UPDATES ON OPEN ACCESS AND RETAIL COMPETITION August 2014

RCOA Set-up RCOA open in 2 grids (Luzon and Visayas) September 27, 2013 (Announcement) December 26, 2012 (Official Launch and start of Transition Period) June 26, 2013 (Commercial Operation) Sellers (Suppliers) RES, Local RES, SOLR (regulated) Buyers (CCs): Phased-in implementation 1MW (2 years) 750KW (with aggregation) Full Retail Competition (household level) Rules and Regulations governing RCOA

Players Contestable Customer (CC) Retail Electricity Supplier (RES) End-users who have a choice of supplier of electricity, as certified by the ERC. Retail Electricity Supplier (RES) Suppliers Licensed by the ERC to supply electricity to CCs. Local RES Non-regulated business segment of a distribution utility to supply electricity to CCs within its franchise area, as authorized by the ERC. Supplier of Last Resort (SOLR) Emergency Supplier to serve CCs in case there is a last resort supply event.

Statistics (as of July 2014) 346 CCs have switched to a RES/LRES 22 Local RES 17 Licensed RES 27 SOLR GRID NO. OF CONTESTABLE CUSTOMERS* (Still serviced by the DU) Luzon 561 MERALCO 387 Visayas 128 VECO 55 TOTAL 689 * Note: These excludes those CCs already have signed Retail Supply Contracts with their respective RES/ registered with PEMC as CRB; and those that were delisted due to termination of service/contracts from their DUs.

Updates Resolution 11, Series of 2013 Resolution 22, Series of 2013 CCs who failed to enter into RSCs shall be deemed to stay with their DU until a RSC is finalized CCs must inform their DU of their stay CCs shall no longer be allowed to revert back to DU if already in the competitive retail market Resolution 11, Series of 2013 Supplemental Rules to the Transitory Rules 10 June 2013 No GenCo, IPPA company, DU and DU affiliate shall be issued a license RES and affiliate RES, acting singly or collectively, shall not be allowed to purchase more than 50% of their capacity requirements from affiliated GenCos RES may only sell up to 50% of its total capacity to end-user affiliates Resolution 22, Series of 2013 Amendments to Rules for the Issuance of Licenses to RES 22 November 2013

Updates Resolution 5, Series of 2014 Resolution 6, Series of 2014 Provision of monthly customer information by DUs in Luzon and Visayas Grids Submission of monthly reportorial requirements by the CRB Resolution 5, Series of 2014 31 March 2014 Withdrawal of the Rules on Customer Switching Retention of Conduct for Competitive Retail Market Participants Resolution 6, Series of 2014

Thank You!