Republic of the Philippines ENERGY REGUL-ATORY COMMISSION San Miguel Avenue, Pasig City, ORDER

Transcription

1 Republc of the Phlppnes ENERGY REGUL-ATORY COMMSSON San Mguel Avenue Pasg Cty N THE MATTER OF THE APPLCATON FOR APPROVAL OF THE PROPOSED PREPAD METERNG SYSTEM AND FOR AUTHORTY TO PROVDE PREPAD RETAL ELECTRC SERVCE WTH PRAYER FOR PROVSONAL AUTHORTY ERC CASE NO PRES XEN ENERGY SYSTEMS NC. (XES) AND BATANGAS ELECTRC COOPERATVE NC. (J3ATELEC ) Appl~ants x x ORDER On August the Xen Energy Systems nc. (XES) and the Batangas Electrc Cooperatve nc. (BATELEC ) fled an applcaton for approval of the proposed prepad meterng system and for authorty to provde prepad retal electrc servce wth prayer for provsonal authorty. n the sad applcaton XES and BATELEC alleged among others that: 1. BArELEC s a non-stock non-proft electrc cooperatve organzed and exstng under and by vrtue of Presdental Decree No. 269\ as amended wth offce address at Calaca Batqngas. t has a franchse to dstrbute electrcty n' the Muncpaltes of Agonclo Balayan Calqca Qalatagan Lemery Lan Nasugbu. San Lus San Ncolas Sta. Teresta and Taaland Tuy all n the Provnce of Batangas; 1 Creatng the "Natonal Electrfcaton Admnstraton" as a Corporaton Prescrbng ts Powers and Actvtes Appropratng the Necessary Fund~ Therefor and Declarng a Natonal Polcy Objectve for the Total Electrfcaton of the Phlppnes on an Area Coverage SeNee Bass The Organzaton. Promoton and Development of Fectrc Cooperatves to Attan the sad Objectve Prescrbng Terms and Condtons lor ther Operatons the Repeal Of Republc ActNo. B038 and for other Purposes

2 "1 ERC CASE NO PR~S " ORDER/September f"cj92 of 1~ ~ ~ ; ~ 2. XES s a corporaton duly organzed and exstng py vrtue of the laws of the Repuplc of the Phlppnes (RP). ts prncpal offce s located at Sute 412 Ctyland PClsong famo Tower Don Chno Roces Avenue Po Del Plar Makat <;:ty; 2.1 XES s a poneerng machne-to-machne and mclchne-to-rnoble technology enabler and; provder n the Asa Pacfc Regon provdng applcatons 3nd platforms whch _ support varous ndustry segments n: partnershp wth telecommuncatons operators system ntegrptors hardware and software vendors and related applqaton developers; 2.2 XES s a provder of prejad electrcty meters and the assocated support servces; 3. They may be served orders and other processes through ther counsel LClchca Clnd Assocates Law Offces at ther gven address; 4. The nstant Applcaton s fled pursuant to Secton 3 of Rule 5 of the "ERG's Rules of Practce and Procedure" approved by the Commsson on June n ts Resoluton No. 38 Seres of 2006 n relaton to the "Rules for Prepad Retal Electrc Servce Usng a Prepad Meterng System" (the Prepad Meterng Rules) approved by the Commsson n ts Resoluton No. 15 Seres of 2009; 5. The present Applcaton does not requre a new rate schedule as the electrcty rate to be appled s BATELEC ls retal rate as already approved by the Commsson. Hence the present Applcaton need not comply wth the regulatory flng requrements for a rate case 2 ; 6. Prepad electrcty meterng systems "Vhle not new n other countres are yet to be mplemented n the Phlppnes and n ts regulatory settng.- Thus the Prepad Meterng Rules were ssued by the Commsson to provde resdental customers q choce for ther energy management strateges enhance the operatonal effcency of Dstrbuton Utltes (DUs) and promote Demand Sde Management (DSy1)3; 7. BATELEC proposes the mplementaton of a prepad meterng system n order to reduce ts meter readng costs as well as to mprove ts revenue management system; 8. T~ey submt that n addtqn the mple[flentaton of a prepad meterng system wll also provde BATELEC 's resdental customers wth an effectve means of managng ther electrcty consumpton; ' : 'Secton 5.1 pre~ad Meterng Rules 3Secton 1.1 Prepad Meterng Rules

3 ERC CASE NO PRES ORDER/September J'.g~JQfJ~ ~~~~_ ~~~-'--'-'~"-'--c "' As opposed to postpad cjstomer~ who wll only know the exte~t of ther electrcty (::onsumpton through ther bll at the end qf every bllng month prepad customers wll be able to montor ther electrcty costs on a real-tme.bass. Consequently prepad customers can manage and budget ther electrcty consumpton more effectvely; 8.2 n addton prepad customers m~y purchase electrcty cr\ldts n qmounts that are reasonably small and better suted fqr household budgetng n vew of the lmted dsposable ncome elf the common Flpno household;. 8.3 ndeed goods alld servces n reasonably small quantte~ avalable for reasonably small costs have proven to be best sute~ to the needs and fnanc;al resources of the commoll Flpnp household. The Commsson may take judcal notce of th13. preva'ence of the purchase of household products n sachets or fl small amounts not to menton the popularty and ubquty qf prepad moble phone credts; 9. Thus each prepad customer can actvely and conscentously montbr anq manage hs electrcty consumpton. to lower hs power costs an~ ensure that such costs are at a evel he can afford; 10. Moreover the mplementaton of a prepad meterng system enhances the operatonal effcency of BATELEC by obvatng costs n relato'n to meter readng bllngs and collec;tons uncollectble accounts plferage among others;. 11.ln qddton prepad meterng helps address other concerns such as resdental customers who are unable to Pqy ther blls or have bee'n found gulty of llegql use of electrcty and the common lessor's rsk Gf lessees qbscondng and leavng behnd ynpad electrcty blls; Thus recognzng the n~ed to enhance both the energy mqnqgemet)t of resdental customer~. and BATELE';C 's. operatonal effcency Applcants propose to.. mplement q prepad meterng system for BATELEC 's customers; They propose to utlze XES's prepqd meterng system to provde Prepad Retal Electrcty SeNce to BATELEC 's resdental customers. Applcants submt that. as dscussed extensvely hereunder the proposed'p'repacf meterng system comples' wth the relevant requrements under the Prepad Meterng Rules; As dscussed below XES's: prepad meterng system utlze~ nfernet and moble phone pl$tforhls to effect qccurate real-tm~ credtng and consumpton. of prepad electrcty credt and provde easly accesr;;ble reahme prepad credt nformaton fdr the beneft of both the custom$rs and the dstrbuton utlty;.. j. : j '.:'

4 .. ERC CASE NO PRES' ORDERSeptember PCg~_j of 1 ~_---~ ~------' '''1'' 13.2 n order to :ensure accessblty relablty and custom:\r convenence n'thedstrbuton of prepad electrcty credt XES'~.. system utlzes the same platform used n the dstrbuton df prepad moble phone credt that reaches practcally every sarsar store level;: 14.The XES MeterS. Applcants wll utlze Form 1S and 2S meters (XES Meters). The XES Meters corpply wth all the relevarjt requrements of the Prepad Meterng Rules; The XES Meters have the capablty to load purchased credt dsplay real tme nformaton on how the load s beng consumed and to g\(e a warrng that the load s close to zero provdng l postve b\jffer before electrcty s automatcally dsconnected 4 ; : 14.2 XES MeterS duly certfed. The XESf Meters comply wth th~ standards of the Amercan Natonal Standards nsttute (ANS);5 The Meters have also passed tests conducted by the Meterng Dvson of the yommsson 6 ; 14.3 Energy management by resdental clstomer. The XE~ Meters enable customers to effectvely montor and manage ther electrcty consumpton by montorng real-tme nformato:n reflected on a lqud Crystal Dsplay (LCD) screen whch replaces the nf3ed for costly human mf3ter readng. The LCD screen shows the followng 7 :.. a) the current balance n pesos and centavos; b) the tme and date; c) the customer's prevous thrty (30) day-perod consumpton; d) the number of qays nto the current perod; e) the consumpton nto the p~rod n kwhr; 14.4 n addton un<;ler)~es's system the customer may access hs.. prepad credt' baclnce at any tme through Short Message Servce (SMS)... :' Upon regstraton as a prepad electrcty customer the customer s gven a username and password to "ccess account h:;tory onlne. Also the customer may regst~r hs moble phone number for SMS notfcatons. The custom$r may also access a vrtual bll transacton hstory and all other relevant detals of hs account over the nternet at any tme; 4 1n complance yvth Secton 1.3 Defntoh of Prepad Meter Prepad Meterng Rules 51n COmplance wth Secton 2.2 Prepad Meterng Rules 61n complance wth Secton 2.3 Prepaq Meterng Rules' 71n complance wth Sectons and 2.4Prepad Met~rng Rules.. "''''.. : ;';

5 : ERC CASE NO PRES' ORDERSeptember '~1'l5 ofj ~ ~---r. :;..'. 14~5' n' order to provde suffcent warnng to the customer the Meter? " have a red Lght Emttng Dode (LED) lght that flashes f th/3 remanng credt s at php50 and below. The customer may alsb opt to receve automatc low credt balance alerts va SMS onc~ hs credt drops to PhP50.00 or below 8 ; 146 n aqqton n order to facltate the customer's management of hs energy utlzaton XES's system ensures that he s duly nforme~ of the relevant detals of hs prepad account ncludng eacr purchase of prepad credt and that he has a record of the same;: :' : nstallaton of XES Meters. The XES Meters are weatherproqf and can be easly nstalled whether ndoors or outdoors 9 ; : 15.As dscussed the XES Meters clearly comply wth all the relevalt requrements of the Prepad Meterng Rules pnd may thus be utlze~ for the mplementaton of the prepad meterng system. The Commsson's approval would greatly facltate the provson of prepap retal electrcty servce by Dstrbuton Utltes (DUs); 16. Approved retal rat~ effectvely appled. Applcants propose that th:e rate to be appljed to prepad electrcty customers shall be the actual cost of electrcty servce at the tme of consunpton. 10 The actual cost s BATELEC 's retal rate approved by the Commsson the sam1e rate pad by postpad customers. Such rate s the only rate that s fa'r and benefcal to the prepad electrcty qustomers snce the electrcty servce that BATELEC wll extend to them wll be equvalent tothb amount of the credt purchased; Notably howeverthe actual cost of electrcty servce at the tm'e of consumpton s not known yet or determnable at such tme. )t s only after the end of the bllng perod that BATELEC wll hav'e the nformaton necessary to determne the retal rate for such bllng perod vyhch nformaton ncludes the generaton charges power delvery seryce charges ancj the lke. nformaton lketh:e sad charges wll Q3 known to 3ATELEC only when t receves the bllngs from te power supplers and.the transmsson servc;e provder;'.. ' 16.2 Gven the foregong t s approprate to' apply the best avalabl'e rate that s a rate'that that most cl<;lsely: approxmates the actu~1 cost at the tme of (:;pnsumpton. The best avalable rate may b'e BATELEC 's mosf recerlavalcble rate whch s lkely the ret~ rate of the prevo4s bllng perod qr the second prevous bllng perod; ". r 61n complance wth Sectons ' anq '2.4: Prepad Meterng Rules gn complanc~ wth Secton 2.4 Prepad Meterng Rules 10ln complance wth Secton 2.6 Prepad Meterng RLJles.. '. L. j :-'

6 ERC CASE NO PRES ORDER/September p g~ 6 ol~_._~.. ~_.. _ ' However there may be a dfference between the best avalablk - - rate and the.actual cost. Thus there s p. need to. maky _ approprate adjustments when the actual cost S determned tf ensure that any over-recovery resultng.from such dfference on the pqrt of BATELEC ls effectvely credted to the customer an~ : conversely any under-recovery s recovered by BATELEC ; 16.4 Wth the adjustment the customer ends up payng the actual cojt of electrcty servce. The applcaton of the best avalable rate ~t the tme of electrcty consumpton as well as the necessary adjustment to correct any over- and under-recoveres can bl:) easly and securely mplemented by XESl's system; Thus Applcants propose that the best avalqble rate at the tme of electrcty consumpton. be appled subject to the necessar~ adjustments at the end of the bllng month; 18. Applcants submt that the actual cost of electrcty servce at the tmf'l of consumpton should be appled to prepad electrcty transactons nstead of the rate current at the tme of the purchase of the credt a;s ndcated n the Prepad Meterng Rules; - ' 18.1 The rate at the tme of credt purchase does not reflect the actual cost of electrcty servce.' f such rate s appled both BATELEc and the prepad customers are :)xposed to the rsks of rate fluctuaton. Ths '{'ll result n over-payment on the part of thr prepad customers or under-recovery on the part of BATELEC; 18.2 n :contrast the applcaton of the rate at the tme of consumpto'n not only reflects the actu)1 cost of electrcty servce but wll also obvate the rsk of rate fluctuaton. t wll also be far and benefcal to the customers snce the electrcty servce that BATELEC Wll extend to them wll be equvalent to the amou~t spent. n the' end t wll protect the nterest of both th'e customers and BATELEC; 19. mplementaton of lfellle rl~e. The lfelne rate under Secton 73 M Republc Act No wll be mplemented for prepad customers.11 A preppd customer who does not reach the relevant electrc~y consumpton threshold at the end of a bllng month wll receve the approprate rebate n hl:; prepad electrcty credt; 20. Utlzaton of well-establshecl -and proven prepad credt dstrputon channels.: As prevously dscusl:;ed Applcants wll make - prepad electrcty cred\ avaableto'satelec 's customers through the same means and usng the same retal channels qs prepad moblb phone credts; " n complanc' wth Sectons and.6 f'reprd f{1eterng Rules..

7 ERC CASE NQ PRES ORDERSeptemper Pa[~7 of~~ '-" :. - -~-: T~ Applcants submt that the r~tal dstrbuton and sales of prepa~ moble phone credts s already well establshed and wdely used and has proven to be a very effectve means of dstrbuton of prepa~ credt; 22. The' utlzaton of the same retal channels ensures the effectvr dstrbuton of prepad electrcty credt and facltates the promoton of the prepad Meterng System as well as customer acceptance an~ convenence;. 23. Purchlse of prepad electrcty credt Postpad electrc~y customers are ssuefj bllngs by BATELEC after the end of the bllng month. for electrcty consumed wthn that bllng month. Th~ cust\lmers then pay ther blls at BATELEC 's offce or paymeht centers. n contrast prepad electrcty customers purchase electrcty credts whch are "loaded" n ther respectve accounts much n thf same way as one Pl1rchasE3s prepad moble phone load for hs prepap phone) account; 24. The prepad load credted to the customer's account s appled to hs elec\rdty conslmpton on q real-tme bass smlar to the applcato:n of mpble phone credt when the customer makes phone calls or sends. text messages;. 25_ The purchase of prepad moble phone credt s subject to a nomn~1 fee to cover qmong others the costs of dstrbuton of credt to retalers or sar-sar stores. Often the fee vares from sar-sar store to sar-s~r store dependng on the3 re3taler; 26. Smlarly prepad electrcty credt s subject to a nomnal fee 10wEjlr than the transacton fee of moble phone provders. As explan~d prevously the credt shall pe appled to the actual cost of electrc\y only. The nomnal fee on the other hand covers the cost of retel dstrbuton of credts the management and operaton of the prepad m~terng system amor19 others;.. 27.Alfcessble prepclq electrcty creqt. Applcants submt th~t convenence for the customers and accessblty of prepad credt f~r pu'rchase are crtcal to the successful mplementaton of PRES; To ensure convenerwe and accessblty to all customers prepad ; credt wll be made qvalable through retalers SLch as sar-sar stores as well as at BATELEC 's man offce and payme~t centers.12a prepad 'electrcty customer need only go to the.'. neghborhood sar~sqr 'stqre to p\ln;hasecredts n the same w~y as he would moble phone creqt. UnlkE) postpad customers he wll not need set asde tme and ncur transportaton costs to go to BATELEC 's offc;e Or payme3nt centers;.: n complance wth Secton Prepad Me;~rng R~es :: 1 ' ~..' '.

8 ERC CASE NO PRES ORDER/September f'<l9_e.?qfja~......_-_ _._ Unlke postpadclstcmers a prepad customer wll not need to go 'to BATELEC 's offce'or payment centers durng workng hourb.' and queue to pay' hs electrcty bls. He only needs to go to the neghborhood sar-sar store at hs convenence savng tme and transportaton costs; 28. Credt n reasonably small ncrements. Prepad credt wll be mad~ avalable to customers at the PhP100 ncr~m~ntsn Applcants submt that PhP100 s reasonably affordable to customers; 29. Manner of Plrchase am credtng to account. 14 Under the XES system tt1e purchase and credtng of prepad electrcty accounts akh to the prepad moble telephone servce; t ' Smlar to the purchase of prepad mqbl\ phone credt where th'e customer nforms the retaler of hsmqble phone number anb makepayment all the prepad customer has to do s gve th~e retaler hs meter number and pay for hs prepad credt. Also. the retaler or sar-sar store attendant processes the transact~n and credts the qustomer's account by way of SMS usng hl s moble phone; Confrmaton of credt purchase.151~ the> customer regstered hs moble phone number wth the XES system for SMS notfcaton\". the customer shall receve confrmaton of the purchase of credt by way of an SMS showng the followng nformaton: a) Name of dstrbuton utlty e.g.batelec ; b) Transacton Number; : c) Date and tme of purchase; d) Meter dentfcaton number; e) Name of customer; f) Load amount; qnd. 'g) Number of transactons n the sllme month; 29.3 n addton the custorl1er mqy f he so desres obtan ~t BATELEC 's offcea'wrtlen cqnfrmaton ofthe credt purchase qnd of any other Cjspect of hs acc(lunt; ; ". 13ln complanc~ wth Secton 2.6 Prepad Meterng Rules 14ln complanc'e wth Secton Prepaq Met~jn~ Rul?s' 15ln complance \/lth Secton 2.7 Prepad MeterrgR~leS..

9 : " ERC CASE-NO PRES ORDER/September f ge?_9 of 1 s._~. ~._. ' r n addton as prevpusly mentoned the customer may accesj3 hs account detals anytme throl\gh 8M8 or through the nternet. He may. also vew the det.als of hs account on the LCD screen or the meter tself; ' 30.Whle the Prepad Meterng Rules requre a prnted confrmaton qf credt purchase 16 Applcants propose the utlzaton of SM).> confrmaton as dscussed above; 30.1 t s clear that the purpose of the reql\rement s. to ensure that th'e customer s duly nformed of the relevant detals of hs purchas:e of the prepad creldt and that he may hqve a record of the samy. However prnted cpnfrmaton s morel approprate for credt purchases made at BA TELEC 's ma[1 offce or payment center~. t s not necessarly approprate for credt purchases made through retalers; : 30.2 For prepad moble: phone credt purchases retalers are ndt requred to ssue' wrtten confrmatqns n behalf of t~e telecommuncatons companes. nstead qn SMS message s transmtted to the moble phone subscrber confrmng and statng the detals of the credt pljrchase; 30.3 Should wrtten confrmaton be requred credt cannot be made avalable throl\gh retalers. As dscussed avalablty of cre~t through retalers provdes the accessblty and convenence 9n the part of the customers that s crucal to the sl\ccessful mplementaton of any prepad meterng system. Wthout sudh 'accessblty and convenence an effectve and successf~1 prepad meterng system s not possble; 30.4 Applcants.submt that confrmaton of credt pl\rchase through 8MS complemented by easy qnd rnmedate access to accou0t nformaton also thro-l9h 8M8 and the opton of obtanng wrtt~n confrmaton at SATELEC 's offce suffcently ensure that tre ntere)sts of the custqmers are protected. The objectve of t~e Rules to ensure that the customer s duly nformed of the relevant detals of hs credt purchqse and that he may have a record of the same are more than qdequately met; 31. Moreoyer the dstrbuton and sales of prepad credt through retalets obvates the need for SA TELEC to ssue bllr19s and collect payments from the cl\stomers; thereby' r~ducng costs ar)denhancng operaton~1 effcency; 16Secton 2.7 prepad Meterng Rules....' :: :

10 ERC CASE NO PRES ORDER/September p~1~9l1a_ _._ _ Non-nterrupton of servce durng off-holrs. 17 Electrcty servce s nterrupted when the customer runs out of prepad credt despte 10Wt balance warnngs from hs meter and through SMS. However servc~ should not be nterrupted f the Gustomer runs out of credt because there s no credt avalable for purchase; 32.1 XES's system shall be programmed not to nterrupt the electrc. servce durng hours when retalers and BATELEC 's offce an~ payment centers are CO. sed ("off-hours") even f the custome1r runs out of prepad credt; 32.2The customer may stll aval of electrcty servce untl the tme hl. can already purchase electrcty credt or when the retalers c\r BATELEC 's offce and payment centers. Durng off-hours th~ customer may ncur a negatve balance n hs credt whch wll b~ netted out once he purchases credts; : 32.3 BATELEC wll not need to ncur the costs of mantanng at leadt one outlet for prepad credt open 24 hours a day for purchase qf prepad credt whch costs wll necessarly be passed on to tp customers; 33. The foregong arrangement ensures electrcty servce s ndt nterrupted by reason Of unavalablty of electrcty credt whle at thf same tme obveltng the necessty of addtonal costs on the pelrt of BATE-EC ; 34. Whle the Prepad Meterng Rules requre thelt customers shall havb eelsy access to prepad credt 24 hours a day18 Applcants propose thb foregong arrangement to ensure that the customer's rghts Elre morb than adequately protected; 34.1 t s clear that the polcy objectve of such requrement s to ensure that a customer yvll not suffer an nterrupton of servce due tb unavalablty of credt for purchase; 34.2 ApplcElnts subr(lt thelt the foregong arrangement ensures that such objectve s met whle at the SElme tme obvatng th~ necessty of addtonal costs on the part of BA TELEC r mantanng a sales outlet twenty-four (24) hours a day whch costs are necessarly passed on to the customers. n addtoh the arrangement s more benefcal and convenent to thb customers snce they wll no longer be constraned to travel toth@ sales outlet at ungodly hours only to purchase credt; " :; ""." :... '.-.. '"-'.' ;'." " " 17ln complance wth Secton 2.8 Prepad Meterng Rules 1 Secton 2.8 prepad Meterng Rules..: :. :

11 ERC CASENO PRES. ORDER/September f~.l:l.ua'. " r... ~..._ SM~ notfcatons and servces. As mentoned earler upon regstraton as a prepad electrcty customer the customer may regster hs moble phone number for SMS notfcatons and other SMS-based servces prov~ed by XES's system. To address thf necessary cost of such servces and at the same tme ensure that thf customers are not und\.lly burdened the SMS servces are subject to a per-$ms fee that s not greater than the fee mposed by moble phon1e operators for smlar value-added servces; 36. Notfcatons of unbundled charges. n order to nform prepa'd customers of the unbundled components of BATELEC 's preval~g retal rate '9 BATELEC shall post a prnted temzaton at ts man offc~ and payment centers and shall furnsh a copy to a resdent~1 cllstomer upon hs request. n addton the temzaton shall be easjly afcessble by the prepad customer onlne; 37. Terms' and condtjolls of servce. A summary of the terms a1d condtons of servce. to customers s attached hereto as Ann 1 x "F.;wln addton the procedure that BATELEC seeks to apply n the converson of customers from post-pad to prepad servce and vc~versa ncludng the refund and payment of the bll depost s contan~d n Annex "G" hereof1...'. 38. Montorng and complance wth reportor1 requrements. XES ls system enables BATELEC to easly and effectvely montor all prepad meterng transactons and electrcty consumpton and mantan a~d access records of the same. XES's system provdes BATELEC wth real-tme onlne nterface for montorng as well as record keepng ov~r at least the precedng two years22; 39.XESl's system greatly facltates BATELEC 's complance wth t~e Commsson's record keepng 23 and reportoral requrements24 as well as clstomer requests for account nformaton and records z5 wlh XES's system the requred nformaton s readly avalable and m~y be easly extracted n a matter of seconds thereby reducrlg admnstratve costs and enhancng operatonal effcency;.. 40.R.ecpvery of cost of meters. Under Prepad Meterng Ruler cystomers shall not be made to advance the cost of or purchase t~e p~epad meters. Prepad meter deposts shall not be collected from t~e customers' ' t.. '". <' 19ln complance v.:th Secton 5.2 Prepad Meterng Rules 20ln complance vjth Secton Prepad Meterng Rules 21 ln complance wth Secton 2;1.11 and n accordance wth Secto~ 2.10 and Artcle Prepad Metenng Rules 221n complance wth Secton Prepad Meterng Rules :. 23ln complance wth Secton 2.9 PrepC\d f'1eterng R~les '..' 241n complance w.th Artcle V Prepad Metflrng Rules n complance wth Secton 2.9. Prepad Meterng R41es... ::'.'.

12 ERC CASE NO. 2Q PRES ORDERSeptEjmber PaRt'l12 of 1~_.:_ ~-'-" ~-"-c_ t 41. As the cost ofprepadmet~rs consttut\ls captal cost on the part 9f BAl'ELEC t s thus proposed that such cost be recovered n thr sam e m anner as other cap tal costs" subje ct to the flng of th[ app~oprate applcaton wth the Commsqon 2 ; ~ r. ''. : f:. ' 42Target date for mplementaton BATELEC ntends to offer antl provde PRES 'to ts c ustomers wthn a reasonable tme from the ssuance of the approprate authorty by the Commsson 27 ;.' 43.lnf9rrnaton campagn. n order to nform ts customers of ts offer to provde PRES such that they may make nformed decsons oh wh~ther to subscrbe to the sad servce BATELEC.wll wth th:e assl::;tance of XES: undertake a program to duly nform ts customefls of the varous aspects of the PRES 28 ; 44. Plot Tests. n order to ensure that rllable mplementaton of thle Prepad Meterng Servce Applcants have successfully conduct~d plot runs of the system endng on June ; '; : 45 UndFlr the Prepad Meterng Rules29th\ Commsson may allow an excepton from any provson of the sad Rl1leswhere good reasqn appears and f sl1ch excepton s n the publc nterest and s ncbt '- contrary to law rules and regulatons; 46. For the reasons ext\lnsyely dscussed above' Applcants move for n excclpton from the provsons of the sad Rules partcularly Secton 2)6 on the applcaton ofthe rate at the tme 9f credt purchase Secton 2J7 on the requrement of a wrtten confrmpton of credt purchase a1d Secton 2.8 on mantanng a sales outlet for twenty-four (24) hours la day as well as other provsons to whch the proposed prepad met~rng system and ts 'mplementaton may be nconsstent wth; 47. Par~nthetcally Applcant XES manfests that t has nsttuted a penqng petton to ntate rule-makng30under Secton 21 of the ERC[s Rules of Practce and Procedure the cause of acton thereof beng to effe t amendments to 'the Prepad Meterng Rules ncludng the provsons abovemertoned;.. 261n complafjc~w'th Secton 21.7 Prepaq Meterng Rules 27. ':.. ' ";': ' : n complanc(l Wth Secton frepfl1c Meterng Rules 28ln complance wth Secton 2113 Prepad Meterng Rules 29 : '" Secton 71 Prepad Meterng Rules' :. 30 ERC Case No enttled "n th'emt;jtt"r.ofthe Petton for the Amendment of the Ru/~s for Prepad Retfl Electrc Servce Usn;l fl F'repj;d Metelng 9ystem Approved by the Honorab)e Energy Regl.f19~ory Commsson n E~~ Rel3o/utO? No 115 Seres of 2009" :." r ( '. ':: l. ': :: :: [ :.-:

13 ... ERC CASE NO PRES ORDER/September PgE3 13 0L1_tl~ ~...._. ~ ~ J. ALLEGATONS N SUPPORT OF THE PRAYER FOR PROVSONAL AUTHORTY 48. The~ seek to offer and provde the Prepad Meterng System at th~ earlf'st possble tm~ n order to provde BATELEC 's customers wtr an ~ffectve convenent and affordable means of managng ther ene~gy consumpton;:.'. ' 49. Ver/y the cost of electrcty servce represents a necessary monthl~ fna~cal burden to every household partcularly those wth lmte8 spe~dng capacty. Thus t would greatly beneft the customers qf BATELEC to aval of at the e"rlest possble tme " me"ns by whch to effectvely montor "nd control ther power consumpton "nd pay fdr the 1ame through means easly wthn ther spendng capacty; 50. n ~dton the mplementaton of the Prepad Meterng System entals sgnfcant prelmnary work to est"blsh the system and retal networ~ asvyell as to conduct "n nformat.o. n camp. agn to suffcently apprsle the (;ustomers of the Prepad Meterng Servce; 51. The 'ssuance of " provsonal approval by the Commsson wll greatly facltate the conduct of such premnary. work and ensure thle av"q"blty of the Prepad Meterng System to. BATELEC 's custome~s "t the soonest possqle tme; and 52. They pray th"t the Commsson mmed"tely ssue an Order grantn1g provsonal "pproval of the present Applcaton ncludng the pr"yer f9r excepton from certan provsons of the Prepad Meterng Rules so th'rt they can already mpleltlent the proposed prepad Meterng System and.. after due hemng render " Decson m"kng such provsonkl approval permanent. the requre~ - Fndbg the sad applcaton to be suffcent n form and n SUbstance W~h fees havng been pad the same s hereby set for jursdctonkl " ' : ". hearng ex~ostory presentaton pre-tral conferenfe "nd evdentary hearng 9n. - :'.'. r '.. -' ;>:. -.. '- : ~. ' _ October (Wednesday) at three o'clock:ll the afternoon (3:00 P.M) at the ERC H~arng RoolTJ ~5th Floor Pacfc qenter Buldng San M9U~1 Avenue Rasg Cty.... '

14 ERC CASE NO PR~S ORDER/September pag ElJ-Lo.c..f --1 8=----~ XES and BATELEC are hereby drected to ca4se the publcaton of the ;..:. ". '. attached Not(:e of Publc -jearng at ther own expense once (1x) n r " newspaperc;>f gene:)ral crculaton n the Phlppnes at l'ast ten (10) days beforr the scheduled date of ntal: hejarng. They are also drected to nform the consumers ~tnn 3ATELEC 's franchse area by any other means avalable an6 approprate: of the flng of the nstant applcaton therreasons therefor and tf the scheduled hearng thereon. ;'. Let cppes of the applcaton ths Order and the attached Notce of Publc Hearng be f\lrhshed the Offce of the Solctor General (OSG) the Commsso1n on Audt (COA) and the Commttees on Energy of. both Howses of congrest They are hereby requested f they so desre to send ther duly authorze[d representatves at the scheduled hearngs. : ' Lke1'Fe let copes of ths Order and the attached Notce of Publc r. ' Hearng be frnshed the Offces of the Governor of Batangas and the Mayors the Muncpaltes wthn the franchse area of BATELEC for the approprat1e :. ". postng thereof on ther respectve bwlletn boards.. XES and BATELEC are hereby drected to fwrnsh all those maknb requests theefor wth copes 6f the applcaton and ts attachments subject Jo ; rembursemeht of reasonable pnotocopyng costs.. ".".. _ : -. ~'.. On the date of the nlal hearng and pre-tral conference XES anb.. BATELEC must submt to the: Comm~son ther wrtten Complance wth th~ jursdctonarequrements att~chng marked th~ therewth methodcally arranged and dut : ' : ' evdences on the: aotucl pqst[lg and publcaton of the Notce Jf

15 . : 1 ERC CASE NO PRES ORDERSertember Pa~J_5 of r8-~-.-c--. ' T Publc Hearng consstng of (:;ertfcatons ssued to that effect sgned by thr : afore-mentpned Mayors or t~erdulyauthorzed representatves bearng thf seals of thjr offces and the ~ffdavt of the Edtor or Busness Manager of th~ newspaper where the sad Notce of Publc Hearng was publshed together wt the complete ssue of the sad newspaper and such other proofs of complance " "' wth the requrements of the Commsson. ' XES lnd BATELEC and all nterested partes are drected to submt ~t least fve (5) days before the date of ntal hearng and pre-tral conference the'r respectve pfe-tral Brefs contanng among others: : : : (a) A sut1mary of admtted facts and proposed stpulaton of facts;. (b) The ssues to be tred or resolved; (c) The (locuments or exhbts to be presented statng the purposes theretf and proposed markngs therefore; and " (d) The rumber and names of the wtnesses wth ther wrtten testmones n an ndvdual affdavt form to be attached to the Pre-Tral Bref. FalutE? pf XESland BATELEC to submt the requred Pre-Tral 3ref a+ Judcal Affl~avts of ther wt~esses wthn the prescrbed perod shall be la ground for 9rn'cellaton of the scheduled hearng and the resettng of whch shj be sx (6) rn~nths from sad date of cancellatol"). 'r '' /" As p~rt of the pre-tral conference XES and BATELEC must also ~e prepared td make an expostory presentaton of ther applcaton aded dy ' : whatever c6'mmuncaton' meduftl that they may deeftl approprate for the purpose n' lorder to put n ~an ' words and explan for the beneft of the

16 t. ERC CASE NO PRES ORDERSe'ptember ~911e '16.()U~~ "' '_T " ~ consumers fnd other concerned partes what the applcaton s all about and thb reasons and justfcatons beng cted n support thereof. SO ORDERED. pasgcty September FOR AND BY AUTHORTY OF THE COMMSSON:. ".C.:; ~ ~ 4/~AS JS/~RC CASENO. 2011'Or MC QRPER

17 . ERC CASE NO PRES' ORDER/September J'. 9.1Lof t? CoPy Furn::;hed: 1. LACHCA AND ASSOCATES LAW OFFCES Atte'lton: ATYS. SUNDY LORENCE C. LACHCA and CHRSTENE SALVE A. DEMASP Counsels for XES qnd BATELEC Sute 1903-B West Tower Phlppnes Stock Exchange Centre Exchange Road Ortgas Center Pasg Cty 2. BATANGAS ELECTRC COOPERATVE NC. (BATELEC ) Atte'lton: ENGR. RCARDO C. CASTLLO JR.~ General Manager of BATELEC Calaca Batangas 2. XENENERGY SYSTEMS NC. (XES) Attenton: MR. AREL DELA CRUZ Presdent of XES Sute 412 Ctyland Pasong Tamo Tpwer 2210 Don Chno Races Avenue Pa Del Plar Makat Cty 3. Offce of the Solctor General 134 Amorsolo Street Legasp Vllage Makat Cty Metro Manla 4. Commsson on Audt Commonwealth Avenue Quezon Cty Metro Manla 5. Senate Commttee on Energy GSS Bldg. Roxas Blvd. Pasay Cty Metro Manla 6. HO\.lse Commttee on Energy Batasall Hlls Qurno Cty Metro Manla 7. Offce of the Presdent of PCC Phlppne Chamber of Commerce and ndustry (PCC) 3 rd Flpor ECC Buldng 355 Sen. Gl Puyat Ave. Makat Cty 8. Offce of the Muncpal Mayqr Muncpalty of Agoncllo Provnce of Batangas 9.. Offce of the Muncpal lyayqr. Mun~palty of Balayan Provnce of BCltangas 10. Offlceqf the Muncpal JYlayor MUn(::PClty of Calaca Provnce of Batangas

18 ERC CASE NO PRES. ORDER/september E..ge 18 of ;."':1 8"----_..._ Offce of the Muncpal Mayor Muncpalty of Calatagan Provnce of Batangas 12. Offce ~f the Munc<pal Mayor Mun~palty of Lemery Provnce of Batangas 13. Offce of thl' Munlfpal MC\yor Muncpalty of Lan. Provnce of Satang's 14. Offce ofttle Munqpal Mayor Muncpfl1ty of NasLjgbu Provnce of Batangas. 15. Offjce of the Muncpal Mayor Muncpalty of San Lus Provnce of Batangas 16. Offce of the Muncpal Mayor Muncpalty of Santa Teresta Provnce of Batangas 17. Offce of the Muncpal Mayor Muncpalty oftaaland Tuy. Provnce of Batangas.