Electric Power Crisis Provision

Rule 24. Electric Power Crisis Provision

The Congress may authorize, through a joint resolution, the establishment of additional generation capacity if the President of the Philippines declares an imminent shortage of Electricity supply

Rule 25. Review Of IPP Contracts

This creates an inter-agency committee:

• chaired by the Secretary of DOF
• with the Secretary of the DOJ and the Director General of the NEDA as members

This Committee shall immediately review all IPP Contracts.

In cases such contracts are grossly disadvantageous, or onerous to the Government, the Committee shall, cause the appropriate government agency to file an action under the arbitration clauses provided in said contracts or initiate any appropriate action under Philippine laws.

PSALM shall diligently seek to reduce stranded costs.

Rule 26. Renegotiation Of Power Purchase And Energy Conversion Agreements Between Napocor And Pnoc-edc

^a As per Section 69, all power purchase and energy conversion agreements between the PNOC-EDC and NAPOCOR, including, but not limited to, the Palinpinon, Tongonan and Mt. Apo Geothermal complexes, shall be reviewed by the ERC within 3 months from the effectivity.

^b The ERC shall amend the terms of the agreements to remove any hidden costs or extraordinary mark-ups in the cost of power or steam above their true costs.

^c The ERC shall ensure that all savings realized from the reduction of said mark-ups shall be passed on to all End-users.

^d All amended contracts shall be submitted to the Power Commission for approval.

Rule 27. Royalties, Returns [rentals] And Tax Rates For Indigenous Energy Resources

The provisions of Section 79 of Commonwealth Act No. 137 (C.A. No. 137) and any law to the contrary notwithstanding, the President of the Philippines shall reduce the royalties, returns [rentals] and taxes collected for the exploitation of all indigenous sources of energy, including but not limited to, natural gas and geothermal steam, so as to effect parity of tax treatment with the existing rates for imported coal, crude oil, bunker fuel and other imported fuels.

To this end, the DOF shall recommend to the President of the Philippines the issuance of an Executive Order within thirty (30) calendar days from the effectivity of these Rules.

To ensure lower rates for End-users, the ERC shall forthwith reduce the rates of power from all indigenous sources of energy.

Rule 28. Environmental Protection

As per Section 65 , Electric Power Industry Participants in the generation, distribution and transmission sub-sectors of the industry shall comply with all environmental laws, rules, regulations and standards promulgated by the DENR including, in appropriate cases, the establishment of an environmental guarantee fund.