QuestionsQuestions (ERC Resolution NO. 19, SERIES OF 2009)
Section 43 of Republic Act No. 9136 (EPIRA) empowers the Energy Regulatory Commission (ERC) to establish and enforce a methodology, in the public interest, for the recovery of fuel and purchased power costs and incremental foreign-exchange adjustments by the National Power Corporation (NPC).
ERC refers to the Implementing Rules for the Recovery of Fuel and Independent Power Producers (IPP) Costs: Generation Rate Adjustment Mechanism (GRAM) and Incremental Currency Exchange Rate Adjustments (ICERA), adopted on February 24, 2003.
The Power Sector Assets and Liabilities Management Corporation (PSALM) filed the application for approval of proposed rules for the automatic recovery of monthly fuel, purchased power, and foreign-exchange-related costs.
ERC Case No. 2008-019 RM.
Public consultation was set for November 13, 2008; stakeholders raised several issues and concerns during that consultation.
ERC issued a Notice dated December 17, 2008 proposing separate Rules for the automatic recovery of monthly fuel, purchased power costs, and foreign-exchange-related costs of NPC, which was set for public consultation on January 26, 2009.
The proposed rules were posted on February 11, 2009, and interested parties were directed to submit comments on or before February 25, 2009.
ERC considered all comments submitted by the parties in the finalization of the proposed rules.
ERC resolved to adopt the Rules for the Automatic Recovery of Monthly Fuel and Purchased Power Costs and Foreign-Exchange Related Costs by NPC, with the rules attached as an Annex (ANNEX A).
The resolution shall take effect fifteen (15) days following its publication in a newspaper of general circulation in the Philippines.
Copies are to be furnished the University of the Philippines Law Center-Office of the National Administrative Register (UPLC-ONAR), the National Grid Corporation of the Philippines (NGCP), the Philippine Chamber of Commerce and Industry (PCCI), and all distribution utilities.
Because the resolution is based on ERC’s authority under EPIRA Section 43 to establish a methodology not only for fuel and purchased power costs recovery but also for incremental foreign-exchange adjustments.
GRAM refers to the Generation Rate Adjustment Mechanism and ICERA to Incremental Currency Exchange Rate Adjustments; they are earlier mechanisms referenced by ERC as part of the framework for recovering fuel and related costs and currency exchange adjustments.
ERC conducted public consultations, issued notices for comments, received stakeholder submissions, and then deliberated on those comments before adopting the final rules through a resolution.