Republic of the Philippines

ENERGY REGULATORY COMMISSION

A world class and independent electric power industry regulator that equitably promotes and protects the interests of consumers and other stakeholders, to enable the delivery of long-term benefits that contribute to sustained economic growth and an improved quality of life.


RULE 20 - PROCEDURES AND REQUIREMENTS IN PARTICULAR COMMISSION PROCEEDINGS

A. Applications for a General Change in Rate Schedules or Revision of Rates
 
Section 1. Applications for a General Change in Rate Schedules or Revision of Rates. - Applications for a general change in rate schedules shall indicate the revised rates applied for and the reasons cited to justify such revision or adjustment. Rate applications of distribution utilities that are not yet under performance-based regulation shall conform to the appropriate form in the attached ERC Standard Forms.
 
Section 2. Supporting Documents and Information. - The application for a general change in rate schedules shall be accompanied by the following documents and information:
 
(a) Schedule A (in ERC Format)
 
Table 1: Development of Rate Base
 
Specific Requirements: For Electric Cooperatives (EC) and Private Utilities (PU)
1.1. Appraisal Report
1.1.1. Independent appraiser should be accredited by ERC
1.1.2. Appraisal Report must be in accordance with the Guidelines for the Appraisal of Property, Plant and Equipment for Rate Fixing Purposes of ERC
1.1.3 Two (2) copies of Valuation Report of Independent Appraisal Company
1.2. Detailed Breakdown of assets, additions and retirements after the last approved application up to the present appraisal
1.3. Schedule showing the percentage of local and foreign cost component of assets under appraisal
1.4. Schedule of rate of depreciation and method used per asset category
1.5. Schedule of utility plant in service for the test year (both depreciable and non-depreciable assets)
1.5.1. Schedule: Comparison of Utility Plant in Service (Test Year vs. Previous Year) Assets with more than 100% increase from previous years need detailed breakdown with corresponding justification
1.6. Schedule of depreciation expense on Appraisal Increase (from last approved appraisal)
1.6.1. Schedule of depreciation rate
1.7. Schedule of Construction Work-In-Progress (Status and Percentage of Completion)
1.8. Determination of Cash Working Capital (computation, billing cycle, supporting documents)
1.9. Schedule of Assets previously disallowed by ERB/ERC indicating order/decision date, if any
 
Table 2: Capital Costs
 
Specific Requirements: For PUs only
2.1. Copy of the Approved Capital Expenditure (CAPEX) Project/s or the application in the absence of approved CAPEX Project/s for the Test Year
2.2. Projected Statement of Invested Capital and Rate of Return for a Five (5) Year Period
2.3. Schedule of Invested Capital and Rate of Return (for the Test Year period)
2.4. Schedule of Annual Debt Cost Calculation for the Test Year
 
Specific Requirements: For ECs only
2.1. National Electrification Administration (NEA) Loan Profile for the Test Year
2.2. Loan Profiles from sources other than NEA for the Test Year (Include loan profiles for the succeeding year(s) if new loans were acquired after the test year)
2.3. Detailed Breakdown of the amount of Debt Service reflected in the current rate application (Uniform Filing Requirements / UFR)
2.4. Written explanation reconciling the differences in total amount of Debt Service (UFR) (excluding Interest Cost on Cash Working Capital) vs. the Test Year’s Loan Profile/s (NEA and other sources)
2.5. Copy of the Approved Capital Expenditure (CAPEX) Project/s or the application in the absence of approved CAPEX Project/s for the Test Year
 
Table 3: Operation & Maintenance Expense
 
Specific Requirements: For ECs and PUs
3.1. Power Cost
3.1.1. Generation Cost Schedule for the Test Year
3.1.2. Transmission Cost Schedule for the Test Year
3.1.3. System Loss Schedule for the Test Year
3.1.4. Written explanation reconciling the differences in the amount reflected in the Generation & Transmission & System Loss Schedules vs. rate application (UFR)
3.1.5. Sources of Power
i. NPC (Main or Small Power Utilities Group / SPUG), pls. specify)
ii. Independent Power Producers (IPP)
iii. Self-generation
iv. Others (ex. Other Distribution Utilities / DUs)
3.1.6. Certified True Copies of Power Bills used in the Test Year
3.2. Explanation on any discrepancy of the amount reflected in the rate application vs. Audited Financial Statement (F/S)
3.3. Detailed Breakdown of all Expenses/Accounts - with explanation as to the purpose of expenses (both in hard and electronic copies)
3.4. NEA Cash Approved Budgets for the Test Year (For ECs)
3.5. Top Twenty (20) Uncollectible Accounts (Acct. Code No. 420-904)
3.6. Copies of publications/fliers made for Informational and Instructional Advertising Expenses for the year 2003 and corresponding costs thereon. (Acct. No. 420-905-00)
 
Table 4: Payroll Portion of O & M
 
Specific Requirements: For ECs and PUs
4.1. Plantilla/Payroll (per employee, latest monthly) basic salary, SSS, 
Pag-ibig, PhilHealth, 13th month pay & other benefits for the Test Year (Use Table 1)
4.2. For the 2 years prior the Test Year, Test Year and the Year after:
4.2.1. Total number of plantilla (permanent) positions
4.2.3. Number of positions filled-up
4.2.4. Number of vacant positions
4.2.5. Number of contractual employees
4.2.6. Number of casual employees
4.3. Written explanation reconciling the difference in the Plantilla/Payroll vs. the Payroll Cost reflected in the rate application (if any)
4.4. Certified photocopies of the following issuances: 2003 to present
 
Specific Requirements: For ECs only
4.5. Wage orders issued affecting the EC’s salaries & wages
4.6. Copy of NEA approval on each of the incentives/ benefits granted by the cooperative to its officers and employees (Refer to Table 2)
4.7. If applicable, copies of the EC Board Resolution on the incentives/benefits granted to officers and employees
4.8. If applicable, copies of the Collective Bargaining Agreement (CBA) on increase in salaries or grant of incentives or benefits
4.9. Details of Pension & Benefits (Acct. No. 430-926-00)
4.10. Officers’ Allowances & Benefits (Acct. No. 433-934-00)
 
Table 5: Depreciation and Amortization Expense
 
Table 6: Income Tax & Other Items
 
(b) Work Papers on Details & Explanations
1. Audited F/S (Audited F/S of test year)
2. Balance Sheet
3. Income Statement
4. Cash Flow
5. Notes to the Financial Statement
6. Trial Balance
7. Work Papers
7.1. To explain functionalization of each account and its basis
7.2. To explain calculation of electricity-related amounts/ adjustments transferred to column 4 of Schedule A
7.3. To allocate electricity-related amounts in column 5 of Schedule A among the five functions in cols. 6-10
8. Projected Financial Statements for Five (5) Year Period
9. Projected Cash Flow Statements for Five (5) Year Period
 
(c) Schedule A-1: Summary of Revenue
1. Sources for all Distribution/Transmission
2. Related Business
 
(d) Schedule B in ERC Format: Summary of Cost of Service (CoS) using Revalued Assets/ Projected Values (For PUs only)
 
(e) Schedule C: Cost of Capital
 
Specific Requirements: For ECs only 
1. Calculation/Methodology/Debt Service Details
2. Detailed summary of all components of total EC debt service
3. All supporting documentation including any reports submitted to NEA or Power Sector Assets and Liabilities Management Corporation (PSALM)
 
(f) Schedule D: Functionalization Factors
1. Detailed computation/explanation of any deviation/modification made on default factors of the UFR Model 
2. Method used in the Demand-Customer Split Minimum Plant Method
2.1. Summary of Meters (latest data)
2.1.1. Type, Quantity and Amount
2.1.2. Number and Cost (disposed and under repair)
2.2. Summary of Transformers (latest data)
2.2.1. Type, Quantity and Amount
2.2.2. Number and Cost (disposed and under repair)
2.3. Summary of Poles (latest data)
2.3.1 Type, Quantity and Amount
2.3.2. Number and Cost (disposed)
3. Narrative description of the functionalization factor if code designation is used
4. The relative (decimal representations of percentages) amounts constituting the functionalization factors
5. The absolute amounts constituting the factors, i.e. the data used as numerators and divisors in calculating the functionalization factors
 
(g) Schedule E: Billing Determinants & Customer Class Allocation
 
1. Sub-Schedule E-1: System Data
 
Specific Requirements For ECs and PUs
1.1. Basis of kWh Sales
1.1.1. Actual
1.1.2. Average
1.1.3. Annualized
i. Increase or decrease in kWh sales due to adjustment for changes in customer composition and/or for changes in the number of customers
ii. Increase or decrease in kWh sales due to adjustment other than for the effects of customers(e.g. reclassification of customers), reflecting each adjustment separately
1.2. Basis of kW Demand 
1.2.1. Annual Billing Demand (kW) for the test year for customer classes with demand meters meaning, all customers of that particular class should have demand meters
1.3. Basis of Number of Customer
1.3.1. Average number of customers
1.3.2. Year-end number of customers
1.4 System Load Factor
1.5. Schedule of Power Interruptions for Five (5) Year Period
1.6. Narrative explanation for all adjustments made for the Year of the above schedule
1.7. Frequency Distribution of Customers and kWh consumption of Residential Customers (Test Year and Current Year)
 
2. Sub-Schedule E-2: Customer Adjustments
 
Specific Requirements: For ECs and PUs
2.1. Does the DU have the following customer classes:
2.1.1. Sale for Resale? If yes:
- Identify the customer/s
- Provide copy of the contract
- When did the sale started?
- What is the rate/kWh charged to his customer?
- To date, does the DU still have this type of customer?
2.1.2. “Others”? If yes:
- Identify the customer/s and give brief description of customer class (e.g. 
- Temporary Lightings during fiestas)
- What is the rate/kWh charged to this customer?
- To date, does the DU still have this type of customer?
2.1.3. Large Load? If yes:
- Identify the customer/s
- Provide copy of the contract
- When did the sale start?
- What is the rate/kWh charged to his customer?
- To date, does the DU still have this type of customer?
- From what voltage level does this customer take power?
- What is the product line of this customer?
- Is it considered in the computation of the Total Revenue 
Requirement? If not, submit schedule showing the cost of servicing and revenue derived from the same.
- Provide same schedule for other customers under the same scenario
2.1.4. Streetlights?
- How does the DU bill this type of customers (Per number of bulbs/per street/per barangay/per municipality?)
- Are they metered?
2.1.5. List of Barangay Power Association (BAPA) (For ECs only)
- Indicate number of mother meters and individual house connections per BAPA and corresponding kWh Sales
- Identify the customer/s and give brief description of customer class (e.g. Temporary Lightings during fiestas)
- What is the rate/kWh charged to the customer?
- How does the DU bill this type of customers (Per number of bulbs/per street/per barangay/per municipality?)
 
3. Sub-Schedule E-3: Rate of Return
 
Specific Requirements: For PUs only
3.1. Determination of Return on Rate Base/Weighted Average Cost of Capital (WACC) (study and supporting documents)
 
4. Sub-Schedule E-4: Class CoS Analysis
 
5. Sub-Schedule E-5: Class Allocation Factors for
5.1. Generation
5.2. Transmission
5.3. Distribution
5.4. Supply
5.5. Metering
 
(h) Schedule F: Rate Design
 
1. Sub-Schedule F-1: Revenue Summary
2. Sub-Schedule F-3: Rate Class Definition
3. Sub-Schedule F-4: Load Research Data
 
Specific Requirements: For ECs and Pus
3.1. Sub-Schedule F-4.1: Basis of System Peak Demand
3.2. Sub-Schedule F-4.1.1: Total system peak demand and peak demand by rate and by class for the Test Year and for each month of the Test Year
3.3. Sub-Schedule F-4.1.2: Detailed computation of Coincident and Non- Coincident Peak per customer class for the Test Year 
 
4. Sub-Schedule F-5: Justification for Consumption Level-Based Rates
5. Sub-Schedule F-6: Proof of Revenue Statement
5.1. Sub-Schedule F-6.1: Comparison of Revenue and Rate (Existing vs. Proposed)
6. Sub-Schedule F-7: Rate Design Analysis Data
6.1. Sub-Schedule F-7.1: Customer Profile and Rate Impact Simulation per customer class
 
(i) Schedule H 
 
1. Sub-Schedule H-1: Computation of Inter-Class Cross Subsidy
2. Sub-Schedule H-2: Proof of Revenue Statement
3. Sub-Schedule H-3: Computation of Lifeline Rate
 
Specific Requirements: For ECs and PUs
3.1. Sub-Schedule H.3.1: Detailed Breakdown of Lifeline Discount granted and collection of subsidy
3.2. Sub-Schedule H.3.2: Frequency Distribution of Customers and kWh consumption of Residential Customers (Test Year and Current Year)
 
(j) Schedule J: System Losses & Associated Costs
 
Specific Requirements: For ECs and PUs
1. Proposed cap on the recoverable rate of system losses based on load density, sales mix, cost of service, delivery voltage, and any other relevant technical parameters. The supporting data and analysis shall distinguish between technical and non-technical system losses and differentiate losses based on customer class.
2. Detailed system loss information for the past five (5) years and any applicable engineering studies
3. Calculations of all costs directly attributed to system losses
4. Calculations of the rate components for the recovery of costs associated with system losses in a fashion separate and distinct from other rates; and
5. Plan to reduce system losses over the next five (5) years which shall include costs and/or investments to attain such deduction
 
(k) Schedule K: Rate Schedules for Each Customer
 
(l) Schedule L: Non-Recurring Rates & Supporting Cost Data
 
 
B. Applications for Approval of Power Supply Contract
 
Section 1. Applications for Approval of Power Supply Contract. – Applications for approval of power supply contract between a distribution utility and power producer, other than those covered by the Guidelines for the Setting and Approval of Electricity Generation Rates and Subsidies for Missionary Electrification Areas (ERC Resolution No. 11, series of 2005, dated 6 July 2005), shall include a statement of the salient provisions of the said contract, including the stipulations on the pricing, and a statement of its impact on the overall rates of the applicant-utility once said contract is approved.
 
Section 2. Supporting Documents and Information. - The application for approval of power supply contract shall be accompanied by the following documents and information:
 
(a) Articles of Incorporation of Generation Company
(b) Securities and Exchange Commission (SEC) Certificate of Registration of the said Articles of Incorporation of Generation Company
(c) Latest General Information Sheet of Generation Company
(d) Board of Investment (BOI) Certificate of Registration of Generation Company
(e) Environmental Compliance Certificate (ECC) issued by the Department of Environment and Natural Resources (DENR) to the Generation Company
(f) Power Supply Agreement/Energy Conversion Agreement Contract (PSA/ECA)
(g) Details of the PSA/ECA
1. Executive Summary
2. Sources of Funds/Financial Plans
2.1. Debt/Equity Ratio
2.2. Project Cost 
2.3. Annual Interest
2.4. Computation of Return on Investment/WACC
2.5. Certification from the Bank/Lending Institution specifying the principal amortization, term and interest during the cooperation period of the loan agreement
3. Purchased Power Rate
3.1. Breakdown of the base prices of Operation and Maintenance, Capacity Fee, Fixed Operation Fee, and Energy Fee (provide computations)
3.2. Sample Computation of Power Rates with the supporting documents on the assumptions taken
3.3. If applicable, basis/rationale of indexation and level of indexation
4. Cash Flow specifying the following:
4.1. Initial Costs 
4.2. Breakdown of Operating and Maintenance Expenses and
4.3. Minimum Energy Off-take (MEOT)
 
(i) All details on the procurement process of fuel including requests, proposals received, tender offers, etc.
(j) Copy of Related Agreements (i.e. Transmission Wheeling Contract, Fuel Supply Agreements, etc.)
(k) Certificate of Compliance (COC) issued by the ERC pursuant to the Guidelines for the issuance of COC for Generation Companies/Facilities
(l) Certification by NPC on whether or not Transition Supply Contract (TSC) capacity and energy are expected to be available during the contractual period (include relevant supporting documentation, data and analysis supporting each statement)
(m) All relevant technical and economic characteristics of the generation capacity, installed capacity, mode of operation, and dependable capacity of the plant
(n) Details on the procurement process used by the Distribution Utility leading to the selection of the Generation Company including request(s) for proposals, proposal received by the Distribution Utility, tender offers, etc.
(o) Details regarding transmission projects or grid connection projects necessary to complement the proposed generation capacity, including the parties that will develop and/or own such facilities, any costs related to such project, and specification of the parties responsible for recovery of any costs related to such projects
(p) Certification regarding the consistencies and inconsistencies between the proposed generation capacity and the Department of Energy’s (DOE) Philippine Development Plan (PDP). Any inconsistency shall be supported by relevant analysis including but not limited to, forecasts and assessment of available generation capacity and technology mix.
(q) Details regarding the load forecast projections in accordance with the latest Distribution Development Plan of the Distribution Utility and the variability of those projections over the proposed contractual period, including the estimation of the potential for a reduction in load supplied by the Distribution Utility due to retail competition. Any inconsistency shall be supported by relevant analysis.
(r) If the application is filed later than two years following the effectivity of the Guidelines for the Recovery of Costs for the Generation Component of the Distribution Utilities’ Rates, the application must include an alternative Demand Side Management (DSM) program that could be implemented by the Distribution Utilities if approved by the ERC. The Distribution Utility shall submit the projected costs and benefits of the DSM program.
 
Section 3. Applications for Approval of Power Supply Contract between an Electric Cooperative and a New Power Provider. - The applicant in applications for approval of power supply agreement between an electric cooperative and a new power provider (NPP), as the same is defined in the Guidelines for the Setting and Approval of Electricity Generation Rates and Subsidies for Missionary Electrification Areas (ERC Resolution No. 11, series of 2005, dated 6 July 2005), shall comply with the requirements in said guidelines pertaining to the notification by the electric cooperative of the launch of the competitive selection process and the requirements pertaining to the filing and approval of the power supply agreement (PSA) between an electric cooperative and an NPP and approval of the true cost of generation rate (TCGR).
 
In these applications, the Commission will render a decision within ninety (90) days from the date of the filing of the application, unless it extends the 90-day decision period for a maximum of ninety (90) days on account of extraordinary circumstances attending the application. If no decision is rendered within the original or the extended decision period, the PSA and the NPP TCGR will be deemed approved.
 
C. Application for Approval of Electric Distribution Capital Projects
 
Section 1. In General. - Any plan for expansion or improvement of distribution facilities shall be reviewed and approved by the Commission to ensure that all capital projects are optimized and that the contracting and procurement of the equipment, assets and services have been subjected to transparent and competitive bidding and purchasing processes to protect public interest. Applications of this nature shall be governed by the Guidelines to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects.
 
Section 2. Application for Approval of Major Electric Capital Projects. - The application for the approval of any Major Electric Capital Project/s, as the same is defined in the Guidelines to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects shall comply with the formal requirements in Rule 3 and shall be accompanied by the following supporting documents:
 
(a) Description of the Project
(b) Justifications for the Project (include the adverse effects of the non-implementation of the proposed Project(s) and impact or benefits of the proposed Project(s) on the system) 
(c) Options/Alternatives considered in lieu of the proposed Project(s) 
(d) Five-year Historical and Forecast Planning Data consistent with the Distribution Development Plant (DDP)
(e) Technical Analysis (Simulation and/or Computation) 
(f) Projected Financial & Economic Cost Analysis
1. Impact/effect on rate base of the proposed Project(s)
2. Net Present Value, Internal Rate of Return and Benefit/Cost Ratio analysis (include analysis of the alternatives) 
(g) Conceptual Engineering Design and Drawings 
(h) Project Cost Estimates which have to be in reference to a specified design and bill of materials in the latest Manual of Construction Standards submitted to the ERC 
(i) Project Financing Plan
(j) Proposed Gantt Chart Schedule (include Bidding and Procurement Schedule) 
(k) Board Resolution or Secretary’s Certificate approving the proposed Project(s)
(l) Sworn Statement from the authorized representative of the Electric Utility that an application for approval from the concerned agencies that may have interest in the proposed project has been filed /or shall be filed by (specify date of filing and furnish ERC a copy within 5 days upon filing) 
(m) Sworn Statement from the authorized representative of the Electric Utility that the proposed major capital project is consistent with the DDP. Projects which are not included in the DDP need justification.
 
Section 3. Application for Approval of Major Non-Electric Capital Projects. - The application for the approval of any Major Non-Electric Capital Project, as the same is defined in the Guidelines to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects shall comply with the formal requirements in Rule 3 and shall be accompanied by the following supporting documents:
 
(a) Description of the Project
(b) Justification for the Project 
(c) As-built Design and Drawings, if applicable
(d) Actual Project Cost
(e) Projected Financing Plan
(f) Gantt Chart Schedule
(g) Board Resolution or Secretary’s Certificate approving the proposed project/s
(h) Sworn Statement from the authorized representative of the Electric Utility that an application for approval from the concerned agencies that may have interest in the proposed project has been filed or shall be filed, if applicable
 
Section 4. Issuance of Provisional Authority. - Upon filing of the application, the Commission may, on its own or upon motion, grant the issuance of a Provisional Authority (PA) based on the allegations of the application and on such other documents attached thereto or submitted by the parties. The Commission, if necessary, may schedule a hearing for the issuance of a PA not later than thirty (30) days from the filing of the application. Thereafter, the Commission shall issue a ruling either granting or denying the PA stating clearly the reasons therefor, within seventy five (75) days from the filing of the application.
 
Section 5. Decision. - Any application for the approval of Major Capital Projects and/or Major Emergency Capital Projects shall be decided by the Commission within ninety (90) days from the time the applicant formally offers its evidence; otherwise, the application shall be deemed approved upon the lapse of said period.
 
Section 6. Permit Fee. - For the authorization and approval of Major Capital Projects and/or Major Emergency Capital Projects, an electric utility shall be required to pay a permit fee based on the existing schedule of ERC Fees and Charges.
 
Section 7. Referral to the Distribution Management Committee or Technical Consultant. - The Commission may refer to the Distribution Management Committee or engage the services of a consultant at a reasonable cost, in the evaluation of any Major Capital Project application submitted to it for approval. The applicant shall be charged an amount equivalent to the expenses incurred by the Commission in engaging the services of the consultant, and said expenses shall be recovered by the applicant as part of the capital expenditure of the project being evaluated.
 
Section 8. Reportorial Requirements. - In addition to the foregoing, the electric utility shall comply with the reportorial and other requirements contained in the Guidelines to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects.
 
D. Applications for Authorizations as Required by Section 20 (e) and (g) of the Public Service Act
 
Section 1. In General. - A distribution utility shall secure the Commission’s authorization for issuance of stock certificates representing an increase of capital; for issuance of any share of stock without par value; or issuance of any bond or other evidence of indebtedness payable in more than one year from the issuance thereof. It shall also secure the Commission’s approval to the sale, alienation, mortgage, encumbrance, or lease of its property, franchises, certificates, privileges, or rights or any part thereof; merger or consolidation of its property, franchises, certificates, privileges, or rights or any part thereof, with those of another utility.
 
Section 2. Supporting Documents. - Applications under Section 1 shall be accompanied by the following documents and information insofar as they are applicable:
 
(a) Latest Audited balance Sheet and Profit and Loss Statement;
(b) Letter of approval of lending institution from where the loan is to be secured;
(c) List of projects and/or items of equipment and their estimated cost to which the proceeds of the loan will be utilized;
(d) List of properties to be mortgaged (with specifications);
(e) Details or specifications of the equipment/projects to be purchased; and
(f) Basis/Reasonableness of the estimated cost per project/equipment.
 
Section 3. Applications for Issuance of any Bond or Other Evidence of Indebtedness Payable in More Than One Year To Fund Electric Capital Projects. - If the issuance of bonds or other evidence of indebtedness payable in more than one year from issuance is for the purpose of funding the distribution utility’s electric capital projects, the application for authorization therefor and for the mortgage or encumbrance of property to secure such indebtedness, if such is the case, shall be joined with the application for approval of said electric capital projects to be filed under Rule 20 (C).
 
Section 4. Issuance of Provisional Authority. - Upon filing of the application under Section 1, the Commission may, on its own or upon motion, grant the issuance of a Provisional Authority (PA) based on the allegations of the application and on such other documents attached thereto or submitted by the parties. The Commission, if necessary, may schedule a hearing for the issuance of a PA not later than thirty (30) days from the filing of the application. Thereafter, the Commission shall issue a ruling either granting or denying the PA stating clearly the reasons therefor, within seventy five (75) days from the filing of the application.
 
Section 5. Decision. - Any application under Section 1 shall be decided by the Commission within ninety (90) days from the time the applicant formally offers its evidence; otherwise, the application shall be deemed approved upon the lapse of said period.
 
E. Consumer Complaints 
 
Section 1. Intent, Application and Scope. - It is the Commission’s intent that disputes between regulated companies and their customers are resolved as quickly, effectively, and inexpensively as possible. This rule establishes informal customer complaint procedures that are designed to address disputes, subject to the Commission’s jurisdiction, that occur between distribution utilities and individual customers. It provides for expedited processes for customer complaints that can be resolved quickly by the customer and the distribution utility. It also provides a process for informal Commission staff resolution of complaints that cannot be resolved by the distribution utility and the customer.
 
Section 2. Informal Process for Consumer Complaints. -
 
(a) Any customer of a distribution utility may file a complaint with the Commission’s Consumer Affairs Service or with its Visayas or Mindanao Field Offices whenever the customer has an unresolved dispute with the distribution utility regarding the electric service that is subject to the Commission’s regulation. The complaint shall be communicated in writing. The complaint shall include the name of the distribution utility against which the complaint is made, the name of the customer and the customer’s service address, and a description of the complaint.
 
(b) The Commission staff handling the complaint will determine if the customer has earlier contacted the distribution utility and referred the complaint to the distribution utility’s Consumer Welfare Desk (CWD) officer for resolution. If the customer has not yet contacted the distribution utility, the Commission staff will advise the customer to refer the complaint first to the distribution utility’s CWD officer.
 
(c) If the complaint has already been referred to the distribution utility’s CWD officer and no resolution has been reached, the Commission staff shall notify the distribution utility of the complaint and request a written response from the distribution utility within five (5) days from receipt of the notice, copy furnished the customer. The notification to the distribution utility by the Commission staff will be addressed to the distribution utility’s CWD officer or any other responsible officer.
 
(d) The distribution utility’s response to the Commission staff shall explain the likely cause of the problem, all actions taken by the distribution utility to resolve the customer’s complaint at the CWD level, and the distribution utility’s proposed resolution of the complaint and shall answer every specific question raised by the Commission staff in the notification. The distribution utility’s response shall also include communications sent to the customer that contain the distribution utility’s proposed resolution of the complaint or statement of position in addressing or resolving the complaint.
 
(e) If a customer objects to the distribution utility’s response to the complaint or rejects the distribution utility’s proposed resolution thereof, the customer may request further review of the complaint by Commission staff. Commission staff will then propose a resolution of the complaint. Before coming up with a proposed resolution of the complaint, the Commission staff may conduct informal conference between the parties and direct the submission of copies of bills, billing statements, field reports, photographs, documents, or other information in the participants’ possession that may be necessary.
 
(f) If the proposed resolution is acceptable, the customer and the distribution utility shall manifest their acquiescence thereto in writing. If the customer or the distribution utility is not in agreement with Commission staff’s proposed resolution and no other resolution is agreed upon by the parties, the complaint shall be endorsed for hearing and dispute resolution by the Commission.
 
Section 3. Formal Hearing. -
 
(a) After the Commission staff endorses the complaint for hearing, the customer shall be required to verify his or her complaint, if the same has not yet been verified, and the complaint shall be docketed as a consumer complaint and assigned a case number. Thereafter, the Commission shall issue an order requiring the respondent to file its answer thereto within fifteen (15) days from receipt of the order. If the respondent fails to file its answer within the period, the Commission shall render a decision based on the records.
 
(b) After respondent files its answer, the Commission shall determine if the case can be tried under the summary procedure in Section 2 of Rule 17. If the Commission determines that this procedure is applicable, it shall issue an order to this effect as stated in Section 2 of Rule 17. If the Commission determines otherwise, it shall set the case for pre-trial conference and require the parties to submit their pre-trial briefs in accordance with Section 3 of Rule 16.
 
F. Commission-initiated Investigation
 
Section 1. Inquiry of the Commission. - The Commission may motu proprio initiate an action or inquiry against any person or entity when so required by law, national or public interest, and/or in its exercise of any of the powers and functions vested upon it by Republic Act No. 9136 or any other law enforced and administered by it.
 
Section 2. Contents of the Order. - In the exercise of its prerogative, the Commission may commence such hearing or inquiry by an order to show cause, setting forth the grounds and legal bases for such order. The order shall state the facts constituting the violation and also the range or extent of the sanction or penalty that may be imposed should the violation be substantiated, and shall be served upon the person or respondent being investigated.
 
Section 3. Answer. - Within a period of fifteen (15) days from receipt of a show cause order, the respondent shall file an answer in accordance with Rule 5.
 
Section 4. Disposition. - If the Commission finds the answer sufficient in form and substance to warrant termination of the inquiry, it shall issue an order to that effect; otherwise, it shall proceed to conduct the hearing on the matter.
 
Section 5. Offers of Settlement. - Any party to an administrative proceeding may, at any time before a decision is rendered, make an offer to the Commission conditionally or otherwise for a consented decree, voluntary compliance or desistance and other settlement of the case. The offer and any or all of the ultimate facts upon which the offer is based shall be considered for settlement purposes only, and shall not be used as evidence against any party for any other purpose and shall not constitute an admission by the party making the offer of any violation of the laws, rules, regulation, orders and resolution of the Commission, nor as a waiver to file any warranted criminal action.
 
Section 6. Cease and Desist Order. - In appropriate cases, the Commission shall issue Cease and Desist Order after due notice and hearing.
 
Section 7. Imposition of Fines and Penalties. - The imposition of administrative fines and penalties shall be governed by the Guidelines to Govern the Imposition of Administrative Sanctions in the Form of Fines and Penalties Pursuant to Section 46 of Republic Act No. 9136, as amended.
 
G. Compliance Filings with the Commission
 
Section 1. In General. - When the Commission issues an order that authorizes or requires a party to make a filing to implement specific terms of the order or to comply with conditions for the issuance thereof with respect to the issues resolved in the proceeding, the filing is deemed a “compliance filing”. A compliance filing is made under the docket number of the order to which it relates.
 
If the Commission in its order directs a party to initiate an entirely new proceeding, such filing made in compliance with said directive will be assigned a new docket number, treated as a separate application or petition, and covered by the same rules applicable to all other applications or petitions.
 
Section 2. Reporting Requirement. - The Commission may, in its order, require a party to report periodically to the Commission with respect to a subject matter stated therein. The reports must be filed under the docket number of the proceeding in which the order is entered, unless otherwise specified in the order establishing the requirement or directed by the Commission.
 
Section 3. Compliance filing pursuant to certain Rules or Guidelines adopted by the Commission. - When the Commission adopts certain rules authorizing or requiring a party to make a filing in accordance therewith, the filing is likewise deemed a “compliance filing”. This compliance filing is filed with the Commission’s Docket Section, which will assign it a separate number, and must include the following:
 
(a) A verified cover letter that identifies the specific rules to which the filing relates, the period covered, if applicable, and the name, address and contact number of the person making the filing, and summary of the compliance; and
(b) All the pertinent or required documents to be submitted in support of the compliance filing as provided in the applicable rules or as may be required by the Commission.
 
Section 4. Commission Action on Compliance Filings under Section 3. - Within fifteen (15) days from the filing, the Commission shall make a determination of the completeness of the submission. If it finds that there are still documents and other data that must be submitted, it shall issue an order directing the submission of such other documents and data. In such case, the filing shall be deemed to have been made only upon the receipt by the Commission of such additional documents and data.
 
After consideration of all the documents submitted in support of the compliance filing, the Commission may enter an order approving the compliance filing or rejecting the same or any portion of the filing that fails to comply. However, if the rules to which the compliance filing relates provide for the automatic approval thereof upon the lapse of a specified period stated therein if no decision is reached thereon by the Commission, then the filing shall be deemed approved upon the lapse of the period or any extension thereto made by the Commission, as may be the case. 

 


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