Chapter 9

Review of Water Rates

1. LEGAL BASIS

It has often been the misconception that once water rates are presented and accepted in a public hearing, the process is already enough to warrant implementation thereof. Such is not the case, because Sec. 63 of PD 198, as amended, provides that the rates and charges established by the local water utility, after hearing is conducted for the purpose, are subject to review by the Administration to establish compliance with the above-stated provisions.

It should be understood that the review of rates includes approval by the Administration, or disapproval if found to be inadequate or in excess of the parameters set by law in fixing such increase, and subsequent confirmation by the LWUA Board of Trustees.

2. DOCUMENTARY REQUIREMENTS

In order for the rates to be reviewed, the following documents are needed to be submitted by the water district:

a. District Board Resolution, adopting the water rates. The resolution must indicate the rate schedule/s and the expected date/s of implementation.

b. Minutes of Public Hearing, integrating the proceedings involved in the conduct of the hearing and indicating the rate schedule/s and the expected date/s of implementation. A copy of the attendance and where applicable, photographs taken during the conduct of the hearing may, likewise, be included.

c. Cashflow Projection, covering the period within which the rate schedule/s are to be effective. This is prepared in a prescribed format.

d. Consumption Pattern, covering the preceding six-month period separately for the residential and commercial usage. These are presented in prescribed charts.

e. Water District Profile, serves as a window to the water district operations. This is prepared in a prescribed format.

3. EFFECTIVITY

Water rates, once confirmed, are executory and enforceable after the lapse of seven calendar days from posting in a public place in the locality of the water district, without prejudice to an appeal being undertaken by a water concessionaire to the National Water Resources Board (NWRB) whose decision is appealable to the Office of the President. An appeal to the NWRB must be perfected within thirty days after the expiration of the seven-day period of posting. The Board will decide on the appeal within thirty days from perfection.

For practical intents and purposes, the start of implementation is deemed as the consumption month following the seven-day posting period.

4. PROVISIONAL IMPLEMENTATION

In instances where there is inconceivable urgency for the district to implement the established water rates and when such could not wait for the final review by the Administration, a district may be granted provisional implementation of the rates, subject to the following conditions:

a. The rate increase is in conformity with the provisions of Section 63 of PD 198 (as amended), LOI 700 and other applicable policies and guidelines.

b. A majority of the consumers and the local government officials do not object to the new rates as certified by the hearing officer.

c. There is urgency to implement the increase within 30 days immediately following the month of public hearing under the following conditions:

(1) The district has an existing negative cashflow.

(2)The provisional implementation of the rates is necessary to avert an imminent negative cashflow.

d. The provisional implementation of the rates is executory and enforceable after the lapse of seven (7) calendar days from posting and will remain effective for a period of ninety (90) calendar days from the date of approval of the provisional implementation.

e. The provisional implementation is without prejudice to an exception being taken by water concessionaires to LWUA within thirty (30) calendar days from said implementation. LWUA must make decision within thirty (30) calendar days from the time of receipt of the exception to the provisional implementation.

f. The rates must be elevated to the LWUA Board for confirmation within sixty (60) calendar days from the date of approval of the provisional implementation.

Notwithstanding the above-stated conditions, provisional implementation may only be granted by the Administration when all the documentary requirements for the review of the rates are submitted.