Republic of the Philippines

SUPREME COURT
Manila
NATIONAL ASSOCIATION OF
ELECTRICITY CONSUMERS FOR
REFORMS (NASECORE),
represented by Petronilo L.
Ilagan, FEDERATION OF
VILLAGE ASSOCIATIONS
(FOVA), represented by
Siegfriedo A. Veloso,
FEDERATION OF LAS PINAS
HOMEOWNERS ASSOCIATION
(FOLPHA), represented by
Bonifacio Dazo, and RODRIGO
C. DOMINGO, JR., in his
personal capacity and as
member of the Class,
Petitioners,
--versus--
MANILA ELECTRIC COMPANY
(MERALCO), ENERGY
REGULATORY COMMISSION
(ERC) and DEPARTMENT OF
ENERGY (DOE), PHILIPPINE
ELECTRICITY MARKET CORP.,
SEM-CALACA POWER
CORPORATION, MASINLOC
POWER PARTNERS CORP., SAN
MIGUEL ENERGY
CORPORATION, SOUTH
PREMIERE POWER
CORPORATION, THERMA
MOBILE INCORPORATED, FIRST
GAS POWER CORPORATION,
QUEZON POWER PHILS. (LTD)
COMPANY, THERMA LUZON,
INCORPORATED, FGP
CORPORATION, NATIONAL
GRID CORPORATION OF THE
PHILIPPINES, 1590 ENERGY
G.R.No.210255
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CORPORATION, BAC-MAN
ENERGY DEVELOPMENT
CORPORATION / BAC-MAN
GEOTHERMAL, INCORPORATED,
AP RENEWABLES
INCORPORATED, FIRST GEN
HYDRO POWER CORPORATION,
GN POWER MARIVELES COAL
PLANT LTD., CO., PANASIA
ENERGY HOLDINGS, POWER
SECTOR ASSETS & LIABILITIES
MANAGEMENT CORP., SN
ABOITIZ-BENGUET,
INCORPORATED / SN ABOITIZ-
MAGAT, INCORPORATED,
STRATEGIC POWER
DEVELOPMENT CORPORATION,
TRANS ASIA POWER
GENERATION CORPORATION,
VIVANT STA. CLARA NORTHERN
RENEWABLES GENERATION
CORPORATION,
Respondents.
x----------------------------------x
COMPLIANCE
{With Attached Copy of the
Amended Petition dated January 12, 2014)
CLASS PETITIONERS, by the undersigned counsel, unto this
Honorable Court, respectfully state: THAT-
1. In compliance with the Resolution of the Honorable
Court dated December 23, 2013 requiring the "petitioners in G.R.
No. 210255 to submit (1) proof of authority of Rodrigo C.
Domingo to sign, execute, verify and deliver the Petition and
other papers and instruments he may deem appropriate and
necessary on behalf of petitioner Federation of Las Pinas
Homeowners Association (FOLPHA); and (2) a certified true copy
of the assailed Order of the Energy Regulatory Commission dated
December 9, 2013", petitioners:
2
1.1. Respectfully inform and manifest to the
Honorable Court that they already amended their
original Petition for Certiorari and Prohibition dated
December 18, 2013 to reflect the fact that Rodrigo C.
Domingo is an individual petitioner acting in his own
behalf and in behalf of all those individuals belonging to
the Class. Said amendment was done in order to
rectify the seeming error, committed through
inadvertence, which made it appear that the said
petitioner is acting as one of the authorized
representatives of petitioner FOLPHA, when in truth he
is not. That petitioner Rodrigo C. Domingo really
intended to act as an individual petitioner in the instant
case is supported by his very own "Verification and
Certification of Non-Forum Shopping."
1.2. The aforesaid inadvertence on the part of
the petitioners was occasioned by the inherent urgency
and immediacy to file the present Petition at the
earliest possible opportunity, as demanded by the
circumstances at hand.
1.3. With the above-said amendment, the need
to submit petitioner Rodrigo C. Domingo's proof of
authority to represent FOLPHA now becomes irrelevant
and inconsequential. Hence, the compliance with the
above-said requirement.
1.4. Further, as regards the required "certified
true copy of the assailed Order of the Energy
Regulatory Commission dated December 9, 2013",
petitioners hereby inform the Honorable Court that
such certified copy was appended in the original copy of
the Petition as Annex "H" thereof. The ERC letter
dated December 9, 2013 labeled as Annex "H" in the
Petition is one and the same as the referred ERC Order
dated December 9, 2013.
2. Additionally, in compliance with the above-
mentioned Resolution requiring the petitioners to "submit a
soft copy of their Petition by compact disc (CD) pursuant to
the Efficient Use of Paper Rule x x x", it is hereby
respectfully manifested that the said required soft copy in a
CD was already submitted with the Honorable Court upon or
simultaneous with the filing of the Petition. A separate soft
3
copy of the Petition, including its annexes, was, in fact, also
sent to this Honorable Court via the electronic mail address:
efile jro@sc.judiciary.gov.ph.
3. Further, in compliance with the Resolutions dated
January 9, 2014 and January 10, 2014 of the Honorable Court
requiring the petitioners to implead necessary parties in the
instant case, the same had already been accomplished by
including the names of the following respondents in the Amended
Petition for Certiorari and Prohibition:
a. Philippine Electricity Market Corporation (PEMC);
b. SEM-Calaca Power Corporation;
c. Masinloc Power Partners Corporation;
d. Therma Luzon, Incorporated;
e. San Miguel Energy Corporation;
f. South Premiere Power Corporation;
g. Therma Mobile Incorporated;
h. First Gas Power Corporation;
i. Quezon Power (Phils) Ltd, Co.;
j. FGP Corporation;
k. National Grid Corporation of the Philippines;
I. 1590 Energy Corporation;
m. AP Renewables, Incorporated;
n. Bae-Man Energy Development Corporation/
Bae-Man Geothermal; Ineoporated;
o. First Gen Hydropower Corporation;
p. GN Power Mariveles Coal Plant, Ltd. Company;
q. PANASIA Energy Holdings, Incorporated;
4
r. Power Sector Assets and Liabilities Management
Corporation;
s. SN Aboitiz Power-Benguet, Incorporated I
SN Aboitiz Power-Magat, Incorporated;
t. Strategic Power Development Corporation;
u. Trans-Asia Power Generation Corporation;
v. Vivant Sta. Clara Northern Renewables
Generation Corporation.
3.1. All copies of the petitioners' pleadings in the
instant case had already been personally served on
the afore-enumerated necessary parties, as shown by
their respective acknowledgement stated at the bottom
portion hereof.
3.2. In the light of the Resolutions issued by the
Honorable Court and the foregoing compliance thereto
made by the petitioners, it is still respectfully
manifested and reiterated that the present Petition is
basically and solely confined to the issue of non-
observance of due process by respondents ERC and
MERALCO in the assailed automatic imposition of rate
increase. Consequently, such imposition of MERALCO
as regards electricity rate adjustments and increases
made automatically are certainly illegal and must be
refunded to its electricity-consuming subscribers.
Verily, nowhere in the allegations of the instant Petition
was there a mention of collusion among electricity
industry players, particularly with the willing
participation of the impleaded necessary parties.
3.3. Thus, aside from the amendment made as
regards the legal standing of petitioner Rodrigo C.
Domingo, Jr. and the inclusion of the names of the
above-mentioned necessary parties, no other
amendment was introduced by the petitioners in the
Amended Petition for Certiorari and Prohibition.
s
3.4. Petitioners, however, are not manifesting
that no collusion is existing between respondents as
regards electricity rate fixing; only that the said issue is
not covered by their Petition and that they are not
prepared to tackle the same in the present case due to
lack of sufficient knowledge, authoritative and
conclusive factual basis and substantial documents to
support such claim at this time.
3.5. Incidentally, a perusal of the Resolution
dated January 10, 2013 reveals that it is no other than
respondent MERALCO which suggested the inclusion of
some of the necessary parties ordered to be impleaded
herein.
4. A copy of the Amended Petition dated January 12,
2014 is hereto attached and made an integral part of the instant
Compliance.
Prayer
WHEREFORE, premises considered, it is respectfully prayed
of the Honorable Court that the foregoing be NOTED and deemed
full and sufficient compliance with the Resolutions dated
December 23, 2013, January 9, 2014 and January 10, 2014.
Other remedies appropriate under the premises are also
prayed for.
Metro Manila, January 12, 2014.
RENE A. V. SAGUISAG
Counsel for Petitioners
4045 Bigasan Street
Brgy. Palanan, Makati City
IBP Lifetime No. 03214122903
PTR No. 3671506-01.02.13-Rizal
Roll of Attorneys No.19190
MCLE Exemption No. 3-001432-6.28.10 Pasig
6
LEONARD S. DE VERA
Co-Counsel for the petitioners
Penthouse B, Windsor Tower
163 Legazpi St., Legazpi Village, Makati City 1229
Telefax No. (02) 8127739
PTR No. 4233296-01.07.14-Makati City
IBP Lifetime Member Roll No. 000000
Roll of Attorneys No. 23534
MCLE Compliance No. IV-0019174-04.26.13
NELSON A. LOYOLA
Counsel for Petitioners
Suite 201 Carreon Building
2746 Zenaida Street
Brgy. Poblacion, Makati City
PTR No. 3676854-01.08.13-Makati
IBP Lifetime No. 0010-11.15.93
Roll of Attorneys No. 23649
MCLE Compliance No. V-0001091-11.12.13
~
ounsel ( etitioners
RONNIE B. ODILLAS
No. 137 Libis Gochuico Street,
Circumferential Road 3,
Caloocan City 1400
Tel. No. 3511718
Email: ronrodillas@yahoo.com
IBP NO. 926338; 01-16-13-Calmana
PTR NO. 5534040; 01-14-13-Caloocan City
Roll of Attorneys No. 48536
MCLE Compliance No. IV - 0018734, April 24, 2013
Copy furnished: (By personal service)
MANILA ELECTRIC COMPANY
Lopez Building, Ortigas Avenue
Pasig City
7
ENERGY REGULATORY COMMISSION
Pacific Centre Building
San Miguel Avenue, Pasig City
DEPARTMENT OF ENERGY
Energy Center, Rizal Drive
Bonifacio City
Taguig City 1632
Impleaded Necessary
Parties
THE SOLICITOR GENERAL
134 Amorsolo Street, Legaspi
Village, Makati City
PHILIPPINE ELECTRICITY
MARKET CORP.
18/F Robinsons Equitable
Tower, Ortigas, Pasig City
SEM-CALACA POWER
CORPORATION
2/F DMCI Plaza Building 2281,
Don Chino Races Extension,
Bgy. Magallanes, Makati City
8
I hereby acknowledge receipt,
by personal service, of the
copies of the (1) Petition for
Certiorari and Prohibition (Class
Suit) dated December 18, 2013
and the (2) Compliance (with
Attached Copy of the Amended
Petition) dated January 12,
2014.
(Signature & Date Above
Printed Name)
MASINLOC POWER PARTNERS
CORP.
Philamlife Tower 8767, Paseo
De Roxas, Makati City 1200
SAN MIGUEL
CORPORATION
2/F 808 Building, Gen.
Meralco Avenue,
Center, Pasig City 1600
SOUTH PREMIERE
CORPORATION
2/F 808 Building, Gen.
Meralco Avenue,
Center, Pasig City
THERMA
INCORPORATED
ENERGY
Lim car.
Ortigas
POWER
Lim car.
Ortigas
MOBILE
Ground Floor, Philippine
Fisheries Development
Authority Complex Building,
Navotas City
FIRST GAS POWER
CORPORATION
3/F Benpres Building, Exchange
Road car. Meralco Avenue,
Ortigas Center, Pasig City
QUEZON POWER PHILS. (LTD)
COMPANY
14/F Zuellig Building
Makati Ave. car. Paseo De
Roxas, Makati City 1225
THERMA LUZON,
INCORPORATED
NAC Tower, 32nd Street,
Bonifacio Global City, Taguig
City
9
FGP CORPORATION
3/F Benpres Building, Exchange
Road cor. Meralco Avenue,
Ortigas Center, Pasig City
NATIONAL GRID CORPORATION
OF THE PHILIPPINES
Quezon Avenue cor. BIR Road,
Diliman,Quezon City 1100
1590 ENERGY CORPORATION
Unit 107 First Midland Office
Condominium Building
Gamboa St., Legaspi Village,
Makati City
AP RENEWABLES
INCORPORATED
15/F, NAC Tower, 32nd St.,
Bonifacio Global City, Taguig
City
BAC-MAN ENERGY
DEVELOPMENT CORPORATION/
BAC-MAN GEOTHERMAL,
INCORPORATED
38/F One Corporate Center
Julia Vargas cor. Meralco
Avenue, Ortigas Center, Pasig
City 1605
FIRST GEN HYDRO POWER
CORPORATION
3/F Benpres Building, Exchange
Road cor. Meralco Avenue,
Ortigas Center, Pasig City
GN POWER MARIVELES COAL
PLANT LTD., CO.
1905 Orient Square Building
Don Francisco Ortigas, Jr. Road,
Ortigas Center, Pasig City
10
PANASIA ENERGY HOLDINGS
2/F 808 Building, Gen. Lim cor.
Meralco Avenue,
Ortigas Center, Pasiq City
POWER SECTOR ASSETS &
LIABILITIES MANAGEMENT
CORP.
7/F Bankmer Building, 6756
Ayala Avenue, Makati City
SN ABOITIZ-BENGUET,
INCORPORATED/
SN ABOITIZ-MAGAT,
INCORPORATED
10/F, NAC Tower, 32nd St.,
Bonifacio Global City
Taguig City
STRATEGIC POWER
DEVELOPMENT CORPORATION
2/F 808 Building, Gen. Lim cor.
Meralco Avenue,
Ortigas Center, Pasig City
TRANS ASIA POWER
GENERATION CORPORATION
11/F PHINMA Plaza, 39 Plaza
Drive, Rockwell Center
Makati City 1200
VIVANT STA. CLARA NORTHERN
RENEWABLES
GENERATION CORPORATION
Unit 107, First Midland Office
Condominium Building
Gamboa St., Legaspi Village,
Makati City
11
REPUBLIC OF THE PHILIPPINES )
MAKA TI CITY ) S.S.
AFFIDAVIT OF SERVICE
(Jn compliance with Section 12. Rule 13 oft he Rules
as amended by Supreme Court Resolution dated April 8. 1997)
L ALLEN D. BUG-AT AN, Filipino, of legal age, with office address at 15
111
Floor, LPL Center, 130 L. P. Leviste Street, Salcedo Village, Makati City, after having
been duly sworn in accordance with law, hereby depose and state: That -
1. I am a liaison officer of Domingo Dizon Adre & Leonardo - A Law
Partnership, of which petitioner Rodrigo C. Domingo. Jr. is one of the pminers;
2. On January 13, 2014, I served by personal service, in so far as can be done, the
foregoing "Compliance (With Attached Copy of the Amended Petition for Certiorari
and/or Prohibition)" dated January 12, 2014, in the case entitled "National Association
of Electricity Consumersf(Jr Refimns (NASECORE). et. al. vs. Manila Electric Company.
et. al." G. R. No. 210255, pending with the Supreme Court, Manila, to the following
respondents:
1. Manila Electric Company
Lopez Building, Ortigas A venue
Pasig City
2. Energy Regulatory Commission
Pacific Centre Building
San Miguel A venue, Pasig City
3. Department of Energy
Energy Center, Rizal Drive
Bonifacio City
Taguig City 1632
4. The Solicitor General
134 Amorsolo Street
Legaspi Village, Makati City
5. Philipine Electricity Market Corporation
18/F Robinsons Equitable Tower
01iigas Center, Pasig City
6. Sem-Calaca Power Corporation
2/F DMCI Plaza Building
2281 Don Chino Roces Extension
Brgy. Magallanes, Makati City
7. Masinloc Power Partners Corporation
Philamlife Tower
8767 Paseo de Roxas
Makati City
8. San Miguel Energy Corporation
2/F 808 Building
Gen. Lim comer Meralco A venue
01iigas Center, Pasig City
9. South Premiere Power Corporation
2/F 808 Building
Gen. Lim corner Meralco A venue
Ortigas Center, Pasig City
10. Therma Mobile Incorporated
Ground Floor
Philippine Fisheries Development Authority Complex Building
Navotas City
11. First Gas Power Corporation
3/F Benpress Building
Exchange Road corner Meralco A venue
Ortigas Center, Pasig City
12. Quezon Power Phi ls. (LTD) Company
14/F Zuellig Building
Makati A venue corner Paseo de Roxas
Makati City
13. Therma Luzon Incorporated
NAC Tower, 32
11
d Street
Bonifacio Global City
Taguig City
14. FGP Corporation
3/F Benpress Building
Exchange Road corner Meralco A venue
01iigas Center, Pasig City
15. National Grid Corporation of the Philippines
Quezon A venue corner BIR Road
Diliman, Quezon City
16. 1590 Energy Corporation
Unit 107 First Midland Office Condominium Building
Gamboa Street, Legaspi Village, Makati City
17. AP Renewables Incorporated
15/F NAC Tower, 32
11
d Street
Bonifacio Global City
Taguig City
18. Bae-Man Energy Development Corporation/
Bae-Man Geothermal Incorporated
3 8/F One Corporate Center
Julia Vargas corner Meralco Avenue
Ortigas Center, Pasig City
2
19. First Gen Hydro Power Corporation
3/F Benpress Building
Exchange Road comer Meralco A venue
Otiigas Center, Pasig City
20. GN Power Mariveles Coal Plant Ltd., Co.
1905 Orient Square Building
Don Francisco 01iigas, Jr. Road
01iigas Center, Pasig City
21. Panasia Energy Holdings
2/F 808 Building
" Gen. Lim corner Meralco A venue
Otiigas Center, Pasig City
22. Power Sector Assets & Liabilities Management Corporation
7 IF Bankmer Building
6756 Ayala A venue, Makati City
23. SN Aboitiz-Benguet Incorporated/
SN Aboitiz-Magat Incorporated
I O/F NAC Tower, 32
11
d Street
Bonifacio Global City, Taguig City
24. Strategic Power Development Corporation
2/F 808 Building
Gen. Lim corner Meralco A venue
Ortigas Center, Pasig City
25. Trans Asia Power Generation Corporation
11 /F Phinma Plaza
39 Plaza Drive, Rockwell Center
Makati City
26. Vivant Sta. Clara Northern Renewables Generation Corporation
Unit l 07 First Midland Office Condominium Building
Gamboa Street, Legaspi Village, Makati City
or their respective counsel of record. Service on the other respondents shall be made
today, as far as practicable, on the following working day.
3. I am executing this Affidavit in order to attest to the truth of the foregoing
statements.
SUSCRIBED AND SWORN TO before me this 13th day of January 2014 in
Makati City, affiant exhibiting to me his Philhealth Card No. 01-051485921-9 with his
picture attached thereon as a competent of proof his identity.
Doc.No . .Jl!i_;
Page No. JJ, ;
Book __ ;
Series of 2014.
3
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Republic of the Philippines
SUPREME COURT
Manila
NATIONAL ASSOCIATION
OF ELECTRICITY
CONSUMERS FOR
REFORMS (NASECORE),
represented by Petronilo L.
Ilagan, FEDERATION OF
VILLAGE ASSOCIATIONS
(FOVA), represented by
Siegfriedo A. Veloso,
FEDERATION OF LAS
PINAS HOMEOWNERS
ASSOCIATION (FOLPHA),
represented by Bonifacio
Dazo, and RODRIGO C.
DOMINGO, JR., in his
personal capacity and as
member of the Class,
Petitioners,
Page 1of43
--versus-- G.R.No.210255
MANILA ELECTRIC
COMPANY (MERALCO),
ENERGY REGULATORY
COMMISSION (ERC) and
DEPARTMENT OF ENERGY
(DOE), PHILIPPINE
ELECTRICITY MARKET
CORP., SEM-CALACA
POWER CORPORATION,
MASINLOC POWER
PARTNERS CORP., SAN
MIGUEL ENERGY
CORPORATION, SOUTH
PREMIERE POWER
CORPORATION, THERMA
MOBILE INCORPORATED,
FIRST GAS POWER
,:'.';' ,-;
.. -.
-
CORPORATION, QUEZON
POWER PHILS. (LTD)
COMPANY, THERMA
LUZON, INCORPORATED,
FGP CORPORATION,
NATIONAL GRID
CORPORATION OF THE
PHILIPPINES, 1590
ENERGY CORPORATION,
BAC-MAN ENERGY
DEVELOPMENT
CORPORATION / BAC-MAN
GEOTHERMAL,
INCORPORATED, AP
RENEWABLES
INCORPORATED, FIRST
GEN HYDRO POWER
CORPORATION, GN POWER
MARIVELES COAL PLANT
LTD., CO., PANASIA
ENERGY
POWER SECTOR ASSETS &
LIABILITIES MANAGEMENT
CORP., SN ABOITIZ-
BENGUET, INCORPORATED
/ SN ABOITIZ-MAGAT,
INCORPORATED,
STRATEGIC POWER
DEVELOPMENT
CORPORATION, TRANS
ASIA POWER GENERATION
CORPORATION, VIVANT
STA. CLARA NORTHERN
RENEWABLES
GENERATION
CORPORATION,
Respondents.
x-----------------------------x
Page 2 of 43
AMENDED
PETITION FOR CERTIORARI
and/or PROHIBITION
(Class Suit)
(Under Rule 65, Revised Rules of Court, with
Prayer for a Temporary Restraining Order/
Status Quo Ante Order and Injunction)
Page 3 of 43
CLASS PETITIONERS, by the undersigned counsel, unto
this Honorable Court, respectfully state: THAT-
I.
PREFATORY STATEMENT
"The essence of due process is distilled in the
immortal cry of Themistocles to Alcibiades "Strike -
but hear me first!
1
" (Italics supplied)
1. The same allegorical and resounding cry was
heard by the framers of our present Constitution when they
enshrined in Article III, Section 1 thereof that:
"Section 1. No person shall be deprived of life
liberty or property without due process of law, x x
x." (Italics supplied)
2. It is the very same resounding cry which the class
petitioners eloquently repeat in the present petition as they
plead and challenge the validity of the oppressive and
exorbitant automatic electricity rate adjustments and
increases imposed by respondent MERALCO to its electricity
subscribers, with the accommodating imprimatur of the
Energy Regulatory Commission (ERC), the very
administrative agency tasked to regulate and ensure the
welfare and protection of the electricity-consuming public.
1
Restituto Ynot vs. Intermediate Appellate Court, G. R. No. 74457, March 20, 1987.
Page 4 of 43
3. The present Petition squarely rests on and is
delimited by the legal postulate that respondent ERC gravely
abused its discretion, amounting to lack or excess of
jurisdiction, when it allowed the said automatic rate
adjustments and increases of MERALCO in its generation
costs, without first requiring publication, notice or hearing
involving the public who will bear the brunt of such
adjustments or increases in electricity rates, in violation of
the due process clause of the Philippine Constitution.
Consequently, such imposition of MERALCO as regards
electricity rate adjustments and increases made
automatically are certainly illegal and must be refunded to
its electricity-consuming subscribers.
4. The present Petition made no attempt to include in
its scope the issue regarding the alleged collusion between
and among the electric power industry players, to include
government agencies tasked to oversee and regulate them.
5. Petitioners come directly to this Honorable Court
on account of the fact that the present case seriously and
plainly involves public policy and that it is of transcendental
importance to the public in general, and that swift and
immediate redress from the Court is required by the
circumstances.
II.
NATURE OF THE PETITION
6. This Petition for Certiorari is a valid recourse
under Rule 65, Sections 1 and 2 of the 1997 Revised Rules
of Civil Procedure availed of to impugn the Resolutions and
Orders (letters) made by the ERC pertaining to automatic
rate adjustments or increases imposed by MERALCO in its
generation costs for having been issued with grave abuse of
discretion amounting to lack or excess of jurisdiction.
Section 1, Rule 65 of the 1997 Revised Rule on Civil
Procedure provides:
Page 5 of 43
"Section 1. Petition for certiorari. When
any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in
excess of its or his jurisdiction, or with grave abuse
of discretion amounting to lack of excess of its
jurisdiction, and there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course
of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the
facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of
such tribunal, board or officer, and granting such
incidental reliefs as law and justice may require.
X x x." (Italics and underscoring supplied)
Upon the other hand, Section 2 of Rule 65, Revised
Rules of Court, provides:
"Section 2. Petition for orohibition. - When the
proceedings of any tribunal, corporation, board,
officer or person, whether exercising judicial, quasi-
judicial or ministerial functions, are without or in
excess of its or his jurisdiction, or with grave abuse
of discretion amounting to lack or excess of
jurisdiction, and there is no appeal or any other
plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the
facts with certainty and praying that judgment be
rendered commanding the respondent to desist from
further proceedings in the action or matter specified
therein, or otherwise granting such incidental reliefs
as law and justice may require.
The petition shall likewise be accompanied by a
certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings
and documents relevant and pertinent thereto, and a
sworn certification of non-forum shopping as
provided in the third paragraph of section 3, Rule
46." (Italics and underscoring supplied)
Page 6 of 43
III.
TIMELINESS OF THE PETITION
7. On December 5, 2013, MERALCO sought the
ERC's clearance for the staggered implementation of its
generation costs recovery for the November 2013 supply
month, by way of an exception to the Automatic Generation
Rate Adjustment (AGRA) Rules.
8. On December 9, 2013, the ERC, through its
Chairperson, Zenaida G. Cruz-Ducut, and Commissioners
Alfredo J. Non and Josefina Patricia A. Magpale-Asirit, sent a
letter to MERALCO's Ivanna G. Dela Pena, First Vice
President and Head, Regulatory Management Office,
advising the grant of clearance for a sought-staggered
implementation of its generation cost recovery.
9. Based on Section 4, Rule 65 of the Revised Rules
on Civil Procedure, herein petitioners have a period of sixty
(60) days from receipt of the above-stated letter granting
clearance for the staggered implementation of MERALCO's
generation cost recovery for the November 2013 supply
month. Considering that petitioners came to know of the
issuance of the said clearance only on December 12, 2013,
then it has until February 10, 2014 within which to file the
present Petition.
10. The filing of the present Petition on December 20,
2013 is, therefore, within the reglementary period.
IV.
THE PARTIES
11. Herein petitioners are a class of similarly situated
individuals who are all subscribers of the respondent utility
company MERALCO, with common or general interest to
numerous persons who are also its subscribers and
consumers. Class petitioners may be served with orders,
resolutions, decisions and other processes of this Honorable
Court at the given address of the undersigned counsel.
Page 7 of 43
12. Petitioners NASECORE, FOVA and FOLPHA are an
aggrupation of different socio-civic organizations who are
collectively promoting and upholding consumer rights
welfare and protection, which are all organized and existing
under and by virtue of the laws of the Republic of the
Philippines. Almost all of its members, if not all, are
subscribers or consumers being serviced by respondent
MERALCO.
The following are the enumeration of the different
Secretary's Certificates showing the appointment or
delegation of the following individuals who represent and
can act for and in behalf of their respective petitioner-
organizations, to wit:
a. NATIONAL ASSOCIATION OF ELECTRICITY
CONSUMERS FOR REFORMS (NASECORE),
represented by Petronila Ilagan, as Annex "A"
hereof;
b. FEDERATION OF VILLAGE ASSOCIATIONS
(FOVA), represented by Siegfriedo Veloso, as
Annex "B" hereof
'
c. FEDERATION OF LAS PINAS HOMEOWNERS
ASSOCIATION (FOLPHA), represented by Bonifacio
C. Daza, as Annex "C" hereof.
13. Petitioner Rodrigo C. Domingo, Jr. is a Filipino, of
legal age, a member of the Philippine Bar and, similar to the
rest of the members of the class, is a subscriber and
consumer of respondent MERALCO. He is suing in his
individual capacity and as a member of the Class. He may be
served with resolutions, notices, orders and other processes
of this Honorable Court at his postal address located at 15/F
LPL Center, 130 L. P. Leviste Street, Salcedo Village, Makati
City. He requests that henceforth he be furnished copies of
all relevant pleadings.
14. Petitioners are suing on the ground that the
issues raised herein are matters of public service, policy and
interest, and that respondent MERALCO, being a public
utility company enjoying franchise from the government,
had submitted itself to government regulations and
Page 8 of 43
surrendered certain business prerogatives. Petitioners, as
citizens organizations of the Philippines, is therefore invoking
the sovereign police and protective power of the State in
filing the instant case
2
.
15. Respondent Department of Energy (DOE) is a
government instrumentality tasked mainly to prepare,
integrate, coordinate, supervise and control all plans,
programs, projects and activities of the government relative
to energy exploration, development, utilization, distribution
and conservation. It is the agency which effected the
assailed amendment of Section 4 (e), Rule 3 of the IRR
EPIRA. It may be served with summons and other
processes of this Honorable Court at its principal office
located at Energy Center, Rizal Drive, Bonifacio Global City,
Taguig City 1632.
16. Respondent Energy Regulatory Commission (ERC)
is, likewise a government instrumentality created under
Republic Act No. 9136, otherwise known as the Electric
Power Industry Reform Act of 2001 (EPIRA Law), tasked
mainly to regulate electricity power rates and to protect
consumer and subscriber interests.
It may be served with summons and other processes of
this Honorable Court at Pacific Centre Building, San Miguel
Avenue, Pasig City, where it maintains its principal office.
17. Respondent Manila Electric Company (MERALCO)
is a corporation duly organized and existing under the laws
of the Republic of the Philippines with principal address at
Lopez Building, Ortigas Avenue, Pasig City, where it may be
served with summons and other processes of this Honorable
Court. MERALCO is engaged in the business of electricity
distribution with franchise to operate granted by the
Republic of the Philippines in Metro Manila, Bulacan, Laguna,
and other adjoining provinces in Luzon.
18. As stated, the present Petition makes no attempt
to include in its scope the issue regarding the alleged
collusion between and among the electric power industry
players, to include government agencies tasked to oversee
and regulate them. However, such non-inclusion of the said
2
Lawyers Against Monopoly and Poverty (LAMP), et. al. vs. MERALCO, G. R. No. 141369, April 9, 2003.
Page 9 of 43
issue of collusion does not mean that herein petitioners are
of the admission that no such collusion exists within the
power industry.
19. It must be stressed, however, in its Consolidated
Comment I Opposition with Counter-Petition dated January
8, 2014, respondent MERALCO, no less, clearly pointed to
the generation and/or transmission companies as the main
reason for the imposition of the arbitrary power rate
increase. Such asseveration is a clear admission on the part
of respondent MERALCO that the said generation and/or
transmission companies are the culprits in the present
dispute. In effect, respondent MERALCO is pointing out that
on the issue of collusion it is practically out of the loop, so to
speak, as it merely passes-on to the consumers the
generation and transmission charges.
Thus:
"l.29 In order to ensure lower electricity
rates, generation charges of GenCos and
transmission charges of NGCP, among others, are
legallv considered as mere "pass-through charges",
which are billed directly by the DUs to their
customers. When MERALCO bills its customers the
pass-through charges it does not stand to benefit
therefrom. The only portion that goes to MERALCO
are the distribution-related charges." (Italics and
underscoring supplied)
20. Threading on the above position, no less than
respondent MERALCO sought relief from the Honorable Court
in order to implead in the present case generation and
transmission companies, as well as the market, where it
sources its supply of electricity. The following entities are
necessary parties and part of the electric power industry
which may have colluded with each other, as determined by
the Honorable Court in its Resolutions dated January 9 and
10, 2014, and which are all impleaded herein as
respondents, to wit:
a. Philippine Electricity Market Corporation
(PEMC);
b. SEM-Calaca Power Corporation;
Page 10 of 43
c. Masinloc Power Partners Corporation;
d. Therma Luzon, Incorporated;
e. San Miguel Energy Corporation;
f. South Premiere Power Corporation;
g. Therma Mobile Incorporated;
h. First Gas Power Corporation;
i. Quezon Power (Phi ls) Ltd, Co.;
j. FGP Corporation;
k. National Grid Corporation of the Philippines;
I. 1590 Energy Corporation;
m. AP Renewables, Incorporated;
n. Bae-Man Energy Development Corporation I
Bae-Man Geothermal; Incoporated;
o. First Gen Hydropower Corporation;
p. GN Power Mariveles Coal Plant, Ltd.
Company;
q. PANASIA Energy Holdings, Incorporated;
r. Power Sector Assets and Liabilities
Management Corporation;
s. SN Aboitiz Power-Benguet, Incorporated I
SN Aboitiz Power-Magat, Incorporated;
t. Strategic Power Development Corporation;
u. Trans-Asia Power Generation Corporation;
v. Vivant Sta. Clara Northern Renewables
Generation Corporation.
Page 11of43
They are corporations existing and duly organized under
and by virtue of the laws of the Republic of the Philippines
and that they may be served with Summons, notices,
resolutions, orders and other processes of the Honorable
Court at their respective addresses stated at the bottom
page of this Amended Petition.
v.
Class Suit Allegations
21. Class petitioners bring this action in their behalf
and on behalf of the class of similarly situated persons,
whether natural or juridical, with common or general
interest to many persons who are all subscribers and
consumers of respondent MERALCO.
22. The subject matter of the present Petition is of
transcendental importance to all and is aimed to affect and
promote the common good. It is therefore a class suit
pursuant to Sec. 12, Rule 13 of the Rules of Court of the
Philippines. The affected parties are so numerous,
consisting of some 5,000 MERALCO subscribers, more or
less, that it is impracticable to bring them all before the
court so that they may sue for the benefit of all.
23. The named members of the class petitioners are
typical and representative of the class and that they can
fairly and adequately protect the interest and welfare of the
class. Class petitioners' claims do not conflict with those of
the class and that they are represented by an experienced
group of lawyers knowledgeable in civil and class actions.
24. There are common questions of facts and law
relating to the relief demanded by the class petitioners
including, but not limited, to the following:
a. Declaring the amendment of Section 4
( e), Rule 3 of the IRR EPIRA made by the DOE to
be illegal, null and void ab initio;
Page 12 of 43
b. Declaring all Resolutions, Orders or any
other issuances of the ERC authorizing, allowing,
confirming, sanctioning or clearing the automatic
power rate adjustments or increases imposed by
MERALCO as inherently null and void on the
ground of grave abuse of discretion, amounting to
lack or excess of jurisdiction;
c. Declaring all electricity rate
adjustments or increases automatically imposed
or collected by MERALCO from its subscribers and
consumers as inherently and patently null, void
and illegal;
d. Prohibiting the ERC from allowing
MERALCO to automatically impose and collect
electricity rate adjustments and increases;
e. Ordering the audit and subsequent
refund of all rate adjustments or increases
automatically collected or imposed by MERALCO
to all of its consumers or subscribers by virtue of
the assailed ERC Resolutions, Orders or issuances;
f. Ordering the creation of a committee,
headed by the Commission on Audit (COA), and
where consumer interests are sufficiently
represented, that would conduct the audit and
subsequent refund of all automatic electricity
rate adjustments or increases illegally imposed
and collected by MERALCO;
g. Ordering the deposit into an escrow
account of the aggregate amount of refund
determined by the above-said Committee;
h. Ordering the proportionate distribution
of the determined amount of refund to all class
members;
i. Ordering the reimbursement in favor of
the petitioners the costs of the present class suit.
VI.
Brief Statement of Material Facts
and of the Case
Page 13 of 43
25. On February 2, 2006, this Honorable Court, in the
case entitled "NASECORE, et. al. vs. ERC and MERALC0
3
",
issued a Decision of even date, the dispositive portion of
which states:
"WHEREFORE, premises considered, the
petition is GRANTED. The assailed ERC Order
dated June 2, 2004 in ERC Case No. 2004-112 is
DECLARED VOID and accordingly SET ASIDE." (Italics
supplied)
26. On August 16, 2006, this Honorable Court issued
a Resolution of even date denying the respective Motions for
Reconsideration filed by the ERC and MERALCO assailing the
above-quoted Decision, the dispositive portion of which
states that:
"WHEREFORE, the Motion for Reconsideration
dated February 17, 2006 of the ERC and the Motion
for Reconsideration dated February 20, 2006 of
MERALCO are DENIED with FINALITY.
The Comment-in-Intervention dated March 6,
2006 of PEPOA and the Intervention dated March 27,
2006 of PIPPA are, likewise, DENIED.
Consequently, upon finality of the Decision
dated February 2, 2006, MERALCO
is DIRECTED to REFUND to the affected consumers
the amount of P0.1327 per kWh (representing the
unauthorized increase from P3.1886 to P3.3213 per
kWh under the nullified ERC Order dated June 2,
2004) reckoned from when the same was charged
and collected from the affected consumers. Instead
of an actual refund, MERALCO may correspondingly
credit in favor of the affected customers the
appropriate amounts for their future
consumption. The ERC is DIRECTED to ensure the
proper execution of the judgment in this case."
(Italics supplied)
3
G. R. No. 163935, February 2, 2006.
Page 14 of 43
27. The above-said case proceeded from the petition
for certiorari, prohibition and injunction, on the ground of
violation of due process, filed by NASECORE, FOVA and
FOLPHA, seeking to nullify the Order dated June 2, 2004 of
the Energy Regulation Commission (ERC) in ERC Case No.
2004-112 approving the increase of respondent MERALCO's
generation charge from P3.1886 per kWh to P3.3213 per
kWh effective immediately, even without complying first
with the requisites of publication mandated by Section 4
(e), Rule 3 of the Implementing Rules and Regulations
(IRR) of the Electric Power Industry Reform Act (EPIRA).
Said Section 4 (e) of the IRR for EPIRA provides:
"(e) Any application or oetition for rate
adjustment or for any relief affecting the consumers
must be verified, and accompanied with an
acknowledgement of receipt of a copy thereof by the
LGU Legislative Body of the locality where the
applicant or petitioner principally operates together
with the certification of the notice of publication
thereof in a newspaper of general circulation in the
same locality.
The ERC may grant provisionally or deny the
relief prayed for not later than seventy-five (75)
calendar days from the filing of the application or
petition, based on the same and the supporting
documents attached thereto and such comments or
pleadings the consumers or the LGU concerned may
have filed within thirty (30) calendar days from
receipt of a copy of the application or petition or
from the publication thereof as the case may be.
Thereafter, the ERC shall conduct a formal
hearing on the application or petition, giving proper
notices to all parties concerned, with at least one
public hearing in the affected locality, and shall
decide the matter on the merits not later than twelve
(12) months from the issuance of the
aforementioned provisional order.
This Section 4(e) shall not apply to those
applications or petitions already filed as of 26
December 2001 in compliance with Section 36 of the
Act." (Italics and underscoring supplied)
Page 15 of 43
28. In emphasizing the need and the importance to
comply with the publication requirement, this Honorable
Court ratiocinated that:
"Indeed, the basic postulate of due process
ordains that the consumers be notified of any
application, and be apprised of its contents, that
would result in compounding their economic
burden. In this case, the consumers have the right
to be informed of the bases of
respondent MERALCO's amended application for the
increase of its generation charge in order to, if thev
so desire, effectively contest the same.
xx x.
The requirement of due process is not some
favor or grace that the ERC mav dole out on a bout of
whim or on occasion of charitv. Rather, it is a
statutory right to which the consuming public is
entitled.
The reauirement of publication in applications
for rate adjustment is not without reason or
purpose. It is ancillary to the due orocess
requirement of notice and hearing. Its purpose is
not merely to inform the consumers that an
application for rate adjustment has been filed by the
public utility. It is to adequately inform them that
an application has been made for the adjustment of
the rates being implemented by the public utility in
order to afford them the opportunity to be heard and
submit their stand as to the oroorietv and
reasonableness of the of the rates within the period
allowed by the Rule. Without the publication of the
application, the consumers are left to second-guess
the substance and merits of the application.
4
" (Italics
and underscoring supplied)
29. The attempt to automatically impose - that is,
without complying with the required publication an
electricity rate increase or adjustment having been stunted
and struck down by this Honorable Court's above-mentioned
Decision and Resolution, the Department of Energy, through
then Secretary Raphael P. M. Lotilla, in a seeming act of
4
Ibid.
Page 16 of43
accommodation in favor of respondent MERALCO and
apparently in collusion with respondent ERC, subsequently
issued "Amendments to Section 4 (e) of Rule 3 and
Section 7 of Rule 18 of the Implementing Rules and
Regulations (IRR) of Republic Act No. 9136, otherwise
known as the Electric Power Industry Reform Act",
effectively doing away with the requirement of publication in
certain rate increase and adjustment applications of
distribution utilities (referring to MERALCO in the present
case).
The lone amendment to Section 4 (e) of Rule 3 of the
IRR EPIRA reads:
"(e) Any application or petition for rate
adjustment or for any relief affecting the consumers
must be verified, and accompanied with an
acknowledgement of receipt of a copy thereof by the
LGU Legislative Body of the locality where the
applicant or petitioner principally operates together
with the certification of the notice of publication
thereof in a newspaper of general circulation in the
same locality.
The ERC may grant provisionally or deny the
relief prayed for not later than seventy-five (75)
calendar days from the filing of the application or
petition, based on the same and the supporting
documents attached thereto and such comments or
pleadings the consumers or the LGU concerned may
have filed within thirty (30) calendar days from
receipt of a copy of the application or petition or
from the publication thereof as the case may be.
Thereafter, the ERC shall conduct a formal
hearing on the application or petition, giving proper
notices to all parties concerned, with at least one
public hearing in the affected locality, and shall
decide the matter on the merits not later than twelve
(12) months from the issuance of the
aforementioned provisional order.
This Section 4 (e} shall not apply to Generation
Rate Adjustment Mechanism (GRAM}, Incremental
Currency Exchange Recovery Adjustment (ICE RA},
Transmission Rate Adjustment Mechanism,
Transmission True-up Mechanism, System Loss Rate
Adjustment Mechanism, Lifeline Rate Recoverv
Mechanism, Cross-Subsidy Mechanism, Local
. .,.
Page 17 of 43
Franchise Tax Recovery Mechanism, Business Tax
Recovery Mechanism, Automatic Generation Rate
Adjustment Mechanism, VAT Recovery Mechanism,
Incremental Generation Cost Adjustment
Mechanism, and Recovery of Deferred Accounting
Adjustment for Fuel Cost and Power Producers bv
NPC and NPC-SPUG, Provided that, such adjustments
shall be subject to subsequent verification by the
ERC to avoid over /under recovery of charges."
(Italics and underscoring supplied)
30. The introduction of the above-quoted amendment
to Section 4 (e), Rule 3 of the IRR EPIRA paved the way for
the ERC's introduction of the "GUIDELINES FOR THE
AUTOMATIC ADJUSTMENT OF GENERATION RA TES
AND SYSTEM LOSS RATES BY DISTRIBUTION
UTILITIES." Under the said guidelines, a distribution utility
like respondent MERALCO may now automatically adjust or
increase not only the system loss rates, but the generation
rates as well. This is so because the publication and other
requirements stated in Section 4 (e) of the original IRR
EPIRA had already been effectively amended as stated
above, providing for an Automatic Generation Rate
Adjustment Mechanism.
Section 2, Article III of the above-mentioned Guidelines
provides for an automatic Generation Rate increase, as
follows:
"Section 2. Billing of New Generation Rate --
The Distribution Utilities shall bill their customers
the Generation Rate calculated in accordance with
the immediately preceding Section effective on the
tenth (10) day of each month." (Italics and
underscoring supplied)
A certified true copy of the "GUIDELINES FOR THE
AUTOMATIC ADJUSTMENT OF GENERATION RATES
AND SYSTEM LOSS RA TES BY DISTRIBUTION
UTILITIES" is hereto attached and marked as Annex "D"
hereof.
31. Subsequently, ERC likewise issued Resolution No.
10-01 and Resolution No. 10-04, both Series of 2004 and
both entitled IN THE MATTER OF AMENDING THE
Page 18 of 43
GUIDELINES FOR THE AUTOMATIC ADJUSTMENT OF
GENERATION RATES AND SYSTEM LOSS RATES BY
DISTRIBUTION UTILITIES."
Certified true copies of the said Resolution No. 10-01
and Resolution No. 10-04, both Series of 2004, are hereto
attached and marked as Annexes "E" and "F" hereof.
32. Likewise, Resolution No. 16, Series of 2009,
entitled "A RESOLUTION ADOPTING THE RULES
GOVERNING THE AUTOMATIC COST ADJUSTMENT AND
TRUE-UP MECHANISMS AND CORRESPONDING
CONFIRMATION PROCESS FOR DISTRIBUTION
UTILITIES", a certified true copy of which is hereto
attached and marked as Annex "G" hereof.
33. On December 5, 2013, respondent MERALCO
sought clearance from respondent ERC for the staggered
collection of its generation costs for the November 2013
supply month. MERALCO proposed to impose a generation
charge of PhP7.90/kWh in its December 2013 billing, instead
of the calculated PhP9.1070/kWh, and collect the deferred
amount of about PhP3 Billion in its February 2014 billing.
34. Likewise, in a letter dated December 5, 2013,
petitioner NASECORE wrote the respondent ERC, through its
Chairperson Zenaida G. Cruz-Ducut, urging it "to
immediately direct MERALCO not to implement its
reported rate increase this month and .January next
year as this will be contrary to law", to no avail.
35. On December 9, 2013, the ERC, through its
Chairperson, Zenaida G. Cruz-Ducut, and Commissioners
Alfredo J. Non and Josefina Patricia A. Magpale-Asirit, sent a
letter to MERALCO's Ivanna G. Dela Pena, First Vice
President and Head, Regulatory Management Office,
advising the grant of clearance for the sought staggered
implementation of its generation cost recovery.
A certified true copy of the letter dated December 9,
2013 sent by ERC to MERALCO is hereto attached and
marked as Annex "H" hereof.
Page 19 of 43
36. Section 4 ( e) of Rule 3 of the IRR EPIRA having
been amended by doing away with publication, which was
originally required, the generation rate adjustment or
increase intended by MERALCO now becomes automatic,
without any mechanism that would apprise or notify the
public of the reasonableness or justness of such adjustment
or increase.
37. Further, ERC practically and deliberately resorted
to a regulatory failure on its part when it conveniently
surrendered its functions to MERALCO when it allowed the
latter to automatically determine its rate adjustment or
increase without even complying with the publication
requirement and conducting the requisite public hearing
thereto.
38. In the present Petition, class petitioners are of the
position that the requirement of publication as an essential
element of due process is inherently indispensable, even in
the light of the amendment made in so far as Section 4 ( e)
of Rule 3 of the EPIRA IRR is concerned. Thus, the related
issuances of the ERC regarding the automatic electricity
generation rate adjustment or increase are all null and void
for being violative of the due process clause of the
Constitution and for having been issued with grave abuse of
discretion amounting to lack or excess of jurisdiction.
39. Hence, this Petition.
VII.
ARGUMENT
RESPONDENT ERC UNDENIABLY
ACTED WITH GRAVE ABUSE OF
DISCRETION, AMOUNTING TO LACK
OR EXCESS OF JURISDICTION,
WHEN IT GAVE CLEARANCE AND
ALLOWED RESPONDENT MERALCO
TO AUTOMATICALLY COLLECT, OR
ABOUT TO DO SO, ALBEIT IN A
STAGGERED AND UNLAWFUL
MANNER, ITS NOVEMBER 2013
SUPPLY MONTH GENERATION
COSTS WITHOUT FIRST
PUBLISHING IT AS REQUIRED BY
LAW, AS WELL AS ALL OR ANY
OTHER GENERATION COSTS
IMPOSED BY RESPONDENT
MERALCO WITHOUT DUE PROCESS
OF LAW AGAINST ITS CONSUMERS
AND SUBSCRIBERS IN OTHER
INCLUSIVE SUPPLY MONTH
PERIODS WHICH WERE LIKEWISE
NOT PRIORLY PUBLISHED. ALL
ACTS BEING CONSTITUTIONALLY
INFIRMED.
VIII.
ISSUES
A.
The amendment made in
Section 4 (e), Rule 3 of the IRR
EPIRA is illegal per se for being
violative of the declared State Policy
of EPIRA and due process.
B.
Rate adjustments or increases
cannot be done automatically
without first complying with the
publication requirements of the law.
c.
Respondent ERC and
respondent MERALCO violated the
Page 20 of 43
due process clause when automatic
rate adjustments or increases borne
out by its alleged generation costs
were allowed and subsequently
collected against the electricity
consuming public.
D.
The due process clause
enshrined in the present
Constitution is deemed to be
written in every statute, contract,
regulation, or undertaking.
E.
Automatic electricity rate
adjustments or increases of
MERALCO are not only violative of
due process but also amount to a
regulatory failure on the part of the
ERC, an abject surrender of its
regulatory functions, in violation of
Section 25, EPIRA.
F.
The automatic rate
adjustments or increases made and
imposed by MERALCO against its
consumers and subscribers being
inherently and patently illegal for
being violative of due process, a
refund of all amounts collected by
MERALCO from the petitioners is
proper and the class must be
ordered.
Page 21of43
IX.
Discussions
A.
The amendment made in
Section 4 Ce), Rule 3 of
the IRR EPIRA is illegal
per se for being violative
of the declared State
Policy of EPIRA and due
process.
B.
Rate adjustments or
increases cannot be done
automatically without first
complying with the
publication reguirements
of the law.
c.
Respondent ERC and
respondent MERALCO
violated the due process
clause when automatic
rate adjustments or
increases borne out by its
alleged generation costs
were allowed and
subseguently collected
against the electricity
consuming public.
D.
The due process clause
enshrined in the present
Page 22 of 43
Page 23 of 43
Constitution is deemed to
be written in every
statute, contract,
regulation, or
undertaking.
40. The above-stated issues, being materially
relevant with each other, shall be discussed jointly herein.
41. Taking cue from the holding of the above-stated
Resolution of this Honorable Court in the above-said case of
"NASECORE, et. al. vs. ERC and MERALCO" to the effect that
"[I]t should be made clear that, unless Section 4( e),
Rule 3 of the IRR of the EPIRA is amended, the
adjustments of rates based on purchased power or
fuel adjustment costs shall not or in no case be
"automatic"", the Department of Energy amended Section
4 (e), Rule 3 of the IRR EPIRA by exempting certain rate
adjustment or increase mechanisms from the publication
requirement. Thus, by doing away with the said
requirement, it is believed that electricity rate adjustments
or increases, as demonstrated by the herein assailed acts of
respondents ERC and MERALCO, can be made and imposed
automatically.
42. However, it is the firm position of the class
petitioners that, even in the light of the aforesaid
amendment introduced in Section 4 (e), Rule 3 of the IRR
EPIRA, publication of electricity application for rate
adjustments or increases is INDISPENSABLE and that its
imposition cannot be made automatically. In fact, class
petitioners are of the solid position that the amendment
made is per se illegal for being violative of the intendments,
provisions and the declared State Policy behind the EPIRA.
43. Settled is the rule that "[A]n implementing
rule or regulation must conform to and be consistent
with the provisions of the enabling statute; it cannot
amend the law either by abridging or expanding its
scope.
5
"
5
Romarico J. Mendoza vs. People of the Philippines, G. R. No. 183891, October 19, 2011.
Page 24 of 43
44. More so, in the case of Luis K. Lakin, Jr. vs.
COMELEc6 the Supreme Court held:
"The authority to make IRRs in order to carry
out an express legislative purpose, or to effect the
operation and enforcement of a law is not a power
exclusively legislative in character, but is rather
administrative in nature. The rules and regulations
adopted and promulgated must not, however,
subvert or be contrary to existing statutes. The
function of promulgating IRRs may be legitimately
exercised only for the purpose of carrying out the
provisions of a law. The power of administrative
agencies is confined to implementing the law or
putting it into effect. Corollary to this is that
administrative regulation cannot extend the law and
amend a legislative enactment. It is axiomatic that
the clear letter of the law is controlling and cannot
be amended by a mere administrative rule issued for
its implementation. Indeed, administrative or
executive acts shall be valid only when they are not
contrary to the laws or the Constitution." (Italics and
underscoring supplied)
45. A mere cursory inspection of Section 2 ( c) of the
EPIRA would readily reveal that the publication of electricity
rate adjustments or increases is indispensable, and that its
imposition on the consumers and subscribers cannot be
effected automatically.
Section 2 (c) of the EPIRA provides:
"Section 2. Declaration of Policy. -- It is hereby
declared the policy of the State:
(a) Xx x;
(b) Xx x;
( c) To ensure transparent and reasonable prices of
electricity in a regime of free and fair competition and full
public accountability to achieve greater operational and
economic efficiency and enhance the competitiveness of
Philippine products in the global market:
(d) Xx x;
(e) Xx x;
(f) Xx x;
(g) Xx x;
6
G. R. No. 179431-32,
(h) Xx x;
(i) Xx x;
(j) Xx x;
Page 25 of 43
(k) X x x." (Italics and underscoring supplied)
46. Clearly, the amendment in Section 4 (e), Rule 3
of the IRR EPIRA, which effectively dispensed with the
publication requirement of certain electricity rate
adjustments or increase mechanisms, definitely makes it a
total impossibility to enforce and implement the avowed
State Policy of transparency in electricity rate fixing
considering that rate adjustments and increases can now be
effected automatically, without any way or method of
apprising or informing the affected public as regards its
justness or reasonableness. Needless to state, publication
of the application for rate adjustments or increases is a
means of ensuring "transparent and reasonable prices
of electricity in a regime of free and fair competition
and full public accountability to achieve greater
operational and economic efficiency and enhance the
competitiveness of Philippine products in the global
market."
47. Moreover, publication likewise is an effective tool
in preventing the public from second-guessing the substance
and merits of a particular rate adjustment or increase.
Publication notifies and informs the public that a rate
adjustment or increase is being applied for, as it encourages
participative initiatives on the part of the public, thereby
ruling out any arbitrary and oppressive electricity rate
adjustments. Publication, therefore, is the concrete
manifestation of due process which is essential in any
application for any rate adjustment or increase.
48. Considering that the amendment on Section 4
(e), Rule 3 of the IRR EPIRA, which dispensed with the
publication requirement, clearly runs afoul with the enabling
law which it is supposed to implement, then such
amendment can only be deemed and treated as illegal.
Mere implementing rules and regulations cannot amend,
supplement or substitute for the law itself. Indeed, "the
river cannot rise higher than its source.
7
"
7
Paulo Ballesteros vs. Rolando Abion, G. R. No. 143361, February 9, 2006.
Page 26 of 43
49. The aforesaid amendment made on the IRR
EPIRA being in itself illegal, all other subsequent issuances
made on the basis thereof, particularly the ERC Resolution
No. 10-01 and Resolution No. 10-04, both Series of 2004, as
well as its latest letter dated December 9, 2013 clearing and
allowing the staggered but automatic rate adjustment or
increase of MERALCO's generation cost for November 2013
supply month, must in similar manner be deemed and
declared illegal, null and void ab initio.
It must be struck down! And soon.
50. Incidentally, it bears stressing that no other than
respondent MERALCO committed itself to be transparent and
public in its rates. Thus, Section 5, R. A. 9209, otherwise
dubbed as the MERALCO Mega Franchise, provides:
"Sec. 5. Rates for Services. -- The retail rates
to its captive market and charges for the distribution
of electric power by the grantee to its end-user shall
be regulated by and subject to the approval of the
ERC.
The grantee shall identify and segregate in its
bill to the end-users the components of the retail
rate pursuant to Republic Act No. 9136, unless
otherwise amended. Such rates charged by the
grantee to the end-users shall be made oublic and
transparent. The grantee shall implement lifeline
rate to end-users as mandated under Republic Act
No. 9136." (Italics and underscoring supplied)
51. Additionally, MERALCO likewise committed to be
responsible to the public by supplying electricity in the least
cost manner, by charging reasonable, just and competitive
power rates for its services, by not committing acts
constituting abuse of market power, unfair trade practices,
monopolistic schemes and other activities that will hinder
competitiveness or business and industries.
Thus, Section 4, of the same MERALCO Mega Franchise
provides:
Page 27 of 43
"Section 4. Resaonsibility to the Public. - The
grantee shall supply electricity to its captive market
in the least cost manner. In the interest of the public
good and as far as feasible and whenever required
by the ERC, the grantee shall modify, improve or
change its facilities, poles, lines, systems and
equipment for the purpose of providing efficient and
reliable service and reduced electricity costs. The
grantee shall charge reasonable, just and
competitive power rates for its services to all types
of consumers within its franchised area in order that
business and industries shall be able to compete.
The grantee shall have the obligation to provide
open and nondiscriminatory access to its distribution
system and services for any end-user within its
franchise area consistent with Republic Act No.
9136, otherwise known as the "Electric Power
Industry Reform Act of 2001 ". The grantee shall not
engage in any activity that will constitute an abuse
of market power such as but not limited to, unfair
trade practices, monopolistic schemes and any other
activities that will hinder competitiveness or
business and industries." (Italics and underscoring
supplied)
52. Noteworthy is the fact that the above-stated
commitment of MERALCO to the public, as stated in its Mega
Franchise, can only be done and realized by notifying the
public through publication of its application for rate
adjustments or increases and by encouraging public
participation in the process of its approval, rather than
embedding it automatically, albeit arbitrarily, in each of its
consumer's monthly billing by reason of an instant rate
imposition.
53. Viewed in another context, however, the
automatic rate adjustments and increases promote a
violation of Meralco's Mega Franchise, which is in itself a
ground for its revocation.
54. Additionally, it must be emphasized that the
amendment made on Section 4 (e), Rule 3 of the IRR EPIRA
dispensing with the publication requirement of applications
for rate adjustments or increases does not divest
respondents ERC and MERALCO of the obligation under the
law to publish and conduct public hearings or consultations
thereon.
Page 28 of 43
55. Suffice it to state that the public in general,
represented by the herein class petitioners, who shall be at
the receiving end of the burden imposed by rate
adjustments or increases, has the right to be notified and
informed thereof, as well as the right to present its side and
be heard. This is in accordance with the due process clause
enshrined in the Constitution, which is deemed written in
every statute, contract, regulation or undertaking. Thus,
even if the requirement of publication had been deleted as a
result of the amendment, such requirement, being essential
to due process, is still deemed effectively written in the IRR
EPIRA.
Thus, in the case of Ruben Serrano vs. NLRc8, the
Supreme Court ruled that:
"Elementary is the doctrine that constitutional
provisions are deemed written into every statute,
contract or undertaking." (Italics and underscoring
supplied)
56. Likewise, due process was simply and plainly
described in the case of Jose R. Catacutan vs. People
9
as:
"Due process simply demands an ooportunity to
be heard." "Due process is satisfied when the parties
are afforded a fair and reasonable opportunity to
explain their respective sides of the controversy."
(Italics and underscoring supplied)
57. Given the foregoing disquisition, it is more than
clear that the assailed automatic rate adjustments and
increases allowed by ERC and immediately implemented by
MERALCO is violative of the declared State Policy stated in
the EPIRA and of due process.
8
G. R. No. 117040, January 27, 2000; cited in the separate concurring opinion of then Chief Justice
Artemio Panganiban.
9
G. R. No. 175991, August 31, 2011.
E.
Automatic electricity rate
adjustments or increases
of MERALCO are not only
violative of due process
but also amount to a
regulatory failure on the
part of the ERC, an abject
surrender of its regulatory
functions, in violation of
Section 25, EPIRA.
58. Section 25 of the EPIRA provides:
Page 29 of 43
"SEC.25. Retail Rate. - The retail rates charged
by distribution utilities for the supoly of electricity in
their captive market shall be subject to regulation bv
the ERC based on the principle of full recovery of
prudent and reasonable economic costs incurred, or
such other orinciples that will promote efficiency as
may be determined by the ERC.
Every distribution utility shall identify and
segregate in its bills to end-users the components of
the retail rate, as defined in this Act." (Italics and
underscoring)
59. Clear from the above-quoted prov1s1on of the
EPIRA that no other government agency or private entity is
tasked and mandated to regulate the retail rates being
charged by MERALCO to its captive market. However, when
the ERC cleared and allowed said MERALCO to automatically
adjust and increase its rate given the herein assailed
Resolutions and letter, respondent ERC practically and
conveniently surrendered and delegated its regulatory
functions and office to MERALCO. Automatic rate
adjustment or increase effectively defeated the regulatory
authority of ERC, as mandated by law.
60. More than being a total regulatory failure on the
part of the ERC, its act of allowing an automatic rate
adjustment or increase amounts to a delegation of its
authority and regulatory functions which is definitely
Page 30 of 43
violative of the above-quoted prov1s1on of the EPIRA.
Settled is the rule that a delegated authority cannot further
be delegated "potestas delegate non delegare
potest."
Thus:
"The rule is that what has been delegated
cannot be delegated, or as expressed in the Latin
maxim: potestas delegate non delegare potest. This
rule is based upon the ethical principle that such
delegated power constitutes not only a right but a
duty to be performed by the delegate by the
instrumentality of his own judgment acting
immediately upon the matter of legislation and not
through the intervening mind of another.
10
" (Italics
and underscoring supplied)
61. Axiomatic in the act of ERC is the invalidity of its
action.
F.
The automatic rate
adjustments or increases
made and imposed by
M ERALCO against its
consumers and subscribers
being inherently and
patently illegal for being
violative of due process, a
refund of all amounts
collected by MERALCO
from the petitioners and
the class must be ordered.
62. The amount collected or imposed by MERALCO to
its subscribers and consumers from the time the automatic
rate adjustments or increases had been allowed by
10
William C. Dagan, et. al. vs. PHILRACOM, et. al., G. R. No. 175220, February 12, 2009.
Page 31of43
respondent ERC being patently illegal, the same should be
returned by way of refund to them, with dispatch. Such
illegal collection or imposition of automatic rate adjustment
or increase amounts to unjust enrichment on the part of
MERALCO, necessitating its return to the said subscribers
and consumers
11

63. Note must be made that the herein assailed ERC
Resolutions date back to the year 2004 when automatic rate
adjustment and increase was allowed by ERC. Thus, the
year 2004 must be the reckoning year of the refund prayed
for.
64. In order that the refund may be effected in a
transparent manner, a committee headed by the
Commission on Audit (COA), and joined by representatives
of the electricity consuming public, through the herein class
petitioners, must be created and its members appointed, for
the sole purpose of conducting a diligent audit designed to
ascertain the total amount of refund due to MERALCO
consumers and subscribers.
65. Likewise, in the name of transparency, MERALCO
must be made to deposit the amount of refund to an escrow
account in favor of the class petitioners and the class itself
of subscribers and consumers.
x.
GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK OR EXCESS OF JURISDICTION
66. In the case of Tri-Corp Land & Development,
Inc. vs. Court of Appeals
12
, the Supreme Court had the
occasion to define grave abuse of discretion, to wit:
"As defined, grave abuse of discretion means
such capricious and whimsical exercise of judgment
as is equivalent to lack or excess of jurisdiction or,
where the power is exercised in an arbitrary manner
by reason of passion, prejudice, or personal hostilitv,
11
Similar to what was ordered in the aforesaid case of NASECORE vs. ERC & MERALCO, infra.
12
G. R. No. 165742, June 30, 2009.
Page 32 of 43
and it must be so patent or gross as to amount to an
evasion of a positive duty or to a virtual refusal to
perform the duty enjoined or to act at all in
contemplation of law." (Italics and underscoring
supplied)
67. In the case at bar, respondents clearly acted with
grave abuse of discretion, sufficient to conclude that they
acted in a whimsical, capricious, or arbitrary manner by
reason of prejudice amounting to an evasion of a positive
duty or to a virtual refusal to perform the duty enjoined or
to act at all in contemplation of law, when:
a. The DOE amended Section 4 (e), Rule 3
of the IRR EPIRA in violation of the provision and
declared State Policy of the law;
b. Respondent ERC, following and basing
on the illegal amendment made by the DOE,
issued the herein assailed Resolutions and letter
allowing the automatic rate adjustment and
increase in favor of MERALCO, which resulted in
the unlawful imposition of illegal electricity rate
adjustment or increase and in clear violation of
due process of law;
c. The ERC virtually surrendered its
regulatory functions, as an undue advantage, in
favor of MERALCO and against the general public.
XI.
ALLEGATIONS IN SUPPORT OF
THE APPLICATION OF THE CLASS PLAINTIFFS
FOR A TEMPORARY RESTRAINING ORDER I STATUS
QUO ANTE ORDER AND INJUNCTION
Class plaintiffs adopt and reiterate the herein-above
allegations insofar as they are material hereto;
Page 33 of 43
68. The issuance by respondent ERC of the herein
assailed Resolution and Letter which is immediately
executory on the part of MERALCO to automatically collect
and impose electricity rate adjustment and increase leaves
class petitioners without any other plain, speedy, immediate
and available recourse under the law to prevent the
execution thereof, upon its lapse into finality.
69. The threatened execution of the above-stated
Resolutions and letter would definitely render nugatory and
academic the relief and remedies herein prayed for, if the
same will not be outrightly restrained and/or enjoined. It
would definitely be promotive of the interest of substantial
justice and public policy to restrain and/or enjoin the
execution of the same issuances.
70. In the same manner, not only the class
petitioners, but the public in general based on the
perpetration of an injustice, would suffer grave and
irreparable injury if the said Resolutions and letter are
executed or carried out by MERALCO with the concurrence of
DOE and ERC, as it would deprive the class petitioners and
the class itself of their rights without due process of law.
71. Class petitioners are meritoriously entitled to the
relief and remedies prayed for, and the whole or part of such
relief and remedies consist in restraining the commission of
the acts complained of, or the performance of an action or
acts, either for a limited period or perpetually.
72. The commission or continuance of the acts
complained of during the litigation or the non-performance
thereof would work grave injustice to the herein class
petitioners and the general public.
73. MERALCO, with the concurrence of DOE and ERC,
is doing, threatening, is about to do or procuring to be
done, some acts in violation of the petitioners' and the
public's rights respecting the subject of the action herein and
tending to render the judgment hereof ineffectual.
74. The threatened and actual implementation and
execution of the said Resolutions and letter would serve no
purpose but to tolerate unjust enrichment and injustice.
Page 34 of 43
75. There is a need to place the parties in their
respective status before the filing of the present case and
before the issuance of the assailed Resolutions and letter by
the ERC, necessitating the issuance of a Status Quo Ante
Order.
76. The immediate issuance of the injunctive and
ancillary relief of restraining and/or enjoining the
implementation or execution of the afore-mentioned
Resolutions and letter issued by respondent ERC in favor of
MERALCO is highly in order.
77. Or if the acts complained of have already been
commenced or accomplished, the immediate issuance of the
injunctive and ancillary relief of restraining and/or enjoining
the implementation or execution of the afore-mentioned
Resolutions and letter issued by the ERC in favor of
MERALCO is highly in order.
XII.
Prayer
WHEREFORE, premises considered, it is respectfully
prayed of this Honorable Court that:
Immediately upon Filing of the Petition
1. A Temporary Restraining Order (TRO) or a Status
Quo Ante Order be issued ex-parte immediately and with
extreme dispatch, restraining and enjoining respondents,
their agents, representatives and all other persons, agencies
or instrumentalities who may be acting under their direct
and incidental control and supervision, from implementing,
executing and carrying out the execution of its Resolution
10-01, Resolution 10-04, both Series of 2004, and the letter
of ERC to MERALCO dated December 9, 2013 (Annexes "E",
"F" and "H", respectively);
Page 35 of 43
After Due Notice and/or Summary Hearing on
the Issuance of Injunction
2. A Writ of Prohibitory Preliminary Injunction be
immediately issued restraining and enjoining the
respondents, and all other persons, agencies or
instrumentalities who may be acting under their direct and
incidental control and supervision, from implementing,
executing and carrying out Resolution 10-01, Resolution 10-
04, both Series of 2004, and the letter dated December 9,
2013, until the final disposition on the merits of the present
petition;
After Hearing on the Merits
3. The Writ of Prohibitory Preliminary Injunction be
declared permanent and perpetual;
4. Render a Decision declaring the respondents to
have acted with grave abuse of discretion, amounting to lack
or excess of jurisdiction, and consequently:
a. Declaring the amendment of Section 4
(e), Rule 3 of the IRR EPIRA made by the DOE to
be illegal, null and void ab initio;
b. Declaring all resolutions, orders or any
other issuances of respondent ERC authorizing,
allowing, confirming and implementing the
automatic power rate adjustments or increases
imposed by MERALCO as inherently null and void
on the ground of grave abuse of discretion,
amounting to lack or excess of jurisdiction;
c. Declaring of all electricity rate
adjustments or increases automatically imposed
or collected by MERALCO from its subscribers and
consumers as inherently and patently null, void
and illegal;
Page 36 of 43
d. Prohibiting the ERC from allowing
MERALCO to impose and collect automatically
rates adjustments and increases;
e. Ordering the audit and subsequent
refund of all rate adjustments or increases
automatically collected or imposed by
respondent MERALCO to all of its consumers or
subscribers by virtue of the assailed ERC
resolutions, orders or issuances with utmost
dispatch, reckoned from the year 2004;
f. Ordering the creation of a committee,
appointing the Commission on Audit (COA) as
head, and where consumer interests are
sufficiently represented, that would conduct
immediate audit and subsequent refund of all
automatic electricity rate adjustments or
increases illegally imposed and collected by
MERALCO reckoned from the year 2004;
g. Ordering the deposit in an escrow
account the aggregate amount of refund
determined by the committee headed Commission
on Audit (COA); and
h. Ordering the proportionate distribution
of the determined amount of refund to all class
members;
Other remedies appropriate under the premises are
also prayed for.
Metro Manila, January 12, 2013.
RENE A. V. SAGUISAG
Counsel for Petitioners
4045 Bigasan Street
Brgy. Palanan, Makati City
RENE A. V. SAGUISAG
IBP Lifetime No. 03214122903
PTR No. 3671506-01.02.13-Rizal
Roll of Attorneys No.19190
Page 37 of 43
MCLE Exemption No. 3-001432-6.28.10 Pasig
LEONARD S. DE VERA
Counsel for Petitioners
Penthouse B, Windsor Tower
163 Legazpi St., Legazpi Village, Makati City 1229
Telefax No. (02) 8127739
PTR No. 4233296-01.07.14-Makati City
IBP Lifetime Member Roll No. 000000
Roll of Attorneys No. 23534
MCLE Compliance No. IV-0019174-04.26.13
NELSON A. LOYOLA
Counsel for Petitioners
Suite 201 Carreon Building
2746 Zenaida Street
Brgy. Poblacion, Makati City
PTR No. 3676854-01.08.13-Makati
IBP Lifetime No. 0010-11.15.93
Roll of Attorneys No. 23649
MCLE Compliance No. V-0001091-11.12.13
RONNI!.:.

No. 137 Libis Gochuico Street,
Circumferential Road 3,
Caloocan City 1400
Tel. No. 3511718
Email: ronrodillas@yahoo.com
IBP NO. 926338; 01-16-13-Calmana
PTR NO. 5534040; 01-14-13-Caloocan City
Roll of Attorneys No. 48536
MCLE Compliance No. IV - 0018734, April 24, 2013
Page 38 of 43
Copy furnished: (By personal service)
DEPARTMENT OF ENERGY
Energy Center, Rizal Drive
Bonifacio City
Taguig City 1632
ENERGY REGULATORY COMMISSION
Pacific Centre Building
San Miguel Avenue, Pasig City
MANILA ELECTRIC COMPANY
Lopez Building, Ortigas Avenue
Pasig City
THE SOLICITOR GENERAL
134 Amorsolo Street, Legaspi
Village, Makati City
I hereby acknowledge
receipt, by personal
service, of the copies of the
(1) Petition for Certiorari
and Prohibition (Class Suit)
dated December 18, 2013
and the (2) Compliance
(with Attached Copy of the
Amended Petition) dated
January 12, 2014.
(Signature & Date Above
Printed Name)
Impleaded Necessary
Parties
PHILIPPINE ELECTRICITY
MARKET CORP.
18/F Robinsons Equitable
Tower, Ortiqas, Pasiq City
SEM-CALACA POWER
CORPORATION
2/F DMCI Plaza Building
2281, Don Chino Races
Extension,
Bgy. Magallanes, Makati City
MASINLOC POWER
PARTNERS CORP.
Philamlife Tower 8767, Paseo
De Roxas, Makati City 1200
SAN MIGUEL ENERGY
CORPORATION
2/F 808 Building, Gen. Lim
cor. Meralco Avenue, Ortigas
Center, Pasio City 1600
SOUTH PREMIERE POWER
CORPORATION
2/F 808 Building, Gen. Lim
cor. Meralco Avenue, Ortigas
Center, Pasio City
THERMA
INCORPORATED
MOBILE
Ground Floor, Philippine
Fisheries Development
Authority Complex Building,
Navotas City
FIRST GAS POWER
CORPORATION
3/F Ben pres Building,
Exchange Road car. Meralco
Avenue,
Ortiqas Center, Pasiq City
Page 39 of 43
QUEZON POWER PHILS.
(LTD) COMPANY
14/F Zuellig Building
Makati Ave. cor. Paseo De
Roxas, Makati City 1225
THERMA LUZON,
INCORPORATED
NAC Tower, 32nd Street,
Bonifacio Global City, Taguig
City
FGP CORPORATION
3/F Ben pres Building,
Exchange Road cor. Meralco
Avenue,
Ortigas Center, Pasig City
NATIONAL
CORPORATION
PHILIPPINES
GRID
OF THE
Quezon Avenue cor. BIR
Road, Diliman,Quezon City
1100
1590 ENERGY CORPORATION
Unit 107 First Midland Office
Condominium Building
Gamboa St., Legaspi Village,
Makati City
AP RENEWABLES
INCORPORATED
15/F, NAC Tower, 32nd St.,
Bonifacio Global City, Taguig
City
BAC-MAN ENERGY
DEVELOPMENT
CORPORATION I
BAC-MAN GEOTHERMAL,
INCORPORATED
38/F One Corporate Center
Julia Vargas cor. Meralco
Avenue, Ortigas Center, Pasig
Page 40 of 43
City 1605
FIRST GEN HYDRO POWER
CORPORATION
3/F Ben pres Building,
Exchange Road cor. Meralco
Avenue,
Ortigas Center, Pasig City
GN POWER MARIVELES COAL
PLANT LTD., CO.
1905 Orient Square Building
Don Francisco Ortigas, Jr.
Road,
Ortiqas Center, Pasiq City
PANASIA ENERGY HOLDINGS
2/F 808 Building, Gen. Lim
cor. Meralco Avenue,
Ortigas Center, Pasiq City
POWER SECTOR ASSETS &
LIABILITIES MANAGEMENT
CORP.
7/F Bankmer Building, 6756
Ayala Avenue, Makati City
SN ABOITIZ-BENGUET,
INCORPORATED /
SN ABOITIZ-MAGAT,
INCORPORATED
10/F, NAC Tower, 32nd St.,
Bonifacio Global City
Taguig City
STRATEGIC POWER
DEVELOPMENT
CORPORATION
2/F 808 Building, Gen. Lim
cor. Meralco Avenue,
Ortiqas Center, Pasig City
TRANS ASIA POWER
GENERATION CORPORATION
11/F PHINMA Plaza, 39 Plaza
Page 41of43
Page 42 of 43
Drive, Rockwell Center
Makati City 1200
VIVANT STA. CLARA
NORTHERN RENEWABLES
GENERATION CORPORATION
Unit 107, First Midland Office
Condominium Building
Gamboa St., Legaspi Village,
Makati City
Page 43 of 43
REPUBLIC OF THE PHILIPPINES)
Makati City ) SS.
x----------------------------------x
VERIFICATION I CERTIFICATION
I, RODRIGO C. DOMINGO, one of the petitioners in the above-
entitled case, of legal age, Filipino citizen, with postal address located
at 15/F LPL Center, No. 130 L. P. Leviste Street, Salcedo Village,
Makati City, after having been duly sworn in accordance with law,
hereby depose and state: That -
1. I am one of the petitioners in the present class action
against respondents;
2. I caused the preparation of the foregoing Amended
Petition for Certiorari and Prohibition;
3. I have read the contents thereof and affirm that the same
are true and correct to the best of my personal knowledge and/or are
based on authentic records;
4. Pursuant to and in compliance with Supreme Court
Administrative Circular NO. 04-94, I hereby certify that I have not
commenced any other action or proceeding involving the same issues
in the Supreme Court, the Court of Appeals, or different divisions
thereof, or any other tribunal or agency; to the best of my knowledge,
no such action or proceeding is pending with the Supreme Court, the
Court of Appeals, or different divisions thereof, or any other tribunal or
agency; and if I should thereafter learn that a similar action or
proceeding has been filed or is pending before the above tribunals or
agency, I hereby undertake to report that fact within five (5) days
therefrom.
\
RODRIGO C. DOMINGO, JR.
Petitioner/ Affia nt
OSCA ID No. 3677
issued by Makati City
on April 27, 2005

SUBSCRIBED AND SWORN to before me this_ January 2014, in
the City of Makati, the affiant exhibited to me his government-issued
ID as stated above, bearing his photograph, as his competent evidence
of his identity.
Doc. No.
Page No. .((,
Book No. lt.3
Series of 2014.
VERIFICATION a CERTIFICATfON
PETRONllO L ILAGAN, of legal age, FHipi110, married, with office and postal address
at No. 10 Bayside Court Compound, 680 Quirino Avenue, Tambo, Paranaque after
being swor;;, deposes and states: THAT
1. He is the President of the Natfonal As.sodation of Electricity Consumers
for Reforms, f nc. t who had caused the preparaUon of the foregoing Petition a copy of
Secretary's Certificate authorizing Mr. Petronilc L . tlagan to file this Petition is
attached as Annex A"
2. He read and fully understood the allegations contafned in said Petition
and that all the facts therein contained are true and ::orrect based on his personal
knowledge and authentic records.
3. . He hereby certify that he have not commenced nor caused the
commencement of any other action or proceeding involving the issues raised herein
before the Regional Trial Court, the Supreme Court or .ctifferent Divisions thereof, or
any other tribunal or agency, and that to the best of his no such action or
proceedings is pending before the Regional Trial Cour( the Supreme court, or
different Dlvisions ther,.=of, or any other tribunal or agency; and that if he should
Learn that a similar action or proceeding has been filed or pending before the
Supreme Court, or different Divisions thereof> or any other tribunals or agency, he
shall notify this Honorable Commission within five (5) days from such notice.
IN WITNES.S WHEREOF, he has hereunto o.fffxed his th1s 19th day of
December 2013 at ParaFiaque City.
ILAGAN
nt
SUBSCRIBED AND SWORN to before me this -- day of 2 0 2ui
3
2013, by
affiant who showed me his Drivers License N10-74-012320 issued by LTO - East
Avenue) ei.-id ttj bot f, :Wflf.
Doc. No._ f ;
Page No._.,... ;
Beak No. ltJ
-
Sertes of 2013
...----
ATT U"UZ:

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'tk.,:-:t
1
VERl.FICATION & CKRTrFfCA TION
STRGFRIF..DO A,. VELOSO, of legal age, Fi1ipino, married. with office and postal
address at ff 19 Tagaytay .SL .Afabang Hills Vi Hage. Cupang, Mu.o:tinlupa City. after being
sworn. deposes and state.s: THAT
1 , He is a Dire<.iOr of the Federation of Village who had caused the
preparation of the foregoing Petition a copy of Secretary's Ce1tificate authorizing
SlliG.F.R.IEDO A VELOSO 10 flle this Peiiiion is attuched as
2_ He read and fully understood till: allegatfons contal.ned in said Petition and that all
the fa'-1S therein contained arc true and correcL ha'led on personal k.nowledge and
authentic records_
3. He hereby certify- that he have not commenced nor caused. the commencement of any
other action or proceeding the issues raised herein before the R.cgiorutl Trial
Court, the Supreme Court or different Ohir;ions thereof.. or any other tribunal or agency,
and that to the best of his knowledge. no such action or proceedings. is pending hefore the
.Regional Trial Court, tho;; Supreme Court. or different Divisions thereof, or any olher
tribunai or agency; anri ihat if he shoujd learn that a simllar. action or proceeding has been
filed or pcntling before the Supreme Court, or different Divisions thereof, or any other
tribunals or agency, he ,(tha1J notify this Honorable Commission Viithin five (5) days from
such notice_
TN WITNESS he has hcreunLc aff'1Xed his s.ignature this 17lh day of
December 2013 at \4UN11}.."1.,L"PA CITY_
<iFRIEDO A. VELOSO
Affianb
. 1 a inu
SUBSCRTRF.D AND S\VORN to before me on this __ '
1
day oi 2013,
by affiar.t who showed me his OSCA ID No_ 19263 a.L Munlin1upa City ()1i
November 20, 2007_

Page No.
Book.No_ , ___ _
Series of2013"'-
VER.IFICA TIOH a i;_ERTIF!_CA
OONIFACIO C. DAZO of Eegai Filipino_, widower, with office and postal address at
Myrna Panlilio St.i B.f.Resort Pinas after sworn, deposes and
states: THAT
1. He Is th President of the Federation of Las Pinas Homeowners
Association, who had caused the pr:eparatfon of the foregoing Petition a copy of
Sec-.retarys Certificate authorizlng BONlFACIO C. DAZO to fite this Petition is
attached as
2. He read and fully understood allegations contained in said Petition
and that an the facts therefn contained are true and c..orrect based on his persooat
knowledge and authentic records.
He hereby certify that he have not oor caused the
commencement of any other action or prot:eeding invob1ing the issues ralsed herein
before the Regionat Trial the Supreme Couft or different Of.visions or
any other tribunal or agency, and that to the best of his no such action or
proceedings is pending before the Regional Trial Court, the Supreme or
different Divisions thereof
1
or any other trtbe.mal or agency; and that ff he should
that a similar action or proceeding has been filed or pending before the
Supreme or different DMSions thereof, or any other tribunals or agency,. he
!Shall notify this Honorable Commission within five (5) days from such notice.
WITNESS WHEREOF) he has hereunto affixed his signature this 16th .day of
December 2013 at las Pma'i C1ty.

BONtf' ACIO C. DAZO
Afflant
SUBSCRIBED AND SWORN to before me thi5 of JlEf: 2 0 2013 2013
1
by
affiant who showed me ms Communtt:y Certifkate No. 06133462 issued on Froruary
2013 at las Pinas City. cs 10 No. {:f.3v3'4.! b' . . e,..'ry .t'l'l N.n 14,
Doc. No.,
?age No. ;
Book No. ;
Series of 2013
... - ----
REPUBLIC OF THE PHILIPPINES )
MAKA TI CITY ) S.S.
AFFIDAVIT OF SERVICE
(In compliance with Section 12. Rule 13 of the Rules qj"Court,
as amended by Supreme Court Resolution dated April 8. 1997)
I, ALLEN D. BUG-ATAN, Filipino, of legal age, with office address at 15
111
Floor, LPL Center, 130 L. P. Leviste Street, Salcedo Village. Makati City, after having
been duly sworn in accordance with law. hereby depose and state: That -
1. I am a liaison officer of Domingo Dizon Adre & Leonardo - A Law
Partnership, of which petitioner Rodrigo C. Domingo. Jr. is one of the partners;
2. On January 13, 2014, I served by personal service, in so far as can be done, the
foregoing "Compliance (With Attached Copy qf the Amended Petition for Certiorari
and/or Prohibition)" dated January 12, 2014, in the case entitled "National Association
~ Electricity Consumers/hr Re_fimns (NASECORE). et. al. vs. Afanila Electric Company,
et. al." G. R. No. 210255. pending with the Supreme Comi, Manila. to the following
respondents:
1. Manila Electric Company
Lopez Building, Ortigas A venue
Pasig City
2. Energy Regulatory Commission
Pacific Centre Building
San Miguel Avenue, Pasig City
3. Department of Energy
Energy Center, Rizal Drive
Bonifacio City
Taguig City 1632
4. The Solicitor General
134 Amorsolo Street
Legaspi Village, Makati City
5. Philipine Electricity Market Corporation
18/F Robinsons Equitable Tower
01iigas Center, Pasig City
6. Sem-Calaca Power Corporation
2/F DMCI Plaza Building
2281 Don Chino Roces Extension
Brgy. Magallanes. Makati City
7. Masinloc Power Paiiners Corporation
Philamlife Tower
8767 Paseo de Roxas
Makati City
8. San Miguel Energy Corporation
2/F 808 Building
Gen. Lim corner Meralco A venue
Ortigas Center, Pasig City
9. South Premiere Power Corporation
2/F 808 Building
Gen. Lim corner Meralco A venue
01iigas Center, Pasig City
10. Therma Mobile Incorporated
Ground Floor
Philippine Fisheries Development Authority Complex Building
Navotas City
11 . First Gas Power Corporation
3/F Benpress Building
Exchange Road corner Meralco A venue
Ortigas Center, Pasig City
12. Quezon Power Phi ls. (LTD) Company
14/F Zuellig Building
Makati A venue corner Paseo de Roxas
Makati City
13. Therma Luzon Incorporated
NAC Tower, 32
11
d Street
Bonifacio Global City
Taguig City
14. FGP Corporation
3/F Benpress Building
Exchange Road corner Meralco A venue
Otiigas Center, Pasig City
15. National Grid Corporation of the Philippines
Quezon Avenue corner BIR Road
Diliman, Quezon City
16. 1590 Energy Corporation
Unit 107 First Midland Office Condominium Building
Gamboa Street, Legaspi Village, Makati City
17. AP Renewables Incorporated
15/F NAC Tower, 32
11
d Street
Bonifacio Global City
Taguig City
18. Bae-Man Energy Development Corporation/
Bae-Man Geothermal Incorporated
38/F One Corporate Center
Julia Vargas corner Meralco Avenue
Ortigas Center, Pasig City
2
19. First Gen Hydro Power Corporation
3/F Benpress Building
Exchange Road corner Meralco A venue
Otiigas Center, Pasig City
20. GN Power Mariveles Coal Plant Ltd., Co.
1905 Orient Square Building
Don Francisco Otiigas, Jr. Road
01iigas Center, Pasig City
21. Panasia Energy Holdings
2/F 808 Building
" Gen. Lim corner Meralco A venue
01iigas Center, Pasig City
22. Power Sector Assets & Liabilities Management Corporation
7/F Bankmer Building
6756 Ayala A venue, Makati City
23. SN Aboitiz-Benguet Incorporated/
SN Aboitiz-Magat Incorporated
I O/F NAC Tower, 32
11
d Street
Bonifacio Global City, Taguig City
24. Strategic Power Development Corporation
2/F 808 Building
Gen. Lim corner Meralco A venue
01iigas Center, Pasig City
25. Trans Asia Power Generation Corporation
11 IF Phinma Plaza
39 Plaza Drive, Rockwell Center
Makati City
26. Vivant Sta. Clara Northern Renewables Generation Corporation
Unit I 07 First Midland Office Condominium Building
Gamboa Street Legaspi Village, Makati City
or their respective counsel of record. Service on the other respondents shall be made
today, as far as practicable, on the following working day.
3. I am executing this Affidavit in order to attest to the truth of the foregoing
statements.
SUSCRIBED AND SWORN TO before me this 13th day of .January 2014 in
Makati City, affiant exhibiting to me his Philhealth Card No. 01-051485921-9 with his
picture attached thereon as a competent of proof his identity.
Doc. No. _jgg__;
Page No. .2,(, ;
Book o ~ __ ;
Series of2014.
3
TABLE OF ANNEXES
AMENDED PETITION
NASECORE, ET. AL. VS. MERALCO, ET. AL.
G.R. NO. 210255
SUPREME COURT, MANILA
ANNEXES DESCRIPTIONS
"A" Secretary's Certificate of National Association of Electricity
Consumers for Reform (NASECORE) dated December 19,
2013.
"B" Secretary's Certificate of Federation of Village Associations
(FOVA) dated December 16, 2013.
"C" Secretary's Certificate of Federation of Las Piiias
Homeowners Associations (FOLPHA) dated December 20,
2013.
"D" Guidelines for the Automatic Adjustment of Generation
Rates and System Loss Rates by Distribution Utilities.
"E" Certified True Copy of Resolution No. 10-01, Series of
2004 entitled In The Matter of Amending the Guidelines
for the Automatic Adjustment of Generation Rates and
System Loss Rates by Distribution Utilities.
"F" Certified True Copy of Resolution No. 10-04, Series of
2004 entitled In The Matter of amending the Guidelines
for the Automatic Adjustment of Generation Rates and
System Loss Rates by Distribution Utilities.
"G" Resolution No. 16, Series of 2009 entitled A Resolution
Adopting the Rules Governing the Automatic Cost
Adjustment and True-Up Mechanisms and Corresponding
Confirmation Process for Distribution Utilities.
"H" Certified True Copy of the letter dated December 9, 2013
sent by ERC to MERALCO.
4NNEX A
ANNEX A
SECRETARY'S CERTIFICATE
I, G. GOZUN, a duly elected, qualified and incumbent Corporate
Secretary of National Association of electricity Consumers for Reforms, Inc
(NASECORE), a non-stock corporation duly organized and existing under and by virtue
of the laws of the Philippines, do hereby certify that:
At the special meeting of the Board of Directors of the NASECORE duly
convened and held on December 13, 2013 at which meeting a quorum was present,
acted throughout and voted, the following resolutions were approved:
"RESOLVED, that the Board of Directors of NASECORE approve, as it hereby
approves, the filing of ti1e Petition with the Supreme Court of the Philippines.
RESOLVED, that Mr. Petronila L. Ilagan, President of NASECORE was
empowered, and is hereby empowered to sign, execute, verify and deliver on behalf
of NASECORE the said Petition, any papers and instruments that he may deem
appropriate and necessary, for the furtherance of NASECORE's interest.
WITNESS THE SIGNATURE of the undersigned as such officer of the
Association and its corporate seal hereunto affixed on this 13th day of Dece , er 2013
at Paraiiaque City.
OP te Secretary
itin
AND SWORN to before me this of 2013, affiant
exhibiting to me his Driver's License No. NOJ-01.-3082 J6 issued at LTD - East
Doc. No. _J_J,_
Page No._!lL_
Book No. &J
Series of 2013
0ypi"r""j 3,413 .

Until December 31 2'013
Appt No M-5:? 1 City
IBP #8CJ9i'(l M21y D Z\J12-W;M
PTR .J.3n 111 )0"13-M;ik;iti
S C HrJll Nfl
MCLE Com pl 1;,rn'.Y' i'io I \I -001 1330
Unit nf Tower
#98 Huf1no St cor Valero SL
Salc:Rdo CAit
2
SECRETARY'S CERTIFICATE
1, MELANlE ROSAS, a duly elected, qualifi(";d incumbent C'.orporatc Secretary of
Federation of Village Associations (l;OVA), a non-stock corporation duly orga:nit.ed and
under and by virtue oftbe laws of the Philippines, do hereby certify that:
At ihe regular of the Board of Directon; of FOVA duly convened and held on
October 12, 2013 at v,.tiich meeting a. quorum was present, acted throughout a..-,d voted, the
follo'\\ing resolutions. were approved.
"RESOLVED, that the lloard of Directors ofFOVA approve, it hereby approves, the
fi1ing of the Petition with the Sttpreme court of the Philippines_
RESOLVED, that Engr. 51egfriedo A. Veloso, Director for External Affairs of .FOY A
was empowered, and is hereby empowered to execute, verify and deliver on behalf of
YOVA the said Peiiliotr, any papers and instruments that he may deem appropriate and
necessary, for the furtherance of 1''0Y A's
WITNESS THE SIGNATURE of the underl'l.igned as t>uch officer ofJ Ass wlation and
it8 corpornre seal hereunto affix.ed on this l 7tJ' day ofDecemher 2013 at M:u.inl City.
SURSCRIBRD Al{O SWORN to before me th1s ffitar of December 2013, affiant ex.hibit.ing
to me her Community Tax Ccriiticate No. 07889794 issued at Muntinlupa CiLy on Fehrua.ry 1,
2013.

PaNo_
::.--r Tt
Sert.es of 201v-
}.
t,
.!
ANNEX C
ANNEX A
SECRETARY'S CERTIFICATE
I, EDWARD COLOBONG , a duly elected, qualified and incumbent Corporate
Secretary of the FEDERATION OF LAS PINAS HOMEOWNERS ASSOCIATION (FOLPHA), a
non-stock corporation duly organized and existing under and by virtue of the laws of
the Philippines, do hereby certify that:
At the special meeting of the Board of Directors of the FOLPHA duly
convened and held on December 14, 1013 at which meeting a quorum was present,
acted throughout and voted, the following resolutions were approved:
"RESOLVED, that the Board of Directors of FOLPHA approve, as it hereby
approves, the filing of the Petition with the Supreme Court of the Philippines.
RESOLVED, that BONIFACIO C. DAZO, President of FOLPHA was empowered,
and is hereby empowered to sign, execute, verify and deliver on behalf of FOLPHA the
said Petition, any papers and instruments that he may deem appropriate and
necessary, for the furtherance of FOLPHA's interest.
WITNESS THE SIGNATURE of the undersigned as such officer of the
Association and its corporate seal hereunto affixed on this L6th day of December 2013
at Las Pinas City.

Corporate Secretary
oEC 2 O 2013
SUBSCRIBED AND SWORN to before me this day of 2013, affiant
exhibiting to me his Driver's License No. _N 1MlDll41 lu ... I ,.. J .. '-J t1 H al

Page No._!fk__
Book No. lo4
Series of 2013
avid lM,- Juii:J 31, fl<i/f.
AT _6
N ... i' _ JC
Untrl 31 2013
Appl M.',:J1 M.'lkn11 r,,h'
r;,.l;:\v ??
i:.m 11). ?013-Makati
s c: f'.'("1i'
rvic1 .. 1: r:...m',:r.: .. , ';1,-, 1\/ .. 0011330
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1
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1
li \l,:11t:.ro St
'v'uld[:<e Makau CJt)I"
-
.. ..;.:.
ANNEX 0

\ERCJ

Republic of the Philippines
ENERGY REGULATORY COMMISSION
San Miguel Avenue, Pasig City
GUIDELINES FOR THE AUTOMATIC ADJUSTMENT OF
GENERATION RA TES AND SYSTEM LOSS RA TES BY
DISTRIBUTION UTILITIES
Pursuant to Section 43 (f} of Republic Act No. 9136 or the Act. 'Rule 7 of
its Implementing Rules and Regulations (IRR) and Section 10 of Republic Act
No. 7832, the Energy Regulatory Commission (ERC) hereby adopts and
promulgates these Guidelines to establish a process for the automatic
adjustment of Generation Rates and System Loss Rates by Distribution Utilities.
ARTICLE I
GENERAL PROVISIONS
These Guidelines shall have the following objectives:
a) To ensure and maintain the quality, reiiability. security and affordability
of the supply of electric power;
b) To ensure transparent and reasonable prices of electric power service
in a regime of free and fair competition and to achieve greater
operational and economic efficiency:
c) To ensure full recovery of all allowable Generation Costs and other
costs associated with the System Loss Caps in an efficient and timely
manner; and
d} To protect the public interest as it is affected by the rates and services
of Distribution Utilities.
ED
"10fi"la!ll'
F.NERGY P.ii:GUtATORY
Page I of7
(
- ------------- ---- - -
ARTICLE II
SCOPE AND DEF1NlTlON Of TERMS
Section 1. Scope - These Guidelines shall apply ~ o all Distribution Utilities.
Section 2. Definition of Terms - As used in these Guidelines, the
following tenns shall have the following respective meanings:
a)
b)
c)
d)
e)
f)
Act" un!ess otherwise stated, shall refer to Republic Act No. 9136,
otherwise known as the "Electric Power Industry Reform Act of 2001 ".
"Average Transmission Rate (ATR)" shall mean the transmission
costs approved per unbundling divided by the annualized kWh sales
per unbundling.
"Deferred Accounting Adjustment (DAA)" shall mean the
component of the. generation rate, calculated in c c o r d n ~ with the
Generation Rate Adjustment Mechanism (GRAM), intended to recover
the deferred accounting balance.
"Distribution Utility {DU)" shall refer to any electric cooperative,
private corporation, government-owned utility or existing local
government unit which has an exclusive franchise to operate a
distribution system in accordance with the Act.
.. Energy Regulatory Commission" or "ERC" shall refer to the
regulatory agency created by Section 38 of the Act.
"Generation Cost" shall mean costs associated with the acquisition of
purchased power. Generation costs include only those costs that are
reasonable, prudently incurred, and are eligible for recovery in
accordance.with the current practice of the ERC.
g) "Generation Rate" shall mean the cost of power generated and sold
to the distribution utility by the National Power Corporation (NPC) as
well as the Independent Power Producers (IPPs), which shall be
passed on to the OU's customers, as calculated in the fonnula
prescribed in these Guidelines.
h) "Ineligible Supply Co.ntracts" shall mean power supply agreements
entered into by the DUs with the IPPs, which were not approved by the
then Energy Regulatory Board or by the ERC. .
Page 2 of7
i)
j)
k)
I)
m)
'"Other Generation Rate Adjustments (OGA)" shall refer to
under(over)-recoveries in generation costs, recoveries from violation of
contracts and other pilferages, as well as other adjustments deemed
necessary by the ERC, subject to the provisions of these guidelines.
The OGA shall not be subject to any carrying charge.
"Prompt Payment Discount shall mean the three percent
(3%) discount that electric distribution utilities get from NPC for paying
their power bills on or before the tenth (10th) day of the month following
the billing period.
"System Loss" shall mean the difference between {kilowatt-hour)
k\Nh purchased and/or generated and kVVh sold by a Distribution Utility
expressed as a percentage of kWh purchased and/or generated.
"System Loss Cap" shall mean the level of System Loss recoverable
from customers as estabnshed by the ERC in accordance with Section
43 (t) of the Act.
"System Loss Rate" shall mean the rate determined in accordance
with the formula set forth in Article IV hereof. Individual System Loss
Rates may be calcuf ated for different customer classes if the
Distribution Utility maintains records on the individual customer class
System Loss.
ARTICLE Ill
MONTHLY ADJUSTMENT OF THE GENERATION RATE '"' - ---
Section 1. Adjustment Formula - On the tenth {10) day of each
calendar month, Distribution Utilities shall calculate new Generation Rates based
on the following formula: .
. GR = AGC + OGA
VVhera:
GR = Generation Rate to be charged per kWh
AGC = Adjusted Generation Cost, automatically computed without need
of prior ERC verification and confirmation, as follows:
[(GC; + GCi; + ..... + GC
0
)-(PPD * 50%)]
=
T P
Page 3 of7
(
GC i
10
n = The Generation Cost in Pesos from source of power 1
through source of power n for the previous month,
excluding power sourced from self-generating facilities
PPD = Prompt Payment Discounts availed by the Distribution
Utility, net of the Prompt Payment Discounts passed on to
the end customers relative to the previous month's
gene.ration cost
TP =Total Purchases in kWh for the previous month
OGA = Other Generation Rate AdjustmentsT refer to adjustments
deemed necessary by the Commission after prior
verification and confirmation, which shall include, but
shall not be limited to, under(over)-recoveries in
generation costs and recoveries from violation of
contracts and other pilferages_ The OGA sharl not be
subject to any carrying charge_
.,..,,-.., .. "In the case of ineligible supply contracts, generation costs from such
contracts shall not be included in the calcufation of recoverable generation costs.
In the event, however, that a DU inadvertently or willfully recovers the same, the
ERC shall automaticalty order the refund thereof through the "OGA" without
prejudice to the imposition of appropriate penalties.
Section 2. Billing of New Generation Rate - The Distribution Utilities
shall bill their customers the Generation Rates calculated in accordance with the
immediately preceding Section effective on the tenth (10) day of each month.
ARTICLE IV
MONTHLY ADJUSTMENT OF THE SYSTEM LOSS RA TE
Section 1. Adjustment Formula - On the tenth (1 O} day of each
calendar monthT Distribution Utilities shaU calculate new System Loss Rates
based on the following formula:
SLR= (GR* U) + (ATR * U)
lNhem: ....
SLR== System Loss Rate
GR = Generation Rate calculated in accordance with Article llf
Page 4 of7
ATR =Average Transmission Rate based on the most recent
unbundling decision in Peso per kWh, computed as .
Transmission Costs per unbundling divided by the
Annualized Sales in kWh per unbundling
U =Gross Up Factor=(% System Loss I [1-%System LossJ)
The % System Loss is based on the actual System Loss or the System
Loss cap whichever is lower plus actual company use or the company use cap of
1 % whichever is lower. The actual System Loss and company use are based. on
the preVious month figures to be submitted by the DU. Actual System Loss can
be calculated on an individual customer class level if the Distribution. Utiljty has
the requisite information to support individual System Loss Rates.
Section 2. Billing of System Loss Rate - The Distribution Utilities shall
bill their customers on the tenth (10) day of each month the System Loss Rates
calculated in accordance with the immediately preceding Section.
ARTICLE V
VERIFICATION PROCESS
Section 1. Monthly Reporting Requirements - On or before the
twentieth (20th) day of each month, the Distribution Utilities shall provide the
ERC with all calculations related to Articles Ill and IV along with supporting
documentations, which shall include, but riot limited to, the following:
Invoices from power suppliers;
Sample bills to end-users;
Official receipts of payment of power supplier invoices
ERG FormsM-001 & M-002; and
Other documents deemed relevant by the ERC.
Section 2. Post Verification - At least every six (6) months. the ERC
shall verify the recovery of Generation Costs by comparing the actual allowable
costs incurred for the period with the actual revenues for the same period
generated by the Generation Rates and the portion of the Systems Loss Rates
attributable to Generation Costs.
Shoufd the ERC fail to verify the Generation Rate (including the OGA) and
System Loss Rate within six (6) months from the submission of calculation and
supporting documentations in accordance with the immediately preceding-;
Section, the rates shall be deemed final and Confirmed.
Page 5 of7
(
Upon completion of the semi-annual verification process, the ERC shall
issue an Order establishing the adjustments to be included in the OGA resulting
from 5aid semi-annual verification. These adjustments shall be implemented in
the succeeding six (6) month period to reflect any over or under recovery.
Section 3. Prior Verification of Other Generation Rate Adjustments
(OGA). OGA other than those included in Article V, Section 2 shall be verified
and confirmed by the ERC -within forty five (45) days from date of its filing and
only thereafter shall they be recoverable.
ARTICLE VI
FINAL FILING UNDER THE GENERATION RATE ADJUSTMENT
MECHANISM
Section 1. Effectivity of the Generation Rate Adjustment Mechanism
(GRAM} - Upon the effectivity of these Guidelines, the GRAM shall no longer be
applicable to Distribution Utilities.
Section 2. Final filing under GRAM - Distribution Utilities that are using
the GRAM to recover Generation Costs shall file their final GRAM applications
within si:it;ty (60) days from the effectivity of these Guidelines. ' Ttteifr'Tat13RAM
filing shall include the period from their last approved GRAM filing to the
effectivity of these Guidelines for purposes of calculating the final Deferred
Accounting Adjustment (DAA).
ARTICLE VII
Section 1. Fines and Penalties. Violation of any provision of these
Guidelines shall be subject to the imposition of fines and penalties in accordance
with the Guidelines to Govern the Imposition of Administrative Sanctions in the
Fann of Fines and Penalties Pursuant to Section 46 of Republic Act No. 9136
promulgated by the ERC on May 17, 2002.
ARTICLE VIII
FINAL PROVISIONS
Section 1. Exception Clause. Where good cause appears, the ERC
may allow an exception from any provisions of these Guidelines, if such
-"'.!l!f'
Page 6 of7
exception is found to be in the public interest and is not contrary to law or
any other related rules and regulations.
Section 2. Separability Clause - If for any reason, any part or section
of these Guidelines is declared unconstitutional or invalid, the other parts
or sections hereof which are not affected thereby shall continue to be in tun
force and effect.
Section 3. Effectivity - These Guidelines shall take effect on the
fifteenth (15th) day following its publication in two (2) newspapers of
general circulation.
Paslg City, October 13, 2004.
,,.. RODOLFO 8. ALBANO, JR.
(On Official Travel)
OLIVER B. BUTAUD
Commissioner
/'
~ . ; ~
Commissioner
Page 7 of7
Chairm n
Commissioner
. L 4 ~
Commissioner
.-'99f
ANNEXE-
Republic of the Philippines
ENERGY REGULATORY COMMISSION
San Miguel Avenue, Pasig City
RESOLUTrON No.10...01, Serles of 2004
IN. "lliE MATTER OF AMENDING THE GUIDELINES FOR
lliE AUTOMATIC ADJUSTMENT OF GENERATION RATES
AND SYSTEM LOSS RATES BY DISTRJBUTION UTIUTI.ES
This is to AMEND Secfions 1 and 2 of Artides Ill and IV of the
GUfDEUNES FOR THE AUTOMATIC ADJUSTMENT OF GENERATION
RAl"ES AND SYSiEM LOSS RATES BY DISTRIBUTION UTILITIES
rGuidelines") approved on 13 Ociober 2004 which read as forlows:
.ARTlCLE Ill
MONTHLY ADJUSTMENT OF THE GENERATION F<A I:::
Section 1. Adjustment Formula - On the tenth (10) day of
each cafendar m6ntli. Distribution Utilities shaU calculate new
Generation Rates based on the following formula:
xxx xxx xxx
Section 2. Billing of New Generation Rate - The Disttibu1:i:on
ummes shal1 bill their customers the Generation Rates calculatoo in
accordance with the fmmediately preceding Section effective on the tenth
(10) day of each month."
mARTICLE IV
MONTHLY ADJUSTMENT OF THE SYSTEM LOSS RATE
. Section 1. Adjustment Formula - On the ten1h (10) day of
each ca1e11dar month, Di.stributlon vtHlties shall calculate new
System Loss Rates based on the following
xxx xxx :xxx
Section 2. BilJlng of System Loss Rate -- The Distribution
Utilities shall bfH their customers on the tenth (10) day of eacti
month trre System Loss Rates calculated rn accordance with the
Section." J (
The Commission, after due deliberation, RESOLVED, as it hereby
RESOLVES. to amend the aboVG-4UOted portion of the Guidelines. to now read
as fo41ows:
"ARTICLE Ill
MONTHLY ADJUSTMENT OF "fHE GENERATION RA TE
Section 1. Adjustment Formula - On or.befo..-e the te11th
(10} day of each calendar month. Distribution shall
calculate new Generation Rates based on the following formula:
xxx xxx
Section 2. Billing of New Generaticm Rate - The Dfstribution
Utilities shall bill their customers the Generation Rates calculated in
accordance with tf'le immediately preceding Section effecUve on or before
tl1e tenth (10) day of each monl11."
''ARTICLE IV
MONTHLY AbJUSTMENT OF THE SYSTEM LOSS RATE
Section 1. Adjustment Formula - On or before the tenttl
{10) day of each calendar month, Distribution Utirities shaU
cafculate new System Loss Rates based on the folfowing formula:
x J( x x .x: x xxx
Section 2. BllUng of System loss Rate - The UWities
shall bfll their customers on or before 1ha tenth {10) day of each month the
System Loss Rates calculated in accordance wlih the imrnedlate!y
preceding
(
,.
:
This Resolution shall take effect on the eighth (8lh) day roilowing. its
publication in two (2) daily newspapers of general circulation in the Phflippines.
_Pasig City, October 20, 2004.
(On Official
RODOLFO B.
~ ; ; ( ~
.r - RAuf A. TAN
Commissioner
JESUS N. ALCOR:DO
Commissioner
Commissioner
.....
- --
............ ,,....
-- ---- -:--"'-
ReptJbHc of the PMippines
ENERGY REGULATORY COMMISSION
San Miguel Avenue. Paslg City
. ANNEX. f
RESOLUTJON NO. 10-04. Series of 20fl4
I
IN THE MATTER OF .AMENDING THE GWDEUNES FOR
lHE AUTOMATIC ADJUSTMENT.Of GENERATION RATES
AND SYSTEM LOSS RATES SY DISTRIBUTION lfTJUTIES
. -. .; .,,.,._
This is to AMEND Sectian 1 of Article IV of the GUIDELINES FOR ll-IE
AUTOMATrc ADJUSTMENT OF GENERAilON RATES AND SYSTEM LOSS
RATES BY OlSTRJBUTION UTILITIES approved on 13 October-
:- 2004 which read as follows:
ARTICLE IV
MONTHLY ADJUSTMENT OF THE SYSTEM LOSS RA.TE
Section 1. Formula On the tenth {10) day of each
calu11dar month. Distribution Utilities shall calculate new System Loss Rates
based on the following
. SLR= (GR"' U)-+- (Alf{* U)
Where_-
SLR"" System Loss Rato
GR= Generation Rate calcvlatcd in accordance with Article HI
ATR Transmission Rate basAd on the most recent
unbundfinu decision iri Pe.so per k.Wh. computed as
Transmission CosL<;; per unbu ndUng divided by the
Annualized Sales in kWh per unbundling
U :; Gross Up Factor"'"(% System Loss I [1-%System Loss])
The % System Loss is based on actual System loss or tha Sysrom
Loss cap whichever is lower plus actual company use or the '90mpany use cap of .
1 % whichever is lower. The actual loss and oompany use are on ..
tha previous month figures to be submJtted by the OU. Actual System-Loss can
be calculated on an indMdual customer cl.ass levef if the Distribution Utility has -
the requisite information to $upport individual System Loss Rates."
The Commission. after due deliberation, RESOLVED. as it hereby
RESOL,VES. to amend the above-quoted portion of the Guidelines, to now read
as follows:
KARTICLE IV
MONTHLY ADJUSTMENT OF THE SYSTEM LOSS RATE
Section 1. Adjustment Fonnula - On or the tenth (10) day or
each calendar month. Distribution UtiHties shall calculate new System Loss Rates
based on the following fonnula:
SLR== (GR'* U) + (ATR U)
V'tlhero:
SLR = System Loss Rate
GR Generation Rate calculated in accordance with Article m
ATR:;:: Average Transmission Rafe based on themost recent
unbundling decision in Peso per kWhT computed as
Transmission Costs per unbundling divided by the
Annualized Sales in kWh per unbundiing
U = Gross Up Factor = (% System Lass I [1- %System Loss])
The % System. Loss is based on the actual System loss or the System
Loss cap whichever is lower plus actual company use or the company use cap of
1 % whichever is tower. The actual System Loss and company use are based on
the average of the most recent twelve ( 12) month period for which information ts
available. Acb.lal System Loss can be calculated oo an individual customer class
level if the Distribution Utility has the requisite information to support i11dfvidual
System Loss Rates.
..
i
,.
t;
This Resolution shaJf take-effect on thEdhird (311'.!lday following ;ts publication
in two {2) newspapers pf general circulation fn the Philippines.
Pasig Clty. October 27. ~ -
~ ; ( . ~
c AAfJF ,&z;l
Co
. . \
m miss.ion er
Commissioner
. ...

.J
----------- ---

- ?
r. .
Republic of the Philippines \ ::: _'
ENERGY REGULATORY ./.
_ Sao Pas1g ANNEXtr'
RESOLUTION Series of 2009
A RESOLUTION ADOPTING THE RULES GOVERNING
THE AUTOMATIC COST ADJUSTMENT AND TRUE:-UP MECHANISMS
AND
CORRESPONDING CONFIRMATION PROCESS FOR DISTRIBUTION
UTrLITIES
WHEREAS: pursuant to Section 43 (t) or Republic /\ct No. 9136,
the Energy Regul.3tory Commission (ERC} is mandated to promulgate
rules and regulations and perform such other regulatory functions as are
and neces.sary in order to ensure the sttC':Cf.?ssfur restructuring
aml moderni7::ition of the eredric power indua.try:
WHEREAS, the F.RC hA$ adopted seveL"'.o,11 aut.ornatic oost
adjustment mechanisms in separate issuances. and tt is deemed ideal 1D
update, :m<f ration;;tliza 1he requirements und.er all thes.e
separate
WHEREAS, the ERC finds it necessary to establish a syslernatized
confirmation prot::Qss that conforms to the due pror.ess requitoemerit of the
law for the foJlowirig automatic cost adjustment and true-up mechanisms:
1. Automatic Generation Rate and Systern 1.oss Adjustment
Mechanism;
2. Transrnis:sion R<itc Adjustmenl Machanism;
3. Lifeline Rate Recovery Mechanisrn;
4. locar franciii:se Tax: Recovery Mecihanism;
!:>. locaJ Business To:.x Recovery Mechanism;
5_ Guidellnes for Ure Ci'il<."1.Jlation or tl1c Over or Under
Recovery in the lmplemcntaHon <if Lifeline Rates b:y
rn stribution Utilities:
7. GtsidelinAs fur a True-Up Mechanism of the Over or Under
Recovery in the lmplemenfation of lnler-Class Cross
Subsidy Re1noval by Dis11ibution Utilities;
8. ERC Resolution No. 12, Series of 2005, A Resolution
Approving a New Policy on the Treatme11t of Prompt
Payment Discount (PPDt:
9. Guidelines for the Calculation of the Over nr Under
Recovery ill Implementation of System Rate by
Distribution Utilities; and
10. Rules for fhe Calculation of the Over or Under Recovery in
the Implementation of Transmission Rates.
of
u
WHEREAS, on November 22 and 25, 2008, the ERC conducted
public consultations for !he adoption of the proposed Rules Governing 1he
Automatic Cost Adjustment and True-up Mechanisms and Corresponding
Confirmation Process for Distribution UfillliP-S;
NOW THEREFORE, the ERC, after oonsiderlng the various views
and commcnbi submitted by.all interested parties, hereby RESOLVES, as
Lt is hereby RESOLVED, to APPROVE and ADOPT, the Rules Goll6ming
the Automatic Cast Adjus:tmont and T me-up Mechanisms and
Correspond;ng C-Onnrmation Process for Distributfon Ufilmes herein
attached as Annex A and made an integral part of this Resolution.
This Resolution shail take effect fifteen (15) days following its
p11blicaUon in a newspaper of general circulation in the country.
Pasig City, July 13, 2009.
TANEOA
RULES GOVERNING THE AUTOMATIC COST ADJUSTMENT
AND TRUE-UP MECHANSMS AND CORRESPONDJNG
CONFIRMATION PROCESS FOR DISTRIBUTION UTILITlES
Pursuant to Section 43 (f} amt {t} of Republic Act Na_ g136 or the Act. Rule 7 of
its lmpTementing Rules and Regulations (IRR) and Section 10 of Republic Act
No_ 7832, the Energy Regulatory Commis.sion (ERG) hereby adopts and
promulgates these Rules to establish a procedure for the automatic recovery or
refund af pass through costs and the confirmation process that would govern
the automatic cost adjustment a.nd 1n1e-up mechanisms approved by the F,RC.
Section 1. ObjeetJves
ARTICLE 1
GENERAL PROVISIONS
Rurss shalr '1ave the fo[fowing objectives:
1.1 To ensure appropriate recovery of various pass. through costs in 3n
efficient manner;
1.2 To put in ptace a fair and transparent proceS$ for the confirmation of the
automatic cost adjustments by the Distribufton Utilities
(DUs} and the true-up of other pags-through charges as ;:1pproved by the
ERC;
1.J To ensure and mafntain the qualrty, reltabllity, security and affordability uf
the supply of electric power; and
1-4 To protect the publk; intemst as ii ls affected by the and services of
the Dus.
Section 2. Scopa
These Rules shall apply to all DUs, and shall govern the recovery of the
following pass through
21 Generation:
2.2 Trdnsmission;
2.3 Systern Loss;
2.A Lifeline Suhsidy; and
2.5 local Franchise and Business Taxes.
Section 3. Definitton of Terms
Unless the context otherwise providP-S.. the fotlowiog worrls and tcl'TTls
used herein shall have the fallowing meanings:
3.1 "Act" unress otherwise stated, shall refer to Republic Act No. 9136,
otherv1ri:so known as 111e a8eciric PoWlr Industry Refurm Act. of
3.2 "Business Tax .. shall refer to the tax levied by f:he cities and
municipalities pursunnt to Soclions 143 arld 161 of the Local
Government Code of 1991.
J..3 ''Captive Market'' shall refer to electricity end-users who do not have the
choice of a Supplier of may be determined by the ERC in
accordance with the Ad.
3.4 "Commission" shall refer to the Energy Regulatory Commission
created unde.- Section 38 of Republic Act No. 913fi.
3.5 "Company Uso" shall fefer to the Energy used by the Oistribution Utility
in fhe proper operation of the Distribution System (e.g. substation ser"\/lce
and Distr!butron Uti!Tty'$ offices, warohouses, workshops and other
essentil'!I electrical Loads).
3.6 "msb'ibution Charge$" shafl rsfer to the distribution, supply, metering
1'!.nd other reJated chargcsJadfustments.
3.7 "Distribution Utility (DU)" shall refer to any electric cooperative, pnvate
corporation, government-owned utility or existing local gcivernment unit
which has an exclusive franchise to operate a distribution system in
accordance wrth the Act
3.8 "Electrlc Cooperative {EC}" shall refer to a Distribution Utility organized
and incorporated pursuant to Presidential Decree No. 269, as amendoo
by Presidential OeeteeNo. 1645 and Republic Acl No. 6938, otherwise
known as the Cooperative Code of the Philippines.
3.9 "Fmnchrse Tax" shall refor to the tax levied by the province and cities
an businesses enjoying a franchise pursuant to Sections 137 and 151 of
Republic Act No. 7160, otheiwi!-\e known as the Locaf Govemment Code
of 1991.

<
i
.
3.10
3.11
"Goneration Rate (GR}" shall to the rat_e with the
purchase of power from power supplierls and d1smbution utility-owned
generation facifity as incorporated in the approved unbundred rates or as
subsequently authorized by tho Commission.
"Gross Sales or RQc9ipb;" shall, as defined in SectJon 131(n) o1' the
Local Government Code of 1991, fnclude the total amount of tnoney or
equivalent representing the contract price, componsation or service
fee, including the amount charged or materials supplied with the services
and deposits or advance payments actually ar constructively received
during the taxable quarter for the services perfomied or to be performed
for another person excluding discounts if determinable at the of
Mies. sales return, tax, and valuo-added fa)( (VAT).
3.12 "Ineligible Supply Contracts" shall refer to power supply agreements
entered into by the OU(S; with the IPPs or other DUs, which were net
approved by the then Energy Regulatory Board or by fhP. Commissjon.
3.13 "LifelinE! Subsidy Rate (LSRJ" shall refer to the rate charged to non-
fife!ine customers to cover the lifelil"l'e discount provided to
marginalized/low income captive market end-users.
J.14 .. MarginaJrzod End-Ul?;ars" shall refer to low-income household
electricity consumers who cannot afford to pay at full (;Ost and have
levels of electricity consumption below a threshofd level as determined
by the Commission_
3.15 "'National Grid Co1pora.tion of the PhHipph1es (NGCPr shafl rater to
the private consortium which had been awarded the concession tu
as:;:vme the power transmission functions of the National
Corporation (iRANSCO). '
3.16 "National Power Corporation (NPC)" shaU mfer to government
corporation created under Republic Ad No. 6395, as amettdcd_
3.17 "N:1tional Transmission Corporation (TRANSCO)" shall refer to
Corporation organized pursuant to the Act whfch assul"l1$d the electrical
transmission function of the NPC.
3.18 "Net Settlement Surplus (NSSJ" shaJI to the settrement surplus
remaining after all market transactions have bee11 accounted for,
including the assignment of transmiMlon line rentals to Network Servioo
Providers. This remainder is assumed to be attributed to eoonomrc
rentals arising from other binding constraints, and accounted for irt
:qccordance with dause 3.13.16 cf the WESM Rules_
P;ige 3 of 3.3

-------- ..
3.19
Electricity Markel Corporation (PEMC}" shall refer 10 the
entity responslble for the operafions or the spot market, by the
Philippine l:.lectricity Market (PEM) Board in accordanco W1th clause 1.4
of the WESM Rules.
3.20 "Pilferage Cost Recoverlos {PCR)" shall refer to oosts recovered 1Tom
illegal tapping, tampering of meter, use of jumper, and other means of
illlclt usage afelectricity.
J.21 ''Power Factor Discount (PFO}" shall refer to the discount extended to
OUs having maintained their power factor above the set ilireshold which
maximi:zes the capacity of TRANSCO's facilities thereby resulting to real
savings in power costs, improvement of voltage regufation and in
system capacity.
3.22 "Prompt P2ymellt Diseount <PPD}" shatl refer to the discount that OUs
get from power supplier/s for paying their bills within 1he dis.cm mt pP.riorl
3.23 "Power Supplicr/s" shall refer to an entityfies selling power to a DU
which may indude the following: a) National Power Corporation (NPC);
b} Independent Power Producers (IPPs), either through bilateral power
supply contracts or through the Wholesare Electricity Spot Market; and c)
Other DUs.
3.24 "Recovery Period" shal! refer to the period whP-n the cost
adjustments are implemented.
:3.25 .. System Loss" shall refer to the difference between kilowatt-hour (kWtT}
purchased and/or genorated and kWh sold plus company use.
system Loss Cap" shall refer lo the level of System Loss recoverab'e
from customers, as provided for under Republ!c Act No. 7832 or the Anti-
electricity and Electric Transmissjon lir'!cs/Matetials Pjlferage Act of
1994, until a different cap is determined, as established by the
Commission in accordance with Sectiofl 43 (f) of the Act.
3.27 "System Loss Rate (SLR.)" shall refer to the rate determined in
acoordance with the formula set forth in Article II hereof. For DU::; where
different system fos$ charges were granted for each of their respective
customer classes in the Unbundling Decisions, SLR shaCI be calculated
based on an indiVidual customer class level with the re-qursim reliable
information to support individual System Loss Rates.
3.28 "Transmission Rate (TR}'
1
shall refor to the rate with the
cost incurred in the transmission of electricity from the genera.tors to the
distribution utilities system
3.29 "Wholes:1lc Eloctrlcity Spot Market shall refer to the market
whore trading of electncity is made, established purnuarrt to Section 30
ofRA 9136.
ARTICL.E2
CALCULATION OF THE ADJUSTED
RETAIL RATES
Section 1. Generation Rate. The Generation Rate (GR) of the DU shall be
determined as follows:
1.1. For a DU sourcing 100% of Its pOWer requirement Fram NPC:
1.1.1. forTOU customers, the GR shall be the NPC TOU rates
pfus adjustments on GRAM, !CERA and franchise and
Benerrts to Host Communities as approved by the

1.1.2. For customers under special programs of the OU, the GR
shall be based on their contracts; and
1. 1.3. f'or ofhe.- customers, the GR ::shall be computed using the
formula prov[ded under Section 2 hereof.
1.7. For a DU sourcing its power requirement from sources ather than
NPC:
1.2.1. For TOU customers, the GR shall be the OU's TOU rates as
approved by the Commission;
1.2.2. For customers under srecral programs of the DU, the
GR shall be on their contracts;
1.2.3. For customers of a Buying DU under a Sale for Resale
if the customers being supplied are no\
connected v..ith the niai11 distribution grid and the oost is
dttferent from those for other regular customers, the GR
shall lm:[ude the Generation, Transmission, System Loss.
Distribution. Supply and Metering Charges uf the SB!ling
DU: and
1 2.4. For other customers, the GR shall be computed using tht'!
formula provided under Section 2 hereof.
P;ige 5 oS 33
Section 2. Generation Rat.a Formula. The GR applicable to customer.:;
refem:d to in Sections 1.1.3 and 1.2-4 shall be calculated and billed each
calendar month by the DU using the foUowing formula:
FORMULA 1
GR::= AGR+OGA
Where:
GR =
Generation Rats expressed in Pesa.lkV\fh;
AGR ""
Adjusted Generation Rate cafculaied. as follows:
AGR =
TGC
TPG

!Nbcro:
TGC= r(GC, +GC,, 1 (PPD, + PPD. -t--t-- rrD.)-PCR l
GCi ton The Generation Costs in Pesos from source of power
i through source of power n for the previous month
coming from Transition Supply Contracts (excluding
Mandated Rate Reduction and penalties), Power
Supply Agreements, WESM purchases, and
distribuflon utility-owned generation facility, as
incorporated in the approved unbundled rates or as
subsequently authorized by the Commission, less the
following:
a. Generation revenues from TOU customers;
b_ Cost of power distributed to customers under
OU's special programs:
c. Cost of power distributed to customers under a
Sale fur Resare Agreement, ii the customers
being suppriecl .are not connected with the main
distribution grid arid the cost is different from
those for other regt1lar customers: al"!d
Page0 of 53
-----------
PPDitan
PCR.
TPGr:n
d. Net Settlement Surplus amount as determined in
Article 5, Section 5.4 of the Rules for the
Dlsfribufion of Nat Settlement Surplus, if any_
Prompt Payment Discounts availed by the DU from
souroe of power i through source of power n for the
previous month, net of the Prompt Paymf':nl
Discounts passed on to the eJld customers., where
di:soount passed on to c1Jstomers can not be higher
than the discount availed from the power suppllerfs,
relative to the previous month's generaiion cost;
Pilferage cost recoveries during the prevfous rnonth:
and
= Total kWh Purchased and (;Qmnllted for lhe preYiOIJEl
month net of l<Wh sold to customers under TOlJ,
and kWh dfstnbuted to sped.al proararm and Sale for
Resale Agreements, if the customers being supplied
are not connected with fh@ main distribution grid and
the cost is different from those fur other regular
customers_
OGA = Other Generation Rate Adjustmenf.s, refer to adjustments
deemed necessary by the Commission after prior verification
and confinnation, and the GOUR determined using the formuJa
provided in Article 4, Seciion 2 heraof. The OGA shalr not be
subject to any carrying charge_
ln the case of ineligible supply contracts, generation oosts from such contracts
shall indude the kUowatt-hours pertaining to ineligible contracts pcgg!:!d at the
OU's load weighted average NPC TOU rates or fhe 9ctuaf rate as billed by the
IPP, whichever is lower.
Section 3. Rate. The Transrnissicn Rate (iR) shall be
calculated and billed each calendar month by the DUs 1he following
formulae;
3.1. For Customer classes with TR expressed in Peso/kWh:

. fii'P"i[ r;;-
- -
------------
FORMULA?.A
TRN lransmisslon Rate expressed iti Peso/kWh;
fN PTC .x.
OTCA,.,
VVhere:
ITC = Refers to the previous month's ach.Jal
c06.f, not of fifty percent {50%) of PFD av<o1ileLI,
11\lhere:
PFD = Power Factor Discounts availed
by the OU, net of the Power
Factor Discounts {liven to
customers arid Third Parties for
the month, whero: Oiscoun1
passed on to customers and
Third Partie$
from TRANSCOJNGCP for tile
month; and
Actual or computed Coincident Peak Demand
Allor-.ation Factor fur customer class N corresponding
to the previous month's period or the CP demand
allocation factor as reflected in the last approved
unbundled rates of the f)U_
= Total kWh Purchased end Generated forthe previous month;
= Other Transmission Cost Adjustments, refer lo adjustments
deemed necessary by the Comm;ssion after prior verification
and confitmaUon, and the TOUR. determined using 1he
funnura provided tn /\rtfc!e 4, Section 3 hereof; and
N "" Refers to a specific customer class (ex. N'="1,2, .... , Vllhere
1= Residential, 2"" Comrrercial, etc.).
Page8of33
-- -----
------------- -
3.2. Glasses with TR 0xpressed in Pesa/kW:
FORMULA2.B
TR.:-:: (_ti)' \) t OTCA,.
' D .
A'
WtJere:
TR Transmission rate expressed in PesolkW;
"
t"!o. "" FTC. .r CP,.;
l.Nhere:
l'TC "' Refers to the previous month's actual transmission cost,
net of nfty percent (50%} of PFO availed;
l.r\l'here:
PFD = Pov.rer Factor Discounts. availed by
the DU, net of the Power Factor
Discounts given to customer$ and
Third Parties for the month, where:
Discount passed on to customers and
Third Parties <;" discount availed from
TRANSCO/NGCP for the month; and
CI',. "' Actual or computed Coinc;:ident Peak Demand Allocation
Factor for customer class N corresponding to the
previous month's period or (he CP demand allocation
factor as reflected in the last approved unbundled
rates afthe DU.
= Other Transmission Cost Adjustments, refer to adjustments
deemed necessary by the Commission after prior verification and
confirmation, and the TOUR detenninecl using the formula
provided in Article 4, Section 3 hereof
Page 9<lf 33
N
3.3
kW billing detn.and for lhe previous month for customer dassN:;
and
Refers ta a specific customer class (ex. N=1,2 .... , where
1"' Rosidcntial, 2=- Commercial, etc.).
Customer classes v1Jith TR e:xpressed in both Peso/kWh and
Peso/kW.
The component expressed rn Peso/kWh shall remain c::mstanl
The component expressed n Peso/kW shall be d j u ~ t e d using the
following fonnula:
FORMULA2.C
111/ht'!'rc:
'J']{,, = Transmission rate eio:pfessed in Peso/kW;
Lt\11Jere:
I'TC = Refera to th<J previous month's actual transmission cost.
net of fifty percent (50%} of PFD availed, by the
corresponding kWh purchased;
!Nhem:
PFO Power Factor Discounts availed by the
OU, net of the Power Faci:or Disoounts
given to customers and Third
Parties for the month, where: Discount
passed on to customers and Third
Parties ~ discount availed from
TRANSCO/NGCP for the month; and
Page 10 of 3.'3
s'T'P. .
TKR.,.
OJ'CA,.,
CP .,. = Actuai or computed Coincident Peak Demand Allocation
Factor for customer crass N corresponding to 1hl'\
previous month's period or the GP demand allocatkm
factor as reflected in the last approv-ed unbundled
rates {lf me ou _
= kWh sales for the previous month for class N;
Current TR component expressed in Peso/kVllh for customer
class N;
- Other Tr:ilnsmission Cost Adjustments. refer to
deemed necessary by the Commission after prior verification a11d
oonfirmaticn, and ihe TOUR determined using the formula
proVided rn Article 4. Sec:fion 3 hereof;
D,,, ... !<.VI billfny t.lemantl for the previous month for customer class N;
and
N Refers to a specifTc customer class (e.Jc N=1,2, ____
1
where
1'= Residential, 2= Comrnerdal, etc_),
Section 4. System Loss Rate. The System Loss Rate {SLR) .$hall be
calculated and billed e:ach calendar month by the DUs usfng tile following
fannula:
FORMUlA3
.SLR= (TGR + ATR) U + OSLA
lr'Vhere.-
Sf,R "' S}"$tern loss Rate expressed in Peso/kWh;
n;R Total Generation Rare including custornern under 1he DU's TOU
program calculatea as follows:
TUR
GTGC
PlllQe 11of33
lNhero:
c;u;<.: -1-(.i(.:_,.;. ---'--GC.)-50%( PPJJ. + PPD. + --- + I'C.R l
CC i ton
The C"-.e11eration Co:sts in Pesos from source of
power i through source of power n for the previous
month coming from TtansrUon Supply Contracts
(excluding Mandated Rate Reduction and
penalties), Power Supply Agreements, WESM
purcl1ases. and distribufior; utility--0wned generation
facility, as Incorporated in the approved unbundled
rates or .as subsequently authorized by the
Commission, less the following:
a. Cost of power distributed to customers under
DU's speccal programs;
ti,_ Cost of power distributed to custoniers under a
Sale for Resale Agreement, if the customers
berng supplied are not connected with the main
disfribtrtion grid and tile cost is different from
tf'lose for other regulGr custornors; and
c Net Settlement Surpr11s amount as determined
itr Article 5, Section 5.4 of the Rules for the
Distribution of Net Settlement Surplus, if any;
PPTJ,,,,., Prompt Payment Discounts availed by lhe
Distribution Utility from source nf power i 1hrough
source of power- n for the previous month, net of the
Prompt Payment Discounts passed on 1o the end
customers, where discount passed on to customers
cannot be higher than the discount availed from the
power supplier/s, relafi\le to the pre1ious month's
cost, anr:!
I'CR Pilferage cost recoveries during the previour:> month.
TPGs; R "' Total kWh Purchased and Generated fo: the pre'llious
rnonth nat kWh distributed to special programs and
Sale .for Resale Agreements, if such sales have
different system loss charge rates from regular
customers_
P;:ige 12 of J3
A1'R Average Transmission Rate expressed in Peso/kWh, compt1ted
as follows:
t
ATR - --'-'--
TPG ID!
Whore:
t:: = Total Transmission Cost far the previous month;
INhere:
If SLR is a uniform r;h;nge to an ctJStorner classes:
t,,. = PTC as in Article 2, I
hP.reaf;
If SLR varie$ per each customer class:
\IVhero:
PTC ==As defined in Articie 2, SF.clion 3 flereof;
and
CP:,""- A.$ dcfinad in Article 2, Section 3 hereof.
Total kWh Purchased and Generated for the previous
month net of kWh distributed to special programs aM
Sale for Resale Agreements. if such sales have
different system loss ci'large rates from regul;:i,r
customers.
U Gross Up SL I (1- Actual % System lo..o;s);
The %SL. is based on:
a} the Acttia[ Systems Loss for the most
recent 12-month period or the Systems
loss Cap, whichever is lower; plus
Page 13 Of33
....
b) the Actual Company Use for the most
recent 12-month period or 1 %, whichever
is lower.
The Achlal % Sys'lem LoM, on the other hand. is based
on:
a) -the Actual System Loss for the most recent
12-month period; plus
b) the Actual Company Use for the most
recent 12-month period.
The kWh Sales to be used in determining the 5';stem loss shall
be net of kWh distributed to 5peGial programs .and Sale for
Resale Agreements, if such sales have different sysfP.m
charge r;Jtcs from regufar
If SLR vartes per customer class, the DU shall COJ'Tl'ute the
applicable Gross Up Factor per customer Class.
Pursuant to ERG Resolution No. 17, Series of 2G08, upon the
Commission's approval of the DU's Operation and Maiotenance
E)(penses, wherein !:he Company Use shall have been indudod,
the sanie shall no longer form oart of the %8L and Actual % SL
as defined above: and
OST.A == Other System Loss Cost Adjustments. refer to adjustments
deemed neces.$ary by the Commrssion after prior verification and
confirmation, and the SLOUr{ determined using the formula
provided in Article 4, Section 4 heteof.
Section S_ Lifeline Subsldy Ra.ta Fommla. The Ufeline Subsidy Rate {LSR)
shall be calculated and bifled each CEilendar month by the OU the
fortowing formula:
FORMULA 4
TD
(
'\
s,,:: J +OT.RA
Page14of J3
f.Sli == Lifeline Subsidy Rate expressed in Peso/kWh
TD Total Discount amount given to Ufeline customers in the
previous month computed as follows:
OLRA
L msfSR ')( TRateJ+ [Neu.st x Fi..xed I Cu.s-t]D]
IM"lore:
j =: Lifeline level bracket 1 to lifelrne bracket n;
f)
Fixi!d/Ctl!.1
"' Tota! k\Nh for the previous month of lifeline
bracket
"' Total PhP/kWh ralo subject lo lifeUne discount
which include generation, transmission, system
loss. distribution, supply, and loan
c.n llrl o nation;
Total number of for the previous
montti for lifeline bracket j;
Disr:nunt rate for lifeline bracket i: and
"' Fixed metering charge for residential customers_
Total kWh of non-lifeline customers for the previous monlh; and
Other Lifeljne Rate Cost Adjustments, refer to adjustments
deemed neoossaiy by the Commission after prior verification
and confirmation, and' LSOUR determined using the formula
provided in Article 4, Section 5 hereof.
SGction 6. The Franchiso and Rates shall be calculated using
the following formulae:
6.1. For franchise Taxes that a OU is required to pay the
LGU/s that shall be tm;luded in its customers' bills, recovery
shall be b::ised on the tax rate against the total
distribution charges in Peso (Distribution, Supply, Metering
Page 15 of33
6.2.
and other charye5ladjustmerrts, i.e. subsldy on li"felioe charge.
lifeline subsidy oiscount and inter-dass crass subsidy charge,
Reinvestment Fund oolloctions in the case of an EC).
For transparency, the EC shall reflect as a fine ilem in its
monthly billing:!\ to its customers lhe approved Fund
rate/kWh and corresponding revenues
For Business Taxes that a DU is requlretl to pay 1he LGU/s that
shall be included in its customers' bills, recovery shafl be based
on the fulfowing formula
FORMULAS.A
VI/hem:
ill"
OlJTA
r
Bta J
BT= -_--- + OBT/I
',S P;.<r
Business T<iJ<es Charge expressed in representing
busines:s ta.ices that a DU is requjred to pay the LGU/s ;
Business Tax (excluding penalty and surr::harge) other than
those already GOnsidered in the rates, paid for the
preceding calendar year;
Actual kWh S::iles for the preceding C31endar yea.-; and
Other Business Cost Adjustments, refer to adjustments
deemed necessary by tile Commission after prior verifiGation
and confirmation, and the BTOUR determined using the
formura. provided in Artide 4, Section 6.1 hereof_
The computation af busines:.s taxes shall be based on the
DU's talal dfstribution excluding the penalties and
surctiarges paid by the DU. For an EC, Reinvestment Fund shall
be excluded from the total distribution charges_ For transparency,
the EC shalf reflect as a separate line item in its monthly bi!lings to
its customers lhe apprnved Reinvestment Fund rate/kWh and
corresponding revenues.
A DU that intends to include in its retail rates the franchise and
business laxes imposed on it by the LGUIS- where it operates
must first submit lo the ERC the certified true copies of the valid
Page 16 of 33
tax ordinanc::els subjecting it lo such taxes. In case of
Business l"axes, .submissions shall incfude tax receipts for the
payments made for the preoec.tlng year, data its kWh sales
the previous year, and other relevant data. l he DU shall await
the ERC's clearance before the inclusion and imriosition of such
taxes in its customers' retail rotes.
For Franchise and Business Taxes that a DU had already paid lo
the conoemed LGU/s prior to the implementalion of recovery of
current Franchise and Business Taxes shall bill! arlrnN'ad recovery
based on the following formula:
FORMULA5.B
(
"
Lji + Bt
TRAC -- -"--" l + OFBA
,
1Nhere:
TRAC "" Tax Recovery Adjustment Charge expressed in Pesolk'!Nh
applied to ttte customer's monthly billing until such time the total
franchise and business taxes paid to the local govemment shall
have been fully recovered:

"'

S1;u..ir:
OFR-4.
Local franchise lax {excluding penalty and surcharge} paid
prfar to the irrrplementation of the approved franchise tax rate;
Business Tax {excluding penalty and surchaTges) paid prior
to fhe irnpleme11tatiorl ofthe apprt1ved bu$ines.s tax formula;
Projected kWh sales for a particular proposed recovery period
or as dc1ermined by ERC; and
Other Franchise and Business Ta1<es Cost Adjustments, refer tu
adjustments deemed necessary by the Commission after prior
veriftcation and confinnation, and the TROUR determined using
the formul3 provided in Article 4, 5ection 6.'.2 hereof
Page Uof :)3
- ---------- ------
Before incruding the TRAC in its customers' brll, the DU shall
submit to the ERC rts calculation thersof using the TRAC_ formula
provided abOlo'e, together with the following it"lformat1on and
supporting documents:
a. Proposed recovery period;
b_ Certified true copy of prior years Tax Assessments
i:ssuoo hy the conr.erni:!d LGU!s;
c. Certified true copies of Local Tax
d. Certified true copies of Official Receipts;
e. Projected kilowalt-hour5 sales for the particular
proposed rerovery; and
t other relevant documents <rs may be required by
ihe ERC.
Upon receipt of the complete documents, tha ERC shall verify and
determine from the submissions the apprupriate TRAC that the
DU snail be allovved to impose on its customers.
The DU shaU await the ERC's cleara.noo before the inciusion a11d
imposition of such taxes in its ct1stomers' retail rates and shall
impose !he TRAC allowed until such time that its franchise and
business tax i:;ayments. as may be adjui;;;ted by the ERC during its
prior verification, have been fully recovered.
ARTJCLEJ
REPORTORIAL REQUIREMENTS
Section 1. Submission of Reportorial Requirements. S1artin9 on the month
foflowitig the fndusion fn the cuslomers' bills, the DU shall provide the ERC with
all calculations and information relative to the adjustment mechanisms provided
for hereln through the prescribed Uniform Reportoria' Requirements along with
supporting documentations, which shaU lnciude. but not !imited to, the following:
Paae 1B of 33
1.1 Baslc Supporting Documents
1.1.1 Invoice$ from Power Supplicr/s and National Transmis.-;ion
Corporation {TRANSCO}/N.ational Grid Corporation of the
Philippines {NGCP);
1.1.2 Debit/Credit Memos from Power Supplier/s and
TRANSCO/NGCP, if any;
1.1.3 Official of payments to Power SuppliP.r/s and
1-RANSCO/NGCP; and
1 .1.4 Actual consumer bills per class (3 bPUs per class).
1.:2 For Generation Rat:es and svstem Loss Rates
1.2.1 Sworn statement of DU if it has fts own generation
{one-time submission only, if applicable};
1.2.2 Monthry Generation Report for DU-Owned generation
facility, if appfiGable; and
1.2.3 Svvorn and ootanzed statement on PPD availed from power
supplier/s, PPO extended to end-users and pilferage
recoveries enjoyed by the DU_
1.3 For Tr.msmiS$ion Rates
1.3.1 Sworn and notlrized on PFD availed from
TRANSCO/NGCf and PFD extended to end-users and
Third Parties by thP- DU.
1.4 For Franchise Tax and Businoss Tax {FTBT) Rates
1 A.1 Actual consumer bills per class (3 bills per ciass) iri the
area where FTIJT rate/s is/are leVied; and
1.4.2 Summary of the tax imposition and collection for every
locality with;n its franchise area relative to taxes COl"flluled
in accordance with Article 2, Section 7 of these Rules.
1.5 For Tax Recovery Adjustment Che1rge (TRAC)
1 .5.1 Actual collections from the ifr4Jl>i!meniation of TRAC; and
1.S.? Actual consumer bilr$ per ciass (3 bills per class) in the
area where TRAC rate/s isfi:ire fevied; and
ARTICLE4
CALCULATrON OF THE OVER OR UNDER RECOVERY IN THE
IMPLEMENTATION OF ADJUSTMENT MECHANISl'WS
Section 1. Calcufatlon of Over/Under RecoveriDs. The DU shall calculate the
over or under recoveries on ihe Generation Rate. Transmission Rate, ::>ystem
Loss RateT Lifeline Subsidy Rate and Franchise and Busiriess Truces Rate
brought about by the variance between the allOW"1blo cost and the revemes
billed using the applicable fommlae.
Section 2. Generation R<1te OverlUnde.- Recovery. The Generation R1:1te
Over/Under Recovery (GOUR) applicable to customers being referred to in
Article 2, Sub-$eclions 1. t.3 and 1.2.4 s ~ r r be carculated based on the
fo!lowirig formula:
FORMULAS
GOUR
llGC =
GOUR , _((.AGC - GRR )+ r_GOUR J
SG(J'.".', ho:I
Refers to under/oV?.r-recoveries in generation costs
during the recovery period expressed in Peso/kWh;
Total Allowable Generation Cost, computed as foJlaws:
Pf=19C 20 of 33
Wf1ere:
GC i ton = Tue Generation Costs in Pesos from source of power
i through source of power n for month 1 to f1l coming
from Transition Supply Contracts (excluding
Mandated Rate Reduction and penalties), Power
Supply Agreements, WESM purchases, and
distribution ulility-owned generation facUrty, as
incorporated in Uie approved unbundled rates or as
subsequently authorized by the Commission, less
the following'.
a. Generation revenues from TOU
b. Cost of power to customers under
DU's special programs;
c. Cost or power distributed to custorners under a
Sale tor Resale Agreement, if the customers
being supplied are not ooOrJecied with the main
distribution grid and the CO!;t is different from
fur otner regular customen;; and
d. Net Settlement Surplus amount as determined In
Article 5, Sociion 5.4 of 1he Roles for the
Distributron of Net SetUement Surplus, ff any;
= Prompt availed by the DU, net of
the Prompt Payment Dfsooul'1ts passed on to the end
customers for month 1 tom, whsre disoounts passed
Qfl fo customers Qtrmot be higher than the discount
avaired from tho power supplierfs, relative tn
generation cost;
Pilferage recoveries fur month 1 torn:
Total l<V\/h Purchased and Generated for month 1 to
m ncl of kWh sold to wstorners under TOU, kWh
distributed to speciai programs and Sale for Resale
Agreements, if the customers be1ng suppfied are not
connected with the main disbiblf1ron grfd and the cost
is different from those for other regurar custoniorn;
and
Actual kWh Sales for month 1 lo m net of kWti sold
tu cu3tomers underTOU, kWh distributed to special
progtams and Sale for Resale Agreement.s, if thr:'l
customers being suppliE)d are not connected wlth the
main distribution grid and the cost is dirEerent from
those for other regular customers_
111 the case of irie!igible supply contracts, genp.ration uosts from
such contracts shan in(:!Ude the kilO'luatt-hours pertaining to
ine!igibte contracts but the oosts shall be peuged at the DU's load
weighted averayo NPC TOU rates or the rate as billed by
the IPP, whichever is lower_
GRl? = Total ganmalion revenues billed to customers exoept those
associated with TOU, special and Sale for Resare
Agreements, if the area is not connected with the main
distribution grid and thP- crn;t i!l. diff@r.eint fn:im thosG for other
regurar custorners, computf!<I follows:
r<iOUR
Whero.-
AGR.c,R As defined in Section 2, Article 2 hereof ;and
= Adtlal kWh Sares for month 1 tom, net or kWh sold
to cus!omers under TOU, and kWti di:;fribu!ed to
special programs and Sale for Resale Agreements, if
the customers belng supplied are not connected With
lhe main distribution grid and the oost is. different
from lhose for other regufl'!'r customers.
= lhe tot.al running balance of the refund/mlleG! as a result of
any prior ocmftrmafion/s; and
"" Tota[ actual kWh Sales. for the recovery period net of kWh sold
to customers under TOU, and kWh distributed to specia!
programs ancf Sale for Resare Agreements, if tire customer$
be;ng suppUed are not connected with tf1e main distribl.Jlian grid
and the cost is dmerent from th.osa for other regufar customers
Section 3. Trartsrnissron Rate Over/Under Recovery. Trie Tratlsmission Rate
Over/Under Recovery (TOUR) shall be c:;i[culated pm customer c:rass based on
the following formula:
- -. ------------ --
3.1. For Customer ciasses with TR e><pressad in Pewlk.Wh:
FORMULA 7
_ l(ATC,. -TRRJ + rTOUR,.}
TOUR .. = .. .
. srozm,.
3.2. Customer cl:aS$CS with TR expressed in Peso/kW and Customer
dassos with TR e.icpressed in both Peso/k\/Vh and Peso/kW.
FORMULAS
TOUR,,., =- Refers tc over/under recoveries in transmission cost during the
recovery period expressed in Pcso/kVl/h for class N;
ATCh = Refers to the a!!ttJ:ill transmission cost during the recovery
VWiero:
period computed as follows:
, r(TC -so% J>fD ' ]
ATC ,, - L l -- . -. -. --ls rur:N CP ,.
' "' \ f'P(J mvN }
1'(-: .. The actual !rans.mission cost 111 Peso f.or month 1 to
m;
PFD "' Power Factor Discounts availed by the DU, net of the
Power F-actor Discounts given to customers and
Third Parties for momh 1 to m , where: Disrount
passed on to customers and Third Parties ::s; disr::aunt
availed from iRANSCOINGCP for month 1 to m;
TPGmu11 = Total Purchased and Generated in kWh for month
1 to m corresponding to the transmission cost;
P:iga23 of 33

-
= Actual kWh &!!es for month 1 to m corresponding to
the transmission cost;
"" Actual or oomputed Coincident Peak Demand
Allocafion Fac::tor for customer class N corresponding
to the recovery period or the CP demand allocation
factor as reflected in the fast approved
rates of the DU; and
Refern to a specific cus1oTTl(lr class {ex. N= 1,2,-..
where 1"' Residential, 2= Commercial, etc.).
TRR,,. Transmission CM! RecoveliM during the recovery period, to
bP. cnrnputed as follows:
TRJ?. . .: 2:J(FJ\,. fr1Php/ kWhx Sh) +(TR.., in Ph Pl kWx

.'tR1o1 "" Transmission Rate in PhP/kWh and/or PhPJkW as
applicable to customer class N as implemented by
the OU for morrth 1 to rn. lf the transmission rate for
customer N is e)(pressed in PhPlkWh arily, thf'ln the
Transmission Charge in PhP/kW .in the formula
should be squaf to zero {O) and vice-versa;
S,.. Total kWh sales for customer class N for month 1 to
m;
llD.; Total kW billing demand for customer class N for
month 1 tom; end
N = Refers to a specific ct1stomer ciass (eir. N=1,2, .. _ .,
where 1= Residential, 2"" Commercfal. etc.)_
rTOUR "' The total running balance of the refund/roflect as a result of
prior com'irmafa:m/s_
"" Total kWh Sales for the recovery pl'!riod fur aJstorner class N.
Total kW bflling demand the recovery period for customer Giass
N.
j
Section 4. systetn Loss Rate Over/Under Recovery. The System l.os.s Rale
OvF!r/Under Recovery {SLOUR) shall be Ci'Jlculated based on the following
formula:
FORMULAS
SLOUJ?,,, ((ASLC - 1SU0.:t.:
TPG,,,;r."'
1-Vhcro:
.S'f,OUR :o Refers 1o over/under recoveries in system loss during fhP.
recovery period cxrm:eaed in
AS! . .<:' Allowable System Loss Cost Jncurred during the recovery
period computed as follows:
l>WJere:
ASlC = L l(GTCC +TC - 50%PFD)U]
t...,.,
GTGC = As defined in Section 4, Article 2 horeof;
TC = The acttml transmission cost in Peso for month 1 to
m:
l'FD Power Factor Discount$ availed by the DU, net of the
Power Factor Discmmts given to customers and
Third Parties for month 1 to m whero: Discount
passed on to customers and Thlrd Parties
availed ftom TR.l\NSCOINGCP for morrth 1 to m; and
U - Gross Up Factor=% SL/ (1- Actual% .System

The %SL is based on:
Cl) the Actuat Systems Los:s for month
1 to rn or the Systems Loss Cap,
whichever is ICJ1Ner; plu.s
Page 2S of33
b} the Actval Campany use for month
1 tom or 1%, whichever is tower.
The ActL1al "lo System Loss. on the other
hand, rs based on:
a} the Actual System Loss for month 1
tom; plus
b) the Actual Company Use for month
1 tom.
The kV'Jh Sales to be used in determining the System
lo:s:. shall be net of kWfl distributed to special
programs and Sal?. fnr .AQreeiments, ;f such
sales have different system loss charge rates from
regular customers.
lf SLR varies per customer class, the DU shall
compute tho applfcable Gross Lip Factor per
customor class.
Pursuant lo ERG Resolution No. 17, Series of 2008,
1Jpon the Commission's of the OU's
Operation and Maintenance wherein th"'
Company Use shall have been Included, the same
shafl no longer furm part of the %SL and Actual %
SL as defined above.
ASLR "' Tol;;ll actual system loss revenues for generation and
transmission billed to customers except those associated with
special programs and Sale for Resale Agreements, if such
sales have different system loss charge mtes from regular
customers, computed as foHows:
Asr.R. --= ,L {SLR x s_tu), .. J
J,,IN
Where:
SLR. = As defined in Seci,ion 4, Artit:le 2 hereof: and
rST.OUR
Actual kWh Safes for month 1 to tn, net of kWh
distributed to speci;:d programs. and Sale for Resafe
if sucti sale$ have different system lOM
charge rates from regular customers;
The total running balance. of the rerund/coUecl as a result of
prior coniirmation/s; and
Total kWh Purchased and Generated for the recovery period
net kWh t.o customers under special programs end
Sale for Resare Agreement:s. if such sales have diffurent
system loss <-.harge rates from regular customers_
Section 5. Lifeline Subsidy OvertUllder Rt1covery. The Lifeline SUb.5idy
Over/Under Recovery (LSOUR} to be charged to non-lifeline customers shall be
C<:1lc;ulatel'.I !Ja$ed on trm tolfowing:
FORMULA 10
LSOl!l? .,,,.
LD
W'hern:
LSOUR = Refers to over/under recoVerics on lifeline subsidy during the
recovery period e)(pressed in Peso/l<Wn;
LD = Difference between the Total Discounts givon to lifeline
customers and Totar Subsidy corlected ffom non-lifeline
custom5rs, computed as follows:
LI) - L (TS - .TD)
!'-tU
TS lifeline subsidy amount collected from non-lifeline
custr.Hners for month 1 to m. computed as follows:
Where:
S 1.SOrJ!!.1.,.
ISR
--- -------- ----
total kWh consumption of norHifeHne
customers for the month; and
lifeline subsfdy rate per collected
ftom for the
month.
tD total diswunt amount given to lifeline customers for
month 1 to m, computed a.o;; follows:
TD, - L l\(S,_"""' >< TRurrr)+(NCusl '' >< Ftxeil Dj
i-1 ..
Where
j = Lifeline level bracket 1 to lifefine
bracket n;
fl"rw//
Clut
D
= Total kWh consumption of lifeline
customers for tile month of
.bracket j;
Total PhPll<\'Vh rate subject to lifeline
discount which include generation.
tran:smlssion, system loss.
distribution, supply, metering and
loan oondon:rtion;
Total number of customers for the
month for lifeline bracket j;
"' Fixed metering charge for residential
a.nd
Dlscount rate for lffefine :bracket j.
Total kWh consumption of 110!"1-lifeline customers for the
recovery period.
Section G. Franchise and Business Truces Over/Under Recovery. The
Franchise and Business Taxes Over/Under Recovery to be charged to
sh<11f be based on tfHi. folloWing formulae:
rage2aof 33

... , r;,A- . . .
I
.-,
... ----------------- -----
6_ L f--or BT Over/Under Recovery (BTOUR) to be charged to
customers 8hafl be calrulated baserj on thP. following formula:
FORMULA 11
]
o [(BTR.+/fl."'Rd 1- ... BrR )-(BT..4,+ BT,(+ ... BTA,,)j
B l 'R - -' --- - -
8
... .lllT'Olf1\-Y1n.oi;
Mlhern:
f11VUR = Refers to over/under recoveiie,s business during the
recovery p1;1riod in Peso.lk\Nh;
HTR,"'" "" Business tax revenue tor the period i to n oomputed
as follows:
RTA,,,,,,
6.2.
JJTR r x L: s """'"A )
..
l11horo:
BT ERC Approved Annual Tax- Rate; and
= kWh Saras for month i to month m durrng
the recovery period.
"" ERC verified business t3:xes paid by tho DU tor ttic recovery
p-eriod I to n; and
Total actual kWh Gares for the recovery periocl.
For TRAC Over/Under Recovory (TROUR) to be charged to
shall be calcola!ed based on the following formula:
FORMULA 12
_ ((TRAC x ,LS1"RO(!J1,n- )- J-tllTA J
TROUR = - __ i..,1---nr ------

(oo' .... d
TR OUR
TRAC
s

f'JJ"fA
,.. Refers to over/under recoveries franchise and busine5s
taxe$ during the recovery period expres$ed in Peso/k\Nh
for dass N;
= Tax Recovery Adjustment Charge implemented by the DU;
Actual kWh Sales for month i to month m during the
recovery period;
"" ERG verified Franchise i3nd Business Tax payments paid
by the DU; and
ARTICLE5
FILING AND RESOLUTION OF THE APPLICJ\ TION S
Sect.ion 1. Filing. The DUs file their respective consofidateo
within 1he penod as prescribed hereunder:
..
- - ---
Distribution
Period of Filing Covered Adjustments
UUlities
o------- -
Luzon OUs Octoher 30, 2009
Adjustments implemented until ttiP.
billing month of December 2008
-- --
_,__
-- --
----
--- ...
Vi:;ayas OUs October 30, 2010
Adjustments implemented until the
billing month of December 2009
,___ -
-
Mindanao DUs October 30, 2011
Adjustments implemented until the
bflllng month of December 2010
r
Page 30 of
Thereafter. the OUs shall file their consofidated appliC3tions within
the period as prescribed hereunder:
...
I
---
Di stti butio n Utilities Period of Fmng
Covered Adjitslments
---
-
Luzon DUs October 30, 2012. Jan. 2009 - oec. 2011
J
--- --
..
-
..
Visayas UU s October 30, 201:'1 Jan. 2010- Dec. 2012
----
Mindanao DUs October 30, 2014 Jan. 2011 - Dec. 2013
Subsequently, the DUs shail file their respective com;olidated applications every
(3) years foflowing the sequenoo of period of filrng prescribed above.
Section 2. True Up Mtlchanisms Approved by th9 .ERC. The filing of
c.alcutaltons of over or under recoveries from adjustments implemented
by the OUs referred to in the prcoeding Section shall indude the Ufelfne Rate
Recovery Mechanism, Inter-class Cross Subsidy Recovery Mechanism,
Recovery Mechanism of Under Recoveries in the Reinstatement of Prompt
Payment Discounts, Recovery Mechanism in the Implementation of System
Loss Rates, Recovery Mechanisrn in the lmpfemeniation of Transmission Rates
a11d such other mechanisms that the ERC may adopt.
Section 3. Applfc:1bility of Rules Governing the True-Up lllloc:hani:srns. The
specffic rules fur the calcuration of over and under recoveries and such other
pertinent provislans as provided in the following:
3.1 Guidelines for the Calculation of the Over or Under Recovery in
the lmprementation of Lifeline Rates by Distribution UtHitiett;
3.2 Guidelines for a True-Up Mechanism of the Over or Under
Reoovery rn the Implementation of Inter-Class Cross S1ibSidy
removal by Distribllfion Vtmfies;
3.3 ERC Resolution No. 12, Series of 2005, A Resolution Approving a
New Poficy on the Treatment of Prompi Payme11t Discount {PPD);
f'age 31 of 3."'l
3_4 GuideHnes for the Calculation of the Over or Un<ler Recovery ir.
the lmplementation of System Loss Hate by Distribution Utilities;
and
3.5 Rules for the Calculation of tile Over or Under Recovery in lhe
Implementation of Rates_
sh..i.ll continue to be in force and shall be used in the verification -of any over and
under reooveries of the DUs and the determination and implementation of the
rates for reoovery or refund of such over or under recoveries as may be ordered
by lhe ERC.
Section 4. Fonn of Application and Supporting Documents. The
applications and supporting documents therewith shall adopt the templates to
be prescribed by the ERC.
Section 5. Referral to External Auditors. At its disc.rc1ion, the ERG refer
the appticalion to an accredited ext:ema[ auditor for audit lhe cost of hiring
such accredited auditor stipulated in 1hc contract for the service$ of such
accredited auditor approvP.d by the ERC shall be borne by the ooricerned DU_
Such cost shall he treated. upon proof of actuat payment. thereof as l"I
recoverable expense and shall be considered in the calculation of over or under
recoveries for the tost period covered_
Section 6. Applicability of the ERC Rures of Practice and Procedure. - The
t=.RC Rules of Practice ancf Procedure shall apply st1ppretorily to the vcrificatton
process outlined in these Rules insofar as 1hny are not inconsistent herewith.
ARTICLE6
VlOLA TION Of THE RULES
Section 1 _ Fines and Penaltios - ViolaUon of any provision of these Rules shall
subject to the imposition cffiries and penafties in accordance with the Rules
to Govern the Imposition of Adrncnistrative SancUot'ls in tho form of Hnas and
Penaflies Pursuant 10 $ec;lion 46 of Republic Act No_ 9136 promufgated by tho
ERC on May 17, 2002, as amended_
P;:i.ge 32 of 3.1
ARTICLE 7
FINAL PROVISIONS
Section 1. Exception - Where good cause appears, the Commission
may allow a11 exemption from any provision of lhese Rule.s, if such is found to
be in the public interest and is not contrary to or any other related nilcs arid
regulations_
Soction 2. Separability Clause - If for any reason. <iny part or section of
theso Rules is declared unconstitutional or invalid, the o!h6r parts or secUons
hereof which are not affected thereby shall continue to be in full force and
effect
3cl0lion 3. Repea:nng Clausa - All previous Commission issuances not
consistent with these Rules are horeby ar:;cordingly repealed or deemed
modified.
Soction 4. Effectlvily - The$e Rules a.hall take effect fifteen (15) days
following rts publication in a newspaper of general circulation.
Pasig City, July 13, 2009.
Pl'lse 33 ot 33

--
EB
' .c;,. .......
. - "' lu!iot
. s. .
K>$ 0 . . . . ;r-r
BlllEllGY Ur.lULJLTOll't (<)11041- ol'tllUH'RllU
9 December 2013
lVANNA G. DEi.A PENA
First Vice Presi dcpJ and H cad
Regulc::itozy Management Office .
MANlLA ELECTRIC CQ.M.PANY
Pasig City
Dear Ms. Dela Pena:
.4NNEX H
In the letter- dated 5 December 2013, MER.ALCO s:ought the Energy
Regul;:.rtory Commission's (ERC) clearance to stagger collection of its
generation costs for the Novemher 2013 supply mori:th, invoking Artide
VlII, Section l of the AGRA (Automatic Gener<Jtion Rate Adjustment) Rules,
. which provides thnt the "ERC may allow- an exception from any pro\risions
of these Guidelines, if sucb exception is found to be in the public: interest
and is not contrary Lo lc::rw or any other related rule.s and regulations."
Specifically, MERALCO proposed to impose a .generation charge of
P.hP7.90/kWh 1n its Decemher 2013 hil)ing, iristead_ of the calculated
PhP9.1070/kWh, and collect the deferred amounl of cihci'ut Phl'3 Billion in
its Ftbruary 2014: biIIing.
At todny's presentation of MERALCO before the ERC of it.c; December
gQ:Heration chrlrge and its proposed cost. recovery deferment, it suggested
DA!o oUier options, which involve capping the generation charge for
December billing ilt PhP7.6 7 /kWh a11<l implementing the deferred cost
recovery in the February 2011 hilling for Option 2 and in tbe February and
March 2014 billi11gs for Option 3.
ERC is wcl1-a\.va1e of the huge impact that MERALCO's generation
ch<J.rge adjustment have 0n -the retail to it<> customers. GJven
that there are a.lso re.ported increases in the pvices of other commodjtiE's.
MERALCO's proposal to: stagger the imp[ementation of it5 ge,neration cost
is timely, as il will cushion t:he impact on the eieclridty consumers.
The ERC therefore grants MERALCO the clearance it seeks to stagger
-Ml1plemcnLation of fL'i generalion cost recovecy by way of an exception to
the AGRA Rules. Accordingly, MERAT.CO is auLhorized to implement a
:1
generation charge of PhP7.67 /kWh in its December 2013 billing and add
to its cakufate<l generation charge for Fchru.:ny 2014 billing the
gcncr;:ition r<ite of PhP1 .00/k'Wh. The halance on the deferred generntion
amount 'l:Vithout any carrying costs shaH he included in MERALCO's
generation charge {or March 2.01-1. Shqufd MERi\.LCO seek to recover its
carrying costs on the. _entire deferred amount, it shall file a form;:il
application for this. -
The foregoing should n0t in any way be constn1erl as ;:i confirm;:ition of
MEHALCO's generation costs incurre<l in November 2013, which shall
rcmilin subject of the confirmation and posl-verificalion proceedings in
accordance wilh the applicible'ERC ri:>soh1tion on the m8tter.
We hope this ::iddresses your concerns.
Very trn 1 y yours,
/I . /] . . l ( ifl
//- ij!_){,'f5p.,
/iZENAIDA G.
t/' Chairperson and CEO
/""'\
\
J. NON .
Commissioner
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