Republic of the Philippines ENERGY REGULATORY COMMISSIO! San Miguel Avenue, Pasig City IN THE MATTER OF THE APPLICATION FOR APPROVAL OF THE POWER SUPPLY AGREEMENT (PSA) BETWEEN CAGAYAN ELECTRIC POWER AND LIGHT COMPANY, INCOPORATED (CEPALCO) AND KIRAHON TWO SOLAR ENERGY CORPORATION (KTEC),. WITH PRAYER FOR THE ISSUANCE OF PROVISIONAL AUTHORITY CAGAYAN ELECTRIC POWER AND LIGHT COMPANY, INCOPORATED (CEPALCO) AND KIRAHON TWO ENERGY CORPORATION (KTEC), Applicants. ERC CASE NO. 2015-152 RC ORDER On 11 August 2015, Cagayan Electric Power and Light Company, Incorporated (CEPALCO) and Kirahon Two Energy Corporation (KTEC) filed an application for approval of their Power Supply Agreement (PSA), with prayer for the issuance of provisional authority. In support of their prayer for the issuance of a provisional authority, CEPALCO and KTEC alleged the following: 1. The basis for their prayer for the issuance of a provisional authority or interim relief prior to the final Decision is Rule 14 of the ERC Rules of Practice and Procedure, to wt 4ERC Case No. 2015-152 RC ORDER/20 October 2015 Page 2 of 17 “Section 3. Action on the Motion. - Motions for provisional authority or interim relief may be acted upon with or without hearing. The Commission shall act on the motion on the basis of the allegations of the application or petition and supporting documents and other evidences that applicant or petitioner has submitted and the comments or opposition filed by any interested person, if there be any.” [Emphasis ours]; 2. At present, due to limited supply of electricity available to CEPALCO while the demand of its customers increases yearly, there is a necessity to secure additional supply through a bilateral contract, such as the subject PSA, following the National Power Corporation (NPC)-Power Sector Assets and Liabilities Management Corporation’s (PSALM) confirmation that they have no available capacity to satisfy its peak load requirement in 2015 and base load requirement starting 2016 and onwards"; 3. However, while the PSA entered into by CEPALCO with KTEC will enable the former to address its power needs, particularly, its peak requirements, the same shall only become effective upon the date of Financial Close, consistent with Section 4.17 of the said PSA; 4. The banks/financial institutions that will provide a large portion of the funds to cover the capital costs of KTEC’s 10 MW AC Kirahon Solar Power Project Phase Two, require at least the Commission’s provisional approval of the PSA, among other conditions precedent to Financial Closing. Hence, a provisional authority from the Commission is imperative for the PSA to take effect; 5. Further, other than marking the effectivity of the PSA, a timely Financial Close would also ensure uninterrupted project construction since seventy percent (70%) of KTEC’s capital costs will be funded by loans from said banks/financial institution. The continuous financing and construction of the project will, in turn, ensure that KTEC can achieve its target commercial operations date 1 Annex “H” of the application YERC Case No. 2015-152 RC ORDER/20 October 2015 Page 3 of 17 by 2016, to the benefit of CEPALCO’s customers in terms of sufficient and reliable power supply; and 6. In view thereof, and in recognition of the fact that a substantial amount of time is customarily needed to evaluate the documents submitted to support the approval of the application, they seek the kind consideration of the Commission to approve the application, immediately, albeit, provisionally, at the soonest opportune time. In the same application, CEPALCO and KTEC prayed that: a) pending hearing on the merits, a provisional authority be duly issued authorizing the immediate implementation of the subject PSA, including the rate structure therein, as applied; b) after due notice and hearing, the application, the PSA and the rate structure contained therein be duly approved; and c) in the event a final authority is issued after KTEC starts actual delivery of power to CEPALCO under the terms of the subject PSA, said final authority be retroactively applied to the date of such actual delivery. Relative to the prayer for a provisional authority, the Commission initially reviewed the application, as follows: 1. Parties to the PSA CEPALCO is a privately-owned electric distribution utility, with principal office address at Masterson Avenue, Upper Balulang, Cagayan de Oro City. It operates a legislative franchise to maintain an electric distribution system in the City of Cagayan de Oro and the Municipalities of Tagoloan, Villanueva, and Jasaan, all in the Province of Misamis Oriental. KTEC is a domestic corporation with office address at Minergy Business Park, PHIVIDEC Industrial Estate, Iligan-Cagayan de Oro- Butuan Road, Sitio Kirahon, Barangay San Martin, Villanueva, Misamis Oriental. It is engaged in the business of developing renewable energy resources such as solar photovoltaic power, and in the construction and operation of solar-electric generating 7ERC Case No. 2015-152 RC ORDER/20 October 2015 Page 4 of 17 2. Executive Summary of the Project Project Name Project Location Generating Technology Gross Installed Capacity Net Installed Capacity Commercial Operation Date Solar Specific Production Gross Capacity Factor Annual Energy Production Annual Energy Degradation Land Area Interconnection 3. Salient Features of the PSA Kirahon Two Solar Project Villanueva, Misamis Oriental Solar Photovoltaic (PV) 12.5 MWde 10.0 MWac 30 June 2016 1,418 kWh/kw DC 16.23% 17,777 MWh 0.75%/year 15 hectares CEPALCO’s 69 kV substation through Kirahon 69 kV Switchyard at Kirahonhon, Villanueva, Misamis Oriental Bel Plant Description. KTEC shall finance, develop, construct, test, commission, own, operate and maintain a Solar Photovoltaic (PV) Electric Power Generation Facility with 10 MW AC net installed capacity or a gross installed capacity of 12.5 MW DC, located within the franchise area of CEPALCO, particularly, in Villanueva, Misamis Oriental; Cooperation Period. CEPALCO shall receive from KTEC and the latter shall deliver to the former, electricity for a term of twenty-five (25) years beginning on the CyERC Case No. 2015-152 RC ORDER/20 October 2015 Page 5 of 17 3-3 34 35 37 3.8 of Commercial Operations, expected to be on 30 June 2016; The Parties may, by mutual consent, renew the PSA based on prevailing power needs, renewals or replacements of the plant facilities. Further, the PSA shall become effective only upon the date of Financial Close pursuant to Section 4.17 of the PSA; Energy Delivery. KTEC guarantees to deliver 18,000,000 kWh of electricity to CEPALCO for the first year of operations, while for each year thereafter, it guarantees to deliver ninety-nine percent (99%) of the energy for the previous year, pursuant to Section 2.02 of. the PSA; KTEC guarantees that during any twelve (12)-month period, in no event shall it deliver less than seventy-five percent (75%) of the Expected Energy Amount for the said twelve (12)-month period (Guaranteed Energy), as specified in Schedule 6 of the PSA; Contract Price. For electricity drawn by CEPALCO, KTEC shall charge a rate of PhP8.75/kWh, subject to adjustment every twelve (12) months from commencement of operations, according to the Feed-in Tariff (FIT) Rules; Prompt Payment Discount (PPD). KTEC shall give CEPALCO a PPD of one percent (1%) for bills paid on or before the due date; Must-Take as Available Plant/Declared Capacity. They agree that the Plant is a Must-Take as Available Plant, hence, has no minimum off-take. Accordingly, KTEC shall not be obligated to ensure the dependable availability of the Declared Capacity per month; Interconnection to CEPALCO’s Distribution Grid. The cost of the interconnection to CEPALCO grid shall be for the account of KTEC. The Plant will be connected to the 69 kV sub-transmission system of CEPALCO through Kirahon 69 kV Switchyard at Kirahon, Villanueva, Misamis Oriental; “yeERC Case No. 2015-152 RC ORDER/20 October 2015 Page 6 of 17 3.9 Allowed Downtime. KTEC is allowed a total of fifteen (15) days per year as Allowed Downtime to conduct the necessary Scheduled Maintenance and for Unscheduled Maintenance on its Plant. Unspent Allowed Downtime shall be carried-over, provided that, it is not more than ten (10) days per year and not more than fifteen (15) accumulated days; and 3-10 Expansion. They may, by mutual consent, increase the net installed generating capacity of the Plant up to a maximum of 20.0 MW AC, provided that, the Energy Fee for such additional capacity shall not exceed the Commission-approved Energy Fee in the PSA. The contract term for any such additional capacity shall be for a period of twenty-five (25) years from the start of commercial operations. 4. CEPALCO’s Procurement Process At present, CEPALCO’s peaking power requirements are being supplied by Mindanao Energy Systems, Incorporated’s (MINERGY) bunker-fed power plants. To accommodate its additional peaking power requirements, it also executed several PSAs with other suppliers, the generating facilities of which run either on bunker-C or diesel fuel. Considering the high generation cost of diesel power plants, CEPALCO is looking for means to mitigate the cost by limiting its daily operations to the extent possible. One mitigating measure identified is to displace some generation of diesel power plants, particularly, during day-time peak, with a cheaper supply from solar PV power plants. Aside from KTEC, CEPALCO also received offers from other solar PV developers. The total capacity from these solar PV plants is enough to displace the day-time generation of CEPALCO’s peaking suppliers. CEPALCO believes that the displacement of day-time power supply from diesel plants will be advantageous to its customers in terms of lower generation rate. KTEC’s affiliate, Kirahon Solar Energy Corporation (KSEC), has an on-going construction of a 10 MW Solar PV which is expected to start its commercial operations in GERC Case No. 2015-152 RC ORDER/20 October 2015 Page 7 of 17 October 2015. From this, CEPALCO is confident that KTEC, which shares the same parent company with KSEC (Solar Pacific Energy Corporation), can deliver the needed capacity in June 2016 as demonstrated by the parent company’s profile and experience in completing projects within CEPALCO’s distribution system. It bears stressing that KTEC’s Solar PV plant will be embedded in CEPALCO’s distribution system. This will result in the elimination of the power delivery service cost of the National Grid Corporation of the Philippines (NGCP). As such, its generation charge will be competitive compared to other possible suppliers. ‘Thus, on 26 June 2015, after due evaluation and deliberation of KTEC’s offer, CEPALCO and KTEC executed a PSA subject of this application. 5. CEPALCO’s Supply-Demand Scenario Based on historical data, CEPALCO’s energy demand grows at an average of five percent (5%) per year. Starting 2015, it projects a substantial addition to its demand requirement due to a number of commercial and industrial customers who applied for service connection. By 2016, CEPALCO projects that, given its existing supply, it will be able to satisfy only eighty-five percent (85%)? of its peak demand. The table below shows CEPALCO’s annual historical and forecasted supply-demand scenario: pee Historical Forecasted Ea 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | PealcDemand, | 148 | 154 | 186.5|226.4| 319.4 | 345.8 | 365.5| 385.6 Suppliers (Firm): | de sete fe : 1. NPC/PSALM | 131.5| 138.9| 114.0 2.0| - pe eee 2. MINERGY ! Diesel 35:3) 353) 353) 353) = | 7 | : 3. MINERGY ae : = { Power Corp. | 150.0 150.0] 150.0| 350.0 4. Cabulig Hydro | 8.0) 8.0) 8.0 8.0] 8.0] 8.0] 8.0] 16.0 5. Bubunawan | 1 | Power Corp. 707.0, 7-0) 7-0) 7.0) 7.0) 7.0) 7.0) 2 Assuming without supply from 7ERC Case No. 2015-152 RC ORDER/20 October 2015 Page 8 of 17 . Pteaed Tel elt ete) te) ce aeleane da ee Coulee . 20.0/ 20.0] 20.0] 20.0] 20.0 Ge da 20.0| 20.0} 20.0 Energy Corp. i = a 7 2 i i : 9. Western | Mindanao a - - 30.0] 30.0] - Eee aee _Power Corp. 10. Modular fice Getierator Getic tute) eammcea ec aenae:| eennesee | ete at ‘ | 41. KSEC : : 10.0} 10.0] 10.0] 10.0] 10.0| 10.0 12. KTEC = : - 10.0] 10.0, 10.0] 10.0| 10.0 Gane 183} 191) 185.9| 203.9/246.6| 226.6| 226.6) 234.6 - i leper nee a [224% 124%| 100%| 90%| 77%| 66%| 62%| 61% Meanwhile, the NPC-PSALM confirmed in its letter dated 20 August 2014 that it has no additional capacity to provide for CEPALCO’s increased energy requirements on top of its existing contracted demand under its Contract for the Supply of Electric Energy (CSEE), which expired on 25 March 2015. Thus, there is an urgent need for CEPALCO to enter into a new PSA for its peak power requirements starting year 2016. 6. Evaluation of the Proposed Rate Under the PSA, the proposed rate of PhP8.75/kWh is subject to adjustment in accordance with the FIT for the solar technology. CEPALCO and KTEC alleged that the same was calculated using a cost-basis methodology taking into account the upfront capital costs, operating expenses and energy production forecast. In determining the reasonableness of the said proposed rate, the Commission made reference to the approved rates and parameters in ERC Case Nos. 2014-020 RC3 and 2014-004 RM4. 3 In the Matter of the Application for Approval of the Power Supply Agreement (PSA) Between Cagayan Electric Power and Light Company Inc.(CEPALCO) and Kirahon Solar Energy Corporation (KSEC), with Prayer for Provisional Authority + In the Matter of the Adoption of the Amendments to Resolution No.10, Series of 2012, A Resolution Approving the Feed-In-Tariff (FIT) Rates, as Necessitated iERC Case No. 2015-152 RC ORDER/20 October 2015 Page 9 of 17 Shown below is a comparison between and among KTEC’s proposed cost components vis-a-vis the Commission’s approved KSEC and FIT for solar power plants’ cost components: FIT for KTEC’s KSEC’s Parameters Proposed Approved ae Total Project Cost_| US$1,967/kW | US$1,963/kW | US$1,958/kW_ Gross Capacity pa 16.23% 17.60% 15.21% Net Capacity % Factor 20.29% 22% 18.50% ity IRR -— Aes 13.84% 16.44% 13.87% Pre-tax WACC 9.62% 10.40% 9.20% Rate, PhP/kWh 8.75 8.75 8.69 Based on the foregoing comparison, the parameters adopted by KTEC in computing its proposed rate are reasonable since these are within the level of the recently approved rates for PV power plants in the Philippines. 6.1 Project and Operating Costs The Project Cost includes upfront capital costs as well as costs during project operations. In addition to Equipment, Procurement, and Construction (EPC) cost, KTEC identified the cost of land acquisition, financing costs, initial working capital requirements, development costs, technical advisory services, contingency, and taxes as part of the Project Cost. KTEC proposed a total project cost of PhP1.106 Billion. It assumed that the facility is seventy percent (70%) financed through loan and thirty percent (30%) financed through equity. The table below provides for the cost components of the solar power facility: Capital Cost USD 000 | PhP coo EPC, Land Purchase and Development Cost 20,729| _ 932,794 Department of Energy (DOE) by the New Installation Target for Solar Energy Generation Set by eeERC Case No. 2015-152 RC ORDER/20 October 2015 Page 10 of 17 Switchyard and Transformer 773 34,763 Transmission Line 10 464 Construction Contingency 2,151 96,802 Value-Added Tax (VAT) ~ ~ Financing Costs 922 41,510 Total Cost 24,585 | 1,106,332 Note : PhP45.00 : US$1.00 Exchange Rate For purposes of issuing a provisional authority, the Commission evaluated the Project Cost based on the documents submitted by CEPALCO and KTEC as well as benchmarking the same to the capital cost used in the recently approved applications with power plants of similar technology. Actual cost valuation is not applicable at this time due to lack of historical data since the power plant is yet to be constructed. The Commission believes that benchmarking is a sufficient basis to initially establish the reasonableness of the rate. It is considered as an appropriate basis to rule out any excess in the proposed cost since it provides a reasonable level or degree of measurement of reasonability as that of actual valuation. Shown below is a comparison between and among KTEC’s proposed vis-a-vis the Commission’s approved KSEC and FIT for solar power plants’ Project Costs: FIT for : KTEC’s | KSEC’s Particular Solar Power Proposed | Approved | S°Rr re" Total Project Cost, uss/kWwe | 967 1,963 1,958 Based on the foregoing comparison, KTEC’s proposed Project Cost is reasonable since the same is within the level among the recently approved project costs for PV power plants in the Philippines. Likewise, solar projects incur significant operating costs. These include scheduled operations and maintenance (O&M), refurbishment of major equipment, particularly inverters stations which are typically replaced on the 10" year, recnce 7ERC Case No. 2015-152 RC ORDER/20 October 2015 Page 11 of 17 costs, lender and owner's technical advisor costs during operations, and general and administrative costs, broken down. as follows: Operating Costs USD 000 PhP ooo Operations and Maintenance 265 11,925 | Insurance Costs 110 4,950 General and Administrative (G&A) 5 3375 Lender’s. Technical Advisor and Owner's Technical Advisor 75 3375 Total 525 23,625 | Refurbishment (Inverters, Panels) 2,000 90,000 Year 10 Note : _ PhP45.00 : US$1.00 Exchange Rate The Commission verified that the foregoing operating costs assumed by KTEC are exactly the same with that of the approved operating costs for KSEC’s PV Solar Project. KTEC further averred that these costs are based on O&M bid proposals from its service providers, principals’ experience, and market data. In calculating the PSA base tariff, these operational costs were considered as follows: Cost Components USD % Total Capital Costs: 24,585 62% O&M Costs (25 years nominal) + Refurbishment 15,125 38% Total 39,710 100% 6.2 Energy Production In order to determine the expected revenue stream, KTEC calculated how much energy would be produced by the Solar Project. It is worth mentioning that KTEC used the same assumption proposed by KSEC in ERC Case No. 2014-020 RC. It can be recalled that KSEC engaged a third-party independent engineer, Snowy Owl Energy, Inc., to conduct a detailed solar energy analysis. The analysis was based on site- specific data, and utilized the ten (10) years of onsite solar irradiation data collected at the CEPALCO 1 MW Indahag ifERC Case No. 2015-152 RC ORDER/20 October 2015 Page 12 of 17 Plant, located very near the Kirahon Solar project site, from 2004-2014. Based on the foregoing, KTEC provided the following analysis: Gross Installed Capacity DC (MW) 12.5 Net Installed Capacity AC (MW) 10.0 Gross Capacity Factor before losses 16.30% Allowance for Losses and Own Use 0.40% Gross Capacity Factor after losses 16.23% ‘Net Capacity Factor after losses 20.29% No. of hours in a year (24 hrs. x 365 days) 8,760 Annual Energy Production (MWh in 1* year) 17,777. Note: Gross Capacity Factor = 17,777 MWh / (12.50 MW x 8,760 hrs.) = 16.23% ‘Net Capacity Factor = 17,777 MWh / (10 MW x 8,760 hrs.) = 20.20% Annual Energy Production = 10 MW x 20.29% x 8,760 hrs. = 17.777 MWh As can be gleaned from the above data, the annual energy production of 17,777,106 kWh was calculated based on a 10 MW net installed solar project. Further, KTEC’s assumed net capacity factor of 20.29% is considerably higher than the Commission’s newly approved net capacity factor of 18.50% for FIT for solar technology. 6.3 Weighted Average Cost of Capital (WACC) KTEC submitted a pre-tax WACC of 9.62% which is based on a cost of debt of 7.5% and a cost of equity of 13.84%, computed as follows: WACC = [re x E/V] + [ra x D/V] Where: Te = the cost of equity Ta = thecost of debt E = the amount of equity funding equivalent to thirty percent (30%) “ifERC Case No. 2015-152 RC ORDER/20 October 2015 Page 13 of 17 D = _ the amount of debt funding equivalent to seventy percent (70%) v = E+D KTEC assumed a 7.5% cost of debt based on CEPALCO’s approved PSA with KSEC. On the other hand, KTEC proposed a cost of equity of 13.84% as a result of its simulated discounted cash flow. Summarized below is KTEC’s calculated WACC using the aforementioned parameters: Particulars |_KTEC’s Calculation Debt Element: _ Pre-tax Cost of Debt ______ 750% Post-tax Cost of Debt 125% Weight of Debt 0% 4.99% Equity Element: Cost of equity 13.84% | Weight of Equity 30% | 4.15% | Post-tax WACC 9.14% Pre-tax WACC 9.62% 7. Commission’s Provisional Approval The issuance of a Provisional Authority would allow KTEC to obtain the needed funds to immediately commence the construction and installation of the 1 MWAC PV Solar Project and to achieve the target commercial operation date as provided under the PSA. The Commission made a rate comparison between the rate proposed by KTEC as against the rates approved by the Commission under KSEC-CEPALCO case, Liberty Solar Energy Corporation (LSEC)-CEPALCO case’, and Feed-in-Tariff (FIT) for solar technology, to wit: 5 ERC Case No. 2015-151 RC entitled “In the Matter of the Application for Approval of the Power Supply Agreement (PSA) Between Cagayan Electric Power and Light Company, Ir (CEPALCO) and Liberty Solar Energy Corporation (SEC), with Prayer for the Issuance Provisional Authority”ERC Case No. 2015-152 RC ORDER/20 October 2015 Page 14 of 17 aS ; Commission's Particulars | KTECs, Caparo LSEC- | approved FIT rate Bree CEPALCO | for Solar Plant Rate, PhP/KWh 8.75 8.75 8.50 8.69 It can be deduced from the above comparison, that the rate proposed by KTEC under the PSA as well as the parameters previously discussed, may be considered acceptable. Given the urgency of the issuance of Provisional Authority on the subject application, the Commission adopted the PSA rate provisionally approved for LSEC-CEPALCO case equivalent to PhP8.50/kWh docketed under ERC Case No. 2015-151 RC. Shown below is a comparison between and among KTEC’s proposed rate, the Commission’s approved PSA rate for KSEC and LSEC cases, FIT for solar power plants, and Commission's provisionally approved rate for KTEC: KTEC’s | KSEC- | LSEC- cooreealFit Commnienon Particulars | proposal | CEPALCO | CEPALCO | rate for Solar | PS4 rate for KTEC Plant Rate, PRP/AWh 8.75 8.75 8.50 8.69 8.50 The foregoing comparison illustrates that the rate provisionally granted for KTEC is within the level of the rates approved by the Commission for similar technology. 8. Rate Impact In order to determine the impact of the implementation of the PSA on CEPALCO’s generation costs, an analysis was conducted taking into consideration comparable alternative sources of supply. CEPALCO and KTEC simulated the rate impact of the PSA, as follows: Without KTEC | _ ‘With KTEC Rate Suppliers Cost, Cost, Impact, i MWh | pipooo | PhP/kWh | MWh | prpogo | PAP/EWh | prpykwh Existing 95,634 | 512,007 | 5.3538 | 94.358| 499,889] 5.2978 | Suppliers apa KTEC = = - 1,276 | _ 10,846 | 8.5000 Total 95,634 | 512,00" 5.3538 _| 95,634 510,735 | 5-3405 TaeERC Case No. 2015-152 RC ORDER/20 October 2015 Page 15 of 17 The main assumptions are as follows: a. The generation costs, excluding fuel, of existing suppliers were based on actual, as-billed, cost for June 2015 billing period; ‘b. The fuel costs are based on the forecasted price as of 2016 of Bunker-C Fuel at PhP25.80/liter and Lube Oil at PhP153.81/liter; and c. The Peso to US$ Exchange rate at Ph45.00. Further, KTEC’s 10 MW AC Kirahon Solar Power Project Phase Two will be embedded in the distribution system of CEPALCO, thereby eliminating any additional power delivery service cost imposed by the NGCP. KTEC’s grant of a PPD under the provisions of the PSA will also redound to the benefit of CEPALCO’s customers. The Commission has a mandate to protect the interest of the electricity consumers insofar as they are affected by the rates, by ensuring that the tariffs imposed are consistent with the principle of full recovery of prudent and reasonable costs. An initial evaluation of the application discloses that the PSA entered into by and between CEPALCO and KTEC will redound to the benefit of CEPALCO’s customers in terms of reliable, continuous, and efficient supply of power within its franchise area at reasonable costs as mandated by paragraph (b), Section 2, Chapter 1 of Republic Act No. 9136 otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA), to wit: Section 2. Declaration of Policy — (b) to ensure the quality, reliability, security and affordability of the supply of electric power; WHEREFORE, the foregoing premises considered, the Commission hereby PROVISIONALLY APPROVES the Power Supply Agreement (PSA) between Cagayan Electric Power and Light Company, Incorporated (CEPALCO) and Kirahon Two Energy Corporation (KTEC), subject to the following oyERC Case No. 2015-152 RC ORDER/20 October 2015 Page 16 of 17 1. The applicable generation rate shall be PhP8.50/kWh which shall be adjusted based on the Feed-in-Tariff (FIT) Rules; 2. The final generation rate that can be recovered shall be determined by the Commission in its Decision in the application; and 3. In the event that the final rate is higher than that provisionally granted, the resulting additional charges shall be collected by KTEC from CEPALCO. On the other hand, if the final rate is lower than that provisionally granted, the amount corresponding to the reduction shall be refunded by KTEC to CEPALCO. SO ORDERED. Pasig City, 20 October 2015. | FusS Tien convent sdizan | ll JOSE VICENTE B. SALAZAR "5" ena Chairman ee Oe. (On Official Travel) ALF J.NON GLORIA VICTORIA C. YAP TARUC Commissioner Commissioner JOSEFINA PA’ A, MAGPALE-., ‘ASIRIT {RONIMO D, STA. ANA issioner Commissioner , Witton ncn authorityERC Case No. 2015-152 RC ORDER/20 October 2015 Page 17 of 17 Copy Furnished: 1 10. ote 12. 13. Diccion Law Firm Counsel for CEPALCO and KTEC Unit 1912 Jollibee Plaza Building, Emerald Avenue, Pasig City Cagayan Electric Power and Light Co., Inc. (CEPALCO) 33 Toribio Chaves St., Cagayan de Oro City Kirahon Two Energy Corporation (KTEC) Minergy Business Park, PHIVIDEC Industrial Estate, Tligan-Cagayan de Oro-Butuan Road, Sitio Kirahon, Barangay San Martin, Villanueva, Misamis Oriental Office of the Solicitor General (OSG) 134 Amorsolo Street, Legaspi Village, Makati City Commission on Audit (COA) Commonwealth Avenue, Quezon City Senate Committee on Energy GSIS Bldg., Roxas Boulevard, Pasay City House Committee on Energy Batasan Hills, Quezon City Office of the City Mayor Cagayan de Oro City, Misamis Oriental Office of the Municipal Mayor Jasaan, Misamis Oriental Office of the Municipal Mayor Tagoloan, Misamis Oriental Office of the Municipal Mayor Villanueva, Misamis Oriental Office of the Provincial Governor Province of Misamis Oriental Philippine Chamber of Commerce and Industry (eccl) 3° Floor, Chamber and Industry Plaza (CIP), 1030 Campus Avenue corner Park Avenue, McKinley Town Center, Fort Bonifacio, Taguig, ow /