Republic of the Philippines

Energy Regulatory Commission

San Miguel Avenue, Pasig City

Draft No. 4

Pursuant to the provisions of Section 41 of Republic Act No. 9136,

otherwise known as the Electric Power Industry Reform Act, the Energy
Regulatory Commission hereby promulgates these Rules on Redistribution of
Electricity.

RULES ON REDISTRIBUTION OF ELECTRICITY

CHAPTER I. GENERAL PROVISIONS

Article 1. Definition of Terms –

a) Building – shall mean a structure that stands alone or that is cut off
from adjoining structures by fire walls and openings therein protected
by approved fire doors1;

b) Common areas2 – shall mean the entire project or building excepting

all units separately granted or held or reserved;

c) Consumer or End-user – shall mean a person or entity which has an

electric service contract with a distribution utility;

d) Distribution Utility – shall mean any electric cooperative, private

corporation or government-owned utility or existing local government
unit which has an exclusive franchise to operate a distribution system
in accordance with the EPIRA;

e) DU Billing Meter - shall mean the billing meter provided by the

distribution utility to the redistributor which registers the sum of the
energy measured by the sub-meters of the redistributor including the
system loss;

1
Philippine Electrical Code, Part I, Volume I, 2000 Edition
2
Based on RA 4762, otherwise known as the Condominium Law
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f) Industrial or Commercial Complex – shall mean, for the purpose of
this Rules, any cluster of buildings, which are used in the production of
goods or intended for commercial use, including buildings or houses
that serve as residences of the buildings’ workers, located within the
vicinity or in a contiguous land area that is fenced off from the
surrounding properties, the buildings, houses and the land where the
said buildings are located, are owned or leased by a single person or
entity;

g) Sub-Meter - shall mean the billing meter provided by the redistributor

to each unit-owner which registers only the energy consumption of the
unit;

h) Redistribution – shall mean the act of redistributing electricity to other

persons or entities by a consumer or end-user;

i) Redistributor – shall mean a consumer or end-user of a distribution

utility that re-distributes electricity to other person/s or entity/ies. This
may include a building administrator charged with the responsibility of
redistributing electricity to the individual unit-owners of the same
building or the owner of the Load-End Power Substation charged with
the responsibility of redistributing electricity to the individual building
owners within an Industrial or Commercial Complex;

j) System Loss – shall mean the difference between the total registered
consumption in the redistributor’s DU Billing meter and the
accumulated energy consumption registered by all of the sub-meters.
System loss shall include technical (including line loss) and non-
technical losses (pilferages);

k) Unit3 – shall mean a part of a building or condominium project intended

for any type of independent use of ownership, including one or more
rooms or spaces located in one or more floors (or part or parts of
floors) in a building or buildings and such accessories as may be
appended thereto;

l) Unit-owner – shall mean a person or entity owning or leasing a unit

inside same building being served by the redistibutor through sub-
meter;

Article 2. Legal Basis. – It is the declared policy of the Commission to

protect the public interest as it is affected by the rates and services of electric
utilities and other providers of electric power.

Furthermore, the Commission is likewise mandated to promote

competition, encourage market development and customer choice.

3
Based on the Condominium Law
Rules on Redistribution of Electricity Page 3 of 3
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Article 3. Guiding Principles. –

a) As a general rule, owners and tenants of units within buildings or

single structures must be connected directly to the distribution utility
which has an existing franchise over the concerned area.

b) DUs must install separate meters to individual unit-owners of

buildings, unless not allowed by the building design pursuant to the
Philippine Electrical Code.

c) All users, whether deriving electricity from DUs or redistributors,

must have equal rights and obligations as embodied in rules and
regulations promulgated by the Commission to protect consumer
interest, including but not limited to the Magna Carta for Residential
Electricity Consumers, the Distribution Services and Open Access
Rules and Republic Act No. 7832 (Anti-electricity Pilferage Law)

d) In cases where redistribution is allowed, the individual unit-owners

shall pay their electric bills to the redistributor as if they are actually
being billed by the distribution utility. Thus, the unit owners shall
only pay for their actual consumption reflected in their respective
sub-meters. This is without prejudice to the recovery of reasonable
expenses in redistributing electricity by the redistributor from their
respective unit-owners and no profit shall be derived from such
recovery.

e) Redistributors are required to bill individually their unit-owners in a

transparent manner as if they are being billed directly by the DU.

Article 4. Coverage. – These Guidelines shall apply to the following:

a) End-user buildings that are singly connected to the distribution

utility. These buildings may be connected to the DU through a few
billing meters, in accordance with the Philippine Electrical Code;
and

b) Industrial or commercial complexes allowed by the DU to operate a

sub-station which is in turn connected to the distribution utility.

CHAPTER II. POLICIES ON ALLOWABLE REDISTRIBUTION

Article 5. General Conditions for Redistribution. An end-user maybe

allowed to redistribute electric service subject to the conditions:

a) A redistributor shall provide and install individual sub-meters to the

units of the individual unit-owner to ascertain the latters’ energy
consumption;
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b) All sub-meters must be tested and sealed by ERC prior to installation;

c) All sub-meters shall be installed in a clean place free of vibration and

easily accessible for reading and testing by both the redistributors and
the individual unit-owner;

d) Common areas shall be metered separately from the unit-owners’

premises;

e) The energy consumption of unit-owners whose leased premises are

not permanent divisions in a building shall be deemed included in the
rentals for such premises.

f) A redistributor shall bill its individual unit-owners monthly. The billing

statement, duly receipted by the unit-owner, must contain the same
detailed information, as shown in the ERC approved unbundled
customer bill format;

g) Individual unit-owners shall pay the redistributor their energy

consumption based on the actual consumption reflected in their
individual sub-meters;

h) A redistributor shall leave a meter reading card after every meter

reading for verification by the end-user;

i) In accordance with the provisions of their contract or established

policies of the homeowner’s association or industrial or commercial
complex, the redistributors shall be allowed to recover from the unit-
owners a fixed amount for other expenses, namely:

i. Electrical consumption of the common areas;

ii. System loss arising from technical losses;

iii. Billing and collection;

iv. Cost of transformers/substations owned by the building if these

were installed to provide electric service;

v. Cost of meters; and

vi. Other expenses reasonably incurred by the redistributor in

redistributing electricity.

Provided, however, that the any or all of the foregoing expenses are
not part of the annual dues or association dues.
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Article 6. Additional Conditions for Redistributors with Sub-
stations. An end-user with a substation allowed to redistribute electric service
shall likewise comply with the following conditions:

a) The redistributor must own the substation and the buildings connected
thereto inorder to validly redistribute electricity thereon;

b) The substation and buildings must be located within a single industrial

or commercial complex situated in a contiguous area fenced off from
the surrounding properties;

c) In cases where other buildings owned by other persons/entities are

located inside the industrial or commercial complex, the DU must give
their consent prior to the connection thereof to the substation.
Otherwise, these buildings must be energized by the DU which has
franchise rights over the area;

d) The redistributor must have a valid contract with the DU wherein the
maximum load capacity of the substation is determined. Unless
otherwise provided for in its contract with the DU, future buildings
owned and constructed by the redistributor shall be automatically
connected to the substation as long as the allowable maximum load of
the substation is not exceeded, after due notice to the DU and
compliance with all technical rules and regulations provided for by law;

e) The redistributor must install a billing meter in each building connected

to the substation to determine the consumption of such building;

f) In accordance with the provisions of their contract or established

policies of the homeowner’s association or industrial or commercial
complex, the redistributors shall be allowed to recover from the unit-
owners a fixed amount for other expenses, namely:

i. Electrical consumption of the common areas limited to that of the

building where the unit-owners are occupying;

ii. System loss arising from technical losses;

iii. Billing and collection;

iv. Cost of transformers/substations owned by the building if these

were installed to provide electric service;

v. Cost of meters; and

vi. Other expenses reasonably incurred by the redistributor in

redistributing electricity.

Provided, however, that the any or all of the foregoing expenses are
not part of the annual dues or association dues.
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CHAPTER III. RIGHTS AND OBLIGATIONS OF UNIT-OWNERS

Article 7. Rights of Unit-Owners – Each unit-owner shall be entitled to

the rights provided to residential customers under Articles 10 (Right to a
Refund of Overbillings), 12 (Right to a Meter Testing by ERC), 18 (Right to
Due Process Prior to Disconnection of Electric Service), 19 (Right to a Notice
Prior to Disconnection), 21 (Right to Tender Payment at the Point of
Disconnection; Deposit Representing the Differential Billing), 22 (Right to
Electric Service Despite Arrearages of Previous Tenant), 23 (Right to
Reconnection of Electric Service), 24 (Right to Witness Apprehension), 25
(Right to ERC Testing of Apprehended Meter), 26 (Right to Payment Under
Protest) and 27 (Right to File Complaints before ERC) of the Magna Carta for
Residential Electricity.

Furthermore, Items 3.5.4 (Estimated Bills) and 3.5.7 (Adjustment for

Billing) of the Distribution Services and Open Access Rules (DSOAR) shall
apply.

References made to the distribution utility in the Magna Carta and the
DSOAR shall be construed as referring to redistributors identified in these
Rules.

Article 8. Obligations of Unit-Owners – Unit-owners shall have the

following obligations:

a) Payment of bill deposits – A bill deposit from all unit-owners to

guarantee payment of bills may be imposed by redistributors. The
amount of the bill deposit shall be equivalent to the estimated billing for
one month; Provided that, such deposit shall be correspondingly
increased/decreased to approximate the actual average monthly bills
for the preceding year. Bill deposits shall be refunded to the unit-owner
at the termination of its service contract to the redistributors;

b) Payment of bills within the period specified under their contract or the
existing policies of the Homeowner’s Association;

c) Payment of late charges and penalties specified under their contract or

the existing policies of the Homeowner’s Association; and

d) To allow the faithful and accurate recording of consumption to be

reflected in his sub-meter.

Article 9. Compliance with Laws, Rules and Regulations.

Redistributors and Unit-owners must comply with all other laws, rules,
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regulations, guidelines, orders and resolutions promulgated by the
Commission.

Article 10. Separability Clause. – If any provision of these Guidelines

is declared unconstitutional or invalid, the other provisions not affected
thereby shall remain in force and effect.

Article 11. Effectivity. – These Guidelines shall take effect fifteen (15)
days after its publication in a newspaper of general circulation.

SO ORDERED.

Pasig City, _________________, 2006

RODOLFO B. ALBANO, JR.

Chairman

OLIVER B. BUTALID JESUS N. ALCORDO

Commissioner Commissioner

RAUF A. TAN ALEJANDRO Z. BARIN

Commissioner Commissioner