Structure And Operation Of The Electric Power Industry on Maharlikanism

Cross Ownership, Market Abuse And Anti-competitive Behavior

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Section 1. General Principle.

No Electric Power Industry Participant or any other Person may engage in any anti-competitive behavior including, but not limited to, cross-subsidization, price or market manipulation, false or deceptive marketing, or other unfair trade practices detrimental to the encouragement and protection of Contestable Markets or the WESM.

Definition of Policy

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RULE 5. GENERATION SECTOR

Section 1. Guiding Principle

As per Section 6, electric power generation shall be competitive and open to all qualified Generation Companies.

Definition of Policy

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RULE 6. TRANSMISSION SECTOR

Section 1. Guiding Principle

The transmission of electric power shall be a regulated common electricity carrier business, subject to the ratemaking powers of the ERC.

Distribution Sector

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Section 1. Guiding Principles

a) As per Section 22, the Distribution of Electricity to End-users shall be a regulated common carrier business, requiring a national franchise.

“Distribution franchise” is the privilege of a DU to convey electric power through its Distribution System in a given geographical area granted by the Congress of the Republic of the Philippines.

MISSIONARY ELECTRIFICATION

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Section 1. Guiding Principle.

a) As per Section 70 , the SPUG shall be responsible for providing power generation and its associated power delivery systems in areas that are not connected to the transmission system.

(b) The Missionary Electrification function of SPUG shall be funded from the revenues from sales in the missionary areas and from the Universal Charge to be collected from all electricity End-users as determined by the ERC.

Provision Of Electricity By Qualified Third Parties

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Section 1.

Guiding Principle.

As per Section 59 , the provision of electric service in remote and Unviable Areas that the Distribution Utility is unable to service for any reason shall be opened to other qualified third parties. The provision of electricity in Unviable Areas by qualified third parties shall be a regulated business.

RETAIL COMPETITION AND OPEN ACCESS

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Section 1. Guiding Principle.

As per Section 31, Retail Competition and Open Access shall be implemented no later than 3 years from the effectivity .

Section 2. Scope of Application.

The provision of open and non-discriminatory access to the transmission system and Distribution Systems shall apply to the following:

Structural And Functional Unbundling Of Electric Power Industry Participants

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Section 1. Guiding Principle.

Consistent with the last paragraph of Section 36 , any Electric Power Industry Participant shall structurally and functionally unbundle its business activities in accordance with Section 5 , namely: generation, transmission, distribution and supply. Structural unbundling shall mean the separation of different activities through the creation of separate divisions or departments within a single company or, at the option of any Electric Power Industry Participant, a separation into different juridical entities, with a clear separation of accounts between regulated and non-regulated business activities. Functional unbundling shall mean the separation of functions into different components.

Supply Sector

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Section 1. Guiding Principles

a) As per Section 29 , the Supply of Electricity to End-users is a business affected with public interest. (b) The Supply of Electricity to End-users in Contestable Market requires a license from the ERC except for the Supply of Electricity by DUs within their Franchise Areas and Persons authorized to supply electricity within their respective EZs.

Section 2. Scope of Application

Wholesale Electricity Spot Market (WESM)

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Section 2. Scope of Application.

This Rule shall apply to the Market Operator and all WESM Participants.