Republic of the Philippines ENERGY REGULATORY COMMISSION San Miguel Avenue, Pasig City IN THE MATTER OF THE PETITION FOR THE ADOPTION OF A PRO-FORMA DISTRIBUTION WHEELING SERVICES AGREEMENT (DWSA) BETWEEN A RETAIL ELECTRICITY SUPPLIER (RES) AND A DISTRIBUTION UTILITY (DU) UPON RETAIL COMPETITION AND OPEN ACCESS (RCOA) ERC CASE NO. 2013-003 RM MANILA ELECTRIC COMPANY (MERALCO), ner. Deter FEBS HB Rez Pet x ORDER On February 11, 2013, Manila Electric Company (MERALCO) filed a petition for the adoption of a pro-forma Distribution Wheeling Services Agreement (DWSA) between a Retail Electricity Supplier (RES) and a Distribution Utility (DU) upon Retail Competition and Open Access (RCOA). In the said petition, MERALCO alleged, among others, that: 1. It is a private corporation existing under the laws of the Republic of the Philippines, with principal office located at Lopez Building, MERALCO Center, Ortigas Avenue, Pasig City. 2. It has a legislative franchise to operate and maintain a distribution system in the Cities/Municipalities of Metro Manila, Bulacan, Cavite and Rizal and certain Cities/Municipalities/Barangays in Batangas, Quezon, Pampanga and Laguna pursuant to Republic Act No. 9209, and is authorized to charge all its customers forERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 2 of 29 their electric consumptions at the rates duly approved by the Commission. 3. The Distribution Services and Open Access Rules (DSOAR), as amended,’ requires DUs such as MERALCO to adopt pro-forma agreements in preparation for RCOA. Among these pro-forma agreements is the DWSA. Under the Rules on Customer Switching issued by the Commission, the RES or the Local RES shall be the one contracting with the DU for the Distribution Wheeling Services (DWS)2 4. Rule 21, Sections 1 and 2 of the ERC Rules of Practice and Procedure provides: “Section 1. Initiation of Rule-making. —- The process of adopting a new rule or amending or repealing an existing rule may be initiated by the Commission or by interested persons upon petition for the issuance, amendment or repeal of any rule. Section 2. Petition to Initiate Rule-making. — Interested persons may petition the Commission to adopt, amend, or repeal a rule by filing a petition to initiate rule- making. xxx." 5. Thus, through the instant petition, it is seeking the adoption of the instant DWSA to serve as the pro-forma DWSA to apply to all DUs in contracting with RESes for distribution of wheeling services. 6. The salient provisions of the pro-forma DWSA are as follows: XXX. ? “Section 4. Guiding Principles a. A single billing policy is initially adopted. The RES or Local RES will thus be contracting with ‘other service providers (i.e. DU for DWS, TRANSCO for transmission and ancillary services, Market Operator (MO) for WESM transactions) on behalf of its Contestable Customers, except shall_subsequ into. ind underscoring supplied}ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 3 of 29 Section 1. Scope. This Agreement is solely for the provision of DWS, which pertains to those services performed by the COMPANY for the conveyance of electricity through its distribution system in order to meet the demand of the customer of the RES. This Agreement does not constitute an Agreement to supply electricity to the RES. Section 2. Provision of DWS. Subject to the terms and conditions of this Agreement, and applicable rules and regulations, the COMPANY shall provide DWS to the RES and the latter's customers under the technical specifications as specified in the attached Schedule with the concerned customer. XXX, Section 3. Charges. The RES shall pay DWS charges, including all applicable taxes, based on the applicable rate schedule for the provision of DWS, which include, among others, the: (i) Distribution Charge: (ii) Standard Connection Charge (SCC), or Guaranteed Minimum Billing Demand (GMBD); (iii) Supply Charge; {iv) Metering Charge; (v) System Loss Charge: (vi) Transmission Charge; (vii) Local Franchise Tax; (viii) Senior Citizen Discount, if applicable; (ix) Lifeline Subsidy; (x) Universal Charge; and (xi) Other Charges and Adjustments which shall include, but not limited to, over/under-recoveries and other pass-through charges approved by the ERC to be billed by the COMPANY to the RES. Said charges shall be payable in accordance with Section 9 hereof, commencing on the first billing month from the effectivity of this Agreement. XXX. Section 5. Duties and Responsibilities of RES. The RES shall: (a) Secure any required approvals, licenses, clearances from the ERC and/or other governmental agencies for its operation, including payment of any fees and execution of any applicable agreement;ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 4 of 29 (b) (c) Require its customers to comply and maintain to comply with the technical specifications and requirements, and technical infrastructure/equipment standards prescribed by the COMPANY, as embodied in the Connection Agreement (CA) executed by said customer of the RES with the COMPANY, including applicable provisions of the Philippine Distribution Code (PDC), rules and regulations of the ERC and any other applicable law or guidelines: Be solely responsible for complying with any applicable WESM requirements pertaining to the RES or its customer and payment of all related obligations to the other market participants; Be solely responsible for all contractual, service and billing matters, including disputes, relating to its customer; and Enjoin its customers not to engage in pilferage of electricity and monitor that its customer strictly complies with it. Section 6. Duties and Responsibilities of the COMPANY. The COMPANY shall: {a) (b) Subject to system constraints, make reasonable provisions to provide steady and continuous DWS to the customers of the RES, but shall not guarantee the DWS against fluctuations or interruptions; Comply with applicable laws, and pertinent government rules and regulations, as well as good utility practice; and Use as reference the registrations of the metering facilities which are capable of measuring energy use and demand, inERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 5 of 29 accordance with applicable rules and regulations. Section 7. Additional Terms and Conditions. Any terms and conditions specifically applicable to the RES’ Customer shall be specified in the applicable Schedule with the concerned customer, which shall be considered integral part hereof. Section 8. Switching of RES’ Customers. Switching of the customers of the RES shall follow the procedure laid down in the applicable rules and regulations: (a) The switching of the RES customers shall not be allowed in the absence of the required switch approval from the Central Registration Body (CRB). (b) The COMPANY shall have the right to fully rely on the Switch Approval sent to it by the CRB and shall not be responsible for verifying the validity of such approval. In all cases, the RES shall hold the COMPANY free from any liability arising therefrom. Section 9. Billing and Payment. The COMPANY shall bill the RES for all the charges stipulated under this Agreement and the applicable Schedule with the RES’ Customer, if any, including any billing adjustment, differential bills and such other charges as may be approved by the ERC. Said bill shall become due and demandable within twelve (12) calendar days from the receipt of said bill by the RES. Any amount unpaid shall be charged with interest at the rate of twelve percent (12%) per annum from the date the bill was due to be paid. The payment of the interest is in addition to, and not in lieu of, all other rights and remedies otherwise available to the COMPANY. XXX,ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 6 of 29 Section 10. Bill Deposit. Prior to the commencement of the services to the RES’ Customers, a bill deposit to secure payment of any outstanding regular bills shall be paid by the RES to the COMPANY, equivalent to the one (1) month estimated billing for all DWS Charges of the RES’ Customer under Section 3 hereof, based on the latter’s average billing in the immediately preceding twelve (12) months or in case of a newly connected RES’ Customer, based on projected demand and/or energy of such customer. The COMPANY may likewise apply such bill deposit to any outstanding bill, billing adjustment or differential billing Said deposit shall be adjusted: (i) annually, to reflect the average billing of the RES’ Customers during a one (1) year period; or (ii) to replace any deposit previously applied to any outstanding bill, billing adjustment or differential billing; or (iii) to reflect the increase or decrease in load, or the number of the RES' Customers under this Agreement. Any excess or deficiency in the amount of bill deposit, after said adjustment, shall be correspondingly refunded through credit to bill to, or collected from, respectively, the RES by the COMPANY. Section 11. Disconnection of Service of RES’ Customers. Subject to prior notice to the RES by the CRB, the services of the RES’ Customers shall be disconnected under any of the following circumstances: (a) RES fails to pay the DWS charges, or any adjusted or differential bills or such other charges stipulated in this Agreement, on the due date, in part on in whole; (b) Termination of the RES supply contract with its customer/s under Section 15 hereof, (c) When the RES has not complied with any of the provisions of the DSOAR, PDC, other applicable laws, including any amendments thereon; (d) In case of non-payment by the RES of its customer's final bill, or balance thereof, as aERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 7 of 29 captive customer, in case of the latter's initial transfer from the captive to the contestable market;, as well as the customer's final bill, in case of regular switching (e) Violation of any of the terms and conditions of this Agreement by the RES; and (f) Other circumstances allowed by law or government rules and regulations. The COMPANY’s exercise of its rights under this Article shall not entitle the RES to renege on its obligation to pay the DWS charges, disconnection fees or other billings rendered under this Agreement. Nothing in this agreement shall prevent the COMPANY from temporarily discontinuing the provision of DWS whenever it finds it necessary to execute any routine maintenance, repairs or modifications on its distribution system or in the event of an emergency or to correct unsafe operating conditions in the distribution or connection facilities; Provided however, that except in cases of force majeure, forced outage/interruption, event of emergency or the need to correct unsafe operating conditions, the COMPANY shall give advance notice to the RES within a reasonable time of said temporary discontinuance of DWS, in a manner allowed by the applicable rules and regulations. In any case, the RES shall be solely responsible in notifying its customers of the disconnection In case the DWS is temporarily discontinued under this Section, the COMPANY shall likewise effect the reconnection of the RES’ Customer's service, when the COMPANY’s routine maintenance, repairs or modification to the facilities and nearby facilities have been completed or when the emergency has ceased or the unsafe operating conditions in the distribution or connection facilities have been corrected. Section 12. Disconnection of the RES’ customer upon request of the RES. |n the event that the RES’ Customer fails to pay the RES for service rendered byERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 8 of 29 due date, the COMPANY shall disconnect the RES’ Customer within 24 hours upon receipt of the request for disconnection from the CRB. (a) (b) (c) Validity of RES’ Request for Disconnection. The COMPANY shall not have any obligation to act upon the RES’ request for disconnection. The COMPANY shall have the right to fully rely upon the request sent to it by the CRB. Absent any request from the CRB, the RES continues to be liable for all DWS billed by the Company for all delivered services to the customer of the RES. RES’ Customer pays the RES at the time of disconnection. |n the event that the RES’ Customer pays the RES before the actual disconnection, the COMPANY shall, within 48 hours from its receipt of notice from the CRB, reconnect the services of the customer. Nonetheless, if the COMPANY was not properly notified within said period and the COMPANY has already effected the disconnection, the RES shall be liable to pay the disconnection fee and shall be solely responsible for all liability, including costs incurred and injury suffered by its customer as, a result of its disconnection. Customer Protest. The RES shall be held solely liable for, and shall defend the COMPANY against, any protest by the RES’ Customer to the disconnection made by the COMPANY under this Section. The RES shall be liable to pay the appropriate disconnection fee for disconnections made under this Section. Section 13. COMPANY’s Inability to Effect Disconnection. In the event that the COMPANY is unable to exercise its right to disconnect under this Agreement and the applicable Schedule with the RES’ERC CASE NO. 2013-003 RM ORDER(February 25, 2013 Page 9 of 29 Customer, despite due diligence and without fault on its part, and the RES’ Customer continues to avail of DWS, the RES shall continue to pay the corresponding charges equivalent to the amount of DWS; Provided that, the COMPANY shall notify the RES of its inability to effect such disconnection within a reasonable time. Section 14, Reconnection of the Customers’ Service. Subject to prior notice to the COMPANY by the CRB, reconnection of the RES’ Customer's service shall be effected by the COMPANY: (a) In cases of Section 11(a) and 11(d), after the RES has settled its obligation with the COMPANY; {b) In case of Section 11(b), if the contract executed between the RES and its customer has been renewed and the RES has requested the inclusion of its customer in the Dws; (c) In case of Sections 11(c) and 11(e) when the RES presents proof to the satisfaction of the Company that the non-compliance and/or violation of the provisions of this Agreement, the DSOAR, as amended, PDC, and/or other applicable laws, has ceased. (d) _ In case of 12(b), within the timeframe provided in said Section. Reconnection of the RES’ Customer under Section 14(a), (b) and (c) shall be subject to payment of appropriate reconnection fees as approved by the ERC. If the emergency or unsafe operating condition, which brought about the suspension of the DWS is due to the fault of the RES’ Customer, the same shall likewise be subject to payment of appropriate reconnection-fees. Section 15. Termination of RES’ Contract with its Customer. Upon termination of the supply contract executed between the RES and its customer, the RESERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 10 of 29 shall, within twenty-four (24) hours, notify the COMPANY of such fact. Thereafter, the COMPANY shall send a final billing to the RES covering the DWS of such customer, including any adjusted or differential bill/s and other applicable charges approved by the ERC, if the service is. terminated before the next scheduled reading. After payment by the RES of the COMPANY’s final billing, including any adjusted or differential bill/s, the COMPANY shall send a certification to the RES that all its bills for that particular customer have been paid. Should the RES fail to notify the COMPANY that its supply contract with its customer has been terminated, the RES shall continue to be liable for all the charges stipulated under this Agreement, In case the termination of the supply contract of the RES with its customer was due to the reversion of the latter to the captive market, in addition to the foregoing paragraph, the discontinuance of DWS to such RES’ Customer shall become effective only at the end of the meter reading date of said customer; Provided that, such reversion of the customer to the captive market has been approved by the ERC, with notice to the COMPANY. For the avoidance of doubt, prior to the effectivity of the discontinuance of the DWS to such RES’ Customer, the RES shall continue to be liable to the COMPANY for the payment of charges as stipulated under Sections 3 and 9 hereof and the observance of the terms and conditions provided in this Agreement and the accompanying Schedule with its customer. Section 16. Undelivered Energy, Damages and Other Losses. The RES understands that the COMPANY undertakes scheduled and/or unscheduled maintenance, repairs and replacement of its facilities to improve service. In such cases, and in other cases of outages due to force majeure or for reasons not attributable to the fault of the COMPANY, the RES agrees that the COMPANY shall not be liable for any undelivered energy, or for damages, whether direct or consequential, including without limitation, loss of profits, loss of revenue, or loss of production capacity, as a result of interruption or disconnection of its service.ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 11 of 29 Section 17. Supply Imbalances. The RES shall have the responsibility of procuring the full power supply requirement of its customers. It shall reimburse to the COMPANY the cost of any additional power supply requirement delivered to the RES’ Customer but billed to the COMPANY by the Wholesale Electricity Spot Market (WESM), including any applicable interest, surcharge or penalties. Section 18. Liability for Non-technical System Losses and Damages as a result of Pilferage. The RES shall be liable for non-technical system losses if it condones, colludes, conspires with, or engages in the pilferage of electricity or tampering of meters or facilities of the COMPANY. Condonation, collusion and conspiracy shall include, but not be limited to, the following instances: (a) when a RES has knowledge of pilferage of electricity committed or being committed by its customer and refuses or fails to report such fact to the COMPANY; and (b) when a RES or any of its employees or representatives assists or participates in the commission of pilferage of electricity by its customer. The RES shall likewise be liable for any damages caused to the COMPANY or third persons arising, or resulting, from such pilferage. Section 19. Force Majeure. The COMPANY shall not be liable to the RES with respect to the non- performance of any of its obligations under this Agreement in the event and to the extent that such non- performance is the direct result of or has been directly caused by force majeure. Force majeure shall mean such event: (i) that is not within the reasonable control, directly and indirectly, of the COMPANY; and (ii) which, despite the exercise of reasonable diligence, cannot be prevented, avoided or removed by the COMPANY; Provided that, the COMPANY has taken all reasonable precautions, and due care in order to avoid or mitigate the effect of such event on the COMPANY’s ability to perform its obligations under this Agreement; Force Majeure shall include, but not limited to, any of the following: (a) A typhoon, storm, tropical depression, flood, drought, volcanic eruption, earthquake, tidal wave or landslide;ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 12 of 29 (b) An act of public enemy, war (declared or undeclared), sabotage, blockade, revolution, riot, insurrection, civil commotion or any violent or threatening actions; (c) Any lawful orders rendered by competent authority, including any advice or warnings of government authorities for safety reasons; and (4) Transmission constraints and/or outages in the Transmission and Distribution System. XXX, Section 21. Effectivity and Termination of Agreement. This Agreement shall be valid and binding to the PARTIES upon execution hereof unless terminated by either party by serving written notice to the other at least thirty (30) calendar days before the effective date of termination. It shall take effect on the earliest next regular meter reading date of the RES’ Customer/s, as contained in the attached Schedule/s, after the execution date hereof, provided that such RES’ Customer/s has/have validly executed Connection Agreement/s with the COMPANY. This Agreement may likewise be terminated: (a) after due notice, for violation of any of the obligations set forth herein by any Party; (b) under Section 15, upon termination of the contract between the RES and its customer; and/or (c) without any need of prior notice: (i) under Section 4, when the RES is no longer eligible for DWS; (ii) when this Agreement is rendered invalid and/or unenforceable by law or competent authority; (iii) when the performance of any obligations under this Agreement has been rendered legally or physically impossible; (iv) in case of the RES’ failure to pay the bill deposit or the corresponding adjustment thereon; and (v) in case of violation of R.A. 7832 otherwise known as “Anti-electricity and Electric Transmission Lines/Materials Pilferage Act of 1994” either by the RES’ own act or if the RES hasERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 13 of 29 condoned, colluded or conspired with its End-use customer. Upon termination or expiration of this Agreement, all rights and obligations of the PARTIES hereunder shall cease, except (a) such rights and obligations as may have accrued as of the date of termination or expiration, such as but not limited to payment of any outstanding bills; and (b) any right or obligation which survives the termination of this Agreement XXX. Annex “A” of the instant petition is as follows: DISTRIBUTION WHEELING SERVICE AGREEMENT (For Retail Electricity Suppliers) This AGREEMENT is entered into this day of at City, Philippines, by and between: , @ corporation duly organized and existing under the laws of the Republic of the Philippines, with principal offices at i duly Tepresented by Mr. (designation) and Mr. , (designation) hereinafter referred to as “COMPANY”, -and- . duly organized and existing under the laws of the Republic of the Philippines, with principal offices at ; duly represented by Mr. (designation), and hereinafter referred to as “Retail Electricity Supplier or RES’; “COMPANY” and “RES” hereinafter shall collectively be referred to as “PARTIES”.ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 14 of 29 WITNESSETH THAT: WHEREAS, the COMPANY is a Distribution Utility (DU) with a legislative franchise to operate and maintain an electric distribution system in the Cities/Municipalities of ; WHEREAS, the RES is duly licensed by the Energy Regulatory Commission (ERC) to sell, broker, market or aggregate electricity to contestable customers; WHEREAS, the RES is desirous of availing of the Distribution Wheeling Service (DWS) offered by the COMPANY, WHEREAS, the PARTIES agree to permit the wheeling transaction to take place based on the terms and conditions as set out in this Agreement, subject to rules and regulations of the ERC and any other applicable laws; NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth herein, the PARTIES hereto agree as follows: Section 4. Scope. This Agreement is solely for the provision of DWS, which pertains to those services performed by the COMPANY for the conveyance of electricity through its distribution system in order to meet the demand of the customer of the RES. This Agreement does not constitute an Agreement to supply electricity to the RES. Section 5. Provision of DWS. Subject to the terms and conditions of this Agreement, and applicable rules and regulations, the COMPANY shall provide DWS to the RES and the latter's customers under the technical specifications as specified in the attached Schedule with the concerned customer. The RES shall not modify or allow the modification of the technical specifications without the written consent of the COMPANY. Should the RES or its customer intend to modify said specifications, the RES shall notify the COMPANY no less than thirty (30) business days in advance. Any incremental cost attributable to any modification in the specifications of the RES or its customer shall be made at the sole expense of the RES.ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 15 of 29 Section 6. Charges. The RES shall pay DWS charges, including all applicable taxes, based on the applicable rate schedule for the provision of DWS, which include, among others, the: (i) Distribution Charge; (ii) Standard Connection Charge (SCC), or Guaranteed Minimum Billing Demand (GMBD); (iii) Supply Charge; (iv) Metering Charge; (v) System Loss Charge; (vi) Transmission Charge; (vii) Local Franchise Tax; Senior Citizen Discount, if applicable; (ix) Lifeline Subsidy; (x) Universal Charge; and (xi) Other Charges and Adjustments which shall include, but not limited to, over/under-recoveries and other pass-through charges approved by the ERC to be billed by the COMPANY to the RES. Said charges shall be payable in accordance with Section 9 hereof, commencing on the first billing month from the effectivity of this Agreement. Section 7. Eligibility for DWS. A RES shall be eligible for DWS if it: (i) continues to possess all the eligibility requirements under the Distribution Services and Open Access Rules (DSOAR), as amended, Revised Rules for the Issuance of Licenses to Retail Electricity Suppliers and other pertinent guidelines, or any amendments thereto; (ii) has no undisputed outstanding debts with the COMPANY, the Transmission Service Provider (TSP), or the Wholesale Electricity Spot Market (WESM); and (iii) complies with the credit requirements approved by the ERC. (See comment in CA on checklist) Section 8. Duties and Responsibilities of RES. The RES shall (a) Secure any required approvals, licenses, clearances from the ERC and/or other governmental agencies for its operation, including payment of any fees and execution of any applicable agreement; (b) Require its customers to comply and maintain to comply with the technical specifications and requirements, and technical infrastructure/equipment standards prescribed by the COMPANY, as embodied in the Connection Agreement (CA) executed by said customer of the RES with the COMPANY, including applicable provisions of the Philippine Distribution Code (PDC), rules and regulations of the ERC and any other applicable law or guidelines; (c) Be solely responsible for complying with any applicable WESM requirements pertaining to the RES or itsERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 16 of 29 (d) (e) customer and payment of all related obligations to the other market participants; Be solely responsible for all contractual, service and billing matters, including disputes, relating to its customer; and Enjoin its customers not to engage in pilferage of electricity and monitor that its customer strictly complies with it. Section 9. Duties and Responsibilities of the COMPANY. The COMPANY shall: {a) (b) (c) Subject to system constraints, make reasonable provisions to provide steady and continuous DWS to the customers of the RES, but shall not guarantee the DWS. against fluctuations or interruptions; Comply with applicable laws, and pertinent government rules and regulations, as well as good utility practice; and Use as reference the registrations of the metering facilities which are capable of measuring energy use and demand, in accordance with applicable rules and regulations, Section 10. Additional Terms and Conditions. Any terms and conditions specifically applicable to the RES’ Customer shall be specified in the applicable Schedule with the concerned customer, which shall be considered integral part hereof. Section 11. Switching of RES’ Customers. Switching of the customers of the RES shall follow the procedure laid down in the applicable rules and regulations. (a) (b) The switching of the RES customers shall not be allowed in the absence of the required switch approval from the Central Registration Body (CRB). The COMPANY shall have the right to fully rely on the Switch Approval sent to it by the CRB and shall not beERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 17 of 29 responsible for verifying the validity of such approval. In all cases, the RES shall hold the COMPANY free from any liability arising therefrom. Section 12. Billing and Payment. The COMPANY shall bill the RES for all the charges stipulated under this Agreement and the applicable Schedule with the RES’ Customer, if any, including any billing adjustment, differential bills and such other charges as may be approved by the ERC. Said bill shall become due and demandable within twelve (12) calendar days from the receipt of said bill by the RES. Any amount unpaid shall be charged with interest at the rate of twelve percent (12%) per annum from the date the bill was due to be paid. The payment of the interest is in addition to, and not in lieu of, all other rights and remedies otherwise available to the COMPANY. The RES may dispute any bills in writing within thirty (30) calendar days from receipt of the bill. Failure to dispute any bill on time shall constitute an agreement by the RES that the bill is accurate and binding. Notwithstanding the foregoing, the RES shall continue to pay the disputed bills without deductions or any offset and shall not be an excuse or ground for the RES to delay payment of succeeding bills or to unilaterally deduct any amount therefrom, Section 13. Bill Deposit. Prior to the commencement of the services to the RES’ Customers, a bill deposit to secure payment of any outstanding regular bills shall be paid by the RES to the COMPANY, equivalent to the one (1) month estimated billing for all DWS Charges of the RES’ Customer under Section 3 hereof, based on the latter's average billing in the immediately preceding twelve (12) months or in case of a newly connected RES’ Customer, based on projected demand and/or energy of such customer. The COMPANY may likewise apply such bill deposit to any outstanding bill, billing adjustment or differential billing Said deposit shall be adjusted: (i) annually, to reflect the average billing of the RES’ Customers during a one (1) year period; or (ii) to replace any deposit previously applied to any outstanding bill, billing adjustment or differential billing; o to reflect the increase or decrease in load, or the number of the RES' Customers under this Agreement. Any excess or deficiency in the amount of bill deposit, after said adjustment, shall be correspondingly refunded through credit to bill to, or collected from, respectively, the RES by the COMPANY.ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 18 of 29 Section 14. Disconnection of Service of RES’ Customers. Subject to prior notice to the RES by the CRB, the services of the RES’ Customers shall be disconnected under any of ‘the following circumstances: (a) RES fails to pay the DWS charges, or any adjusted or differential bills or such other charges stipulated in this Agreement, on the due date, in part on in whole; (b) Termination of the RES supply contract with its customer/s under Section 15 hereof, (c) When the RES has not complied with any of the provisions of the DSOAR, PDC, other applicable laws, including any amendments thereon; (d) In case of non-payment by the RES of its customer's final bill, or balance thereof, as a captive customer, in case of the latter's initial transfer from the captive to the contestable market;, as well as the customer's final bill, in case of regular switching (e) Violation of any of the terms and conditions of this Agreement by the RES; and (f) Other circumstances allowed by law or government rules and regulations. The COMPANY’s exercise of its rights under this Article shall not entitle the RES to renege on its obligation to pay the DWS charges, disconnection fees or other billings rendered under this Agreement. Nothing in this agreement shall prevent the COMPANY from temporarily discontinuing the provision of DWS whenever it finds it necessary to execute any routine maintenance, repairs or modifications on its distribution system or in the event of an emergency or to correct unsafe operating conditions in the distribution or connection facilities; Provided however, that except in cases of force majeure, forced outage/interruption, event of emergency or the need to correct unsafe operating conditions, the COMPANY shall give advance notice to the RES within a reasonable time of said temporary discontinuance of DWS, in a manner allowedERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 19 of 29 by the applicable rules and regulations. In any case, the RES shall be solely responsible in notifying its customers of the disconnection In case the DWS is temporarily discontinued under this Section, the COMPANY shall likewise effect the reconnection of the RES’ Customer's service, when the COMPANY’s routine maintenance, repairs or modification to the facilities and nearby facilities have been completed or when the emergency has ceased or the unsafe operating conditions in the distribution or connection facilities have been corrected. Section 15. Disconnection of the RES’ customer-upon request of the RES. |n the event that the RES’ Customer fails to pay the RES for service rendered by due date, the COMPANY shall disconnect the RES’ Customer within 24 hours upon receipt of the request for disconnection from the CRB. (a) Validity of RES’ Request for Disconnection. The COMPANY shall not have any obligation to act upon the RES’ request for disconnection. The COMPANY shall have the right to fully rely upon the request sent to it by the CRB. Absent any request from the CRB, the RES continues to be liable for all DWS billed by the Company for all delivered services to the customer of the RES. (b) RES’ Customer pays the RES at the time of disconnection. In the event that the RES’ Customer pays the RES before the actual disconnection, the COMPANY shall, within 48 hours from its receipt of notice from the CRB, reconnect the services of the customer. Nonetheless, if the COMPANY was not properly notified within said period and the COMPANY has already effected the disconnection, the RES shall be liable to pay the disconnection fee and shall be solely responsible for all liability, including costs incurred and injury suffered by its customer as a result of its disconnection. (c) Customer Protest. The RES shall be held solely liable for, and shall defend the COMPANY against, any protest by the RES’ Customer to the disconnection made by the COMPANY under this Section. The RES shall be liable to pay the appropriate disconnection fee for disconnections made under this Section.ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 20 of 29 Section 16. COMPANY's Inability to Effect Disconnection. In the event that the COMPANY is unable to exercise its right to disconnect under this Agreement and the applicable Schedule with the RES’ Customer, despite due diligence and without fault on its part, and the RES’ Customer continues to avail of DWS, the RES shall continue to pay the corresponding charges equivalent to the amount of DWS; Provided that, the COMPANY shall notify the RES of its inability to effect such disconnection within a reasonable time. Section 17. Reconnection of the Customers’ Service. Subject to prior notice to the COMPANY by the CRB, reconnection of the RES’ Customer's service shall be effected by the COMPANY: (a) In cases of Section 11(a) and 11(d), after the RES has settled its obligation with the COMPANY; (b) In case of Section 11(b), if the contract executed between the RES and its customer has been renewed and the RES has requested the inclusion of its customer in the Dws; (c) In case of Sections 11(c) and 11(e) when the RES presents proof to the satisfaction of the Company that the non-compliance and/or violation of the provisions of this Agreement, the DSOAR, as amended, PDC, and/or other applicable laws, has ceased. (d) In case of 12(b), within the timeframe provided in said Section. Reconnection of the RES’ Customer under Section 14(a), (b) and (c) shall be subject to payment of appropriate reconnection fees as approved by the ERC. If the emergency or unsafe operating condition, which brought about the suspension of the DWS is due to the fault of the RES’ Customer, the same shall likewise be subject to payment of appropriate reconnection-fees. Section 18. Termination of RES’ Contract with its Customer. Upon termination of the supply contract executed between the RES and its customer, the RES shall, within twenty-four (24) hours, notify the COMPANY of such fact. Thereafter, theERG CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 21 of 29 COMPANY shall send a final billing to the RES covering the DWS of such customer, including any adjusted or differential bill/s and other applicable charges approved by the ERC, if the service is terminated before the next scheduled reading. After payment by the RES of the COMPANY 's final billing, including any adjusted or differential bill/s, the COMPANY shall send a certification to the RES that all its bills for that particular customer have been paid. Should the RES fail to notify the COMPANY that its supply contract with its customer has been terminated, the RES shall continue to be liable for all the charges stipulated under this Agreement. In case the termination of the supply contract of the RES with its customer was due to the reversion of the latter to the captive market, in addition to the foregoing paragraph, the discontinuance of DWS to such RES’ Customer shall become effective only at the end of the meter reading date of said customer; Provided that, such reversion of the customer to the captive market has been approved by the ERC, with notice to the COMPANY. For the avoidance of doubt, prior to the effectivity of the discontinuance of the DWS to such RES’ Customer, the RES shall continue to be liable to the COMPANY for the payment of charges as stipulated under Sections 3 and 9 hereof and the observance of the terms and conditions provided in this Agreement and the accompanying Schedule with its customer. Section 19. Undelivered Energy, Damages and Other Losses. The RES understands that the COMPANY undertakes scheduled and/or unscheduled maintenance, repairs and replacement of its facilities to improve service. In such cases, and in other cases of outages due to force majeure or for reasons not attributable to the fault of the COMPANY, the RES agrees that the COMPANY shall not be liable for any undelivered energy, or for damages, whether direct or consequential, including without limitation, loss of profits, loss of revenue, or loss of production capacity, as a result of interruption or disconnection of its service. Section 20. Supply Imbalances. The RES shall have the responsibility of procuring the full power supply requirement of its customers. It shall reimburse to the COMPANY the cost of any additional power supply requirement delivered to the RES’ Customer but billed to the COMPANY by the Wholesale Electricity Spot Market (WESM), including any applicable interest, surcharge or penalties. Section 21. __Liability for Non-technical System Losses and Damages as a result of Pilferage. The RES shall be liable for non-technical system losses if it condones, colludes, conspires with,ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 22 of 29 or engages in the pilferage of electricity or tampering of meters or facilities of the COMPANY. Condonation, collusion and conspiracy shall include, but not be limited to, the following instances: (a) when a RES has knowledge of pilferage of electricity committed or being committed by its customer and refuses or fails to report such fact to the COMPANY; and (b) when a RES or any of its employees or representatives assists or participates in the commission of pilferage of electricity by its customer. The RES shall likewise be liable for any damages caused to the COMPANY or third persons arising, or resulting, from such pilferage. Section 22. Force Majeure. The COMPANY shail not be liable to the RES with respect to the non-performance of any of its obligations under this Agreement in the event and to the extent that such non-performance is the direct result of or has been directly caused by force majeure. Force majeure shall mean such event: (i) that is not within the reasonable control, directly and indirectly, of the COMPANY; and (ii) which, despite the exercise of reasonable diligence, cannot be prevented, avoided or removed by the COMPANY; Provided that, the COMPANY has taken all reasonable precautions, and due care in order to avoid or mitigate the effect of such event on the COMPANY’s ability to perform its obligations under this Agreement; Force Majeure shall include, but not limited to, any of the following: (a) A typhoon, storm, tropical depression, flood, drought, volcanic eruption, earthquake, tidal wave or landslide; (b) An act of public enemy, war (declared or undeclared), sabotage, blockade, revolution, riot, insurrection, civil commotion or any violent or threatening actions; (c) Any lawful orders rendered by competent authority, including any advice or warnings of government authorities for safety reasons; and (d) Transmission constraints and/or outages in the Transmission and Distribution System. Section 23. Amendment/Modification of Agreement. This Agreement, including the applicable Schedule with the RES’ Customer, constitutes the sole and entire agreement between the PARTIES and supersedes all previous arrangements or agreements in respect of the subject-matter of this Agreement, No amendments ofERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 23 of 29 this Agreement or the applicable Schedule with the RES’ Customer, or consent to any departure therefrom, shall in any way be of any force or effect unless confirmed in writing and signed by the PARTIES. If necessary, such amendment or departure shall be effective only upon approval by the ERC. The failure of any Party, at any time, to require performance of any provision hereof shall in no manner affect the right to enforce the same at a later time. No waiver by any Party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, shall be deemed to be construed as a further or continuing waiver of such breach or waiver of the breach of any other term or covenant, unless such waiver is in writing. Section 24. Effectivity and Termination of Agreement. This Agreement shall be valid and binding to the PARTIES upon execution hereof unless terminated by either party by serving written notice to the other at least thirty (30) calendar days before the effective date of termination. It shall take effect on the earliest next regular meter reading date of the RES’ Customer/s, as contained in the attached Schedule/s, after the execution date hereof, provided that such RES’ Customer/s has/have validly executed Connection Agreement/s with the COMPANY. This Agreement may likewise be terminated: (a) after due notice, for violation of any of the obligations set forth herein by any Party; (b) under Section 15, upon termination of the contract between the RES and its customer; and/or (c) without any need of prior notice: (i) under Section 4, when the RES is no longer eligible for DWS; when this Agreement is rendered invalid and/or unenforceable by law or competent authority; (iii) when the performance of any obligations under this Agreement has been rendered legally or physically impossible; (iv) in case of the RES’ failure to pay the bill deposit or the corresponding adjustment thereon; and (v) in case of violation of R.A. 7832 otherwise known as “Anti-electricity and Electric Transmission Lines/Materials Pilferage Act of 1994” either by the RES’ own act or if the RES has condoned, colluded or conspired with its End-use customer. Upon termination or expiration of this Agreement, all rights and obligations of the PARTIES hereunder shall cease, except (a) such tights and obligations as may have accrued as of the date of termination or expiration, such as but not limited to payment of any outstanding bills; and (b) any right or obligation which survives the termination of this Agreement.ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 24 of 29 Section 25. Delivery of Notices. All notices, letters and/or communications shall be addressed to the following: For the COMPANY: Name: Mailing Address: Phone Number: Fax Number: Email Address: Billing Address: (both electronic and postal) For the RES: Name: Mailing Address: Phone Number: Fax Number: Email Address: Billing Address: (both electronic and postal) ERC License Number: Either Party may change the above information through written notice to the other Party. Section 26. Warranties. The PARTIES represent and warrant to each other that: (i) the signatories to this Agreement are duly authorized to sign this Agreement; and (ii) all requisite authorizations, approvals, permits or consent to make this Agreement or any amendment or supplement thereto valid and enforceable have been obtained. Section 27. Invalidity of Provisions. |f any provision of this Agreement is declared by a competent court to be invalid or unenforceable, the invalidity or unenforceability of such provisions shall not affect the other provisions of this Agreement, and all provisions not affected by such invalidity or unenforceability shall remain in full force and effect. Section 28. Assignment of Rights. The RES shall not assign its rights under this Agreement. In case of any change in its corporate name, or status brought about by merger, consolidation,ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 25 of 29 amendment of articles of incorporation, sale of business or transfer of ownership, the RES shall advise the COMPANY of such fact in writing, within thirty (30) calendar days from the effective date thereof. Violation of this provision shall give the COMPANY the right to terminate this Agreement, without prejudice to any action that the COMPANY may bring for the collection of any outstanding obligation of the RES to the COMPANY. Section 29. Disputes. \f any dispute shall arise between the PARTIES in connection with or arising out of this Agreement, either party may request in writing to meet within five (5) days from occurrence thereof and attempt to resolve the dispute. In the event that such dispute remains unresolved within ten (10) days after such request, the aggrieved party may bring the dispute for resolution by the ERC if said dispute is within the exclusive jurisdiction of the ERC. Otherwise, the aggrieved party may seek redress from the regular courts. In case of the latter, the PARTIES hereby agree that the venue for any court action shall be the regular courts of the principal place of business or principal office where the COMPANY is located. IN WITNESS WHEREOF, the PARTIES hereto have caused the foregoing instrument to be executed by their respective officers and/or their representatives, thereunto duly authorized at the place and on the date first above written. Signature Over Printed Name — Signature Over Printed Name (DU) (RES) (Date Signed) (Date Signed) SIGNED IN THE PRESENCE OF: (Witness Name, Signature Over (Witness Name, Signature Over Printed Name) Printed Name)ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 26 of 29 ACKNOWLEDGMENT Republic of the Philippines} }S.S Before me, a Notary Public, for and in the City of personally appeared the following affiants with their respective competent proof of identities: bu Valid government issued id RES Valid government issued id known to me and to me known to be the same persons who executed the foregoing instrument, consisting of pages, including the page whereon this Acknowledgment is written, with all pages signed by both PARTIES and their instrumental witnesses, and they acknowledged to me that the same is their free and voluntary act and deed and that of the Corporation/Company they respectively represent. IN WITNESS WHEREOF, | have hereunto set my hand and seal this day of , at : Philippines. Doc. No. : Page No. ‘ Book No ; Series of 7. The proposed pro-forma DWSA is already aligned with, and subject to the provisions of the DSOAR, as amended, and other applicable rules and guidelines. It takes into consideration the changes in the regulatory environment brought about by the transition to RCOA as well as the rights, obligations and interests of the RESes and the DUs in connection with the provision of distribution wheeling services 8. Considering, however, that each customer is unique and has specific requirements, the provisions of said pro- forma DWSA are without prejudice to the inclusion ofERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 27 of 29 additional provisions therein to address said specific requirements, which are voluntarily and freely agreed upon by the parties, and which shall form part of the aforesaid agreement, provided, that such additional provisions are consistent with existing pertinent law and rules and regulations of the Commission. 9. The instant petition is being filed to facilitate the smooth transition of the power industry to a regime in which retail competition is already available. The approval of said pro- forma DWSA will ensure that equal treatment would be given to all RESes applying for distribution wheeling services and will provide them the opportunity to evaluate the contract within sufficient time prior to commercial ‘operations of RCOA and enable them to fully participate in the retail market. 10. In view of the foregoing, it submits that there is a need for the Commission to adopt the aforesaid pro-forma DWSA. 11. Thus, it prays for the Commission to exercise its rule- making power and subsequently order the adoption of the pro-forma DWSA to apply to all DUs as proposed and detailed in the instant petition. Finding the said petition to be sufficient in form and in substance with the required fees having been paid, the same is hereby set for public consultation on March 21, 2013 (Thursday) at nine o’clock in the morning (9:00 A.M.) at the ERC Hearing Room, 15" Floor, Pacific Center Building, San Miguel Avenue, Pasig City. The Commission shall cause the posting of the attached Notice of Proposed Rule-Making at its official website at www.erc.gov.ph All interested parties are hereby directed to submit their comments on the proposed pro-forma DWSA on or before March 11, 2013 MERALCO is hereby directed to cause the publication of the attached Notice of Proposed Rule-Making, at its own expense, once (1x) in a newspaper of general circulation in the Philippines, with the date of the last publication to be made not later than two (2) weeks before the date of the scheduled public consultation.ERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 28 of 29 MERALCO is directed to furnish all those making requests therefor with copies of the proposed pro-forma DWSA, subject to reimbursement of reasonable photocopying costs. On the date of the public consultation, MERALCO must submit to the Commission its written Compliance with the jurisdictional requirements attaching therewith, methodically arranged and duly marked, the evidences on the actual publication of the Notice of Proposed Rule-Making consisting of an affidavit of the Editor or Business Manager of the newspaper where the said Notice of Proposed Rule-Making was published together with the complete issue of the said newspaper, and such other proofs of compliance with the requirements of the Commission. MERALCO must also be prepared to make an expository presentation of its proposed pro-forma DWSA, aided by whatever communication medium that it may deem appropriate for the purpose, in order to put in plain words and explain, for the benefit of the consumers and other concerned parties, what the proposed pro- forma DWSA is all about and the reasons and justifications being cited in support thereof. SO ORDERED. Pasig City, February 25, 2013. FOR AND BY AUTHORITY OF THE COMMISSION: ENAIDA Co ae Chairperson Sa a vsesonuwvamoe orderERC CASE NO. 2013-003 RM ORDER/February 25, 2013 Page 29 of 29 Copy Furnished: Manila Electric Company (MERALCO) Lopez Building, MERALCO Center, Ortigas Avenue, Pasig City Office of the Solicitor General 134 Amorsolo Street, Legaspi Village, City of Makati 1229 . Commission on Audit Commonwealth Avenue, Quezon City 1121 Senate Committee on Energy GSIS Building, Roxas Boulevard, Pasay City 1300 House of Representatives Committee on Energy Batasan Hills, Quezon City 1126 Philippine Chamber of Commerce and Industry (PCC!) 3" Floor, ECC Building, 355 Sen. Gil Puyat Ave., Makati City All Distribution UtilitiesRepublic of the Philippines ENERGY REGULATORY COMMISSION San Miguel Avenue, Pasig City IN THE MATTER OF THE PETITION FOR THE ADOPTION OF A PRO-FORMA DISTRIBUTION WHEELING SERVICES AGREEMENT (DWSA) BETWEEN A RETAIL ELECTRICITY SUPPLIER (RES) AND A DISTRIBUTION UTILITY (DU) UPON RETAIL COMPETITION AND OPEN ACCESS (RCOA) MANILA ELECTRIC COMPANY (MERALCO), Petitioner. ERC CASE NO. 2013-003 RM CKETED 8 FEB 2 8. 208 DO Date: NOTICE OF PROPOSED RULE-MAKING TO ALL INTERESTED PARTIES: Notice is hereby given that on February 11, 2013, Manila Electric Company (MERALCO) filed a petition for the adoption of a pro-forma Distribution Wheeling Services Agreement (DWSA) between a Retail Electricity Supplier (RES) and a Distribution Utility (DU) upon Retail Competition and Open Access (RCOA). In the said petition, MERALCO alleged, among others, that: Ae It is a private corporation existing under the laws of the Republic of the Philippines, with principal office located at Lopez Building, MERALCO Center, Ortigas Avenue, Pasig City. 2 It has a legislative franchise to operate and maintain a distribution system in the Cities/Municipalities of MetroERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 2 of 28 Manila, Bulacan, Cavite and Rizal and certain Cities/Municipalities/Barangays in Batangas, Quezon, Pampanga and Laguna pursuant to Republic Act No. 9209, and is authorized to charge all its customers for their electric consumptions at the rates duly approved by the Commission. 3. The Distribution Services and Open Access Rules (DSOAR), as amended,’ requires DUs such as MERALCO to adopt pro-forma agreements in preparation for RCOA. Among these pro-forma agreements is the DWSA. Under the Rules on Customer Switching issued by the Commission, the RES or the Local RES shall be the one contracting with the DU for the Distribution Wheeling Services (DWS).* 4. Rule 21, Sections 1 and 2 of the ERC Rules of Practice and Procedure provides: “Section 1. Initiation of Rule-making. — The process of adopting a new rule or amending or repealing an existing rule may be initiated by the Commission or by interested persons upon petition for the issuance, amendment or repeal of any rule. Section 2. Petition to Initiate Rule-making. — Interested persons may petition the Commission to adopt, amend, or repeal a rule by filing a petition to initiate rule- making. x xx.” 5. Thus, through the instant petition, it is seeking the adoption of the instant DWSA to serve as the pro-forma DWSA to apply to all DUs in contracting with RESes for distribution of wheeling services. 6. The salient provisions of the pro-forma DWSA are as follows: | Promulgated by the Commission in April 2010 ? "Section 4. Guiding Principtes a. Asingle billing policy is intially adopted. The RES or Local RES will thus be contracting with other service providers (ie. DU for OWS, TRANSCO for transmission and ancillary services, Market Operator (MO) for WESM transactions} on behalf offs Contestable Customers, excent for_the Connection Aare subsequently be entered into by ent_whi Contestable Customer and a DU. x" iene ‘and underscoring supplied]ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 3 of 28 XXX. Section 1. Scope. This Agreement is solely for the provision of DWS, which pertains to those services performed by the COMPANY for the conveyance of electricity through its distribution system in order to meet the demand of the customer of the RES. This Agreement does not constitute an Agreement to supply electricity to the RES. Section 2. Provision of DWS. Subject to the terms and conditions of this Agreement, and applicable rules and regulations, the COMPANY shall provide DWS to the RES and the latter's customers under the technical specifications as specified in the attached Schedule with the concerned customer. XXX. Section 3. Charges. The RES shall pay DWS charges, including all applicable taxes, based on the applicable rate schedule for the provision of DWS, which include, among others, the: (i) Distribution Charge; (ii) Standard Connection Charge (SCC), or Guaranteed Minimum Billing Demand (GMBD); (iii) Supply Charge; (iv) Metering Charge; (v) System Loss Charge; (vi) Transmission Charge; (vii) Local Franchise Tax; (viii) Senior Citizen Discount, if applicable; (ix) Lifeline Subsidy; (x) Universal Charge; and (xi) Other Charges and Adjustments which shall include, but not limited to, over/under-recoveries and other pass-through charges approved by the ERC to be billed by the COMPANY to the RES. Said charges shall be payable in accordance with Section 9 hereof, commencing on the first billing month from the effectivity of this Agreement. XXX. Section 5. Duties and Responsibilities of RES. The RES shall: (a) Secure any required approvals, licenses, clearances from the ERC and/or otherERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 4 of 28 (b) (d) (e) governmental agencies for its operation, including payment of any fees and execution of any applicable agreement; Require its customers to comply and maintain to comply with the technical specifications and requirements, and technical infrastructure/equipment standards prescribed by the COMPANY, as embodied in the Connection Agreement (CA) executed by said customer of the RES with the COMPANY, including applicable provisions of the Philippine Distribution Code (PDC), rules and regulations of the ERC and any other applicable law or guidelines; Be solely responsible for complying with any applicable WESM requirements pertaining to the RES or its customer and payment of all related obligations to the other market participants; Be solely responsible for ail contractual, service and billing matters, including disputes, relating to its customer; and Enjoin its customers not to engage in pilferage of electricity and monitor that its customer strictly complies with it. Section 6. Duties and Responsibilities of the COMPANY. The COMPANY shall: (a) (b) Subject to system constraints, make reasonable provisions to provide steady and continuous DWS to the customers of the RES, but shall not guarantee the DWS against fluctuations or interruptions; Comply with applicable laws, and pertinent government rules and regulations, as well as good utility practice; andERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 5 of 28 (c) Use as reference the registrations of the metering facilities which are capable of measuring energy use and demand, in accordance with applicable rules and regulations Section 7. Additional Terms and Conditions. Any terms and conditions specifically applicable to the RES’ Customer shall be specified in the applicable Schedule with the concerned customer, which shall be considered integral part hereof. Section 8. Switching of RES' Customers. Switching of the customers of the RES shall follow the procedure laid down in the applicable rules and regulations. (a) The switching of the RES customers shall not be allowed in the absence of the required switch approval from the Central Registration Body (CRB). (b) The COMPANY shall have the right to fully rely on the Switch Approval sent to it by the CRB and shall not be responsible for verifying the validity of such approval. In all cases, the RES shall hold the COMPANY free from any liability arising therefrom. Section 9. Billing and Payment. The COMPANY shall bill the RES for all the charges stipulated under this Agreement and the applicable Schedule with the RES’ Customer, if any, including any billing adjustment, differential bills and such other charges as may be approved by the ERC. Said bill shall become due and demandable within twelve (12) calendar days from the receipt of said bill by the RES. Any amount unpaid shall be charged with interest at the rate of twelve percent (12%) per annum from the date the bill was due to be paid. The payment of the interest is in addition to, and not in lieu of, all other rights and remedies otherwise available to the COMPANY. XXX,ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 6 of 28 Section 10. Bill Deposit. Prior to the commencement of the services to the RES’ Customers, a bill deposit to secure payment of any outstanding regular bills shall be paid by the RES to the COMPANY, equivalent to the one (1) month estimated billing for all DWS Charges of the RES’ Customer under Section 3 hereof, based on the latter's average billing in the immediately preceding twelve (12) months or in case of a newly connected RES’ Customer, based on projected demand and/or energy of such customer. The COMPANY may likewise apply such bill deposit to any outstanding bill, billing adjustment or differential billing. Said deposit shall be adjusted: (i) annually, to reflect the average billing of the RES’ Customers during a one (1) year period; or (ii) to replace any deposit previously applied to any outstanding bill, billing adjustment or differential billing; or (iii) to reflect the increase or decrease in load, or the number of the RES’ Customers under this Agreement. Any excess or deficiency in the amount of bill deposit, after said adjustment, shall be correspondingly refunded through credit to bill to, or collected from, respectively, the RES by the COMPANY. Section 11. Disconnection of Service of RES’ Customers. Subject to prior notice to the RES by the CRB, the services of the RES’ Customers shall be disconnected under any of the following circumstances: (a) RES fails to pay the DWS charges, or any adjusted or differential bills or such other charges stipulated in this Agreement, on the due date, in part on in whole; (b) Termination of the RES supply contract with its customer/s under Section 15 hereof; (c) When the RES has not complied with any of the provisions of the DSOAR, PDC, other applicable laws, including any amendments thereon;ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 7 of 28 (d) In case of non-payment by the RES of its customer's final bill, or balance thereof, as a captive customer, in case of the latter's initial transfer from the captive to the contestable market;, as well as the customer's final bill, in case of regular switching. (e) Violation of any of the terms and conditions of this Agreement by the RES; and (f) Other circumstances allowed by law or government rules and regulations. The COMPANY’s exercise of its rights under this Article shall not entitle the RES to renege on its obligation to pay the DWS charges, disconnection fees or other billings rendered under this Agreement. Nothing in this agreement shall prevent the COMPANY from temporarily discontinuing the provision of DWS whenever it finds it necessary to execute any routine maintenance, repairs or modifications on its distribution system or in the event of an emergency or to correct unsafe operating conditions in the distribution or connection facilities; Provided however, that except in cases of force majeure, forced outage/interruption, event of emergency or the need to correct unsafe operating conditions, the COMPANY shall give advance notice to the RES within a reasonable time of said temporary discontinuance of DWS, in a manner allowed by the applicable rules and regulations. In any case, the RES shall be solely responsible in notifying its customers of the disconnection. In case the DWS is temporarily discontinued under this Section, the COMPANY shall likewise effect the reconnection of the RES’ Customer's service, when the COMPANY’s routine maintenance, repairs or modification to the facilities and nearby facilities have been completed or when the emergency has ceased or the unsafe operating conditions in the distribution or connection facilities have been corrected.ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 8 of 28 Section 12. Disconnection of the RES’ customer upon request of the RES. In the event that the RES’ Customer fails to pay the RES for service rendered by due date, the COMPANY shall disconnect the RES’ Customer within 24 hours upon receipt of the request for disconnection from the CRB. (a) (b) (c) Validity of RES’ Request for Disconnection. The COMPANY shall not have any obligation to act upon the RES’ request for disconnection. The COMPANY shall have the right to fully rely upon the request sent to it by the CRB. Absent any request from the CRB, the RES continues to be liable for all DWS billed by the Company for all delivered services to the customer of the RES. RES’ Customer pays the RES at the time of disconnection. In the event that the RES’ Customer pays the RES before the actual disconnection, the COMPANY shall, within 48 hours from its receipt of notice from the CRB, reconnect the services of the customer. Nonetheless, if the COMPANY was not properly notified within said period and the COMPANY has already effected the disconnection, the RES shall be liable to pay the disconnection fee and shall be solely responsible for all liability, including costs incurred and injury suffered by its customer as a result of its disconnection. Customer Protest. The RES shall be held solely liable for, and shall defend the COMPANY against, any protest by the RES’ Customer to the disconnection made by the COMPANY under this Section. The RES shall be liable to pay the appropriate disconnection fee for disconnections made under this Section.ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 9 of 28 Section 13. COMPANY’s Inability to Effect Disconnection. In the event that the COMPANY is unable to exercise its right to disconnect under this Agreement and the applicable Schedule with the RES’ Customer, despite due diligence and without fault on its part, and the RES’ Customer continues to avail of DWS, the RES shall continue to pay the corresponding charges equivalent to the amount of DWS; Provided that, the COMPANY shall notify the RES of its inability to effect such disconnection within a reasonable time. Section 14. Reconnection of the Customers’ Service. Subject to prior notice to the COMPANY by the CRB, reconnection of the RES’ Customer's service shall be effected by the COMPANY: (a) In cases of Section 11(a) and 11(d), after the RES has settled its obligation with the COMPANY; (b) In case of Section 11(b), if the contract executed between the RES and its customer has been renewed and the RES has requested the inclusion of its customer in the Dws; (c) In case of Sections 11(c) and 11(e) when the RES presents proof to the satisfaction of the Company that the non-compliance and/or violation of the provisions of this Agreement, the DSOAR, as amended, PDC, and/or other applicable laws, has ceased. (d) _ Incase of 12(b), within the timeframe provided in said Section. Reconnection of the RES’ Customer under Section 44(a), (b) and (c) shall be subject to payment of appropriate reconnection fees as approved by the ERC. If the emergency or unsafe operating condition, which brought about the suspension of the DWS is due to the fault of the RES’ Customer, the same shall likewise be subject to payment of appropriate reconnection-fees.ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 10 of 28 Section 15. Termination of RES’ Contract with its Customer. Upon termination of the supply contract executed between the RES and its customer, the RES shall, within twenty-four (24) hours, notify the COMPANY of such fact. Thereafter, the COMPANY shall send a final billing to the RES covering the DWS of such customer, including any adjusted or differential bill/s and other applicable charges approved by the ERC, if the service is terminated before the next scheduled reading. After payment by the RES of the COMPANY’s final billing, including any adjusted or differential bill/s, the COMPANY shall send a certification to the RES that all its bills for that particular customer have been paid. Should the RES fail to notify the COMPANY that its supply contract with its customer has been terminated, the RES shail continue to be liable for all the charges stipulated under this Agreement. In case the termination of the supply contract of the RES with its customer was due to the reversion of the latter to the captive market, in addition to the foregoing paragraph, the discontinuance of DWS to such RES’ Customer shall become effective only at the end of the meter reading date of said customer; Provided that, such reversion of the customer to the captive market has been approved by the ERC, with notice to the COMPANY. For the avoidance of doubt, prior to the effectivity of the discontinuance of the DWS to such RES’ Customer, the RES shall continue to be liable to the COMPANY for the payment of charges as stipulated under Sections 3 and 9 hereof and the observance of the terms and conditions provided in this Agreement and the accompanying Schedule with its customer, Section 16. Undelivered Energy, Damages and Other Losses. Tne RES understands that the COMPANY undertakes scheduled and/or unscheduled maintenance, repairs and replacement of its facilities to improve service. In such cases, and in other cases of outages due to force majeure or for reasons not attributable to the fault of the COMPANY, the RES agrees that the COMPANY shall not be liable for any undelivered energy, or for damages, whether direct or consequential, including without limitation, loss of profits, loss of revenue, or loss of production capacity, as a result of interruption or disconnection of its service.ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 11 of 28 Section 17. Supply Imbalances. The RES shall have the responsibility of procuring the full power supply requirement of its customers. It shall reimburse to the COMPANY the cost of any additional power supply requirement delivered to the RES’ Customer but billed to the COMPANY by the Wholesale Electricity Spot Market (WESM), including any applicable interest, surcharge or penalties. Section 18. Liability for Non-technical System Losses and Damages as a result of Pilferage. The RES shall be liable for non-technical system losses if it condones, colludes, conspires with, or engages in the pilferage of electricity or tampering of meters or facilities of the COMPANY. Condonation, collusion and conspiracy shall include, but not be limited to, the following instances: (a) when a RES has knowledge of pilferage of electricity committed or being committed by its customer and refuses or fails to report such fact to the COMPANY; and (b) when a RES or any of its employees or representatives assists or participates in the commission of pilferage of electricity by its customer. The RES shall likewise be liable for any damages caused to the COMPANY or third persons arising, or resulting, from such pilferage. Section 19. Force Majeure. The COMPANY shall not be liable to the RES with respect to the non- performance of any of its obligations under this Agreement in the event and to the extent that such non- performance is the direct result of or has been directly caused by force majeure. Force majeure shall mean such event: (j) that is not within the reasonable control, directly and indirectly, of the COMPANY; and (ii) which, despite the exercise of reasonable diligence, cannot be prevented, avoided or removed by the COMPANY; Provided that, the COMPANY has taken all reasonable precautions, and due care in order to avoid or mitigate the effect of such event on the COMPANY’s ability to perform its obligations under this Agreement; Force Majeure shall include, but not limited to, any of the following:ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 12 of 28 (a) A typhoon, storm, tropical depression, flood, drought, volcanic eruption, earthquake, tidal wave or landslide; {b) An act of public enemy, war (declared or undeclared), sabotage, blockade, revolution, riot, insurrection, civil commotion or any violent or threatening actions; (c) Any lawful orders rendered by competent authority, including any advice or warnings of government authorities for safety reasons; and (d) Transmission constraints and/or outages in the Transmission and Distribution System. XXX. Section 21. Effectivity and Termination of Agreement. This Agreement shall be valid and binding to the PARTIES upon execution hereof unless terminated by either party by serving written notice to the other at least thirty (30) calendar days before the effective date of termination. It shall take effect on the earliest next regular meter reading date of the RES’ Customer/s, as contained in the attached Schedule/s, after the execution date hereof, provided that such RES’ Customer/s has/have validly executed Connection Agreement/s with the COMPANY. This Agreement may likewise be terminated: (a) after due notice, for violation of any of the obligations set forth herein by any Party; (b) under Section 15, upon termination of the contract between the RES and its customer; and/or (c) without any need of prior notice: (i) under Section 4, when the RES is no longer eligible for DWS; (ii) when this Agreement is rendered invalid and/or unenforceable by law or competent authority; (ili) when the performance of any obligations under this Agreement has been rendered legally or physically impossible; (iv) in case of the RES’ failure to pay the bill deposit or the corresponding adjustment thereon; and (v) in case of violation of R.A. 7832 otherwise known as “Anti-electricityERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 13 of 28 and Electric Transmission Lines/Materials Pilferage Act of 1994" either by the RES’ own act or if the RES has condoned, colluded or conspired with its End-use customer. Upon termination or expiration of this Agreement, all rights and obligations of the PARTIES hereunder shall cease, except (a) such rights and obligations as may have accrued as of the date of termination or expiration, such as but not limited to payment of any outstanding bills; and (b) any right or obligation which survives the termination of this Agreement. XXX. Annex “A” of the instant petition is as follows: DISTRIBUTION WHEELING SERVICE AGREEMENT (For Retail Electricity Suppliers) This AGREEMENT is entered into this day of at City, Philippines, by and between: , @ corporation duly organized and existing under the laws of the Republic of the Philippines, with principal offices at eee egestas esse eee eeES SESE duly represented by Mr. (designation) and Mr. (designation) hereinafter referred to as "COMPANY"; -and- . duly organized and existing under the laws of the Republic of the Philippines, with principal offices at i duly Tepresented by Mr. (designation), and hereinafter referred to as "Retail Electricity Supplier or RES",ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 14 of 28 “COMPANY” and “RES” hereinafter shall collectively be referred to as “PARTIES”. WITNESSETH THAT: WHEREAS, the COMPANY is a Distribution Utility (DU) with a legislative franchise to operate and maintain an electric distribution system in the Cities/Municipalities of : WHEREAS, the RES is duly licensed by the Energy Regulatory Commission (ERC) to sell, broker, market or aggregate electricity to contestable customers; WHEREAS, the RES is desirous of availing of the Distribution Wheeling Service (DWS) offered by the COMPANY; WHEREAS, the PARTIES agree to permit the wheeling transaction to take place based on the terms and conditions as set out in this Agreement; subject to rules and regulations of the ERC and any other applicable laws; NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth herein, the PARTIES hereto agree as follows: Section 4. Scope. This Agreement is solely for the provision of DWS, which pertains to those services performed by the COMPANY for the conveyance of electricity through its distribution system in order to meet the demand of the customer-of the RES. This Agreement does not constitute an Agreement to supply electricity to the RES. Section 5. Provision of DWS. Subject to the terms and conditions of this Agreement, and applicable rules and regulations, the COMPANY shall provide DWS to the RES and the latter's customers under the technical specifications as specified in the attached Schedule with the concerned customer. The RES shall not modify or allow the modification of the technical specifications without the written consent of the COMPANY. Should the RES or its customer intend to modify said specifications, the RES shall notify the COMPANY no less than thirty (30) businessERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 15 of 28 days in advance. Any incremental cost attributable to any modification in the specifications of the RES or its customer shall be made at the sole expense of the RES. Section 6. Charges. The RES shall pay DWS charges, including all applicable taxes, based on the applicable rate schedule for the provision of DWS, which include, among others, the: (i) Distribution Charge; (ji) Standard Connection Charge (SCC), or Guaranteed Minimum Billing Demand (GMBD); (iii) Supply Charge: (iv) Metering Charge; (v) System Loss Charge; (vi) Transmission Charge; (vii) Local Franchise Tax; (viii) Senior Citizen Discount, if applicable; (ix) Lifeline Subsidy; (x) Universal Charge; and (xi) Other Charges and Adjustments which shall include, but not limited to, over/under-recoveries and other pass-through charges approved by the ERC to be billed by the COMPANY to the RES. Said charges shall be payable in accordance with Section 9 hereof, commencing on the first billing month from the effectivity of this Agreement. Section 7. Eligibility for DWS. A RES shall be eligible for DWS if it: (i) continues to possess all the eligibility requirements under the Distribution Services and Open Access Rules (DSOAR), as amended, Revised Rules for the Issuance of Licenses to Retail Electricity Suppliers and other pertinent guidelines, or any amendments thereto; (ji) has no undisputed outstanding debts with the COMPANY, the Transmission Service Provider (TSP), or the Wholesale Electricity Spot Market (WESM); and (iii) complies with the credit requirements approved by the ERC. (See comment in CA on checklist) Section 8. Duties and Responsibilities of RES. The RES shall: (a) Secure any required approvals, licenses, clearances from the ERC and/or other governmental agencies for its operation, including payment of any fees and execution of any applicable agreement; (b) Require its customers to comply and maintain to comply with the technical specifications and requirements, and technical infrastructure/equipment standards prescribed by the COMPANY, as embodied in the Connection Agreement (CA) executed by said customer of the RES with the COMPANY, including applicable provisions of theERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 16 of 28 {c) (d) Philippine Distribution Code (PDC), rules and regulations of the ERC and any other applicable law or guidelines; Be solely responsible for complying with any applicable WESM ‘requirements pertaining to the RES or its customer and payment of all related obligations to the other market participants; Be solely responsible for all contractual, service and billing matters, including disputes, relating to its customer. and Enjoin its customers not to engage in pilferage of electricity and monitor that its customer strictly complies with it. Section 9. Duties and Responsibilities of the COMPANY. The COMPANY shall: (a) (c) Subject to system constraints, make reasonable provisions to provide steady and continuous DWS to the customers of the RES, but shall not guarantee the DWS against fluctuations or interruptions; Comply with applicable laws, and pertinent government rules and regulations, as well as good utility practice; and Use as reference the registrations of the metering facilities which are capable of measuring energy use and demand, in accordance with applicable rules and regulations. Section 10. Additional Terms and Conditions. Any terms and conditions specifically applicable to the RES’ Customer shall be specified in the applicable Schedule with the concerned customer, which shall be considered integral part hereof. Section 11. Switching of RES’ Customers. Switching of the customers of the RES shall follow the procedure laid down in the applicable rules and regulations.ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 17 of 28 (a) The switching of the RES customers shall not be allowed in the absence of the required switch approval from the Central Registration Body (CRB). (b) The COMPANY shall have the right to fully rely on the Switch Approval sent to it by the CRB and shail not be responsible for verifying the validity of such approval. In all cases, the RES shall hold the COMPANY free from any liability arising therefrom. Section 12. Billing and Payment. The COMPANY shall bill the RES for all the charges stipulated under this Agreement and the applicable Schedule with the RES’ Customer, if any, including any billing adjustment, differential bills and such other charges as may be approved by the ERC. Said bill shall become due and demandable within twelve (12) calendar days from the receipt of said bill by the RES. Any amount unpaid shall be charged with interest at the rate of twelve percent (12%) per annum from the date the bill was due to be paid. The payment of the interest is in addition to, and not in lieu of, all other rights and remedies otherwise available to the COMPANY. The RES may dispute any bills in writing within thirty (30) calendar days from receipt of the bill. Failure to dispute any bill on time shall constitute an agreement by the RES that the bill is accurate and binding. Notwithstanding the foregoing, the RES shall continue to pay the disputed bills without deductions or any offset and shall not be an excuse or ground for the RES to delay payment of succeeding bills or to unilaterally deduct any amount therefrom. Section 13. Bill Deposit. Prior to the commencement of the services to the RES’ Customers, a bill deposit to secure payment of any outstanding regular bills shall be paid by the RES to the COMPANY, equivalent to the one (1) month estimated billing for all DWS Charges of the RES’ Customer under Section 3 hereof, based on the latter's average billing in the immediately preceding twelve (12) months or in case of a newly connected RES’ Customer, based on projected demand and/or energy of such customer. The COMPANY may likewise apply such bill deposit to any outstanding bill, billing adjustment or differential billing. Said deposit shall be adjusted: (i) annually, to reflect the average billing of the RES' Customers during a one (1) year period; or (ii) to replace any deposit previously applied to any outstanding bill, billing adjustment or differential billing; or (iii) to reflect the increase orERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 18 of 28 decrease in load, or the number of the RES’ Customers under this Agreement. Any excess or deficiency in the amount of bill deposit, after said adjustment, shall be correspondingly refunded through credit to bill to, or collected from, respectively, the RES by the COMPANY. Section 14. Disconnection of Service of RES’ Customers. Subject to prior notice to the RES by the CRB, the services of the RES’ Customers shall be disconnected under any of the following circumstances: (a) RES fails to pay the DWS charges, or any adjusted or differential bills or such other charges stipulated in this Agreement, on the due date, in part on in whole; (b) Termination of the RES supply contract with its customer/s under Section 15 hereof, (c) When the RES has not complied with any of the provisions of the DSOAR, PDC, other applicable laws, including any amendments thereon; (d) In case of non-payment by the RES of its customer's final bill, or balance thereof, as a captive customer, in case of the latter's initial transfer from the captive to the contestable market;, as well as the customer's final bill, in case of regular switching. (e) Violation of any of the terms and conditions of this Agreement by the RES; and (f) | Other circumstances allowed by law or government rules and regulations. The COMPANY’s exercise of its rights under this Article shall not entitle the RES to renege on its obligation to pay the DWS charges, disconnection fees or other billings rendered under this Agreement Nothing in this agreement shall prevent the COMPANY from temporarily discontinuing the provision of DWS whenever it finds it necessary to execute any routine maintenance, repairs or modifications on its distribution system or in the event of anERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 19 of 28 emergency or to correct unsafe operating conditions in the distribution or connection facilities; Provided however, that except in cases of force majeure, forced outage/interruption, event of emergency or the need to correct unsafe operating conditions, the COMPANY shall give advance notice to the RES within a reasonable time of said temporary discontinuance of DWS, in a manner allowed by the applicable rules and regulations. In any case, the RES shall be solely responsible in notifying its customers of the disconnection. In case the DWS is temporarily discontinued under this Section, the COMPANY shall likewise effect the reconnection of the RES’ Customer's service, when the COMPANY’s routine maintenance, repairs or modification to the facilities and nearby fa s have been completed or when the emergency has ceased or the unsafe operating conditions in the distribution or connection facilities have been corrected. Section 15. Disconnection of the RES' customer-upon request of the RES. |n the event that the RES’ Customer fails to pay the RES for service rendered by due date, the COMPANY shall disconnect the RES’ Customer within 24 hours upon receipt of the request for disconnection from the CRB. (a) Validity of RES’ Request for Disconnection. The COMPANY shall not have any obligation to act upon the RES’ request for disconnection. The COMPANY shall have the right to fully rely upon the request sent to it by the CRB. Absent any request from the CRB, the RES continues to be liable for all DWS billed by the Company for all delivered services to the customer of the RES. (b) RES’ Customer pays the RES at the time of disconnection. In the event that the RES’ Customer pays the RES before the actual disconnection, the COMPANY shall, within 48 hours from its receipt of notice from the CRB, reconnect the services of the customer. Nonetheless, if the COMPANY was not properly notified within said period and the COMPANY has already effected the disconnection, the RES shall be liable to pay the disconnection fee and shall be solely responsible for all liability, including costs incurred and injury suffered by its customer as a result of its disconnection.ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 20 of 28 (c) Customer Protest. The RES shall be held solely liable for, and shall defend the COMPANY against, any protest by the RES’ Customer to the disconnection made by the COMPANY under this Section. The RES shall be liable to pay the appropriate disconnection fee for disconnections made under this Section. Section 16. COMPANY's Inability to Effect Disconnection. |n the event that the COMPANY is unable to exercise its right to disconnect under this Agreement and the applicable Schedule with the RES’ Customer, despite due diligence and without fault on its part, and the RES’ Customer continues to avail of DWS, the RES shall continue to pay the corresponding charges equivalent to the amount of DWS; Provided that, the COMPANY shall notify the RES of its inability to effect such disconnection within a reasonable time. Section 17. Reconnection of the Customers’ Service. Subject to prior notice to the COMPANY by the CRB, reconnection of the RES’ Customer's service shall be effected by the COMPANY: (a) In cases of Section 11(a) and 11(d), after the RES has settled its obligation with the COMPANY; (b) In case of Section 11(b), if the contract executed between the RES and its customer has been renewed and the RES has requested the inclusion of its customer in the DWS; (c) In case of Sections 11(c) and 11(e) when the RES presents proof to the satisfaction of the Company that the non-compliance and/or violation of the provisions of this Agreement, the DSOAR, as amended, PDC, and/or other applicable laws, has ceased. (d) In case of 12(b), within the timeframe provided in said Section. Reconnection of the RES’ Customer under Section 14(a), (b) and (c) shall be subject to payment of appropriate reconnection fees as approved by the ERC. If the emergency or unsafe operating condition, which brought about the suspension of the DWS is due toERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 21 of 28 the fault of the RES’ Customer, the same shalll likewise be subject to payment of appropriate reconnection-fees. Section 18. Termination of RES’ Contract with its Customer. Upon termination of the supply contract executed between the RES and its customer, the RES shall, within twenty-four (24) hours, notify the COMPANY of such fact. Thereafter, the COMPANY shall send a final billing to the RES covering the DWS of such customer, including any adjusted or differential bill/s and other applicable charges approved by the ERG, if the service is terminated before the next scheduled reading. After payment by the RES of the COMPANY ’s final billing, including any adjusted or differential bill/s, the COMPANY shall send a certification to the RES that all its bills for that particular customer have been paid. Should the RES fail to notify the COMPANY that its supply contract with its customer has been terminated, the RES shall continue to be liable for all the charges stipulated under this Agreement. In case the termination of the supply contract of the RES with its customer was due to the reversion of the latter to the captive market, in addition to the foregoing paragraph, the discontinuance of DWS to such RES’ Customer shall become effective only at the end of the meter reading date of said customer; Provided that, such reversion of the customer to the captive market has been approved by the ERC, with notice to the COMPANY. For the avoidance of doubt, prior to the effectivity of the discontinuance of the DWS to such RES’ Customer, the RES shall continue to be liable to the COMPANY for the payment of charges as stipulated under Sections 3 and 9 hereof and the observance of the terms and conditions provided in this Agreement and the accompanying Schedule with its customer. Section 19. Undelivered Energy, Damages and Other Losses. The RES understands that the COMPANY undertakes scheduled and/or unscheduled maintenance, repairs and replacement of its facilities to improve service. In such cases, and in other cases of outages due to force majeure or for reasons not attributable to the fault of the COMPANY, the RES agrees that the COMPANY shall not be liable for any undelivered energy, or for damages, whether direct or consequential, including without limitation, loss of profits, loss of revenue, or loss of production capacity, as a result of interruption or disconnection of its service. Section 20. Supply Imbalances. The RES shall have the responsibility of procuring the full power supply requirement of its customers, It shall reimburse to the COMPANY the cost of anyERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 22 of 28 additional power supply requirement delivered to the RES’ Customer but billed to the COMPANY by the Wholesale Electricity Spot Market (WESM), including any applicable interest, surcharge or penalties Section 21. Liability for Non-technical System Losses and Damages as a result of Pilferage. The RES shall be liable for non-technical system losses if it condones, colludes, conspires with, or engages in the pilferage of electricity or tampering of meters or facilities of the COMPANY. Condonation, collusion and conspiracy shall include, but not be limited to, the following instances: (a) when a RES has knowledge of pilferage of electricity committed or being committed by its customer and refuses or fails to report such fact to the COMPANY; and (b) when a RES or any of its employees or representatives assists or participates in the commission of pilferage of electricity by its customer. The RES shall likewise be liable for any damages caused to the COMPANY or third persons arising, or resulting, from such pilferage. Section 22. Force Majeure. The COMPANY shall not be liable to the RES with respect to the non-performance of any of its obligations under this Agreement in the event and to the extent that such non-performance is the direct result of or has been directly caused by force majeure. Force majeure shall mean such event: (i) that is not within the reasonable control, directly and indirectly, of the COMPANY; and (ii) which, despite the exercise of reasonable diligence, cannot be prevented, avoided or removed by the COMPANY; Provided that, the COMPANY has taken all reasonable precautions, and due care in order to avoid or mitigate the effect of such event on the COMPANY’s ability to perform its obligations under this Agreement; Force Majeure shall include, but not limited to, any of the following: (a) A typhoon, storm, tropical depression, flood, drought, volcanic eruption, earthquake, tidal wave or landslide; (b) An act of public enemy, war (declared or undeclared), sabotage, blockade, revolution, riot, insurrection, civil commotion or any violent or threatening actions; (c) Any lawful orders rendered by competent authority, including any advice or warnings of government authorities for safety reasons; andERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 23 of 28 (d) Transmission constraints and/or outages in the Transmission and Distribution System. Section 23. Amendment/Modification of Agreement. This Agreement, including the applicable Schedule with the RES’ Customer, constitutes the sole and entire agreement between the PARTIES and supersedes all previous arrangements or agreements in respect of the subject-matter of this Agreement. No amendments of this Agreement or the applicable Schedule with the RES’ Customer, or consent to any departure therefrom, shall in any way be of any force or effect unless confirmed in writing and signed by the PARTIES. If necessary, such amendment or departure shall be effective only upon approval by the ERC. The failure of any Party, at any time, to require performance of any provision hereof shall in no manner affect the right to enforce the same at a later time. No waiver by any Party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, shall be deemed to be construed as a further or continuing-waiver of such breach or waiver of the breach of any other term or covenant, unless such waiver is in writing, Section 24, Effectivity and Termination of Agreement. This Agreement shall be valid and binding to the PARTIES upon execution hereof unless terminated by either party by serving written notice to the other at least thirty (30) calendar days before the effective date of termination. It shall take effect on the earliest next regular meter reading date of the RES’ Customer/s, as contained in the attached Schedule/s, after the execution date hereof, provided that such RES’ Customer/s has/have validly executed Connection Agreement/s with the COMPANY. This Agreement may likewise be terminated: (a) after due notice, for violation of any of the obligations set forth herein by any Party; (b) under Section 15, upon termination of the contract between the RES and its customer; and/or (c) without any need of prior notice: (i) under Section 4, when the RES is no longer eligible for DWS; (ii) when this Agreement is rendered invalid and/or unenforceable by law or competent authority; (iii) when the performance of any obligations under this Agreement has been rendered legally or physically impossible; (iv) in case of the RES’ failure to pay the bill deposit or the corresponding adjustment thereon; and (v) in case of violation of R.A. 7832 otherwise known as “Anti-eleciricity and Electric Transmission Lines/Materials Pilferage Act of 1994" either by the RES’ own act or if the RES has condoned, colluded or conspired with its End-use customer.ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 24 of 28 Upon termination or expiration of this Agreement, all rights and obligations of the PARTIES hereunder shall cease, except (a) such rights and obligations as may have accrued as of the date of termination or expiration, such as but not limited to payment of any outstanding bills; and (b) any right or obligation which survives the termination of this Agreement. Section 25. Delivery of Notices. All notices, letters and/or communications shall be addressed to the following: For the COMPANY: Name: Mailing Address: Phone Number: Fax Number: Email Address: Billing Address: (both electronic and postal) For the RES: Name: Mailing Address: Phone Number: Fax Number: Email Address: Billing Address: (both electronic and postal) ERC License Number: Either Party may change the above information through written notice to the other Party. Section 26. Warranties. The PARTIES represent and warrant to each other that: (i) the signatories to this Agreement are duly authorized to sign this Agreement; and (ii) all requisite authorizations, approvals, permits or consent to make this Agreement or any amendment or supplement thereto valid and enforceable have been obtained. Section 27. __ Invalidity of Provisions. If any provision of this Agreement is declared by a competent court to be invalid orERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 25 of 28 unenforceable, the invalidity or unenforceability of such provisions shall not affect the other provisions of this Agreement, and all provisions not affected by such invalidity or unenforceability shall remain in full force and effect. Section 28. Assignment of Rights. The RES shall not assign its rights under this Agreement. In case of any change in its corporate name, or status brought about by merger, consolidation, amendment of articles of incorporation, sale of business or transfer of ownership, the RES shall advise the COMPANY of such fact in writing, within thirty (30) calendar days from the effective date thereof. Violation of this provision shall give the COMPANY the right to terminate this Agreement, without prejudice to any action that the COMPANY may bring for the collection of any outstanding obligation of the RES to the COMPANY. Section 29. Disputes. |f any dispute shall arise between the PARTIES in connection with or arising out of this Agreement, either party may request in writing to meet within five (5) days from occurrence thereof and attempt to resolve the dispute. In the event that such dispute remains unresolved within ten (10) days after such request, the aggrieved party may bring the dispute for resolution by the ERC if said dispute is within the exclusive jurisdiction of the ERC. Otherwise, the aggrieved party may seek redress from the regular courts. In case of the latter, the PARTIES hereby agree that the venue for any court action shall be the regular courts of the principal place of business or principal office where the COMPANY is located. IN WITNESS WHEREOF, the PARTIES hereto have caused the foregoing instrument to be executed by their respective officers and/or their representatives, thereunto duly authorized at the place and on the date first above written. Signature Over Printed Name Signature Over Printed Name (Date Signed) (Date Signed) SIGNED IN THE PRESENCE OF: (Witness Name, Signature Over (Witness Name, Signature Over Printed Name) Printed Name)ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 26 of 28 ACKNOWLEDGMENT Republic of the Philippines} }Ss. Before me, a Notary Public, for and in the City of personally appeared the following affiants with their respective competent proof of identities: DU Valid government issued id RES Valid government issued id known to me and to me known to be the same persons who executed the’ foregoing instrument, consisting of pages, including the page whereon this Acknowledgment is written, with all pages signed by both PARTIES and their instrumental witnesses, and they acknowledged to me that the same is their free and voluntary act and deed and that of the Corporation/Company they respectively represent. IN WITNESS WHEREOF, | have hereunto set my hand and seal this day of . at : Philippines. Doc. No. Page No. i Book No. Series of 7. The proposed pro-forma DWSA is already aligned with, and subject to the provisions of the DSOAR, as amended, and other applicable rules and guidelines. It takes into consideration the changes in the regulatory environment brought about by the transition to RCOA as well as the rights, obligations and interests of the RESes and the DUs in connection with the provision of distribution wheeling services ieee Considering, however, that each customer is unique and has specific requirements, the provisions of said pro- forma DWSA are without prejudice to the inclusion ofERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 27 of 28 additional provisions therein to address said specific requirements, which are voluntarily and freely agreed upon by the parties, and which shall form part of the aforesaid agreement, provided, that such additional provisions are consistent with existing pertinent law and rules and regulations of the Commission. ie The instant petition is being filed to facilitate the smooth transition of the power industry to a regime in which retail competition is already available, The approval of said pro- forma DWSA will ensure that equal treatment would be given to all RESes applying for distribution wheeling services and will provide them the opportunity to evaluate the contract within sufficient time prior to commercial operations of RCOA and enable them to fully participate in the retail market. 10. In view of the foregoing, it submits that there is a need for the Commission to adopt the aforesaid pro-forma DWSA. 11. Thus, it prays for the Commission to exercise its rule- making power and subsequently order the adoption of the pro-forma DWSA to apply to all DUs as proposed and detailed in the instant petition. The Commission has set the petition for public consultation on March 21, 2013 (Thursday) at nine o’clock in the morning (9:00 A.M.) at the ERC Hearing Room, 15" Floor, Pacific Center Building, San Miguel Avenue, Pasig City. All interested parties may submit their respective comments on the proposed pro-forma DWSA (in both hard and soft copies) on or before March 11, 2013. Electronic copies may be sent to tariffs@erc.gov.ph. Parties who have filed their written comments on or before the prescribed period shall be given priority during the above-scheduled public consultation. Copies of the said proposed pro-forma DWSA may be downloaded from the ERC-administered website at www.erc.gov.ph or may be photocopied, at cost, during regular office hours at the ERC Main Office.ERC CASE NO. 2013-003 RM NOTICE OF PROPOSED RULE-MAKING/February 25, 2013 Page 28 of 28 WITNESS, the Honorable Chairperson, ZENAIDA G. CRUZ- DUCUT, and the Honorable Commissioners, MARIA TERESA A.R. CASTANEDA, JOSE C. REYES, ALFREDO J. NON, and GLORIA VICTORIA C. YAP-TARUC, Energy Regulatory Commission, this 25" day of February, 2013 at Pasig City. ATTY. Fl IS SATURNINO C. JUAN ecutive Director Ill \ citidoparcorowsa2019-003minph