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| Republic of the Philippines
DEPARTMENT OF ENERGY

DEPARTMENT CIRCULAR NO. DC 20{| - O6- CCD 6

CREATING THE STEERING COMMITTEE DEFINING THE POLICIES FOR THE
COMMENCEMENT OF RETAIL COMPETITION AND OPEN ACCESS

WHEREAS, the DOE is mandated to supervise the restructuring of the electric power
industry and towards this purpose, formulate such rules and regulations necessary to
implement the objectives of Republic Act No. 9136 or the Electric Power Industry
Reform Act of 2001 (EPIRA);

WHEREAS, Section 31 of the EPIRA mandates the implementation of RCOA, subject to
five conditions, to wit: (a) Establishment of the Wholesale Electricity Spot Market
(WESM); (b) Approval of unbundled transmission and distribution wheeling charges;
(c) Initial implementation of the cross subsidy removal scheme; (d) Privatization of at
least seventy, (70%) percent of the total capacity of generating assets of NPC in Luzon
and Visayas; and (e) Transfer of the management and control of at least seventy percent
(70%) of the total energy output of power plants under contract’ with NPC to the
Independent Power Producers Administrators (IPPAs) ;

WHEREAS, on 24 January 2007, the ERC issued Resolution No. 3, Series of 2007
indicating the timeline for full RCOA in Luzon, which shall commence six (6) months
from the date of declaration subject to compliance to the EPIRA pre-conditions and two
(2) vital requirements, to wit: a) the adequacy and establishment of all necessary
infrastructures including, but not limited to: transmission networks, generation supply
and the customer switching system; and, b) promulgation by the ERC of all pertinent
rules and regulations governing RCOA;

WHEREAS, the ERC took the preparatory steps for the implementation of RCOA and
has promulgated the following: (a) Rules on Distribution Service and Open Access; (b)
Rules for Customer Switching; (c) Rules for the Supplier of Last Resort; (d) Rules on Rate
Filing by the Supplier of Last Resort; (e) Rules on Contestability; (f) Business Separation
Guidelines; (g) Code of Conduct for Competitive Retail Market Participants; (h)
Guidelines for the Issuance of Licenses to Retail Electricity Suppliers; (i) Competition
Rules and Complaint Procedures; (j) Rules for Setting Distribution Wheeling Rates; (k)
Rules for Setting the Transmission Wheeling Rates; and, (1) Rules for Setting Electric
Cooperatives’ Wheeling Rates;

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Energy Center, Merritt Rd., Fort Bonifacio, Taguig City, Metro Manila, Philippines
Fax # 812-61-94 Tel.# 840-20-08 Fax # 840-21-38 Tel # 840-22-36 Fax # 840-17-31 Tel # 817-86-03 Trunkline 479-29-00
Website: www.doe.gov.ph, E-mail: info@doe.gov.ph
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WHEREAS, Rule 12, Section 3 of the Implementing Rules and Regulations of the EPIRA
issued by the DOE authorized the ERC to declare, after due notice and public hearing,
the initial implementation of RCOA;

WHEREAS, in ERC Case No. 2011-004-RM on 06 June 2011, the ERC declared
compliance with the preconditions for the initial implementation of RCOA;

WHEREAS, under the EPIRA the DOE, among others is mandated to provide a
mechanism for the integration, rationalization and coordination of the various energy
programs of the government which include the implementation of Retail Competition
and Open Access (RCOA);

WHEREAS, to ensure the efficient and effective implementation of RCOA, the DOE
hereby issues these guidelines to provide the transition framework and synchronize the
preparatory actions towards ensuring the sufficiency of existing rules, infrastructures and
other institutional requirements necessary to achieve the goals of EPIRA;

NOW, THEREFORE, from the foregoing premises and pursuant to the mandate of the
DOE under the EPIRA, this Circular is hereby promulgated:

SECTION 1. Creation of the RCOA Steering Committee. The RCOA Steering
Committee is hereby created to ensure that the appropriate conditions for the efficient
transition to RCOA implementation are in place. The RCOA Steering Committee shall
be composed of representatives from:

a. Department of Energy Chair

b. Philippine Electricity Market Corporation Member
c. National Electrification Administration Member
d. National Power Corporation Member
e. National Transmission Corporation Member
f. Power Sector Assets Liabilities Management Corporation © Member
g. National Grid Corporation of the Philippines | Member

Subject to their acceptance, the Department of Finance, the Energy Regulatory
Commission and the Philippine Economic Zone Authority are invited as members of
the RCOA Steering Committee. The Energy Regulatory Commission will serve as co-
chair of the RCOA Steering Committee upon its acceptance. Other government
instrumentalities may also be invited to the RCOA Steering Committee.

As it may deem necessary, the RCOA Steering Committee may invite private sector
representatives from distribution utilities and generation companies as well as other
industry stakeholders.

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Section 2. Responsibilities of the Steering Committee. The Steering Committee
shall be responsible for the following:

a.

Review existing rules and procedures on RCOA, develop and recommend
policies to implement systems and processes needed to govern the
transactions therein;

Develop the timelines and action plan necessary to ensure the smooth
transition to full competitive environment;

Coordinate with various government agencies or units, industry sectors and
such other entities to implement the regular monitoring and feedback
mechanism to concerned parties;

Provide a forum for any recommendations on all pertinent rules and
guidelines;

e. Formulate an information and education campaign about the RCOA; and,

f.

Perform such other related functions and responsibilities as may be necessary.

SECTION 3. Secretariat. The Electric Power Industry Management Bureau (EPIMB)
shall serve as the Secretariat for the RCOA Steering Committee.

SECTION 4. Effectivity. This Circular shall take effect immediately fifteen (15) days
from its publication in a newspaper of general circulation.

This 17th day of June 2011 at Fort Bonifacio, Taguig City, Metro Manila.

JOSH/RENE D. ALMENDRAS
Secretary

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