2. Current Set-up Generation Transmission Distribution Captive Customer With OARC Contestable Customer Single Billing Distribution TransmissionGeneration Single Billing RES/Local RES

3. 3 Competitive generation Regulated transmission and distribution retail Competitive retailproviders End- users Reformed Power Sector

4. Legal Basis

5. 5 Conditions Precedent UnbundlingRemoval of Subsidy WESM NPC Assets Privatization IPP Administrator

6. What are we looking forward to? 2011 Declaration Open Access Date 1 MW & up 2013 750 kW Aggregation 2021 Household demand level

7. Building the Framework 7 Rules governing open access and retail competition Rules defining the qualification of suppliers and customers; Rules governing the behavior and conduct of the market participants; Rules ensuring the provision of continuous supply of electricity for the protection of the contestable customers; Rules governing the commercial transfer of customer from one supplier to another

8. 8 Building the Framework RES Licensing Guidelines Business Separation Guidelines (BSG) Code of Conduct Competition Rules Supplier of Last Resort (SoLR) DSOAR Rules on Customer Switching (RCS) Rules for Contestability

9. Considerations 9 Provisions of the EPIRA and its IRR Sound economic and regulatory principles Best practices in other jurisdictions

10. NEW PLAYERS Retail Electricity Supplier (RES) BUYERSSELLERS 676 - Luzon 65 - Visayas 14 licensed RES 1 potential SOLR for every DU’s franchise area 1 potential Local RES for every DU’s franchise area

11. Transitory Rules for the Initial Implementation of Open Access and Retail Competition On-going (PubCon: Sept. 13, 2011 for 2 nd Draft) Clarifies pre-operational issues to ensure the smooth transition to a competitive retail electricity market Provides procedures regarding the entry of participants into the competitive retail electricity market Simplified switching process 11

12. Thank You