QuestionsQuestions (MIAA Resolution NO. 2012-034)
Section 43(f) of EPIRA (R.A. 9136) provides that any significant operating costs or investment projects of TRANSCO and distribution utilities (DUs) that become part of the rate base are subject to ERC verification to ensure transparent and accepted industry procurement and purchasing practices to protect the public interest.
ERC Resolution No. 13, Series of 2006, adopted guidelines governing the submission, evaluation, and approval of electric distribution capital projects, providing DUs with a uniform system for filing applications for approval of capital projects.
ERC Resolution No. 18, Series of 2008, entitled “Rules for Approval of Regulated Entities’ Capital Expenditure Projects,” covering the rules for approving regulated entities’ CAPEX projects.
The ERC received requests from electric cooperatives (ECs) in Mindanao seeking an extension of time to file their respective multiyear capital expenditure applications, citing their capacity-building and technology-modification needs under the relevant rules.
Section 58 of the EPIRA is cited regarding ERC’s mandate. The National Electrification Administration (NEA) required all ECs to formulate their Integrated Computerized Planning Model (ICPM) for annual CAPEX projects and related programs.
ICPM stands for Integrated Computerized Planning Model. It is relevant because the NEA required ECs to use it in preparation for their annual capital expenditure (CAPEX) projects and programs and structural/institutional development.
DUs submit their annual DDP to the Department of Energy (DOE). For ECs, such plans shall be submitted through the NEA.
The ERC recognized that having a comprehensive and integrated development plan is significant for all ECs and necessary for preparing CAPEX projects/programs and structural/institutional planning/development consistent with the Philippine Distribution Code (PDC) and safety standards set by the Philippine Electrical Code (PEC).
The TWG was created to formulate and promulgate a template of procedures called the “Electric Cooperative Distribution Utility Planning Manual.” It included representatives from the ERC, NEA, IFC, PHILRECA, NAGMEC, and AMRECO.
The MOA adopting the “Electric Cooperative Distribution Utility Planning Manual” was executed on August 5, 2009 among the ERC, NEA, PHILRECA, NAGMEC, and AMRECO.
The ERC posted the proposed amendments on November 16, 2009 on its official website (www.erc.gov.ph). The posting enabled regulated entities to submit comments/inputs on the proposed amendments.
Regulated entities were allowed to submit comments/inputs on the proposed amendments on various dates; these were considered in preparation for issuance of the Amended Rules.
The ERC approved and adopted the “Amended Rules for Approval of Regulated Entities’ Capital Expenditure Projects,” with the attached rules described as Annex “A” and made an integral part of the resolution.
It takes effect immediately upon its publication in a newspaper of nationwide circulation.
Copies are to be furnished the University of the Philippines Law Center–Office of the National Administrative Register (UPLC-ONAR) and all DUs.
The resolution was signed by Zenaida G. Cruz-Ducut (Chairperson), Rauf A. Tan (Commissioner), Alejandro Z. Barin (Commissioner), Maria Teresa A.R. Castaneda (Commissioner), and Jose C. Reyes (Commissioner).
Key dates include: March 8, 2006 (ERC Res. No. 13 adopted guidelines), December 15, 2008 (ERC Res. No. 18 adopted CAPEX approval rules), April 20, 2009 (order suspending EC multiyear CAPEX filings), August 5, 2009 (MOA adopting the planning manual), November 16, 2009 (posting proposed amendments online), and December 9, 2009 (ERC resolution adopted).