A RESOLUTION ADOPTING THE RULES FOR THE DISTRIBUTION OF NET SETTLEMENT SURPLUS

WHEREAS, Section 30 Republic Act No. 9136, otherwise known as the
Electric Power Industry Reform Act of 2001 (EPIRA), provides for the
establishment of the Philippine Wholesale Electricity Spot Market
(WESM);

WHEREAS, commercial operations of the WESM commenced on 26 June 2006;

WHEREAS, there is a surplus or deficit resulting from the aggregate
settlement transaction in the WESM termed as the Net Settlement Surplus
or Deficit;

WHEREAS, there is a need to establish a suitable process for the
immediate and equitable flow back of the Net Settlement Surplus by the
Philippine Electricity Market Corporation (PEMC) to the party who paid
for the same;

WHEREAS, the ERC proposed a set of Rules for the Distribution of Net Settlement Surplus;

WHEREAS, the set Rules for the Distribution of Net Settlement Surplus
establishes, among others, the (i) definition and allocation of Net
Settlement Surplus, (ii) distribution of Net Settlement Surplus;
(iii) flow back computation of Net Settlement Surplus; (iv) treatment of
interests incurred from the Net Settlement Surplus; and (v) reportorial
requirements;

WHEREAS, the said Rules were posted on the ERC Website to solicit
comments from interested stakeholders and a public consultation was
conducted on 29 October 2008;

WHEREAS, the revised Rules incorporating the comments of the
industry stakeholders were again posted on the ERC website on 14 January
2009;

WHEREAS, the Rules were revised to consider the comments submitted on its second posting;

NOW THEREFORE, after careful deliberation on the issues relative
thereto, the ERC RESOLVED, as it hereby RESOLVES, to APPROVE and ADOPT
the “Rules for the Distribution of Net Settlement Surplus”, herein
attached as Annex “A”^[*] and made an integral part of this Resolution.

All previous Decisions, Issuances and Derivatives by the ERC contrary to the instant Resolution are deemed superseded.

This Resolution 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 all entities engaged in the generation, transmission and
distribution of electricity.

Adopted: 23 Feb. 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

 

---

^[*] Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.