A RESOLUTION AMENDING RESOLUTION NO, 16, SERIES OF 2008

WHEREAS, the Commission issued Resolution No. 16, Series of 2008
entitled “A Resolution Adopting Policies to Govern the Transition Supply
Contracts Which Have Been Assigned and Transferred to National Power
Corporation Successor Generating Companies” promulgated on 15 January
2009 and became effective on 31 January 2009;

WHEREAS, on 22 January 2009, Masinloc Power Partners Ltd., Inc. filed
a “Petition to Initiate Rule-making”, docketed as ERC Case No,
2009-002RM, praying for the amendment of Resolution No. 16, Series of
2008, specifically, on the policy on the Mandated Rate Reduction (MRR)
under Section 10 thereof;

WHEREAS, a public consultation attended by concerned stakeholders was conducted to address such issue on the MRR;

WHEREAS, after considering the arguments and submissions of the
parties, the Commission rendered a Decision in ERC Case No. 2009-002RM
partially granting the Petition;

NOW THEREFORE, the Commission, after thorough and due deliberation,
RESOLVED, as it hereby RESOLVES to AMEND Section 10 of Resolution No.
16, Series of 2008, to read, as follows:

“10. Section 72 of the EPIRA on the Mandated Rate Reduction
(MRR) shall continue to be implemented. The NPC successor generating
companies shall implement the same subject to the execution of a written
instrument between NPC and/or PSALM and the concerned
NPC successor generating company specifically containing the assumption
by the latter of such obligation. In the absence of such specific
written instrument, the rights of the residential end-users shall not be
impaired and NPC and/or PSALM shall bear the cost of the rate
reductions implemented by the NPC successor generating company. Thus,
residential end-users of the affected DUs shall continue to enjoy the
rate reduction of thirty centavos per kilowatthour (PhP0.30/KWh) and the
implementation of the same shall terminate upon the expiration of the
term of the assigned and transferred TSCs. If, after the expiration of
the TSC’s term, the NPC successor generating company shall continue to
supply the requirements of the affected DU under an extension as allowed
by the ERC, the obligation to provide the MRR shall cease, unless
otherwise stipulated upon by the NPC successor generating company and
the affected DU, in which case the cost of implementing the MRR shall be
borne by the NPC successor generating company.”

This amendment shall take effect immediately.

Let copies of this Resolution be furnished the University of the
Philippines Law Center-Office of the National Administrative Register
(UPLC-ONAR) and published in a newspaper of general circulation in the
country.

Adopted: 18 May 2009

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