Law Summary

Introduction

This document summarizes the Energy Regulatory Commission's (ERC) Resolution No. 15, Series of 2011, which adopts the Amended Rules for the Approval of the Sale and Transfer of TRANSCO's Subtransmission Assets and the Acquisition by Qualified Consortiums. This resolution builds upon earlier guidelines and amendments concerning the management of TRANSCO's assets.

Background

• Initial Guidelines: On October 17, 2003, ERC issued the Subtransmission Guidelines for the sale and transfer of TRANSCO's Subtransmission Assets.
• Subsequent Amendments:
  • March 17, 2005: ERC Resolution No. 03 amended the original guidelines.
  • January 26, 2009: Further amendments were adopted in Resolution No. 01.
  • December 15, 2010: Resolution No. 27 amended provisions related to end-users connections.

Petitions and Public Consultations

• Petition Filings:
  • December 29, 2010: MERALCO and PEPOA filed a joint petition to amend the Subtransmission Guidelines.
  • January 19, 2011: DLPC and DASURECO submitted a petition to initiate rule-making to amend a specific section of the guidelines.
• Public Engagement: ERC solicited public comments on proposed amendments through its official website and conducted public hearings on May 20, 2011.

Key Amendments to the Subtransmission Guidelines

• Definition of Consortium: Clear definitions and treatment of consortiums involved in acquisitions.
• Deadline Extension: The deadline for the disposition of subtransmission assets is extended to December 31, 2011.
• Right of Way (ROW) Costs: Clarifications on responsibilities for ROW costs incurred before and after signing the Lease Purchase Agreement (LPA).
• Capitalization of Deferred Charges: Mandatory capitalization of deferred subtransmission charges applicable only to Electric Cooperatives (ECs).
• Billing Policies: Guidelines for billing directly connected end-users are established.
• Data Submission: Requirements for submitting necessary data for consortium formation, including a Memorandum of Agreement (MOA).

Implementation and Effectivity

• Resolution Adoption: The ERC formally adopted the amended rules as integral to the resolution.
• Publication Requirement: The resolution will take effect fifteen (15) days following its publication in a newspaper of general circulation in the Philippines.

Distribution of Copies

• Copies of this resolution will be provided to:
  • University of the Philippines Law Center-Office of the National Administrative Register (UPLC-ONAR)
  • TRANSCO
  • NGCP
  • PEPOA
  • All distribution utilities

Key Takeaways

• The ERC Resolution No. 15, S. 2011 amends previous guidelines concerning the sale and transfer of TRANSCO's subtransmission assets to facilitate better governance and oversight.
• Key amendments include extended deadlines, clarified responsibilities for costs, and specific requirements for consortiums.
• The resolution emphasizes public participation and regulatory consistency through earlier resolutions and provisions.
• It highlights the importance of timely publication and dissemination to relevant stakeholders for effective implementation.