Republic of the Philippines ENERGY REGULATORY COMMISSION Pasig City RESOLUTION NO. _2_, SERIES OF 2021 A RESOLUTION ON THE RECOVERY OF PASS-THROUGH TAXES (REAL PROPERTY, LOCAL FRANCHISE, AND BUSINESS TAXES) OF THE DISTRIBUTION UTILITIES WHEREAS, 05 August 2015, the Supreme Court issued a Decision in G. R. No. 166102 entitled, “Manila Electric Company (MERALCO) vs. The City Assessor and City Treasurer of Lucena City”, wherein it ruled that MERALCO’s transformers, electric posts, transmission lines, insulators, and electric meters are no longer exempted from real property tax and may qualify as a "machinery" subject to real property tax under the Local Government Code (LGC). WHEREAS, in light of the said Supreme Court ruling, on 30 January 2017, a Petition for Rule-Making docketed as ERC Case No. 2017-001 RM was filed by the Private Electric Power Operators Association (PEPOA) before the Commission proposing that Real Property Tax (RPT) be allowed as a pass-through cost to the end-users (PEPOA Petition). WHEREAS, on 07 June 2017, the Commission issued an Order with Notice of Proposed Rule-Making setting the said PEPOA Petition for public consultations in Luzon, Visayas and Mindanao on 07 August 2017, 09 August 2017, and 11 August 2017, respectively. WHEREAS, the series of public consultations for the PEPOA Petition were conducted as scheduled. WHEREAS, on 31 October 2018, another Petition for Rule Making docketed as ERC Case No. 2018-006 RM was filed by the Philippine Rural Electric Cooperative Association, Inc. (PHILRECA) before the Commission proposing for rules to allow the pass- through of RPT to the end-users. (PHILRECA Petition). ‘WHEREAS, on 18 February 2019, the Commission issued an Order with Notice of Proposed Rule-Making setting the PHILRECA Petition for public consultations in Luzon, Visayas and Mindanao on 14 March 2019, 04 April 2019, and 22 March 2019, respectively.ERC Resolution No. 0, Series of 2021 A RESOLUTION ON THE RECOVERY OF PASS-THROUGH TAXES (REAL PROPERTY, LOCAL FRANCHISE, AND BUSINESS TAXES) OF THE DISTRIBUTION UTILITIES Page 2 of 3 ‘WHEREAS, the public consultation for Luzon stakeholders for the PHILRECA Petition was re-scheduled on 28 June 2019. WHEREAS, on 02 October 2019, the Commission issued another Order dated 23 September 2019 setting the PHILRECA Petition for another public consultation on 05 November 2019 in order to address the following issues: a) the issue on arrears; and b) the consolidation of the PHILRECA Petition and the PEPOA Petition. WHEREAS, on various dates, the Commission received written comments on the two (2) above-mentioned issues from the following stakeholders: (1) Manila Electric Company (MERALCO); (2) PEPOA; and (3) PHILRECA. ‘WHEREAS, the Commission noted that the subject matters of both Petitions were focused on the recovery of real property taxes alone and thereby resolved to initiate rule-making motu proprio to consolidate the rules on recovery of all other pass-through taxes; ‘WHEREAS, on 05 November 2020, the Commission approved for posting in its official website (www-erc.gov.ph) the first draft of the proposed “Consolidated Rules on the Recovery of Pass Through Taxes (Real Property, Local Franchise, and Business Taxes) of Distribution Utilities” (Draft Consolidated Rules) docketed as ERC Case No. 2020-004 RM. WHEREAS, in its Notice dated 05 November 2020, the Commission directed all interested parties to submit their comments on the Draft Consolidated Rules on or before 25 November 2020. WHEREAS, on various dates, the Commission received various comments to the said Draft Consolidated Rules from the following stakeholders: (1) PHILRECA; (2) PEPOA; (3) MERALCO; (4) Olongapo Electric Distribution Company (OEDC); (5) South Cotabato I Electric Cooperative, Inc. (SOCOTECO 1; (6) Cebu I Electric Cooperative, Inc. (CEBECO 1); (7) Zamboanga del Norte Electric Cooperative ,Inc. (ZANECO); and (8) Batangas II Electric Cooperative, Inc. (BATELEC ID). WHEREAS, after careful evaluation of all the comments and submission of the stakeholders in the two (2) Petitions and in theERC Resolution No. 0, Series of 2021 A RESOLUTION ON THE RECOVERY OF PASS-THROUGH TAXES (REAL PROPERTY, LOCAL FRANCHISE, AND BUSINESS TAXES) OF THE DISTRIBUTION UTILITIES Page 3 of 3 Commission initiated rule-making case, the Commission, in a meeting held on 17 December 2020, approved to issue a new rule for the recovery of pass-through taxes including real property tax, local franchise tax, and business tax. NOW THEREFORE, BE IT RESOLVED, as it is hereby resolved, that the Commission adopts and issues the RESOLUTION ON THE RECOVERY OF PASS-THROUGH TAXES (REAL PROPERTY, LOCAL FRANCHISE, AND BUSINESS TAXES) OF THE DISTRIBUTION UTILITIES, hereto attached as Annex “A” and made an integral part of this Resolution. This Resolution shall take effect immediately following its publication in newspaper of general circulation in the country or in the Official Gazette. Let copies of this Resolution be furnished the University of the Philippines Law Center — Office of the National Administrative Register (UPLC-ONAR) and all industry stakeholders, as well as published in the ERC Website and such other online platform available to the Commission. Pasig City, 17 December 2020. Ofnce of the Charperson 10 AGNES Ue nV *AVSTD-2021-01-570-0001* Chairperson and CEO (On Leave) (On Leave) ALEXIS M. LUMBATAN CATHERINE P. MACEDA Commissioner Commissjoner F Li INDA G. c MARKO Rt 10 L. FUENTES Commissioner Cgmmissioner ¥ a mood ivG/ MccG ROS: JFSC/AJMO/LLGAnnex “A” RULES ON THE RECOVERY OF PASS-THROUGH TAXES (REAL PROPERTY, LOCAL FRANCHISE, AND BUSINESS TAXES) OF DISTRIBUTION UTILITIES ARTICLE I GENERAL PROVISIONS 1.1 Objectives ‘These Rules shall have the following objectives: a. To provide guidance to Distribution Utilities (DUs) through an orderly procedure for recovery of Real Property, Local Franchise, and Business Taxes; b. To allow the full recovery of all just and reasonable components of the taxes levied by Local Government Units (LGUs) against the DUs to enable the latter to operate viably; c. To ensure transparency and efficiency in the implementation of appropriate recovery of tax charges; and d. To put in place a fair and transparent process for the confirmation of the cost adjustments implemented by the DUs and the true-up of the Real Property, Local Franchise and Business Taxes pass-through charges as approved by the Commission. 1.2 Guiding Principles DUs shall be allowed recovery of all just and reasonable costs pertaining to current taxes that are levied by LGUs within the DU’s franchise area, subject to the post-validation and confirmation mechanism of the Commission. The Supreme Court, in the case of Manila Electric Company (MERALCO) vs. The City Assessor and City Treasurer of Lucena City, G.R. No. 166102, dated 15 August 2015, confirmed that machineries owned by DUs are subject to Real Property Taxes (RPT). Pursuant to the said Decision of the Supreme Court, machineries are not exempted from the RPT. This confirms the DUs’ liability to pay RPT not only for land and buildings but for machineries as well. In view of the above-cited Supreme Court Decision, the DUs fall under the following scenarios: 1.2.1. Privately-owned DUs (PDUs) For PDUs under the Performance Based Regulation, these rules shall apply to RPT related to Machineries only, and only until the next regulatory reset when the RPT has been excluded from the Annual Revenue Requirement (ARR). Upon the finalization of the Page 1 0f 15Regulatory Reset Process for the next Regulatory Period, PDUs shall already exclude the RPT in the financial Building Blocks of the ARR for each Regulatory Year in such Subsequent Regulatory Period, and the Rules provided herein shall apply to all RPT charges. 1.2.2. Electric Cooperatives (ECs) The RPT for on-grid ECs are recovered as paid, and the rate of recovery is computed based on the period it has paid subject to the provisions of the Rules for Setting Electric Cooperatives Wheeling Rates (PSEC-WR). The Current RPT Charge for ECs shall refer to the RPT that ECs have paid for the LGUs for the current period covered by the current rate of additional contribution for RPT reflected as a separate line item in the bill. 1.3 Scope and Applicability These Rules shall apply to all DUs where Real Property, Local Franchise, and Business Taxes are levied within their franchise areas and shall govern the recovery of the pass-through costs. Only real property, franchise and business taxes that are assessed by the LGUs for the Year 2021 and thereafter, and subsequently paid for by the DUs shall be allowed to be passed on to consumers, subject to the provisions of these Rules. Tax arrearages, including interests, penalties and other charges imposed on DUs resulting from their delayed payment of the said taxes, shall not be allowed to be passed on to consumers and shall be borne solely by the concerned DUs, unless expressly allowed herein. Tax arrearages shall include taxes assessed for one particular year but paid by the concerned DU in the succeeding year, unless the LGU has allowed the payment thereof in installments in which some or all of the amortizations are paid in the succeeding calendar year. In such instances, the amount of taxes allowed by the LGUs to be paid in the succeeding year shall be allowed to be passed on, provided that the requirements provided under these Rules are complied with. These Rules shall likewise govern the applications for the recovery of any allowable real property, local franchise and business tax. Applications of this nature filed under Resolution No. 16, Series of 2009 shall no longer be accepted by the ERC. Subject to the requirements provided in these Rules, the real property, local franchise and business taxes paid by the DUs for a particular calendar year may be passed on to consumer only within the year it was paid. Other taxes allowed to be passed on to their consumers but paid beyond the period mentioned in the preceding statement shall be recovered through the confirmation mechanisms under Article V of these Rules. Page 2 of 15The resulting pas through charges shall be reflected as a separate line item in their customers’ electricity bills. 1.4 Definition of Terms a. “Annual Revenue Requirement” or “ARR” shall refer to the allowed annual revenue requirement for a utility which fully compensates the utility for efficient distribution expenses such as operating and maintenance expenses, return of capital, return on capital and other taxes; “Business Tax” or “BT” shall refer to the tax levied by the municipalities and cities as contemplated under Section 143 and 151, respectively, of the Local Government Code of 1991; “Compliance Filing” shall refer to Rule 20, Paragraph G, Section 3 of the ERC Resolution No. 38, Series of 2006;: “Current Taxes” shall refer to the Real Property, Local Franchise and Business Taxes that are covered by these rules, which are levied by the LGU for the present year starting 2021 ; “Distribution Utility” or “DU? shall refer to any electric cooperative, private corporation, government-owned utility or existing LGU which has an exclusive franchise to operate a distribution system in accordance with its franchise and Republic Act 9136; “DSM Charges” shall refer to the distribution utility's unbundled rates to cover the operating expenses compose of its payroll and operations and maintenance expenses; “Electric Cooperative” or “EC” shall refer to a distribution utility organized and incorporated pursuant to Presidential Decree No. 269, as amended by Presidential Decree No, 1645 and Republic Act No. 6938. Otherwise known as the Cooperative Code of the Philippines; wherein, On-Grid ECs shall refer to the ECs connected to the Grid operating under the RSEC-WR. Off-Grid ECs shall refer to the island ECs that are not connected to the Grid; “Levying LGU” shall refer to the local government unit authorize to levy tax, fee, charge or other imposition unless otherwise provided under the Local Government Code of the Philippines; "A Resolution Promulgating the Energy Regulatory Commission’s Rules of Practice and Procedure.”, and any applicable amendments thereof Page 3 of 15“Local Franchise Tax” or “LFT” shall refer to the tax levied by the province and cities on business enjoying a franchise as defined under to Sections 137 and 151 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991; “Machineries” shall refer to machines, equipment, mechanical contrivances, instruments, appliances or apparatus which may or may not be attached, permanently or temporarily, to the real property. It includes the physical facilities for production, the installations and appurtenant service facilities, those which are mobile, self-powered or self- propelled, and those not permanently attached to the real property which are actually, directly, and exclusively used to meet the needs of the particular industry, business or activity and which by their very nature and purpose are designed for, or necessary to its manufacturing, mining, logging, commercial, industrial or agricultural purposes, as defined under Section 199 of the Local Government Code of 1991. For DUs, this includes assets such as, transformers, electric posts, transmission lines, insulators, and electric meters; “Privately-owned DUs” or “PDUs” shall refer to private corporation which has an exclusive franchise to operate a distribution system in accordance with its franchise; “Real Property Taxes” or “RPT” refers to Local Taxes imposed by Provinces, Cities and Municipalities within the DU’s franchise area pursuant to Sections 197-283 of the LGC; “Recoverable Cost” shall refer to the cost of any tax imposed to the utility that has been paid or incurred and allowed to be passed on by the utility; “Recovery Period” shall generally refer to the period when the cost adjustments are implemented; “Statement of Account” shall refer to an account statement sent to a customer or client which contains the detailed report of the contents of an account. It shows billings to and payments from the customer or client during a specific time period; and “Tax Assessment” shall refer to the act or process of determining the value of a property, or proportion thereof, subject to tax, including the discovery, listing and appraisal of properties. Page 4 of 15ARTICLE I REAL PROPERTY TAX 2.41. Current RPT Current RPTs that are paid by the DUs are deemed part of their operating costs and shall be allowed to be recovered from the end users as the Current RPT Charge subject to the limitations in these Rules. While the RPT is a common expenditure for all DUs, the rate thereof varies depending on the LGU. The Current RPT Charge to be recovered by the DUs shall be determined and limited to the real property taxes assessed by the LGUs for the present year and paid for by the DUs, as evidenced by the following: a. a certified true copy of the local Tax Ordinance and/or any applicable Provincial Tax Ordinance/Resolution; b. —_ acertified true copy of the tax declaration/s duly issued to the DU; c. —_ acertified true copy of the tax assessment; d. —_ acertified true copy of the statement of account; e. a certified true copy of the official receipt of payment / LGU Assessor's or Treasurer's office issuance of a certificate of full payment; f. projected kilowatt-hours sales for the particular proposed recovery period; and g. _ such other documents as may be required by the Commission. Upon complete submission of the foregoing documents, the DU is hereby authorized to recover from its consumers the allowable Current RPT as pass-through charges pursuant to these Rules. Such pass-through charges shall be reflected as a separate line item in the electric bill, and subject to post-verification and confirmation by the Commission as provided under Article V of these Rules, where the corresponding over/under recovery shall be considered in the DUs filing of their respective applications through Compliance Filing (CF). The recovery period shall be equivalent to the number of months for which the DU has paid the said Current RPT. To illustrate, for DUs that made a one-time payment for the entire amount due for the year, the same shall be recoverable from their consumers for a period of twelve months. On the other hand, for those who paid on a quarterly basis, the recovery period shall be three (3) months of the quarter covered by the said payment. To illustrate, if a DU paid the current RPT for the first quarter of Page 5 of 15the year 2021, the DU may recover the said Current RPT for three (3) months or until March 2021. Notwithstanding the immediately preceding paragraph, the said RPT charges shall only be allowed recovery for the current year and any remaining uncollected amount shall be included as part of the DUs' under- recovery in its compliance filing. To illustrate, the paid RPT for the year 2021 shall only be allowed as a pass-through in 2021. The uncollected portion of the allowable RPT charges shall then be recovered as part of the DU’s compliance filing. Within thirty (30) days from the last billing cycle in which the RPT adjustment was collected and fully recovered, a report on the said recovery, in accordance with the prescribed format provided in Appendix “A” hereof, shall be submitted to the Commission complete with supporting documents regarding its implementation. Monthly collections and revenue shall be included in the DUs submission to the Commission under the Uniform Reportorial Requirements (URR). 2.2, Current RPT Pass-Through Computation The Current RPT Charge shall be calculated using the following formula: RPT, RPT Charge = c Where: RPT = The Current RPT Charge expressed in PhP/kWh Charge representing the RPT paid for the present year to the LGUs located within the franchise area of the DU RPT. = The total RPT paid for present year to all the LGUs imposing the tax within the specific municipality(ies) and/or city(ies)of the franchise area of the DU Se = Projected Total kWh Sales for the recovery period of the Current RPT For PDUs under the Performance Based Regulation, these rules shall apply to Current RPT related to Machineries only, and only until the next regulatory reset. Upon the finalization of the Regulatory Reset Process for the next Regulatory Period, privately-owned DUs shall already exclude the RPT in the financial Building Blocks of the ARR for each Regulatory Year in such Subsequent Regulatory Period, and the Rules provided herein shall apply to all RPT charges that will be imposed by the LGUs. For ECs, these Rules shall be applied prospectively on alll its Current RPT Charges that will be imposed by the LGUs. Page 6 of 15ARTICLE III LOCAL FRANCHISE AND BUSINESS TAXES 3.1 Local Franchise Tax Pass-Through Computation A DU is obligated to pay Local Franchise Taxes (LFT) to their respective LGU/s. This shall be reflected in its customer's electric bill, and its recovery shall be based on the tax rate multiplied against the total gross revenue * in Peso (Distribution, Supply, Metering and other charges/adjustments, i.e. subsidy on lifeline charge, lifeline subsidy discount and inter-class cross subsidy charge, excluding Reinvestment Fund collections in the case of an EC). 3-2 Business Tax Pass-Through Computation Business Taxes (BT) paid by DUs may be recovered from its customers. The recovery of the said taxes shall be reflected in its customer's electric bill, with the amount to be recovered based on the following formula: Beg BT = (#) +OBTA Where: BT = Business Taxes Charge expressed in Peso/kWh representing business taxes that a DU paid to the specifie LGU/s Bta = Business Tax (excluding penalty and surcharge) other than those already considered in the distribution rates, paid for the current calendar year Ser = Projected Total kWh Sales for the recovery period OBTA = Other Business Taxes Cost Adjustment, refer to adjustments as approved by the Commission after prior verification and confirmation. In calculating the local business taxes, it shall be based on the DU’s total distribution charges, excluding the penalties and surcharges paid. The DU shall reflect the computed rate, in PhP/kWh and corresponding revenues in a separate line item in the customers’ monthly billing. 2 The Department of Finance (DOF) Local Circular No. 1-07 dated June 28, 2007 has prescribed the guidelines on how the ECs may be levied by the LGUs on their gross receipts, which is net of the Generation, Transmission, Reinvestment Fund and Universal Charges. Page 7 of 153.3 Supporting Documents for Local Franchise and Business Taxes Adjustment; Recovery Period as a Pass-Through Charge The LFT and BT to be recovered by the DUs shall be determined and limited to the taxes assessed by the LGUs for the present year and paid for by the DUs, as evidenced by the following: a. Certified true copies of the Local Ordinances of the Province, Cities and each of the Municipalities wherein franchise/business tax are levied; b. Tax receipts for the payments made; c. Summary of Franchise/Business tax computation; d. Actual distribution revenues; e. Breakdown of gross sales/receipts; and f. Other relevant documents as may be required by the Commission. Upon complete submission of the foregoing documents, the DU is authorized to recover the allowable LFT/BT under these Rules. Such pz through charges shall be reflected as a separate line item in the electric bill, subject to post-verification and confirmation by the Commission as provided under Article V of these Rules, where the corresponding over/under recovery shall be considered in the DUs filing of their respective applications through Compliance Filing (CF). The recovery period shall be equivalent to the number of months for which the DU has paid the said LFT/BT. To illustrate, for DUs that made a one-time payment for the entire amount due for the year, the same shall be recoverable from their consumers for a period of twelve months. On the other hand, for those who paid on a quarterly basis, the recovery period shall be three (3) months of the quarter covered by the said payment. To illustrate, if a DU paid the LFT/BT for the first quarter of the year 2021, the DU may recover the said LFT/BT for three (3) months or until March 2021. Notwithstanding the immediately preceding paragraph, the said LFT/BT charges shall only be allowed recovery for the current year and any remaining uncollected amount shall be included as part of the DUs’ under-recovery in its compliance filing. To illustrate, the paid BT for the year 2021 shall only be allowed as a pass-through in 2021. The uncollected portion of the allowable BT charges shall then be recovered as part of the DU’s compliance filing. Within thirty (30) days from the last billing cycle in which the LFT/BT adjustment was collected and fully recovered, a report, in accordance with the prescribed format in the Appendix “A” for the BT and Appendix “B” for the LFT, shall be submitted to the Commission, complete with supporting documents regarding its implementation. Page 8 of 15Likewise, the monthly collections and revenue shall be included in the DUs submission to the Commission under the Uniform Reportorial Requirements (URR). ARTICLE IV TRUE UP MECHANISM This Article shall establish a procedure for the recovery or refund of pass-through costs and the confirmation process that would govern the cost adjustment and true-up mechanisms approved by the ERC. 4.1. Calculation of Over/Under Recoveries The DU shall calculate the over or under recoveries on the RPT, LFT and BT Rate brought about by the variance between the allowable cost and the revenues billed using the applicable formulae provided herein. 4.2 RPT Over/Under Recovery Consistent with ERC Resolution No. 16, series of 20093, a pro for true up mechanism is allowed every three (3) years that coincides with the DU’s confirmation filing. The RPT over/under recovery charged to customers shall be based on the following formula: (RPTR, + RPTRy ++ RPTR,) — (RPTA; + RPT Ay + RPTAn) RPToup = fee SkeTOURFoeat Actuat Where: RPTovr = Refers to over/under recoveries real property taxes during the recovery period expressed in Peso/kWh RPTRion = Real Property tax revenue for the recovery period ito n computed as follows: RPTR = RPT Charge x DE Where: RPTCharge = The Current RPT Charge expressed in PhP/kWh as determined in Section 2.2 above ®“A Resolution Adopting the Rules Governing the Automatic Cost Adjustment and True-Uip Mechanisms and Coresponding Confirmation Process for Distribution Utltes. Page 9 of 15SkprourActut = kWh sales for month i to month n during the recovery period RPTAion = ERC verified real property taxes paid by the DU for the recovery period i to n SperouRscua = Actual Total kWh sales for the recovery period. 4.3 Local Franchise and Business Taxes Over/Under Recovery ‘The Local Franchise and Business Taxes Over/Under Recovery to be charged to customers shall be calculated based on the following formulae: 4.3.1 Business Tax Over/Under Recovery For BT Over/Under Recovery (BTOUR) to be charged to customers shall be calculated based on the following formula: (BTR, + BTRy + BTRn) — (BTA; + BTAy + ~~ BTAn) BTour = SarouRzocat actuat Where: BTour = Refers to over/under recoveries business taxes during the recovery period expressed in PhP/kWh BIRiton = Business tax revenue for the recovery period ito n computed as follows: BTR =(BTx )” Sorourscrua.) fm Where: BT = ERC Other Business Tax Rate Ssrour = kWh Sales for the Month i ‘Actual to Month m during the recovery period BTAiwon = ERC verified business taxes paid by the DU for the recovery period ito n Sproutrormacrua, = Actual kWh Sales for the recovery period 4.3.2. Local Franchise Tax Over/Under Recovery For LFT Over/Under Recovery (LFTOUR) to be charged to customers shall be calculated based on the following formula: Page 10 of 15LFTour (LFTR, + LETRy + LFTR,) — (LFTA, + LFTAy + LETAn) SuPrOURroeat actuat Where: LFTour = Refers to over/under recoveries in local franchise taxes during the recovery period expressed in PhP/kWh LFTRiton = Local Franchise Tax revenue for the recovery perioditon LFTA‘ton = ERC verified local franchise taxes paid by the DU for the recovery period ito n = Actual Total kWh sales for the recovery SLPrOURr ott actual i period ARTICLE V FILING AND RESOLUTION OF THE APPLICATIONS 51 Filing The DUs shall file their respective initial consolidated applications through Compliance Filing (CF) within the corresponding periods as prescribed hereunder: DISTRIBUTION | PERIOD OF | COVERED ADJUSTMENTS UTILITIES FILING Luzon DUs 31 March 2023 | January 2021 - December 2022 Visayas DUs 31 March 2024 | January 2021 - December 2023 Mindanao DUs 31 March 2025 | January 2021 - December 2024 Subsequently, the DUs shall file their respective consolidated applications every three (3) years following the sequence of period of filing prescribed under ERC Resolution 21, Series of 20104. 5.2 Form of Application and Supporting Document The Applications and supporting documents therewith shall adopt the prescribed templates (Appendix “A” or Appendix “B”) by the ERC. #4 Resolution Amending Section 4 Article 4 and Section 1 of Article 5 of the Rules Governing the Automatic Cost Adjustment and True-up Mechanisms and Corresponding Confirmation Process for Distribution Usilties. Page 11 of 155-3 ERC Post Audit At any given time, the DUs implementation of recovery of Real Property Taxes, Local Franchises Taxes and Business Taxes may be subjected to any post audit by the Commission to examine the implemented rates based on the recovery period. ARTICLE VI MISCELLANEOUS PROVISIONS 6.1 Separability If for any reason any provision of these Rules is declared unconstitutional or invalid by final judgment of a competent court, the other parts or provisions hereof which were not affected thereby shall continue to be in full force and effect. 6.2 Fines and Penalties Violation of any provisions of these Guidelines shall be subject to the imposition of fines and penalties in accordance with the Guidelines to Govern the Imposition of Administrative Sanctions in the form of fines and penalties pursuant to Section 46 of Republic Act 9136 otherwise known as the Electricity Power Industry Reform Act (EPIRA). 6.3 Exception Clause Where good cause appears, the ERC may allow an exception from any provisions of these Rules if such exception is found to be in the public interest and is not contrary to law or any other related rules and regulations. 6.4 Repealing Clause ‘These rules supersede the current rules on recovery of real property tax provided in the Rules for Setting the Electric Cooperatives’ Wheeling Rates (RSEC-WR) and Rules for Setting Distribution Wheeling Rates (RDWR) and its Position Paper. Similarly, these rules amend and modify the provisions of ERC Resolution No. 16, Series of 2009, relative to the recovery of any local franchise tax and business tax, including the filing of applications for recovery hereof. All previous Commi sistent with these Rules are hereby repealed or modified accordingly.6.5 Effectivity ‘These Rules shall take effect immediately following its publication in newspaper of general circulation in the country or in the Official Gazette. Pasig City, 17 December 2020. Chairperson and CEO (On Leave) (On Leave) ALEXIS M. LUMBATAN CATHERINE P. MACEDA Commissioner Commissigner ae MARKO RO) Commissioner Cofnmi8sioner a is: Mcoa Ros: jfse / Hjmo / lg Page 13 of 15Appendix “A” Name of DU: ERC Case Ni Decision Date : Total Amount to be Collected : Rate per kWh (PhP/kWh) : Implementation Date : Name of LGU/City/Municipality : Collection Due to Real Property Tax (RPT)/ Business Tax Amount to be Collected For the Period Covering Month kWh Sold Amount Collected | Balance (PhP) (PhP) Beginning Balance 0.00 January February ‘March ‘April ‘May June July August September ‘October ‘November December TOTAL 0.00 Ending Balance 0.00 Note: This Report should be submitted on or before the 30" day of the month from the implementation of refund/collection, and every month thereafter until the total amount has been fully refunded collected. Prepared by: Certified True and Correct: ‘Name & Designation ‘Name & Designation Page 14 of 15Appendix “B” Name of DU: ERC Case No. : Decision Date : Tax Rate in Percentage (%) : Implementation Date : Name of LGU/City/Municipality : Collection Due to Local Franchise Tax (LFT) Amount Collected For the Year. Month LFT Revenue (PhP) January February March April May June July ‘August September October November December ‘TOTAL 0.00 Note: This Report should be submitted on or before the 30" day of the month from the implementation of refund/collection, and every month thereafter until the total amount has been fully refunded collected. Prepared by: Certified True and Correct: ‘Name & Designation ‘Name & Designation Page 15 of 15