Question & AnswerQ&A (ERC Resolution NO. 09, S. 2009)
The main purpose is to adopt the Rules for the Calculation of the Over or Under Recovery in the Implementation of Transmission Rates by Distribution Utilities (DUs) to ensure transparent and reasonable prices of electric power, full recovery of allowable transmission costs, protection of the public interest, and maintenance of quality, reliability, security, and affordability of electric power supply.
These Rules apply to all Distribution Utilities (DUs) that are connected to the Grid, including electric cooperatives, private corporations, government-owned utilities, and local government units with exclusive franchises to operate distribution systems.
Net Transmission Cost refers to the total charges of the National Transmission Corporation (TRANSCO), or its buyer or concessionaire, including transmission and sub-transmission costs, ancillary service, connection service, power cost delivery service net of any imbalance charges, costs associated with One-Day Power Sales (ODPS), and value-added tax associated with transmission service. These costs must be prudently incurred, actually paid, verifiable, reasonable, and eligible for recovery per ERC Rules.
Transmission Rates refer to the charges associated with the transmission cost incurred by the Distribution Utility as determined by the ERC in the DU's Unbundling of Rates Application.
It is calculated per customer class using a formula that compares the allowable transmission cost to the transmission recovery actually collected, considering sales volume, billing demand, power factor discounts, and other factors from the time the DU implemented its unbundled rates to the month before implementing new rates per the TRAM Guidelines.
Any approved over or under recovery must be incorporated by the DU as a rate adjustment in the existing transmission rate component of customer bills, either in PhP/kWh or converted to PhP/kW if necessary, ensuring the adjustment is reflected transparently to customers.
The application must include TRANSCO invoices, vouchers and official receipts of payment to TRANSCO, ERC Forms DU-M-01 and DU-M-02, Monthly Financial and Statistical Reports (MFSR) for electric cooperatives or equivalent forms for private utilities, summaries of monthly purchased kWh from all suppliers, and other relevant documents deemed necessary by the ERC.
DUs must submit a report every six months after implementation on their monthly application of the approved rate and the balance of the over or under recovery until it is fully refunded or collected, ensuring ongoing compliance and transparency.
Violations are subject to fines and penalties according to the Guidelines to Govern the Imposition of Administrative Sanctions under Section 46 of Republic Act No. 9136, which empowers ERC to impose administrative sanctions in the form of fines and penalties.
The ERC may allow exceptions if good cause appears, provided the exception is in the public interest and not contrary to any law, rule, or regulation.
The remaining provisions not affected by the declaration shall continue to be in full force and effect due to the separability clause.
These Rules take effect fifteen (15) days following their publication in a newspaper of general circulation in the Philippines.