses of Congress. They are hereby requested, if they sodesire, to send their duly authorized representatives at thescheduled hearing.

PSALM is directed to furnish all those making requeststherefor with copies of the petition and its attachments, subject toreimbursement of reasonable photocopying costs.

On the date of the public hearing, PSALM must submit to theCommission its written Compliance with the jurisdictionalrequirements attaching therewith, methodically arranged and dulymarked, the evidence on the publication of the Notice of ProposedRule-Making consisting of an affidavit of the Editor or BusinessManager of the newspaper where the said Notice of ProposedRule-Making was published together with the complete issue ofthe said newspaper, and such other proofs of compliance with therequirements of the Commission.

PSALM should be guided by Rule 21 of the Commission'sRules of Practice and Procedure.

SO ORDERED.

Pasig City, April 1, 2013.

FOR AND BY AUTHORITYOF THE COMMISSION

t-vzA'/) /\ (~ENAIDA G. CRUZ-DUCUT

Chairperson 1./r"t..- -y

,

\1E1lC C~SE NO. 2013-006 RM Inmal ante,

Page 8: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMORDER/April 1, 2013Pag~_J!of_~_.. . .._...__.__..__. ._ .... . ...._. .... ...._._. ....__. ... _

Copy Furnished:

1. Atty. Maria Luz L. CamineroAtty. Cecilio B. Gellada, Jr.yth Floor, Bankmer Bldg.Ayala Avenue, Makati City

2. Office of the Solicitor General134 Amorsolo Street, Legaspi VillageMakati City, Metro Manila

3. Commission on AuditCommonwealth AvenueQuezon City, Metro Manila

4. Senate Committee on EnergyGSIS Bldg., Roxas Blvd., Pasay CityMetro Manila

5. House Committee on EnergyBatasan Hills, Quirino City, Metro Manila

6. Hon. Carlos Jericho L. PetillaSecretaryDepartment of EnergyFort Bonifacio, Taguig City

7. National Renewable Energy Board3rd Floor, DOE BuildingMerritt Road, Fort BonifacioTaguig City

8. All DUs

9. The General ManagerPhilippine Rural Electric Cooperatives Association4/F Casman Bldg., 1198, Quezon Avenue, Quezon City

Page 9: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

Republic of the PhilippinesENERGY REGULATORY COMMISSION

San Miguel Avenue, Pasig City

IN THE MATTER OF THEPETITION FOR THEAPPROVAL OF THEGUIDELINES ANDPROCEDURE GOVERNINGAVAILMENT ANDDISBURSEMENT OF CASHINCENTIVE TO RENEWABLEENERGY DEVELOPERSOPERATING IN MISSIONARYELECTRIFICATION AREAS

ERC CASE NO. 2013-006 RM

POWER SECTOR ASSETS ANDLIABILITIES MANAGEMENTCORPORATION (PSALM),

Petitioner.)(- - - - - - - - - - - - - - - - - - - - - - - )(

NOTICE OF PROPOSED RULE-MAKING

TO ALL INTERESTED PARTIES:

Notice is hereby given that on February 20, 2013, the PowerSector Assets and Liabilities Management Corporation (PSALM)filed a petition for approval of the guidelines and proceduregoverning the availments and disbursement of cash incentive toRenewable Energy Developers operating in missionaryelectrification areas.

In the said petition, PSALM alleged, among others, thefollowing:

1. Sections 34 of Republic Act No. 9136 (R.A. 9136) or theElectric Power Industry Reform Act (EPIRA) imposesa Universal Charge on all electricity end-users to be

Page 10: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

<-ERC CASE NO. 2013-006 RMNOTICE/April 1, 2013f.~g5!~_of_I_ .. .. . . . . -------- ..- ..---------------- .. ---------

determined, fixed and approved by the Commission forthe following purposes:

a. Payment for the stranded debts in excess of theamount assumed by the National Government andstranded contract costs of NPC and as well asqualified stranded contract costs of distributionutilities resulting from the restructuring of theindustry;

b. Missionary electrification;

c. The equalization of the taxes and royalties appliedto indigenous or renewable sources of energy vis-a-vis imported energy fuels;

d. An environmental charge equivalent to one-fourth ofonce centavo per kilowatt-hour PO.0025/kWh),which shall accrue to an environmental fund to beused solely for watershed rehabilitation andmanagement. Said fund shall be managed by NPCunder existing arrangements; and

e. A charge to account for all forms of cross-subsidiesfor a period not exceeding three (3) years.

2. Corollary, Section 70 of the EPIRA provides thatmissionary electrification shall be undertaken by theNational Power Corporation (NPC) through the SmallPower Utilities Group (SPUG) which shall be responsiblefor providing power generation and its associated powerdelivery systems in areas that are not connected to thetransmission system. It further provides that missionaryelectrification function shall be funded from the revenuesfrom sales in missionary areas and from the UniversalCharge (UC) to be collected from all electricity end-usersas determined by the Commission;

3. Pursuant to Section 34 of the EPIRA, the UC shall be anon-bypassable charge which shall be passed on andcollected from all end-users on a monthly basis by thedistribution utilities (DUs). Collections by the DUs andthe National Transmission Corporation (TRANSCO, nowNational Grid Corporation of the Philippines [NGCPD, asthe case may be, shall be remitted to PSALM on orbefore the 15th of the succeeding month, net of anyamount due to the DU. Any end-user or self-generating

Page 11: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMNOTICE/April 1, 2013fag~ _~D: _ _.._..____.__._._.____ -.-..-----.-- -.---- -- --------.-__- .

entity not connected to a DU shall remit its correspondingUC directly to TRANSCO;

4. Under Section 34 of the EPIRA and Section 6, Rule 18 ofits Implementing Rules and Regulations (IRR), it ismandated to act as Administrator of the funds generatedfrom the UC, and for this purpose shall establish aSpecial Trust Fund (STF) with the Bureau of Treasury(BTr) or in a Government Financing Institution (GFI).The funds are to be disbursed and used only for theintended purposes specified under Section 2, Rule 18 ofthe IRR and Section 34 of the EPIRA in an open andtransparent manner. All amounts collected for the UCshall be distributed to the respective beneficiaries withina reasonable period to be provided by the Commission;

5. On December 20, 2002, the Commission issued anOrder in ERC Case No. 2002-165 (involving NPC'spetition for availments of the Universal Charge-Missionary Electrification [UC-ME] filed on April 15,2002) directing PSALM to submit the procedures andguidelines that shall govern the remittances anddisbursements of the STF, and a quarterly report on theremittances and disbursements against the fund;

6. On February 19, 2003, it submitted the "Guidelines andProcedures Governing Remittances and Disbursementsof the Universal Charge" (UC Guidelines) to theCommission in compliance with the Order datedDecember 20, 2002. During the series of discussion withthe concerned officials of the Commission, new matterswere raised which, among others, involved not only theshare of NPC from the UC for the missionaryelectrification subject of the ERC Case No. 2002-165, butother availments from the UC (i.e. Stranded Debt,Stranded Contract Costs, Environmental Fund, etc.)which do not necessarily fall within the subject matter ofsaid case on (ERC Case No. 2002-165) on missionaryelectrification. Accordingly, the Commission issued anOrder dated April 14, 2003 directing PSALM to addressthese new matters separately from ERC Case No. 2002-165',

7. On April 30, 2003, it filed a separate petition before theCommission praying for the approval of a morecomprehensive collection and disbursement guidelines,docketed as ERC Case No. 2003-187, pursuant to

Page 12: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMNOTICE/April 1, 2013~~9~_.QfL.__._.._ _..__._ .. .__ _ _._ _ ___.___ _._- _ __ __.._..____._ __-

Section 6 (b), Rule 18 of the EPIRA IRR. TheCommission, after appropriate proceedings, approved onDecember 5, 2003 the "Guidelines and ProceduresGoverning Remittances and Disbursements of theUniversal Charge" which addressed the other availmentsfrom the UC under Section 34 of the EPIRA. The UCGuidelines took effect on January 10, 2004 after itspublication in two (2) newspapers of general circulationon December 24 and 26, 2003;

8. Sometime in 2005, or after one (1) year from theimplementation of the UC Guidelines, it submitted forapproval of the Commission in ERC Case No. 2003-187its proposed amendments to the UC Guidelines toaddress the abnormal balance of UC receivables in itsbooks, and to validate the UC billing reports submitted bycollecting entities in the missionary electrification areas.The Commission, after appropriate proceedings,approved on December 7, 2005, the amendmentsproposed by it pertaining to Sections 5.01 (c), Section6.01 (b), and Section 6.05 of the UC Guidelines. The UCGuidelines, as amended, took effect on April 19, 2006after its publication in two (2) newspapers of generalcirculation on April 3 and 4, 2006;

9. On December 16, 2008, Congress passed Republic ActNo. 9513, otherwise known as the "Renewable EnergyAct of 2008" which establishes the framework for theaccelerated development and advancement ofrenewable resources and the development of a strategicprogram to increase its utilization;

10. To encourage investments in the exploration anddevelopment of renewable energy resources, Section 15(h) of R.A. 9513 specifically provides for the cashgeneration-based incentive per kilowatt-hour rategenerated, equivalent to fifty percent (50%) of the UC forpower needed to service missionary areas where itoperates the same, to be chargeable against the UC formissionary electrification;

11. Correspondingly, Section 17 (D), Rule 5 of the IRR ofR.A. 9513 mandated the Commission, in coordinationwith the Department of Energy (DOE), to develop amechanism to implement the provision granting cashincentive to RE Developers operating in missionaryelectrification areas;

Page 13: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMNOTICE/April 1, 2013rage 5 of_I.- .. __._ __.._.__ _.._.__ _ ..__.. _ .. _._ __ __.._

12. On August 22, 2011, the Commission issued ResolutionNo. 21, Series of 2011, adopting the "AmendedGuidelines for the Setting and Approval of the ElectricityGeneration Rates and Subsidies for MissionaryElectrification". Under Section 2 of Article IV thereof, itwas mandated to disburse the approved cash incentivedirectly to the eligible RE Developers within thirty (30)days from receipt of the pertinent data necessary forcalculating the applicable cash incentive for thepreceding month;

13. On July 4, 2012, NPC-SPUG filed an omnibus petitiondocketed as ERC Case no. 2012-085 RC, seeking theapproval of the Commission of the UC-ME Subsidy thatwould sufficiently cover the missionary electrificationestimated requirements for all NPC-SPUG areasincluding Delegated Areas and for the cash incentivepayment to eligible RE Developers for the next calendaryear, among others, with prayer for the issuance of aprovisional authority, pursuant to Section 2, Article V ofthe "Amended Guidelines for the Setting and Approval ofthe Electricity Generation Rates and Subsidies forMissionary Electrification";

14. Pending determination and approval by the Commissionof the omnibus motion of NPC-SPUG in ERC Case No.2012-085 RC, and considering that it administered UC-ME STF (Section 34, EPIRA) shall be the funding sourceof the mandated cash generation-based incentive to REDevelopers operating in missionary electrification areaspursuant to Section 15 (h) of R.A. 9513, which, as perERC Resolution No. 21, Series of 2011, shall bedisbursed directly by PSALM to the eligible REDevelopers, it deems it proper and necessary to draftand propose the guidelines and procedures that shallgovern the availments and disbursements of the cashincentive for the eligible RE Developers operating inmissionary areas and submit the same to theCommission for approval under Rule 21 of theCommission's Rules of Practice and Procedure;

15. In as much as the cash incentive to RE Developersmandated under R.A. 9513 is a newly legislatedincentive affecting as it does the UC-ME fund, itsdisbursement directly to the beneficiary was not coverednor provided under the UC Guidelines. Hence, the need

Page 14: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMNOTICE/April 1, 2013

6 of7

for said separate guidelines and procedures foravailments and disbursement of cash incentive to REDevelopers operating in missionary areas in time for itsapplication/implementation in the event its allocation isapproved by the Commission in ERC Case No. 2012-085RC. The proposed guidelines shall be known as the"Guidelines and Procedure Governing the Availmentsand Disbursement of Cash Incentives to RenewableEnergy Developers Operating in MissionaryElectrification Areas";

16. In formulating the salient features of the proposedguidelines and procedures in accordance with Section 15(h) of RE law, Section 18 of DOE Circular No. DC2009-07-0010 (IRR of RE Law of 2008), Resolution No. 21 aswell as other relevant issuances of the Commission,PSALM conducted prior consultation meetings withstaff/officials of the Commission, DOE, NPC-SPUG,Renewable Energy Management Bureau (REMB),National Renewable Energy Management Board (NREB)and representatives from the existing and potential REDevelopers entitled to cash incentive, documentaryrequirements to avail the cash incentive, plant inspection,and inclusion in the UC-ME petition of forecast cashincentive requirement of RE Developers and true-upadjustment to cover cash incentive shortfalls, amongothers; and

17. It prays that after appropriate proceedings, the"Guidelines and Procedure Governing the Availmentsand Disbursement of Cash Incentives to RenewableEnergy Developers Operating in MissionaryElectrification Areas" be approved by the Commission.

The Commission has set the petition for initial hearing onMay 6, 2013 (Monday) at two o'clock in the afternoon (2:00P.M.) at the ERC Hearing Room, 15th Floor, Pacific Center \.Building, San Miguel Avenue, Pasig City.

All interested parties may submit their comments (in bothhard and soft copies) on the proposed Guidelines on or beforeApril 29, 2013. The proposed Guidelines may be photocopied atcost, during the regular office hours at the ERC Main Office at 15th

Floor, Pacific Center, San Miguel Avenue, Pasig City, ordownloaded in its official website at www.erc.gov.ph.

Page 15: Republic ofthePhilippines ENERGY REGULATORY COMMISSION ... - ERC Case No. 2013-0… · Republic ofthePhilippines ENERGY REGULATORY COMMISSION SanMiguelAvenue, PasigCity IN THE MATTER

ERC CASE NO. 2013-006 RMNOTICE/April 1, 2013fag~?. of Z .. .__. .. .__ _. __. _.__ __ .__. ..__. _

WITNESS, the Honorable Chairperson, ZENAIDA G. CRUZ-DUCUT, and the Honorable Commissioners, MARIA TERESAA.R. CASTANEDA, JOSE C. REYES, ALFREDO J. NON andGLORIA VICTORIA C. YAP-TARUC, Energy RegulatoryCommission, this 15t day of April 2013 at Pasig City.

IS SATURNINO C. JUANecutive Director III

\\t~tCA\E NO. 2013-006 RM noph