A RESOLUTION LIFTING THE MORATORIUM ON THE FILING OF RATE ADJUSTMENT PETITIONS/APPLICATIONS BY THE OFF-GRID ELECTRIC COOPERATIVES

WHEREAS, Section 25 of Republic Act No. 9136, otherwise known as
the Electric Power Industry Reform Act of 2001 (EPIRA) provides that the
retail rates charged by Distribution Utilities (DUs) for the supply of
their electricity in their captive market shall be subject to regulation
by the Energy Regulatory Commission (ERC) based on the full recovery of
prudent and reasonable economic costs incurred, or such other
principles that will promote efficiency as may be determined by the ERC;

WHEREAS, Section 43 (f) of the EPIRA and Section 4 Rule 3 of its
Implementing Rules and Regulations (IRR) empower the ERC to establish
and enforce, in the public interest, a methodology for setting retail
rates for the captive market of a DU. The ERC may likewise adopt
alternative forms of internationally-accepted rate-setting methodology
as it may deem appropriate;

WHEREAS, on April 21, 2008, the ERC adopted Resolution No. 7, Series
of 2008 which imposed a moratorium on the filing of rate adjustment
petitions/applications by the Electric Cooperatives (ECs) in
anticipation of the implementation of the new rate-setting methodology
for ECs or the so-called “Benchmarking Methodology”;

WHEREAS, the moratorium was imposed on all ECs, both on-grid and
off-grid, to prevent duplication of efforts, better manage time and
resources and for the smooth implementation of the said methodology;

WHEREAS, on April 20, 2009, the ERC resolved to subject the Draft
“Rules for Setting the Electric Cooperatives’ Wheeling Rates” (Draft
Rules), which apply only to the “on-grid ECs”, to Rule-Making
proceedings under Rule 21 of the Commission’s Rules of Practice and
Procedures;

WHEREAS, considering that the “Benchmarking Methodology” will apply
only to the “on-grid ECs”, it follows that only their rates will be
adjusted using the said methodology if the same is approved; thus, it
becomes necessary to allow the “off-grid ECs” to file for rate
adjustment petitions/applications since the rationale for the issuance
earlier of the moratorium will not apply to them;

WHEREAS, there are clamors from the “off-grid ECs” to lift the
moratorium on them since they need an adjustment in their rates to
enable them to operate viably and deliver satisfactory service to their
member-consumers;

NOW THEREFORE, the Commission, after thorough and due deliberation,
RESOLVED, as it hereby RESOLVES to LIFT the moratorium on the filing of
rate adjustment petitions/applications by the “off-grid ECs”.

This Resolution shall take effect fifteen (15) days following its
publication in a newspaper of general circulation in the Philippines.

Let copies of this Resolution be furnished the University of the
Philippines Law Center-Office of the National Administrative Register
(UPLC-ONAR) and all “off-grid ECS”.

Adopted: 21 April 2009

(SGD.) ZENAIDA G. CRUZ-DUCUT Chairperson
(SGD). RAUF A TAN Commissioner	(SGD.) ALEJANDRO Z. BARIN Commissioner
(SGD.) MARIA TERESA A.R. CASTAÑEDA Commissioner	(SGD.) JOSE C. REYES Commissioner