Question & AnswerQ&A (ERC)
The purpose of the Guidelines is to set the minimum standards and procedures to be followed by appraisers in generating an appraisal report acceptable to the Energy Regulatory Commission (ERC) for rate-making purposes, as mandated under Section 43, paragraph (f)(i) of R.A. 9136.
Appraisers who have been previously accredited by the Securities and Exchange Commission (SEC) and who submit the required documents to the ERC and meet the qualifications set forth in the Guidelines can be accredited. Foreign appraisers not registered in the Philippines can only perform appraisals in collaboration with an accredited appraiser.
Documents include notarized application for accreditation, company profile, DTI license, certificate of good standing from appraisal associations, list of clientele, bank and company certifications, notarized certification stating qualification requirements compliance, latest audited financial statements, and the SEC accreditation certificate.
PPE refers to tangible fixed assets of an Electric Power Industry Participant (EPIP) used in the business operations, investments, or idle, with useful lives of more than one year.
An appraiser must have adequate technical training and proficiency, knowledge of the asset, maintain independence in mental attitude, exercise due professional care, adequately plan the work, supervise assistants properly, and obtain sufficient evidence to support valuation.
Appraisers, their stockholders, officers, and staff participating in the appraisal process must not own stock in the enterprise whose assets are being appraised and must avoid any association such as being an officer, promoter, consultant, or employee of the enterprise to maintain independence.
Appraisers must use generally acceptable valuation methodologies consistent with the revaluation policies under the Transmission Wheeling Rate Guidelines, the Electric Power Industry Reform Act of 2001, and other ERC guidelines. They must demonstrate appropriateness of the method if challenged by the Commission.
The report should state the purpose, compliance with ERC standards, appropriateness of valuation methodologies, appraiser's independence, detailed asset listing with descriptions, asset utilization, existence verification method, cost details, and asset life information.
An appraiser's accreditation is valid for three (3) years and can be renewed before expiration. The application fee for initial or renewal accreditation is Five Thousand Pesos (P5,000.00).
The invalidity or unconstitutionality of any provision does not affect the other provisions, which will continue to be in full force and effect as the Guidelines contain a separability clause.