Short Title. It shall hereinafter be referred to as the Act. Section 2. Declaration of Policy. Section 3. Section 4.
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Short Title. It shall hereinafter be referred to as the Act. Section 2. Declaration of Policy. Section 3. Section 4. Definition of Terms.
Such resources are renewable on a regular basis and the renewable rate is rapid enough to consider availability over an indefinite time. These include, among others, biomass, solar, wind, hydro and ocean energy; nn "Restructuring" refers to the process of reorganizing the electric power industry in order to introduce higher efficiency, greater innovation and end-user choice.
It shall be understood as covering a range of alternatives enhancing exposure of the industry to competitive market forces; oo "Small Power Utilities Group" or "SPUG" refers to the functional unit of NPC created to pursue missionary electrification function; pp "Stranded contract costs of NPC or distribution utility" refer to the excess of the contracted cost of electricity under eligible contracts over the actual selling price of such contracts in the market.
Section 6. Generation Sector. Upon the effectivity of this Act, any new generation company shall, before it operates, secure from the Energy Regulatory Commission a certificate of compliance pursuant to the standards set forth in this Act, as well as health, safety and environmental clearances from the appropriate government agencies under existing laws.
Any law to the contrary notwithstanding, power generation shall not be considered a public utility operation. For this purpose, any person or entity engaged or which shall engage in power generation and supply of electricity shall not be required to secure a local or national franchise.
Upon implementation of retail competition and open access, the prices charged by a generation company for supply of electricity shall not be subject to regulation by the ERC except as otherwise provided in this Act Pursuant to the objective of lowering electricity rates to end-users, sales of generated power by generation companies shall be value added tax zero-rated.
The ERC shall, in determining the existence of market power abuse or anti-competitive behavior, require from generation companies the submission of their individual pricing formulas as well as their financial statements.
Section 7. Transmission Sector. The ERC shall set the standards of the voltage transmission that shall distinguish the transmission from the subtransmission assets. Pending the issuance of such new standards, the distinction between the transmission and subtransmission assets shall be as follows: kilovolts and above in the Luzon Grid, 69 kilovolts and above in the Visayas and in the isolated distribution systems, and kilovolts and above in the Mindanao Grid: Provided, That for the Visayas and the isolated distribution system, should the 69 kilovolt line not form part of the main transmission grid and be directly connected to the substation of the distribution utility, it shall form part of the subtransmission system.
Section 8. Creation of the National Transmission Company. The TRANSCO shall assume the authority and responsibility of NPC for the planning, construction and centralized operation and maintenance of its high voltage transmission facilities, including grid interconnections and ancillary services.
Within six 6 months from the effectivity of this Act, the transmission and subtransmission facilities of NPC and all other assets related to transmission operations, including the nationwide franchise of NPC for the operation of the transmission system and the grid, shall be transferred to the TRANSCO. The subtransmission functions and assets shall be segregated from the transmission functions, assets and liabilities for transparency and disposal: Provided, That the subtransmission assets shall be operated and maintained by TRANSCO until their disposal to qualified distribution utilities which are in a position to take over the responsibility for operating, maintaining, upgrading, and expanding said assets.
TRANSCO shall negotiate with and thereafter transfer such functions, assets, and associated liabilities to the qualified distribution utility or utilities connected to such subtransmission facilities not later than two 2 years from the effectivity of this Act or the start of open access, whichever comes earlier: Provided, That in the case of electric cooperatives, the TRANSCO shall grant concessional financing over a period of twenty 20 years: Provided, however, That the installment payments to TRANSCO for the acquisition of subtransmission facilities shall be given first priority by the electric cooperatives out of the net income derived from such facilities.
In case of disagreement in valuation, procedures, ownership participation and other issues, the ERC shall resolve such issues. The take over by a distribution utility of any subtransmission asset shall not cause a diminution of service and quality to the end-users. Where there are two or more connected distribution utilities, the consortium or juridical entity shall be formed by and composed of all of them which has been granted a franchise to operate the subtransmission asset by the ERC.
The subscription rights of each distribution utility involved shall be proportionate to their load requirements unless otherwise agreed by the parties. Any violation thereof shall be subject to the fines and penalties imposed herein. Section 9. Functions and Responsibilities. A generation company may develop and own or operate dedicated point-to-point limited transmission facilities that are consistent with the TDP: Provided, That such facilities are required only for the purpose of connecting to the transmission system, and are used solely by the generating facility, subject to prior authorization by the ERC: Provided, further, That in the event that such assets are required for competitive purposes, ownership of the same shall be transferred to the TRANSCO at a fair market price: Provided, finally, That in case of disagreement on the fair market price, the ERC shall determine the fair market value of the asset.
Section The Board shall be composed of a Chairman and six 6 members. All members of the Board shall be professionals of recognized competence and expertise in the fields of engineering, finance, economics, law or business management. No member of the Board or any of his relatives within the fourth civil degree of consanguinity or affinity shall have any interest, either as investor, officer or director, in any generation company or distribution utility or other entity engaged in transmitting, generating and supplying electricity specified by ERC.
Powers and Duties of the Board. Board Meetings. Board Per Diems and Allowances. The affirmative vote of a majority of the members present in a quorum shall be adequate for the approval of any resolution, decision or order except when the Board shall agree that a greater vote is required. In the absence of the Chairman, the President shall preside over Board meetings. Exemption from the Salary Standardization Law.
Transmission Charges. Separate accounts shall be maintained for each business undertaking to ensure that the transmission business shall neither subsidize in any way such business undertaking nor encumber its transmission assets in any way to support such business.
The contract shall include, but not limited to, the provision for performance and financial guarantees or any other covenants which may be required in order to fulfill the obligations of the concession contract. The experience of the strategic partner must be with a transmission system of equal, if not greater, capacity and coverage as the Philippines.
Distribution Sector. Distribution of electric power to all end-users may be undertaken by private distribution utilities, cooperatives, local government units presently undertaking this function and other duly authorized entities, subject to regulation by the ERC.
Functions of Distribution Utilities. Any entity engaged therein shall provide open and non-discriminatory access to its distribution system to all users. Any distribution utility shall be entitled to impose and collect distribution retail wheeling charges and connection fees from such end-users as approved by the ERC.
A distribution utility shall have the obligation to supply electricity in the least cost manner to its captive market, subject to the collection of distribution retail supply rate duly approved by the ERC. To achieve economies of scale in utility operations, distribution utilities may, after due notice and public hearing, pursue structural and operational reforms such as but not limited to, joint actions between or among the distribution utilities, subject to the guidelines issued by the ERC.
Such joint actions shall result in improved efficiencies, reliability of service, reduction of costs and compliance to the performance standards prescribed in the IRR of this Act. Distribution utilities shall submit to the ERC a statement of their compliance with the technical specifications prescribed in the Distribution Code and the performance standards prescribed in the IRR of this Act.
Distribution utilities which do not comply with any of the prescribed technical specifications and performance standards shall submit to the ERC a plan to comply, within three 3 years, with said prescribed technical specifications and performance standards. The ERC shall, within sixty 60 days upon receipt of such plan, evaluate the same and notify the distribution utility concerned of its action. Distribution utilities shall prepare and submit to the DOE their annual distribution development plans.
In the case of electric cooperatives, such plans shall also be submitted through the National Electrification Administration. Distribution utilities shall provide universal service within their franchise, including unviable areas, as part of their social obligations in a manner that shall sustain the economic viability of the utility, subject to the approval by the ERC in the case of private or government-owned utilities.
Areas which a franchised distribution utility cannot or does not find viable may be transferred to another distribution utility, if any is available, who will provide the service, subject to approval by ERC. To this end, distribution utilities shall submit to the DOE their plans for serving such areas as part of their distribution development plans. Distribution utilities may exercise the power of eminent domain subject to the requirements of the constitution and existing laws.
Distribution Retail Wheeling Charge. Distribution Retail Supply Rate. Every distribution utility shall identify and segregate in its bills to end-users the components of the distribution retail supply rate, as defined in this Act. Distribution Related Businesses. Franchising Power in the Electric Power Sector. De-monopolization and Shareholding Dispersal. New controlling stockholders shall undertake such listing within five 5 years from the time they acquire ownership and control. A small distribution company is one whose peak demand is One hundred megawatts MW or less.
The ERC shall, within sixty 60 days from the effectivity of this Act, promulgate the rules and regulations to implement and effect this provision. Supply Sector. For this purpose, the ERC shall promulgate rules and regulations prescribing the qualifications of electricity suppliers which shall include, among other requirements, a demonstration of their technical capability, financial capability, and creditworthiness: Provided, That the ERC shall have authority to require electricity suppliers to furnish a bond or other evidence of the ability of a supplier to withstand market disturbances or other events that may increase the cost of providing service.
Any law to the contrary notwithstanding, supply of electricity to the contestable market shall not be considered a public utility operation. For this purpose, any person or entity which shall engage in the supply of electricity to the contestable market shall not be required to secure a local or national franchise.
The prices to be charged by suppliers for the supply of electricity to the contestable market shall not be subject to regulation by the ERC. Electricity suppliers shall be subject to the rules and regulations concerning abuse of market power, cartelization, and other anti-competitive or discriminatory behavior to be promulgated by the ERC.
In its billings to end-users, every supplier shall identify and segregate the components of its supply charge, as defined herein. Wholesale Electricity Spot Market. The market shall provide the mechanism for identifying and setting the price of actual variations from the quantities transacted under contracts between sellers and purchasers of electricity.
Jointly with the electric power industry participants, the DOE shall formulate the detailed rules for the wholesale electricity spot market. Said rules shall provide the mechanism for determining the price of electricity not covered by bilateral contracts between sellers and purchasers of electricity users. The price determination methodology contained in said rules shall be subject to the approval of ERC.
Said rules shall also reflect accepted economic principles and provide a level playing field to all electric power industry participants. The rules shall provide, among others, procedures for: a Establishing the merit order dispatch instructions for each time period; b Determining the market-clearing price for each time period; c Administering the market including criteria for admission to and termination from the market which includes security or performance bond requirements, voting rights of the participants, surveillance and assurance of compliance of the participants with the rules and the formation of the wholesale electricity spot market governing body; d Prescribing guidelines for the market operation in system emergencies; and e Amending the rules.
The wholesale electricity spot market shall be implemented by a market operator in accordance with the wholesale electricity spot market rules. The market operator shall be an autonomous group, to be constituted by DOE, with equitable representation from electric power industry participants, initially under the administrative supervision of the TRANSCO.
The market operator shall undertake the preparatory work and initial operation of the wholesale electricity spot market. Not later than one 1 year after the implementation of the wholesale electricity spot market, an independent entity shall be formed and the functions, assets and liabilities of the market operator shall be transferred to such entity with the joint endorsement of the DOE and the electric power industry participants.
The ERC may authorize other similar entities to become eligible as members of the wholesale electricity spot market either directly or indirectly. NEA may, in exchange for adequate security and a guarantee fee, act as a guarantor for purchases of electricity in the wholesale electricity spot market by any electric cooperative or small distribution utility to support their credit standing consistent with the provisions hereof.
For this purpose, the authorized capital stock of NEA is hereby increased to Ten billion pesos P10,,, All electric cooperatives which have outstanding uncollected billings to any local government unit shall report such billings to NEA which shall, in turn, report the same to the Department of Budget and Management DBM for collection pursuant to Executive Order issued on December 21, The cost of administering and operating the wholesale electricity spot market shall be recovered by the market operator through a charge applied to all market members: Provided, That such charge shall be filed with and approved by the ERC.
In cases of national and international security emergencies or natural calamities, the ERC is hereby empowered to suspend the operation of the wholesale electricity spot market or declare a temporary wholesale electricity spot market failure.
EPIRA LAW PHILIPPINES PDF
The PEMC fined the violating companies, who took the matter to the courts. The WESM has in fact proven its worth, showing that it can bring prices down when there are ample supplies to fill demand. Its prices reached their lowest for the year in September , with the recovery in supply after plants came back from shutdowns, coupled with the drop in oil and coal prices. Consequently, the generation charge in our Meralco bills that month went down to a P3. But even as contracted prices do not readily adjust to short-term market fluctuations, the WESM made it possible for consumers to still benefit immediately from this reprieve. That September dip was in fact the lowest since October , when record rainfall levels close to high power-consuming Metro Manila brought about cooler weather, and also led to higher dispatch of cheap hydroelectric power. With improvements to the WESM rules and their enforcement, and the impending full implementation of retail competition and open access for consumers above kWh of power usage per month, Epira can yet bring electricity prices further down.
Epira is working
Daigul This rule philippunes apply to the members of the Board who knowingly or by neglect allows the commission or omission under the law. To ensure compliance with this Act, the penalty of prision correccional or a fine ranging from Five thousand pesos P5, The market operator shall be an autonomous group, to be constituted by DOE, with equitable representation from electric power industry participants, initially under the administrative supervision of the TRANSCO. Shortcut for site map footer agency section of the page. The NPC shall sell electricity only from undisposed generation assets philipipnes IPP contracts and peira not incur any new obligations to purchase power through bilateral contracts with generation companies or other suppliers. Where there are two or more connected distribution utilities, the consortium or juridical entity shall be formed by and composed of all of them which has been granted a franchise to operate the subtransmission asset by the ERC. The term of the transition supply contracts shall not extend beyond one year from the introduction of open access. Philippinea recovery of costs incurred by a distribution utility for any generation component in excess of the transition supply contract rates shall be disallowed by the ERC, except for eligible contracts as defined under Section 33 hereof: The unremitted funds shall be deposited in a government bank under a trust fund.
The EPIRA is working