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G.R. No. 170934 - National Power Corporation v. East Asia Utilities Corp & Cebu Private Power Corp.

G.R. No. 170934 - National Power Corporation v. East Asia Utilities Corp & Cebu Private Power Corp.

PHILIPPINE SUPREME COURT DECISIONS

FIRST DIVISION

[G.R. NO. 170934 : July 23, 2008]

NATIONAL POWER CORPORATION, Petitioner, v. EAST ASIA UTILITIES CORPORATION AND CEBU PRIVATE POWER CORPORATION, Respondents.

D E C I S I O N

PUNO, C.J.:

This is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the Decision dated December 14, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 77600, entitled "National Power Corporation v. East Asia Utilities Corporation and Cebu Private Power Corporation." Said Decision affirmed in toto the Decision dated June 28, 2001 rendered by the then Energy Regulatory Board (ERB) in ERB Case No. 99-51 (ERB Decision), as modified by the Order dated March 28, 2003 issued by the then Energy Regulatory Commission (ERC) in ERC Case No. 2001-557 (ERC Order).

The undisputed facts of the case, as summarized by the CA, are as follows:

Petitioner National Power Corporation (NPC) is a government-owned and controlled corporation created and existing by virtue of Republic Act 6395, as amended. On the other hand, respondents East Asia Utilities Corporation (EAUC) and Cebu Private Power Corporation (Cebu Power) are private corporations duly organized under the existing laws of the Republic of the Philippines.

The respondents EAUC and Cebu Power and the petitioner NPC are the complainants and respondent, respectively, in ERB Case No. 99-51 entitled "East Asia Utilities Corporation and Cebu Private Power Corporaiton v. National Power Corporation."

Respondents are both independent power producers (IPPs) duly accredited with the Department of Energy (DOE) as operators of diesel power generating units. Both had secured the approval of the then Energy Regulatory Board (ERB) to sell their excess power to the Visayan Electric Company, Inc. (VECO) under ERB Cases Nos. 94-26 and 97-05. While respondent EAUC is a registered ecozone utility enterprise of the Mactan Economic Processing Zone (MEPZ) which wheels its excess capacity to VECO using its own 69 KV sub-transmission line, respondent Cebu Power sells its entire generating capacity to VECO using a direct connection to VECO's 69 KV grid through its Ermita Substation.

Sometime in 1999, the petitioner billed respondent EAUC as PDS tariffs the amount of P29,069,294.93 for the period covering December 26, 1998 to April 15, 1999. Respondent EAUC paid under protest the total amount billed, out of which the sum of P17,551,912.59 is being contested. Petitioner also billed respondent Cebu Power as PDS tariffs the amount of P3,032,509.08 for the period covering March 26, 1999 to April 25, 1999. Respondent Cebu Power paid under protest the total amount billed and contested P1,324,275.31 thereof.

Despite respondents' protestations, petitioner NPC continued to bill the former with what they claimed as inapplicable/contested tariffs. Fearing that the said unauthorized billings by the petitioner NPC would continuously amplify and escalate to their prejudice, the respondents filed on August 24, 1999 a complaint in the then ERB against petitioner NPC for a refund/credit and/or collection of inapplicable/unauthorized tariffs with prayer for a cease and desist order and/or preliminary injunction.

The petitioner NPC filed its comment on said complaint. It averred that the Power Delivery Services (PDS) that it provides and for which respondent EAUC is being charged of refer to the one associated with the firm Load Following and Frequency Regulation (LFFR) and Spinning Reserve (SR) services. It also averred that the use of its transmission and sub-transmission facilities is the reason why it charges PDS under the approved tariffs for Open Access Transmission Services (AOTS) and Ancillary Services (AS). Also, the PDS charges were applied to the respondents in conjunction with the AS provided to them. Petitioner further averred that it applied the approved PDS charges only to a certain percentage of the billing capacities of the IPPS, i.e., 13.2% of the billing capacities in conjunction with the provision of the firm LFFR and SR while additional PDS charges were applied when back-up power services were requested.ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Furthermore, petitioner averred that the PDS charges are applicable to transmission customers which are embedded generation not for the transfer of power and energy from the generating resources to the load but for the delivery to the generation-based AS being provided by it; that the provision of AS would not be possible unless its transmission and sub-transmission facilities are used; that non-payment of the PDS charges by embedded generation would be less than fair and short of discriminatory to its other customers even as the same would not reflect its true cost of service; that the energy supplied in relation to the provision of non-firm back-up power service requires the consumption of fuel for conversion to electrical energy; that while the 'Peso per kW' charges are similar to its demand charge, the customer is likewise required to pay for the corresponding energy consumption; that there is no question that such energy was delivered inasmuch as the back-up power was delivered as scheduled for a definite period of time; that the Energy Imbalance and Back-up Energy Charge are actually charges for the energy delivered and consumed by the transmission customer or its load and, if the said charges are not paid, petitioner would not be able to recover its variable costs; that with regards to over-generation, part of the stipulation and agreement approved by ERB in ERB Case No. 96-118 provide that it shall not pay the transmission customer for over-deliveries; that in accordance with its prior agreement with respondent EAUC's representatives in Cebu, it was agreed that respondent EAUC would continue to charge VECO for the entire production of respondent EAUC to avoid confusion; that the same virtually makes petitioner NPC pay respondent EAUC (in terms of electricity) for over-deliveries in violation of the stipulation and agreement; that it was agreed that respondent EAUC shall reimburse petitioner for over-deliveries in the form of Over-Generation Charges using applicable rates as if electricity was still sold to VECO; that it does not prevent respondent EAUC from selling as much as it wants to VECO provided that it schedules such deliveries; and that any excess requirement of VECO is already the (existing) market of respondent and should not be expropriated by any other supplier, inadvertently or otherwise, in violation of any existing contract executed by the parties.

On January 11, 2000, respondents EAUC and Cebu Power filed a reply to petitioner's comment with Motion to Reiterate Prayer for the Issuance of a Cease and Desist Order and/or Writ of Preliminary Injunction against the petitioner. Respondents contended that petitioner cannot and must not charge its transmission customers rates that have not been approved by ERB in ERB Case No. 96-118; that the Tariff Structure and Stipulation and Agreement as embodied in the Decision of ERB in ERB Case No. 96-118 consists of the Tariffs for Transmission and Ancillary Services; that under the Transmission Tariff, petitioner adopted the 'Postage Stamp Methodology' while, under the Ancillary Services, it used the 'Marginal Capacity Cost Method'; that in the power delivery of the petitioner, it is but just and proper for it to charge its customers for both Power Delivery (actual usage of the line in transport) and Ancillary Services Charges (maintenance of grid reliability); that in case of IPPs, however, petitioner cannot use the assertion that the transmission facilities are used to provide ancillary services; that justice and equity demand that customers be made to pay only for services that are actually rendered, i.e. that they pay for the transmission line used in transporting power and for the ancillary services required in maintaining grid reliability; that under the existing regulatory framework, petitioner is allowed to recover all its costs, also known as revenue requirement, but must not be allowed to 'Double Recover' its cost by charging at the same time separate amounts for PDS, Ancillary Services and Power Delivery Service for Ancillary Services; that the PDS is not an automatic component of the Ancillary Services, thus, PDS is only applicable to IPPs using the transmission facilities in transporting power while Ancillary Services are required in maintaining grid reliability; that consequently, an IPP need not pay PDS if its facilities are embedded in the distribution network but must, however, pay for Ancillary Services necessary for maintaining grid reliability; that there is no such thing as PDS for Ancillary Services; that an IPP which is not using the transmission system to transport power should not be made to pay for PDS; that it is totally unfair on the part of an IPP to assist respondent in maintaining the grid yet pay for PDS where actual line flows do not exist; that the Open Access Transmission Services (OATS) and Ancillary Services Tariffs as approved by the ERB do not include the Energy Imbalance Charge and Back-up Energy Charge and, consequently, petitioner cannot charge an IPP a fee/tariff which is not approved by the ERB; and that they are in no way questioning the legally [sic] and/or wisdom of the tariffs/charges imposed by ERB in ERB Case No. 96-118 but rather the applicability of the same to a particular class of customers.

During the proceedings in ERB Case No. 99-51, the respondents adduced in evidence the testimonies of their Executive Vice President and General Manager, Mr. John V. Alcordo and Mr. Arthur Evangelista, respectively, and some documentary evidence marked as Exhibits "A" to "HH". For its part, petitioner NPC adduced in evidence the testimonies of its Utility Economics Manager, Jesusito Sulit, and its Transmission Service Bureau Head, Mr. Mario Pangilinan, and some documentary evidence marked as Exhibits "1" to "8".

ERB then ruled that the core issue which was to be passed upon by it is whether or not the respondents, as IPP's embedded in the distribution network of VECO (as the distribution company), are liable to pay petitioner NPC the following:

(a) The firm Power Delivery Services Charges corresponding to the Load Following and Frequency Regulation and Spinning Reserve ancillary services provided by petitioner, or what respondents refer to as 'Transmission for Internal Generation';

(b) The rate for Back-up (Bu, kW) Service prescribed [by] ERB in its June 11, 1997 Decision in ERB Case No. 96-118 in relation to the non-firm Back-up (Bu, kW) Service purchased by respondents from the petitioner;

(c) The energy related service received by respondents in relation to the provision of non-firm Back-up (Bu, kW) Service by petitioner;

(d) The rate for Load Following and Frequency Regulation Service and Spinning Reserve Service relative to the provision of Back-up (Bu, kW) Service by petitioner; andcralawlibrary

(e) The rate for Power Delivery Service relative to the provision of Back-up (Bu, kW) Service by petitioner.

On June 28, 2001, after a thorough hearing and review of both parties' evidence, the ERB rendered a decision, the dispositive portion of which reads as follows:

"WHEREFORE, considering all the foregoing, this Board hereby directs:

1. Respondent to CEASE and DESIST from charging complainants the Power Delivery Service charges corresponding to the Ancillary Services, i.e., firm Load Following and Frequency Regulation Service and Spinning Reserve Service, being availed of by them, or what complainants refer to a[s] "Transmission for Internal Generation" charges, and to REFUND all amounts collected by reason thereof to the complainants who, if they so desire, may opt to credit or apply the same to their future billings from the respondent;

2. Respondent to SUBMIT to this Board, for approval, a proposed rate for non-firm Back-up (Bu, kW) Service, together with the supporting documents used in the determination of the said rate, within thirty (30) days from receipt of this decision. It must be emphasized that in computing for the said rate, the base data to be used should refer to the year 1995, the test year used in determining the tariffs for the OATS and the other ancillary services. Pending approval of the proposed rate, respondent may continue to charge the firm Back-up (Bu, kW) Service rate prescribed in the board's Decision in ERB Case No. 96-11[8]. Any amount corresponding to the difference between the rate presently charged by respondent and the rate for non-firm Back-up Service to be finally approved by the Board shall be refunded to or credited to future billings of the complainants, at the option of the latter.

3. Respondent to CEASE and DESIST from charging complainants the commercial rate for the energy supplied in relation to the provision of non-firm Back-up (Bu, kW) Service, and to instead bill complainants therefore at the computed monthly average One Day Power Sales (ODPS) rate multiplied by the energy involved. Any sum representing the difference between the commercial rate and the computed monthly ODPS rate shall be refunded to or credited to future billings of the complainants, at the option of the latter.

4. Respondent to continue to charge, and complainants to continue to pay the Power Delivery Service (PDS) rate in connection with the provision of non-firm Back-up (Bu, kW) Service.

5. Respondent to CEASE and DESIST from charging complainants the rates for Load Following and Frequency Regulation (LFFR) Service and Spinning Reserve (SR) Service relative to the provision of Back-up (Bu, kW) Service, and to REFUND all amounts collected by reason thereof to the complainants who, if they so desire, may choose to credit or apply the same to their future billings from the respondent.

6. Respondent to submit to this Board for approval rules and regulations implementing the tariffs for the OATS and ancillary services to enable the Board to conduct a review of all existing billing determinants applied by respondent in computing its charges relative to the provision of Power Delivery Services and Ancillary Services to its customers.

With respect to the interest on the refundable amount being sought by complainants, the Board finds no justification to grant the same and so hereby denies complainants' request therefore.

"SO ORDERED."

Respondents, not fully satisfied with the above-quoted decision, sought for a reconsideration thereof with the Energy Regulatory Commission (ERC) which replaced the then ERB relative to the dissenting opinions of former board member Alberto A. Dosayla and former chairperson Melinda L. Ocampo as regard[s] Item 1 of the dispositive portion of ERB's decision in ERB Case No. 99-51 alleging that the dissenting opinions therein of the aforementioned former board members are null and void. The appeal was docketed as ERC Case No. 2001-557.

On March 28, 2003, the ERC issued an order modifying the defunct ERB's decision in ERB Case No. 99-51. The dispositive portion of the said order reads as follows:

"WHEREFORE, the foregoing premises considered, the questioned Decision dated June 28, 2001 is hereby modified as follows:

1) Respondent is directed to CEASE and DESIST from charging complainants the Power Delivery Service charges corresponding to the Ancillary Services, i.e., firm Loading Following and Frequency Regulation Service and Spinning Reserve Service, being availed of by them, or what complainants refer to as "Transmission for Internal Generation" charges, and to REFUND all amounts collected by reason thereof to the complainants who, if they so desire, may opt to credit or apply the same to their future billings from the respondent. Parties are hereby further directed to submit data and computations on the amount charged, as well as the scheme on how the refund/credit should be made. Said computations should cover only the period until September 25, 2002 in view of the unbundling of NPC's rates on September 26, 2002.

2) Respondent is directed to REFUND the amount corresponding to the difference between the rates actually charged to complainants until September 25, 2001 for non-firm Back-up (Bu, kW) Service and the rates authorized by the ERB in ERB Case No. 96-118 (OATS).

3) Respondent is directed to CEASE and DESIST from charging complainants the commercial rate for the energy supplied in relation to the provision of non-firm Back-up (Bu, kW) Service, and to instead bill complainants at the computed monthly average One Day Power Sales (ODPS) rate multiplied by the energy involved. Any sum representing the difference between the commercial rate and the computed monthly average ODPS rate (until September 26, 2002) shall be refunded to or credited to future billings of the complaints [sic], at the option of the latter.chanrobles virtual law library

4) Respondent is authorized to continue to charge and complainants are directed to continue to pay the Power Delivery Service (PDS0 [sic] rate in connection with the provision of non-firm Back-up (Bu, KW) Service.

5) Respondent is directed to submit to the Commission proofs to support its claim that it delivered to complainants more than the actual coincidental peak of the Transmission Customer's load share.

The complainants' prayer regarding the interest on the refundable amount is hereby DENIED for lack of merit.

"SO ORDERED."2

Aggrieved thereby, petitioner National Power Corporation (NPC) filed a Petition for Review with the CA. On December 14, 2005, the CA rendered a Decision3 affirming in toto the ERB Decision, as modified by the ERC Order.

Hence, the instant petition, raising the issue of:

WHETHER THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION DATED JUNE 28, 2001 OF THE ERB AND THE ORDER DATED MARCH 28, 2003 OF THE ERC THAT RESPONDENTS ARE NOT SUBJECT TO POWER DELIVERY SERVICE CHARGES FOR ANCILLARY SERVICES.4

It is undisputed that respondents East Asia Utilities Corporation (EAUC) and Cebu Private Power Corporation (Cebu Power) are both independent power producers (IPPs) which specifically supply generated power directly to Visayan Electric Company, Inc. (VECO), pursuant to an authority granted to them by the then ERB in ERB Case Nos. 9429 and 97-05.

Petitioner argues that the contested PDS charges refer to the one associated with Load Following and Frequency Regulation (LFFR)5 and Spinning Reserve (SR)6;7 that PDS charges are applicable to transmission customers which are embedded generators (such as EAUC and Cebu Power whose facilities are embedded within the transmission/distribution system of a distribution company i.e.' VECO) not for the transfer of power and energy from the generating resources to the load but for the delivery to the generation-based ancillary services being provided by it;8 that the liability of respondents arises from the fact that they are continuously connected to the whole grid which must be maintained to prevent its collapse or rapid decay, hence, that respondents do not use NPC's transmission lines in transporting electricity to its customer is of no moment;9 and that in availing of LFFR and SR, a concomitant capacity in the grid/transmission system had to be likewise reserved in order to accommodate and effectively provide such ancillary services.10

We hold that petitioner's contentions are without merit.

The then ERB was created under Executive Order No. 172, dated May 8, 1987. Pursuant to Republic Act (RA) No. 7638 or the "Department of Energy Act of 1992," the ERB was tasked to determine, fix and prescribe the rates being charged by NPC to its customers.

Section 18 of RA No. 7638 states:

x x x

The power of the NPC to determine, fix, and prescribe the rates being charged to its customers under Section 4 of the [sic] Republic Act No. 6395, as amended, xxx are hereby transferred to the Energy Regulatory Board. The Board shall exercise its new powers only after due notice and hearing and under the same procedure provided for in Executive Order No. 172.11

Pursuant to this mandate, on June 11, 1997, the ERB approved the Open Access Transmission Services (OATS) tariffs and Ancillary Services (AS) tariffs in ERB Case No. 96-118, entitled "In Re: Application for Approval of the Open Access Transmission Tariff (OATT) and Tariff for Ancillary Services for Private Sector Generation Facility," to allow the non-discriminatory use of NPC's transmission grid by private sector generating facilities and electric utilities.12

ERB Case No. 96-118 segregated or unbundled the ancillary services (such as the LFFR and SR) from the basic transmission and subtransmission services to promote competition and efficiency in their supply. Prior to ERB Case No. 96-118, the NPC had been traditionally providing electric power service to customers whereby the generation, transmission, and distribution of electric power are integrated or combined and charged as a single tariff.

Under Executive Order No. 473, dated April 17, 1998, the ERB was further tasked to formulate and adopt the necessary guidelines to identify, segregate and "unbundle" the different components of the electricity tariff that NPC is charging its customers with the end in view of transparency and accountability. Thus, on December 22, 1998, the ERB issued the "Guidelines Implementing Executive Order No. 473 for the Segregation and Unbundling of the Power Tariffs of the National Power Corporation and the Electric Distribution Utilities" (Implementing Guidelines). The Implementing Guidelines provide that the different charges on services provided by NPC must conform to the decision in ERB Case No. 96-118.

Its relevant portions state:

SECTION 2. Power Delivery Services. - The rate for the Power Delivery Service shall include transmission and sub-transmission charges, including return.

A. Transmission Charge. - This shall refer to the rate to be charged for the use of NPC's transmission facilities from the point/s of delivery to the point/s of receipt.

The transmission charge shall conform to the decision in ERB Case No. 96-118 entitled "In Re: Application for Approval of the Open Access Transmission Tariff (OATT) and Tariff for Ancillary Services for Private Sector Generation Facility" and-subsequent decisions related thereto.

B. Sub-Transmission Charge. - This shall refer to the rate to be charged for the use of NPC's sub-transmission lines from the point/s of delivery to the point/s of receipt.

The sub-transmission charge shall conform to the decision in ERB Case No. 96-118 (SUPRA) and subsequent decisions related thereto.

SECTION 3. Ancillary Services Charges. - This shall refer to the rates to be charged for the ancillary services including the costs of services necessary to support the transmission of capacity and energy from resources to loads while maintaining reliable operation of the Transmission Provider's Transmission System in accordance with Good Utility Practice. Said charges shall include rates for load following and frequency regulation, spinning reserve, and back-up power.

The ancillary services charges shall also conform to the decision in ERB Case No. 96-118 (SUPRA) and subsequent decisions related thereto.13

In its Decision, the ERB discussed the nature and components of the OATS and AS and their corresponding tariffs embodied in ERB Case No. 96-118, and held as follows:

Proceeding now to the issue of whether or not complainants herein as PSGFs [Private Sector Generation Facilities], which are embedded in the distribution network of VECO, are liable to pay the Power Delivery Service (PDS) charges corresponding to the Ancillary Services purchased by them, or what complainants refer to as "Transmission for Internal Generation", in addition to the charges they are paying for such Ancillary Services, the Board believes and so holds that they are not liable. In serving the load of VECO, complainants are not making use of respondent's transmission facilities. Since the transmission facilities of respondent are not being used in delivering complainants' power generation to VECO, it follows that respondent has no right to charge complainants the rates for the PDS set by the Board. To do so would run counter to the basic principle in rate-making that a utility can charge rates only for services that are actually rendered to its customers.

The ancillary services availed of by complainants from the respondent, i.e., Load Following and Frequency Regulation (LFFR) and Spinning Reserve (SR), are, as we have discussed earlier, intended to maintain the integrity and reliability of the grid. The rates for these services are separate and distinct from the basic transmission service or PDS, even though such services are a necessary adjunct to the basic transmission service or PDS. More importantly, the rates for these ancillary services, as determined in our Decision of June 11, 1997 in ERB Case No. 96-118 already covered all costs necessary to provide such services to respondent's customers. This is so notwithstanding the claim of respondent NPC that the provision of these ancillary services would not be possible unless its transmission and subtransmission facilities are used. Moreover, when the rates for the PDS were set by this Board using the Postage Stamp Methodology, the revenue requirement needed by respondent NPC during the test year used was divided by the system peak load, which indicates that to allow respondent to charge an additional PDS rate for the ancillary services in question even if the same were applied to 13.2% only of the billing capacities of the independent power producers (IPPs), as averred by respondent, would be tantamount to double charging or over-recovery of costs. It may be mentioned that the application of PDS charges to 13.2% of the billing capacities of IPPs appears to be a unilateral action on the part of respondent and constitutes an implied admission that such charges are without basis for if indeed respondent is convinced of the propriety of imposing PDS charges on the questioned ancillary services, then it could have just applied the PDS charges specifically approved by the Board. To reiterate, the rates for ancillary services have, in our aforesaid decision, been unbundled from respondent's rates for basic transmission and subtransmission service, notwithstanding the fact that such services are necessary adjunct to the basic transmission and subtransmission service.14 (Emphasis added.)

In resolving petitioner's motion for reconsideration, the ERC, which replaced the then ERB by virtue of RA No. 9136 or the "Electric Power Industry Reform Act of 2001," reached the same conclusion as follows:

x x x However, the same does not hold true with regard to the PDS or wheeling charges for LFFR and SR. Complainants should not be charged for it since there is no such thing as PDS for LFFR and SR. Once this reserve is utilized, it is automatically delivered and registered as an added demand and not as a reserve. The actual power that flows thru the line is equal to the supply or power generated and is also equal to the demand or load. This is the principle used in the design of the PDS, to recover the Transmission Cost based on peak demand only and not to recover the Transmission Cost based on peak demand plus LFFR and SR.15 (Emphasis added.)

We find no reason to modify or reverse the above findings of the ERB and the ERC.

Under the decision in ERB Case No. 96-118, which approved the allowable rates for the charges on services provided by NPC to its customers, it is undisputed that there is no provision which allows NPC to charge PDS charges on AS separately from AS charges. On the contrary, the AS charges already cover all costs necessary to provide the same.

As correctly pointed out by respondents, there are two separate tariffs for transmission and AS. NPC's customers are charged for both Power Delivery (actual usage of the line in transport) and AS Charges (maintenance of grid reliability).16 Accordingly, PDS charges are only applicable to IPPs using the transmission facilities in transporting power while AS are required in maintaining grid reliability.17 Consequently, an IPP need not pay PDS charges if its facilities are embedded in the distribution network but must, however, pay for AS necessary for maintaining grid reliability.18 To charge respondents for AS and PDS charges on AS would be tantamount to double charging.

The findings of administrative or regulatory agencies on matters within their technical area of expertise are generally accorded not only respect but finality if such findings are supported by substantial evidence.19 Specifically, the matter of rate-fixing calls for a technical examination and a specialized review of specific details which the courts are ill-equipped to enter; hence, such matters are primarily entrusted to the administrative or regulating authority.20

In the case at bar, the ERC (then the ERB) is the agency tasked by law to fix, determine and prescribe the rates being charged by NPC to its customers. In accordance with this mandate, the ERC approved the rates and the guidelines that NPC must comply with in charging its customers. In the absence of grave abuse of discretion on the part of the ERC, its finding that there is no basis to assess respondents for PDS charges on AS is binding on this Court.

IN VIEW WHEREOF, the petition is DENIED. The decision of the Court of Appeals is affirmed.

Costs against petitioner.

SO ORDERED.

Endnotes:


1 Rollo, pp. 11-86.

2 Id. at 37-45.

3 Id. at 37-50.

4 Id. at 24.

5 Section 3(g), Article 1, Guidelines Implementing Executive Order No. 473 for the Segregation and Unbundling of the Power Tariffs of the National Power Corporation and Electric Distribution Utilities, dated December 22, 1998, defines "Load Following and Frequency Regulation" as "the provisions of generating capacity necessary to adjust total system generation over short periods of time (e.g. minutes) to match system load changes that result from random fluctuations in total Transmission System Load."

6 Section 3(n), Article 1, Guidelines Implementing Executive Order No. 473 for the Segregation and Unbundling of the Power Tariffs of the National Power Corporation and Electric Distribution Utilities, dated December 22, 1998, defines "Spinning Reserve" as "the provision of generating capacity necessary to respond immediately to infrequent, but usually large, failures of generating units or transmission plants."

7 Rollo, p. 39.

8 Id.

9 Id. at 28-29.

10 Id. at 31.

11 Republic Act No. 7638 (1992), Sec. 18.

12 Executive Order No. 473 (1998).

13 Article II, Guidelines Implementing Executive Order No. 473 for the Segregation and Unbundling of the Power Tariffs of the National Power Corporation and Electric Distribution Utilities, dated December 22, 1998.

14 Rollo, pp. 68-69.

15 Id. at 80-81.

16 Id. at 55-56.

17 Id. at 56.

18 Id.

19 Manila Electric Company, Inc. v. Genaro Lualhati, et al., G.R. NOS. 166769 and 166818, December 6, 2006, 510 SCRA 455, 477.

20 Id.

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