Republic of the Philippines San Miguel Avenue, Pasig City on 24
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Republic of the Philippines San Miguel Avenue, Pasig City --- --- - On 24 June 2014, the Philippine Electricity Market Corporation (PEMC) filed an Application for the approval of the Level of Market Transaction Fees (MTFs) for calendar year (CY) 2015 for the Philippine Wholesale Electricity Spot Market (WESM). In the said Application, PEMC alleged, among others, the following: The Market Fee (MF) applied for relates to PEMC's funding requirement for CY 2015 in the amount of Eight Hundred Ninety-Six Million Four Hundred Ten Thousand Pesos (PhP896, 410,000.00) broken down as follows: AMOUNT BUDGET COMPONENTS (PhP in Million) Personnel Services (PS) 415.846 Maintenance and Other Operating Expenses (MOOE) 333.264 Capital Expenditures (CAPEX) 129.724 Provision for the Department of Energy 17.577 (DOE)/Energy Regulatory Commission (ERC) Monitoring Facilities Total 896.410 In preparing its budgetary requirements, Applicant PEMC made an upward adjustment of its proposed PS budget for CY 2014 by seven percent (7%), to account for the projected Consumer Price Index (CPI) in CY 2015 at two percent (2%), and by five percent (5%), to reflect the rate approved by its Board of Directors to cover reasonable annual performance increases of its employees. For MOOE, the proposed amounts are based on the budget it proposed in CY2014, adjusted by the two percent (2%) projected CPI for CY 2015. Some amounts covered by contracts, such as those for Rent and Market Audits, were escalated by ten percent (10%). The proposed CAPEX costs are based on estimates and quotations from suppliers. 3. The amounts proposed are net of applicable taxes, such as corporate income and Value Added Tax (VAT). These also do not cover possible changes in expenses due to changes in law, rules or regulations, compliance with other regulatory requirements, and other external factors. 4. The following items were also not included in the Application: - On 14 August 2012, PEMC filed a separate Application for the approval of additional MTF for the repayment of the MMS Loan pursuant to the terms of the Memorandum of Agreement (MOA) among the National Power Corporation (NPC), National Transmission Corporation (TRANSCO), Power Sector Assets and Liabilities Management Corporation (PSALM), and PEMC. The MMS Loan Repayment Application is still pending with the Commission and b) On 1 July 2013, the Commission authorized the collection of additional MFs to fund the cost of the NMMS. These MFs are collected over a period of three (3) years in addition to the prevailing MF rate. ERC Case No. RC. / Decision dated July in ERC Case No. RC/ { 5. Based on initial indicative figures, the estimated MF Rate is PhP 0.0137/ kWh for CY2015. 6. The indicative MF rate is based on the Luzon and Visayas energy forecast at 65,464 GWh for CY 2015. The energy forecast was attached to the Application as Annex "C". 7. The prevailing Market Fee Rate or Market Transaction Fee level approved by the Commission shall be implemented in CY2015 pending the approval of the instant application. 8. Applicant PEMC prayed that after due hearing, its proposed MF for CY 2015 in the amount of PhP896.41O Million will be approved, without prejudice to the resolution of its MMS Loan Repayment Application. Considering that CY2016 has already commenced and the same has overtaken the proceedings in the instant MTF Application for CY 2015, which is still pending, the Commission shall, in the meantime, authorize PEMC to continue with the implementation of the approved MTF for CY2014 until a new MTF is finally approved for CY2015. the foregoing premises considered, the Commission hereby the Philippine Electricity Market Corporation (PEMC) to continue imposing the approved Market Transaction Fee (MTF) of CY 2014, as embodied in the Decision dated 15 October 2014 in ERC Case No. 2013-137 RC, in the amount of on the market participants in the Luzon and Visayas Wholesale Electricity Spot Market (WESM), pending the final resolution of the proposed MTF for CY2015. Pasig City, 09 February 2016. ERC CASE NO. 2014-092 RC ORDERf09 February 2016 Page40 4 o/the Chairman JOSE VICENTE B. S Chairman and CEO YAP-TARDC Commissioner CommIssioner GEjONIMO D. STA. ANA Commissioner i Copy Furnished: Attys. Criselda S. Martin-Funelas, Celina R. Encarnacion and Gladys Evette G. Nebab Counselsfor Philippine Electricity Market Corporation (PEMC) 18th Floor, Robinsons-Equitable Tower ADBAvenue corner Poveda Street, Pasig City Office of the Solicitor General (OSG) 134Amorsolo Street, Legaspi Village, Makati City 3. Commission on Audit (COA) Commonwealth Avenue, Quezon City 4. Senate Committee on Energy GSIS Building, Roxas Boulevard, Pasay City 5. House of Representatives Committee on Energy Batasan Hills, Quezon City 6. The Officeofthe CityMayor Pasig City 7. Philippine Chamber of Commerce and Industry (PCCl) 3rd Floor, ECC Building, Sen. Gil Puyat Avenue, Makati City 8. Attys. Rommel Yapand Angelica Diane Monteza Counsels for Manila Electric Company (MERALCO) Ortigas Avenue, Barangay Ugong, Pasig City.