WHEREAS, Section 43 of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA) empowers the Energy Regulatory Commission (Commission), in the public interest, to establish and enforce a methodology for the recovery of fuel and purchased power costs and incremental foreign exchange adjustments by the National Power Corporation (NPC).

WHEREAS, on February 24, 2003, the Commission adopted the Implementing Rules for the Recovery of Fuel and Independent Power Producers (IPP) Costs: Generation Rate Adjustment Mechanism (GRAM) and Incremental Currency Exchange Rate Adjustments (ICERA).

WHEREAS, on August 14, 2008, the Power Sector Assets and Liabilities Management Corporation (PSALM) filed an application for approval of the œProposed Rules for the Automatic Recovery of PSALM Generation Assets ™ Monthly Fuel Purchased Power and Foreign Exchange-Related Costs  docketed as ERC Case No. 2008-019 RM;

WHEREAS, on October 21, 2008, the Commission issued an Order setting the PSALM ™s proposed Rules for public consultation on November 13, 2008;

WHEREAS, during the November 13, 2008 public consultation, several issues and concerns were raised by the parties;

WHEREAS, in its Notice dated December 17, 2008, the Commission proposed a separate œRules for the Automatic Recovery of Monthly Fuel, Purchased Power Costs and Foreign Exchange Related Costs of the National Power Corporation (NPC),  which was set for public consultation on January 26, 2009;

WHEREAS, at the January 26, 2009 public consultation, the stakeholders raised several issues pertaining to the following: a) Clarification on the definition of terms; b) Unit of measurement of the reference prices of fuel; c) Relaxation on the limit of adjustments for reference prices; d) Other Fuel Cost Adjustment (OFCA) and Other Purchased Power Cost Adjustment (OPPCA); and e) Test period of filing the adjustments;

WHEREAS, on February 11, 2009, the Commission ™s proposed Rules was posted on its website, and a Notice was issued directing all interested parties to submit their comments thereon on or before February 25, 2009;

WHEREAS, on various dates, the Commission received several comments from the stakeholders;

WHEREAS, the Commission considered all the comments submitted by the parties in the finalization of the said proposed Rules;

NOW THEREFORE, the Commission, after thorough and due deliberation, RESOLVED as it hereby RESOLVES to ADOPT the Rules for the Automatic Recovery of Monthly Fuel and Purchased Power Costs and Foreign-Exchange Related Costs by the National Power Corporation (NPC),  hereto attached as ANNEX œA ^[*]

This Resolution shall take effect fifteen (15) days following its publication in a newspaper of general circulation in the Philippines.

Let copies of this Resolution be furnished the University of the Philippines Law Center-Office of the National Administrative Register (UPLC-ONAR), National Grid Corporation of the Philippines (NGCP), Philippine Chamber of Commerce and Industry (PCCI) and all distribution utilities.

Adopted: 3 Aug. 2009

(SGD.) ZENAIDA G. CRUZ-DUCUT Chairperson
(SGD.) RAUF A. TAN Commissioner	(SGD.) ALEJANDRO Z. BARIN Commissioner
(SGD.) MARIA TERESA A.R. CASTA EDA Commissioner	(SGD.) JOSE C.REYES Commissioner

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^[*] Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.