Guidelines in the Registration of Electric Power Generation Facilities/Utilities/Entities Operating Inside the Ecozones

August 21, 2007

PEZA RESOLUTION NO. 393-07

RESOLVED, That the PEZA Board hereby APPROVES the herein "Guidelines in the Registration of Electric Power Generation Facilities/Utilities/Entities Operating Inside the Ecozones", as follows:

Pursuant to Secs. 12 (c) and (e), Secs. 13 (b), (c) and (d) of R.A. 7916, as amended, Part II, Rule III of the Rules and Regulations Implementing R.A. 7916, as amended, as well as PEZA Memorandum Circular No. 2007-10 issued on 24 April 2007, the PEZA hereby adopts the following guidelines in the registration of utilities operating in the ecozones and electric power intermediaries.

SECTION 1. Principle. —

All electric power generation facilities/utilities/entities intending to operate inside the Ecozone are required to register with PEZA.

SECTION 2. Scope. —

These Guidelines shall apply to the following:

1. Existing Power Generation Facilities

2. Power Generation Facilities Under Construction

3. New or Proposed Generation Facilities

4. Ecozone Locator Enterprise with Self-Generating Facilities

5. Power Utilities currently operating a power distribution system

6. Power Utilities that shall establish and operate power distribution system

7. Entities that shall act on behalf of a locator in negotiations for securing the desired electric power service HSIaAT

Existing entities already registered as a Utility Enterprise with PEZA need not apply for registration but shall comply with the obligations and responsibilities indicated herein.

SECTION 3. Definition of Terms. —

For purposes of these Guidelines, the following definitions shall apply:

1. "Ecozones" refer to selected areas with highly developed or which have the potential to be developed into agro-industrial, industrial, tourist, recreational, commercial, banking, investment and financial centers whose metes and bounds are fixed or delimited by the relevant Presidential Proclamations. An Ecozone may contain any or all of the following: industrial estates (IEs), export processing zones (EPZ), free trade zones and tourist/recreational centers. An Ecozone may also either be public or private. Unless otherwise indicated, the term shall refer to both public and private Ecozones.

2. "Ecozone Developer/Operator" refers to a business entity or concern duly registered with and/or licensed by the PEZA to develop, operate and maintain an Ecozone or any or all of the component IE, EPZ, Free Trade Zone or Tourist/Recreational Center and the required infrastructure facilities and utilities such as light and power system, water supply and distribution system, sewerage and drainage system, pollution control devices, communication facilities, paved road network, administration building and other facilities as may be required by the PEZA. The term shall include the PEZA and/or the Local Government Unit when by themselves or in joint venture with a qualified private entity, shall act as the Developer/Operator of the Ecozones. IaHSCc

3. "Power Supplier or Aggregator" refers to an entity licensed by the Energy Regulatory Commission to act as Retail Electricity Supplier or Wholesale Aggregator pursuant to Republic Act No. 9136, duly registered with PEZA to act on behalf of a locator in negotiations for securing the desired electric power service.

4. "Ecozone Generation Facility" refers to a facility for the production of electricity either using conventional fuels or renewable energy technologies with electricity-generating potential like solar energy, mini-hydro, wind, biomass and such other similar technologies.

5. "Ecozone Locator Enterprise" refers to an individual, association, partnership, corporation or other form of business organization which has been registered with the PEZA as Ecozone Export Enterprise, Ecozone Domestic Market Enterprise, Ecozone Pioneer Enterprise, Ecozone Free Trade Enterprise, Ecozone Facilities Enterprise, Ecozone Developer/Operator, Ecozone Service Enterprise and Ecozone Tourism Enterprise.

6. "Ecozone Power Distribution Enterprise" refers to an entity duly registered as an Ecozone Utility Enterprise and/or authorized by the PEZA to construct and/or operate and maintain the distribution system in the ECOZONES.

7. "Ecozone Power Generation Enterprise" refers to an entity duly registered and/or authorized by the PEZA as a Registered Ecozone Utility Enterprise to generate and operate a generation facility inside the Ecozone for commercial purposes.

8. "Ecozone Self-Generation Facility" refers to a power Generation Facility owned and constructed by an ECOZONE Enterprise/Locator for its own consumption.

9. "Open Access" refers to the system of allowing any qualified Person the use of transmission, and/or Distribution System and associated facilities subject to the payment of transmission and/or distribution retail wheeling rates. HcTEaA

10. "Person or Entity" refers to a natural or juridical person, as the case may be.

11. "PEZA" refers to the Philippine Economic Zone Authority created under R.A. No. 7916, as amended.

12. "PEZA Board" refers to the PEZA Board of Directors.

13. "PEZA Management" refers to the Authority headed by the Director General.

14. "Philippine Distribution Code" refers to a compilation of rules and regulations governing electric utilities in the operation and maintenance of their distribution systems which includes, among others, the standards for service and performance, and defines and establishes the relationship of the distribution systems with the facilities or installations of the parties connected thereto.

15. "Philippine Grid Code" refers to the set of rules and regulations governing the safe and reliable operation, maintenance and development of the high voltage backbone transmission system and its related facilities.

16. "R.A. No. 7916" refers to the "The Special Economic Zone Act of 1995" as amended by Republic Act No. 8748.

17. "WESM" refers to the Wholesale Electricity Spot Market in accordance with R.A. No. 9136.

SECTION 4. Procedure for Applying as a Registered Ecozone Power Generation Enterprise. —

1. Requirements

 A Person or Entity intending to register as Ecozone Power Generation Enterprise and establish an Ecozone Generation Facility shall file the application with PEZA by submitting the following:

a) Duly filled-up and notarized application form and Anti-Graft Certificate;

b) Business Registration (e.g., SEC Registration, DTI Registration);

c) Articles of Incorporation and by-Laws (if applicable);

d) Audited Financial Statements (for the last three years of operation, where applicable); IEHTaA

e) Board Resolution/Special Power of Attorney designating the company's authorized representative to PEZA;

f) Project Study which includes the following:

(1) Technical aspect (type of Generation Facility, drawing/layout of typical support structure arrangement; complete operational plan, including capacity plan and manpower requirement);

(2) Financial aspect (source of funding);

(3) Market aspect (prospective clients, current and future demand estimates); and

(4) Environmental aspect.

g) Proof of land ownership or any perfected contract/document confirming the applicant's authority/clearance to use the proposed location as site for power generation;

 If the applicant is not the registered owner, a perfected contract/document confirming the applicant's authority/clearance is required.

h) Favorable endorsement from the Ecozone Developer/Operator or Zone Administrator, whichever is applicable;

i) Health, safety and environmental Compliance Certificate;

j) Proposed Generation Rate to Ecozone Locator Enterprises; and

k) Other documents as may be required by PEZA.

2. Fees

a) Application Fee PhP3,600.00

b) Registration Fee PhP10,000.00

3. Approval Process

 All applications for registration as Ecozone Power Generation Enterprise and Ecozone Generation Facility shall be subject to PEZA Board approval. CHTAIc

4. Obligation and Responsibilities

a) The Ecozone Power Generation Enterprises shall submit to PEZA its projected five-year annual development plan every 15th of January.

b) The Ecozone Power Generation Enterprises shall comply with the reportorial requirements prescribed by PEZA including annual audit report.

c) The Ecozone Power Generation Enterprises shall comply with the technical standards set by PEZA. Unless otherwise prescribed by PEZA, the standards provided in the Philippine Grid and Distribution Codes shall apply.

d) The Ecozone Power Generation Enterprises shall comply with PEZA's importation guidelines.

e) The participation of an Ecozone Power Generation Enterprise in the Wholesale Electricity Spot Market (WESM) shall comply with the appropriate PEZA guidelines and standards such as, but not limited to the payment of appropriate taxes and other charges imposed by law. It is understood, however, that it is the responsibility of the Ecozone Power Generation Enterprise to secure all the necessary permits outside the PEZA law, rules and guidelines including the membership criteria as prescribed under the Market Rules for its participation in the WESM.

f) A one centavo per kilowatt hour (P0.01/kWh) sales shall be set aside to communities hosting the power generation facility following the rules and regulations and applicable orders and circulars to implement Section 5 (i) of Republic Act No. 7638.

5. A PEZA-registered Ecozone Power Generation Enterprise shall be entitled to the special 5% Gross Income Tax incentive specific to its operations inside the ecozones.

SECTION 5. Procedure for Applying as a Registered Ecozone Self-generating Facility. —

1. An Ecozone Locator Enterprise with existing self-generation facilities, whether used for its own stand-by/back-up or base-load shall submit to PEZA their electrical and mechanical permits issued by the PEZA Building Official which shall serve as basis of PEZA registration. Similarly, submission of registration/recognition by other government agencies shall also serve as basis of PEZA's registration.

2. An Ecozone Locator Enterprise intending to register a self-generating facility shall file the application with PEZA by submitting the following: ISCHET

 

a) Favorable endorsement from the Ecozone Developer/Operator or Zone Administrator, whichever is applicable;

b) Health, safety and environmental Compliance Certificate; and

c) Other documents as may be required by PEZA.

3. Fees

a) Application Fee PhP1,200.00

b) Registration Fee PhP2,000.00

4. Approval Process

 All applications for registration as Ecozone Self-Generating Facility shall be subject to PEZA Board approval.

5. Obligation and Responsibilities

a) The Ecozone Locator Enterprise that sources its power requirements solely or partially from its Ecozone Self-Generating Facility shall submit to PEZA its five-year projected consumption every 15th of January.

b) The Ecozone Locator Enterprise with Ecozone Self-Generating Facility shall comply with the reportorial requirements prescribed by PEZA including annual audit report.

c) The Ecozone Locator Enterprise with Ecozone Self-Generating Facility shall comply with the technical standards set by PEZA. Unless otherwise prescribed by PEZA, the standards provided in the Philippine Grid and Distribution Codes shall apply.

d) The Ecozone Locator Enterprise with Ecozone Self-Generating Facility shall comply with PEZA's importation guidelines for the fuel and other supplies/materials in the operation of the registered self-generating facility.

e) The participation of the Ecozone Locator Enterprise with Ecozone Self-Generating Facility to the Wholesale Electricity Spot Market (WESM) shall comply with the appropriate PEZA guidelines and standards such as, but not limited to the payment of appropriate taxes and other charges imposed by law. It is understood, however, that it is the responsibility of the said Ecozone Locator Enterprise to secure all the necessary permits, outside the PEZA law, rules and guidelines including the membership criteria as prescribed under the Market Rules for its participation in the WESM. CEHcSI

SECTION 6. Procedure for Applying as a Registered Ecozone Power Supplier or Aggregator. —

1. Requirements

 A Person or Entity intending to register as Ecozone Power Supplier or Aggregator shall file the application with PEZA by submitting the following:

a) Duly filled-up and notarized application form and Anti-Graft Certificate;

b) Business Registration/License;

c) Board Resolution/Special Power of Attorney designating the company's authorized representative to PEZA;

d) Project Study;

e) Minimum capitalization and technical expertise, provided that the applicant's submission of a certified true copy of its valid certificate or license as Retail Electricity Supplier or Wholesale Aggregator, issued by the Energy Regulatory Commission, shall be accepted by the PEZA as proof of sufficient capitalization and technical expertise; and

f) Other documents as may be required by PEZA.

2. Fees

a) Application Fee PhP1,200.00

b) Registration Fee PhP2,000.00

3. Approval Process

 All applications for registration as Ecozone Power Supplier or Aggregator shall be subject to PEZA Management approval.

4. Obligation and Responsibilities

a) The Ecozone Power Supplier or Aggregator shall be responsible to offer its services to the Ecozone Locator Enterprise. Such services shall be supported with appropriate contract that shall among others, authorize the Ecozone Power Supplier or Aggregator to negotiate in behalf of the Ecozone Locator Enterprise the desired supply and delivery of generated electric power.

b) The Ecozone Power Supplier or Aggregator shall comply with the reporting requirements set by PEZA. acCDSH

SECTION 7. Procedure for Applying as a Registered Ecozone Power Distribution Enterprise. —

1. Requirements

 A Person or Entity intending to register as Ecozone Power Distribution Enterprise shall file the application with the PEZA by submitting the following:

a) Duly filled-up and notarized application form and Anti-Graft Certificate;

b) Business Registration (e.g., SEC Registration, DTI Registration);

c) Articles of Incorporation and by-Laws (if applicable);

d) Audited Financial Statements (for the last three years of operation, where applicable);

e) Board Resolution/Special Power of Attorney designating the company's authorized representative to PEZA;

f) Project Study which includes the following:

(1) Technical aspect (drawing/layout of typical support structure arrangement; complete operational plan, including capacity plan and manpower requirements);

(2) Financial aspect (source of funding);

(3) Market aspect (prospective clients, current and future demand estimates); and

(4) Environmental aspect.

 Provided that, submission by the applicant to PEZA of a certified true copy of its valid certificate or license to operate a distribution utility issued by the Energy Regulatory Commission shall be deemed compliance with the requirement for the submission of a Project Study.

g) Proof of land ownership or any perfected contract/document confirming the applicant's authority/clearance to use the proposed location as site for power distribution, including rights of way.

 If the applicant is not the registered owner, a perfected contract/document confirming the applicant's authority/clearance is required; AECDHS

h) Favorable endorsement from the Ecozone Developer/Operator or Zone Administrator, whichever is applicable;

i) Health, safety and environmental Compliance Certificate (if required);

j) Application for the Proposed Distribution Rate; and

k) Other documents as may be required by PEZA.

2. Fees

a) Application Fee PhP3,600.00

b) Registration Fee PhP10,000.00

3. Approval Process

 All applications for registration as Ecozone Power Distribution Enterprise shall be subject to PEZA Board approval.

4. Obligation and Responsibilities

a) Operations of the Ecozone Power Distribution Enterprise shall be regulated by PEZA and as such the Ecozone Power Distribution Enterprise shall comply with all the regulatory requirements of PEZA.

b) Ecozone Power Distribution Enterprise shall file an annual report on or before 30th May of each year, for the previous calendar year. The annual report shall contain the following information:

i. The total amount of gross receipts from the sales of electricity in the Ecozone;

ii. The total amount of electricity sold in kwh in the Ecozone;

iii. Total amount of electricity purchased or generated to supply its Ecozone requirements;

iv. Number of customers being served;

v. Customers technical and financial profile;

vi. Project development program;

vii. Latest Audited Financial Statement; and

viii. Other information that may be required by PEZA.

c) Ecozone Power Distribution Enterprise shall provide open and non-discriminatory access to the Ecozone Distribution System. DEcITS

d) Ecozone Power Distribution Enterprise shall comply with the technical and performance standards set by PEZA.

e) Ecozone Power Distribution Enterprise shall comply with PEZA's importation guidelines.

f) Ecozone Power Distribution Enterprise shall serve as the default supplier of Ecozone Locator Enterprises in the event that the Ecozone Locator Enterprises fail to enter into bilateral contracts with entities of their choice to supply electric power. Generation rates shall not be subject to PEZA regulations.

g) Ecozone Power Distribution Enterprise shall provide metering services until such time that PEZA has registered the appropriate service providers that shall operate in the Ecozones.

5. A PEZA-registered Ecozone Power Distribution Enterprise shall be entitled to the special 5% Gross Income Tax incentive specific to its operations inside the ecozones.

SECTION 8. Penalties. —

1. Only PEZA-registered entities shall be allowed to operate inside the ecozones.

2. In the case of existing entities operating a Power Distribution System inside the ecozone, failure to register within thirty (30) calendar days from the effectivity of these guidelines shall entitle the Authority to impose appropriate fines and penalties on the Developer who is responsible to establish and maintain the appropriate infrastructure including public utilities, based on a schedule of penalties to be issued by the PEZA Board, and allow the PEZA Board to determine the new distribution rates to be charged to the Ecozone Locator Enterprises based on information currently available to the PEZA Board.

3. Any violation or default in the performance of the covenants and obligations set forth in this Registration Guidelines by the Registrant shall constitute a ground for the revocation of the registration if no corrective or remedial measures satisfactory to PEZA are instituted within thirty (30) days from written notice of such violation or default. PEZA, however, shall be compensated for all the damages that it may have suffered by reason of such violation or default.

SECTION 9. Transition Period. —

For the period commencing on the first date of effectivity of these Guidelines and sixty (60) days thereafter, unless otherwise extended by the PEZA Board, Entities currently operating and supplying power within the ecozones can continue their operations, notwithstanding clause 1 of Section 8, without being subjected to fines or penalties. AEIDTc

SECTION 10. Effectivity. —

These Guidelines shall take effect fifteen (15) days following the publication once in a newspaper of general circulation.

 

(SGD.) JENNY JUNE G. ROMEROActing Corporate Secretary