Republic of the Philippines

ENERGY REGULATORY COMMISSION

San Miguel Avenue, Pasig City

IN THE MATTER OF THE

PETITION FOR THE AVAILMENT
OF THE ENVIRONMENTAL
CHARGE/SHARE FROM THE
UNIVERSAL. CHARGE FOR THE
REHABILITATION AND
MANAGEMENT OF WATERSHED
AREAS, WITH PRAYER FOR
PROVISIONAL AUTHORITY

ERC CASE NO. 2007-098 RC

NATIONAL POWER
CORPORATION (NPC), 1) 0 C K E .T ED
Petitioner. Date:•!YL ....?13
x------------------------x

ORDER

Before the Commission for resolution is the "Motion for Partial

Reconsideration and Clarification (of the Decision Dated July 16,
2012)" filed on October 8, 2012 by the National Power Corporation
(NPC) praying that the Decision dated July 16, 2012 be
reconsidered and that it be allowed to present additional evidence to
justify the funding of its proposed projects.

In the said motion, NRC moved for the reconsideration of the

following projects:

Project Costs
Area Program/Activity (PhP)
Military-Special CAFGUeAuxiIiarSC)_ 4,320,000.00
Joint Military-NPC-DENR Operations 2,000,000.00
Ecotpurism and Biodiversiy 963,364.41
PMEAD 429,313.35
Lake Lanao PMEAD + Consultant (Honoraria) 669,313.35
U pp er Fire line Establishment 797,064.11
fpbapp lEC/CommpyDeyelopment 40,000.00
Head Office Technical Consultancy 370,917.00
Legal Services 661,253.00
TOTAL 10,251,225.22
ERC CASE NO. 2007-098 RC
ORDER/July 8, 2013
Page 2 of 6

Relative thereto, on October 25, 2012, the Commission issued

an Order setting the said motion for hearing on November 22, 2012.

On November 15, 2012, NPC filed an "Urgent Motion for

Postponement" praying that the hearing set on November 22, 2012
be reset to a later date in view of the unavailability of its counsel.

At the January 15, 2013 hearing, NPC presented its lone

witness, Mr. Emmanuel L. Umali, its Department Manager, who
testified in support of the said motion. In the course thereof, several
documents were presented and marked as exhibits. Thereafter, it
made an oral formal offer of evidence which was admitted for being
relevant and material in the final resolution of this case.

DISCUSSION

Pulangi Ecotourism and Biodiversity Conservation

NPC shall undertake measures to conserve and enhance

biodiversity in watershed areas of Pulangi such as arboretum and
other similar projects. This project will enhance ecotourism in the
said watershed areas and promote/increase awareness among the
residents towards the protection of the remaining forest in the
watershed area.

It was disclosed that this activity was already approved by the

Commission in its Decision dated January 16, 2008 in ERC Case
No. 2006-008 RC. Considering that the budget requested is for the
maintenance and improvement phase of the approved project, the
Commission approves the budget of PhP963,364.41.

Upper Agno File Line Establishment

NPC contended that the cost for fire line establishment in

Upper Agno is higher compared to other areas due to various
factors such as terrain, slope and accessibility of the project site.
Fire lines constructed in Upper Agno are situated in areas that are
relatively steeper in slope and very rugged terrain. NPC submitted a
standard cost which served as a benchmark in determining the
project cost.
ERG CASE NO. 2007-098 RC
ORDER/July 8, 2013
Page 3 of 6

Finding the said justification meritorious, the same is hereby

granted. Accordingly, the project cost of PhP797,064.11 is
approved.

Angat Military-Special CAFGU Active Auxil!ary (SGAA)

NPC submitted a draft Memorandum of Agreement (MOA)that

it intends to enter with the Armed Forces of the Philippine (AFP)
relative to the military assistance necessary for the enforcement of
watershed laws, rules and regulations.

The Commission deems it appropriate to defer consideration

of this project since NPC and AFP have not yet finalized their MOA.
NPC may include this project in its subsequent Universal Charge-
Environmental Charge (UC-EC) application upon the execution of
the MOA.

Angat Joint Military-NPG-DENR Operations

According to NPC, unlike the SCAA, this activity will not

require a MOA with AFP since it will only provide complementary
support/coordination between and among government agencies with
similar forest protection programs covering different watershed
areas.

Similar with SCAA program, this project shall be considered by

the Commission in NPC's subsequent UC-EC application.

Pulangi Project Monitoring, Evaluation, Audit and

Documentation; Lake Lanao Project Monitoring, Evaluation,
Audit and Documentation; and Head Office Technical
Consultancy and Legal Services

The Commission maintains its position that the budget for the
aforesaid projects should be funded by NPC's management through
its general appropriation and not through the Universal Charge-
Environmental Charge (UC-EC).
ERC CASE NO. 2007-098 RC
ORDER/July 8, 2013
Page 4 of 6

Pantabangan Information and Education Campaign

(IEC)ICommunity Development

The Commission maintains its position to allow a budget of

PhP78,000.00 for this project consistent with the same budget
allocated in other watershed areas.

Shown below is the summary of the approved budget for the

following projects:

Approved Project
Areas Program/Activity Costs (PhP)
Pulangi Ecotourism and Biodiversity 963,364.41
Upper Agno Fire line Establishment 797,064.11
Total 1,760,428.52

WHEREFORE, the foregoing premises considered, the

"Motion for Partial Reconsideration and Clarification (of the Decision
Dated July 16, 2012)" filed by the National Power Corporation (NPC)
is hereby APPROVED with Modification.

Accordingly, the Power Sector Assets and Liabilities

Management Corporation (PSALM) is authorized to release the
amount of PhPI,760,428.52 to the NPC to fund its CY 2007
Watershed Management Program. The disbursement and utilization
of the said approved budget should be in accordance with the
"Rules and Procedures Governing the Utilization and Disbursement
of the Universal Charge-Environmental Charge (UC-EC)".

NPC is directed to comply with the following:

a) Submit within forty-five (45) days from receipt hereof, a

Project Implementation Plan (PIP) containing the timelines
of the project implementation; and
 ERC CASE NO. 2007-098 RC
ORDER/July 8, 2013
PageS of 6

b) Submit, every six (6) months thereafter, a status or

progress report of the approved project based on the PIP
which shall include the actual cost and other supporting
documents.

SO ORDERED.

Pasig City, July 8, 2013.

4 at A.1óu<
/7ENAIDA t CUZ-DUCUT
Chairperson

MARIA WA

Lt'CTORIA tcAP-TARUC
ALFREiDO J. NON GLORIA V
I commikioner
Commissioner

GL7RC NPC Environmental Charge Order MR Res

ERC CASE NO. 2007-098 RC
ORDER/July 8, 2013
Page 6 of 6

Copy furnished:

Atty. Melchor P. Ridulme,

Atty. Gordon SY Montojo
Atty. Julieta S. Baccutan-Estamo
Atty. Mark Anthony S. Actub
National Power Corporation
Agham Road, Diliman
Quezon City

2. The Office of the Solicitor General

234 Amorsolo Street, Legaspi Village, Makati City
Metro Manila

3. The Commission On Audit

Don Mariano Marcos Avenue
Diliman, Quezon City, Metro Manila

4. The Committee On Energy

Senate of the Philippines
GSIS Building, Roxas Blvd., Pasay City, Metro Manila

5. The Committee On Energy

House of Representatives
Batasan Hills, Quezon City, Metro Manila

6. Ms. Edith Bueno

Administrator
NATIONAL ELECTRIFICATION ADMINISTRATION
ODFC Building, 1050 Quezon Avenue
Quezon City, Metro Manila

7. All Distribution Utilities