PHILIPPINES Law and Practice Contributed by: Maria Lethel C. Alburo-Mejia, Puno Law
• Authority to exercise the right of eminent domain in so far as it may reasonably be necessary for the efficient maintenance and operation of services. The grantee is author- ised to install and maintain its poles, wires and other facilities over and across public property, including streets, highways, forest reserves and other similar property of the government of the Philippines, its branches or any of its instrumentalities. • Prohibition of the sale, lease or transfer of the franchise or of the rights and privileges acquired thereunder. • Retail rates to its captive market and charges for the distribution of electric power by the grantee to its end-users will be regulated by and subject to the approval of the ERC. 5.4 Eminent Domain, Condemnation or Expropriation Rights to Construct and Operate Electricity Distribution Facilities A distribution utility is authorised under a fran- chise to exercise the right of eminent domain in so far as it may reasonably be necessary for the efficient maintenance and operation of services. The grantee is authorised to install and main- tain its poles, wires and other facilities over and across public property, including streets, high- ways, forest reserves and other similar property of the government of the Philippines, its branch- es or any of its instrumentalities. 5.5 Monopoly Rights for Electricity Distribution Entities Statutorily, a franchise does not confer exclusive rights to operate distribution facilities within the franchised area. 5.6 Electricity Distribution System Charges and Terms of Service Sections 24 and 25 of the EPIRA provide the following.
Section 24: Distribution Wheeling Charge – The distribution wheeling charges must be filed with and approved by the ERC pursuant to paragraph (f) of Section 43 hereof. Section 25: Retail Rate – The retail rates charged by distribution utilities for the supply of electricity to their captive markets are subject to regulation by the ERC based on the principle of full recov- ery of prudent and reasonable economic costs incurred, or such other principles as will promote efficiency as may be determined by the ERC. Every distribution utility must identify and segre- gate in its bills to end-users the components of the retail rate, as defined in this act. The ERC promulgated the Rules for Setting Dis- tribution Wheeling Rates (RDWR). The purpose of the RDWR is to set out the methodology to be used in setting the maximum distribution wheel- ing rates that may be charged for the provision of distribution services. Rate filings and settings for distribution charges are done on a regulatory period (RP) basis. One RP consists of four regulatory years. A regula- tory reset process (RRP) is mandated prior to the start of each RP. The RRP involves the determi- nation by the ERC of price control arrangements to govern an RP. The setting of rates begins with the application for and determination of the annual revenue requirement (ARR). For electric co-operatives (ECs) that are con- nected to the grid, ERC Resolution No 20, series of 2009, also known as the “Rules for Setting Electric Cooperatives Wheeling Charges (RSEC- WR)” sets the initial tariff to be charged by ECs. The initial tariff is subject to adjustment.
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