OPGiI.

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REPUBLIC OF THE PHILIPPINES

ENERGY REGULATORY COMMISSION

SAN MIGUEL AVENUE, PASIG CITY

IN THE MATTER OF THE

APPLICATION FOR APPROVAL OF
THE POWER SALES CONTRACT
BETWEEN SPC ISLAND POWER
CORPORATION (SIPC) AND ILOILO III
ELECTRIC COOPERATIVE, INC.
(ILECO III), WITH MOTION FOR THE
ISSUANCE OF PROVISIONAL
AUTHORITY.

JERGY REGULATORY

WTiM
2016 - 301 ftc-

ERC Case No.

SPC ISLAND POWER CORPORATION
(SIPC) AND ILOILO III ELECTRIC
COOPERATIVE, INC. (ILECO III),
Applicants.

it z

JOINT APPLICATION FOR THE APPROVAL OF

POWER SALES CONTRACT
WITH
MOTION FOR THE ISSUANCE OF PROVISIONAL AUTHORITY
Applicants SPC Island Power Corporation ('SIPC" for brevity) and lloilo III
Electric Cooperative, Inc. (ILECO Ill), by the undersigned counsel, unto this
Honorable Commission, respectfully state:

THE APPLICANTS
SIPC is a generation company duly authorized and existing under
1.
and by virtue of the laws of the Republic of the Philippines with office address at
the 7th floor of the Citibank Center, 8741 Paseo de Roxas, Makati City. SIPC is a
wholly owned subsidiary of SPC Power Corporation (SPC). Copies of SIPC's
Certificate of Registration (amended), Amended Articles of Incorporation,
Amended Bylaws, General Information Sheet and Audited Financial Statements
are attached hereto as Annexes "A," "B," "C," "D," and "E" respectively. Also
attached as "Annex 0-1" is the list of the current stockholders of SIPC attested
by its coroorate secretary. Finally. SIPC's COC from this Honorable Commission
is attached hereto as Annex "D:2"
Applicant ILECO Ill is a franchised electric cooperative organized
2.
and existing under the laws of the Republic of the Philippines with principal office
at Brgy. Preciosa, Sara, Iloilo, Philippines. It has been granted a franchise by the
National Electrification Administration ("NEA"). ILECO Ill's franchise area
encompasses thirteen (13) municipalities namely, Anilao, Banate, Barotac Viejo,
San Rafael, Ajuy, Lemery, Sara, Concepcion, San Dionisio, Batad, Balasan,
Estancia and CarIes. Copies of ILECO Ill Certificate of Registration from NEA
and Constitution and By-laws are attached hereto as Annexes "F" and "F-I",
respectively.

\r

3.
The Parties may be served with orders and other processes
through the undersigned counsel.

NATURE OF THE APPLICATION

4.
Pursuant to Rule 20 (B) of the ERG Rules of Practice and
Procedure, approved by this Honorable Commission on 22 June 2006 in
Resolution No. 38, Series of 2006, this Application is submitted to this Honorable
Commission for the approval of applicants' Power Sales Contract ("PSC" for
brevity). Moreover, Applicants' Motion for the Issuance of Provisional Authority is
made pursuant to Rule 14 of the same ERC Rules of Practice and Procedure. A
copy of the PSC is attached hereto as Annex "G".

COMPLIANCE WITH PRE-FILING REQUIREMENTS

5.
In compliance with Rule 6 of the ERG Rules of Practice and
Procedure, approved by this Honorable Commission on 22 June 2006 in
Resolution No. 38. Series of 2006, applicants have furnished the legislative body
(Sanggunian) of Sara, Iloilo, where ILECO Ill's principal office is located, and the
Sangguniang Panlalawigan of Iloilo with copies of the present application with all
its annexes. Copies of the certificates of postings from the Presiding Officer or
authorized representative of the legislative bodies of Sara, Iloilo and the Province
of Iloilo are attached hereto as Annexes "H" and "H-I", respectively.
Furthermore, applicants have caused the publication of the present application in
a local newspaper circulating within the franchise area of applicant ILECO Ill.
Copies of the corresponding Affidavit of Publication and the newspaper are
attached as Annexes "I" and "I-I," respectively.

BACKGROUND

IS

On November 12, 2008, the Power Sector Assets and Liabilities

6.
Management Corporation ("PSALM" for brevity) issued a Notice of Award to
SPC, officially declaring SPC as the winning bidder for the privatization of the
146.5 MW Panay Diesel Power Plant (located in Dingle, Iloilo) and 22 MW Bohol
Diesel Power Plant (located in Tagbilaran City, Bohol), for a bid price of US$5.7
Million (or about P272.9 Million), to which the Certificate of Effectivity was issued
to SPC on December 8, 2008. On March 24, 2009, with consent and confirmation
from PSALM, SPC executed the Assignment and Assumption Agreement ("AAA"
for brevity) with SIPC for the assignment of the Asset Purchase Agreement
(APA) and LLA from SPC to SIPC. A copy of the AAA is attached hereto as
Annex "K". SIPC started the commercial operations of the Panay and Bohol
Diesel Power Plants on March 26, 2009.
ABSTRACT OF THE POWER SALES CONTRACT
AND RELATED INFORMATION
Executive Summary (Annex "L"). Contract Quantity. Under the
7.
PSC, SIPC shall supply ILECO Ill a total Contract Quantity of 5,280,000 kWh for
a period of 5 years, or an annual contract quantity of 1,056,000 kWh. The PSC is
essentially a peaking power arrangement intended to supplement the power
supply contracts of ILECO Ill between the hours from 1701 to 2100.

8.
The Power Plant. SIPC's power plant is the Panay Diesel Power
Plant Complex (PDPPC), situated in Brgy. Tinocuan, Dingle, lloilo. The PDPPC
has two generating facilities: i) Panay Diesel Power Plant 1 (PDPP1) which is the
original generating facility of the National Power Corporation and ii) Panay Diesel
Power Plant 3 (PDPP3) which is the diesel generating sets transferred from the
defunct Pinamucan Diesel Power Plant in Pinamucan, Batangas, Luzon. The
Description of the PDPPC and the technical specifications of the PDPP3 and
PDPP1 are attached hereto as Annex "M", "M-I" and "P11-2".
9.
SIPC's power plant's current maximum deliverable capacity is
52,000 KW for all its buyers. Attached hereto as Annex "N" is the latest threeyear operational history of the power plant. Also attached is the plant statistics as
of December 25, 2012 as Annex "N-I". Also attached as Annex "N-2" is the
plant statistics from December 26, 2012 to December 25, 2013. Finally, attached
as Annex "0" are the plant statistics for the period from December 26, 2008 to
December 25, 2009.

10.
Term. The term of the PSC is 5 years from the Agreed Date.
Agreed Date, as defined in the PSC, is the start of the delivery of electric energy
by the Seller to the Buyers facilities as agreed by the Parties.
11.
Sale and purchase of power. The sale and purchase of the SIPC
Contract Quantity shall be at a rate of Php2.50/kWh as the Basic Rate plus Fuel
Fee which is the actual cost of fuel used during the billing period to delivery
energy (Annex "B" of the PSC), computed as follows:
RATE COMPUTATION
Basic Rate
Add: Fuel Fee
Energy Fee

Php 2.50/kWh
x.xx/kWh
PhD x.xxlkWh

The Basic Rate represents the fixed and variable costs incurred by the
Seller in delivering energy to the Buyer including the capital recovery and profit
margin, subject to this Honorable Commission's validation for rate approval.
12.
Fuel Fee. Fuel Fee refers to the average monthly cost of fuel used
to generate one (1) KWhr of energy exported by the Power Plant considering the
actual amount of bunker-C and diesel fuel consumed, computed at the weighted
average price of the respective fuels during the Billing Period.
The Fuel Fee is computed as follows:
Fuel Fee (FF) = Fuel Oil Consumption Rate (FOCR) x Fuel Cost (FC)
(FF) = (FOCR) x (FC)
Fuel Oil Consumption Rate (FOCR):
Fuel Oil Consumption Rate, FOCR (in li/KWhr), is the average fuel
consumption rate needed to generate one (1) KWhr of energy during
every billing period based on the actual total fuel consumption of the
Power Plant used to deliver the total metered quantity (MQ), as measured
in the WESM.
Fuel Cost (FC):

Fuel Cost, FC (in Php/li), is the price at which the Seller acquired the
fuel equivalent to the weighted average price of fuels (Bunker-C and
Diesel) consumed for the month.
13. Sample Fuel Fee Computation. Applicant SIPC provided a
sample on the Fuel Fee Computation under Annex "B" of the PSC as follows:
Sample Fuel Fee Computation:
For presentation purposes, shown below are the specific fuel oil
consumption rates (FOCR) of both bunker-C and diesel fuels, based on
actual plant performance on August26 to September 25, 2012:

I. Total Metered Quantity (MQ):

H. Fuel Consumption and Fuel Cost (FC):
a. For Bunker C (HF0):

Volume, Ii

Price, P/li

Total Cost, P

Beginning Inventory:
Deliveries:
08/26/12 09/26/12

1,555,145.09

29.1843

45,385,883.53

220,249.53

29.2866

6,450,35100

Total Fuel Volume/Cost:

1,775,394.62

Less:
Ending Balance Per
Physical Inventory
(09/25/12)

51,836,235.53

883,476.56

Actual Fuel Consumption,

08/26/12 - 09/25/12

Is

3,323,040.00 kwh

891,918.06

Weighted Ave. Price (FCHFO) = Total Cost /Total Volume

FCHFO = P 51,836,235.53 / 1,775,394.62 Ii
FC=P 29.1970/li
b. for Diesel (LFO):

Volume, Ii

Price, P/li

Total Cost) P

Beginning Inventory:
Deliveries:
08/26/12 - 09/26/12

3,648.49

39.2608

143,242.68

9,817.14

43.4585

426,638.00

Total Fuel Volume/Cost:

Less:
Ending Balance Per
Physical Inventory
(09/25/12)

13,465.63

Actual Fuel Consumption,

08/26/12 - 09/25/12

11,139.37

2,326.26

Weighted Ave. Price (FCLFO) = Total Cost / Total Volume

FCLFO = P 569,880.68 / 13,465.63 Ii
FC= P42.3211/li
Ill. Fuel Oil Consumption Rate (FOCR):

El

a. For Bunker-C (UFO)

Actual Fuel Consumption
Total Metered Quantity
Fuel Oil Consumption Rate
EPcflHFo

= 891,918.06 Ii
= 3,323,040 kwh
= 891,918.06 li/3,323,040 kwh
=_0.2684 li/kwh

b. For Diesel (LFO)

Actual Fuel Consumption
Total Metered Quantity
Fuel Oil Consumption Rate
FOCRIFO

= 2,326.26 Ii
= 3,323,040 kwh
= 2,326.26 li/3,323,040 kwh
= 0.0007 li/kwh

Therefore, computing for the Total Fuel Oil Consumption Rate (FOCA):
Total FOCR = FOCRHFO + FOCR 0
Total FOCR
= 0.2684 li/kwh + 0.0007 li/kwh
Total FOCR = 0.2691 li/kwh
IV. Fuel Fee (FF):
FFHFO (in P/Kwh)

FFLFO (in P/kwh)

Total FF (in P/kwh)

= FOCRHFO x FCHFO
= 0.2684 li/kwh x P 29.1970/li
= P 7.8364/kwh
= FOCRLFOX FCLFO
= 0.0007 li/kwh x P42.3211/li
= P 0.0296 /kwh
= FFHFO + FFLFO
= P 7.8364/kwh + P0.0296/kwh
= P 7.866/kwh

Where:
FF (in P/kwh), is the Total Fuel Fees
FFRFO (in P/kwh), is the Fuel Fee for RFO (Bunker-C)
FFLFO (in P/kwh), is the Fuel Fee for LFO (Diesel)
FOCR (in li./kwh), is the Total Fuel Oil Consumption Rate
FOCRHFO (in li/kwh), is the Fuel Consumption Rate of HFO
FOCRLFO (in li/kwh), is the Fuel Consumption Rate of LFO
FCHFO (in P/li) is the Weighted Ave. Price of HFO (Bunker-C) for the Billing Period
FCLFO (in P/li) is the Weighted Ave. Price of LFO (Diesel) for the Billing Period
14. Breakdown of Basic Rate of Php2.50/kWh. SIPC's Basic Rate is
equivalent to Php2.6857/kWh. SIPC, however, decided to offer to the DUs a
Basic Rate of Php2.50/kWh as reflected in the PSC. SIPC's Basic Rate is broken
down as follows:
Capital Recovery Fee (CRF)
= PhP1.1502/kwh
Fixed Operation & Maintenance Costs
= PhPO.7075/kwh
Variable Operation & Maintenance Costs = PhPO.8280/kwh
TOTAL

PhP2.6857/kWh

*Bas ic Rate offered under the PSC P2.5000/kWh

15.
SIPC's monthly capital recovery was derived by setting a rate that
will result to an annual cash flow over the estimated useful life of the PDPP
assets (10-year useful life) and at the same time yield the desired Internal Rate
of Return. Likewise, the net present value of the net cash flow should equal the
initial cost of investment (represented by the acquisition cost of the PDPP assets)
and the additional capita! expenditures (CAPEX) needed to sustain the
operations. The computed annuity was Php88,372,200.00 (or Php7,364,350.00
per month) using a rate of return of 15% and the 10-year asset life as recovery
period. The computed annuity is then translated into kwh based on the monthly
billing determinant.
Breakdown of SIPC's Base Price, Monthly Billing Determinant, Fixed O&M
Costs and Variable O&M Costs and Net Heat Rate Assumption is attached
hereto as Annex "P".
16.
Project Cost and Cost Analysis in Support of the Proposed
Pricing. Attached hereto as Annex "Q" is the power plant's acquisition cost
which provides the amount of Php235,366,824.00 and the required capital
expenditures (CAPEX) needed to sustain the operations for the 10-year
projected useful life of the power plant. Annex Q also provides the Cash Flow
Specifying Initial and Additional Costs and SIPC's Computation of
Levelized Capital Recovery Fee. Notes to the Cash Flow Analysis and the
Levelized Capital Recovery Fee is attached hereto as Annex "Q-1". Finally, the
justification for the CAPEX to sustain the operation of the power plant for the next
10 years is attached hereto as Annex "Q-2".
Based on the Cash Flow scheduled, the monthly capital cost recovery was
derived by setting a rate that will result to an annual cash flow over the estimated
useful life of the power plant assets (10 years) and at the same time yield the
desired Internal Rate of Return of 15%. Likewise, the net present value of the net
cash flow should equal the initial cost of investment and the additional capital
expenditures needed to sustain the operations. Thus, SIPC determined the
Levelized Payment of Php88,055,721.00 per annum (or PhP7,337,977.00 per
month) to recover its capital investment during the 10-year life of the power plant
with a Rate of Return of 15%.
17.
Recovery of the Levelized Payment. The monthly levelized
payment of Php7,364,350.00 shall be recovered from WESMIPSC transactions
and ASPA (Ancillary Service Procurement Agreement) transactions in the
amounts of Php4,285,608.00 and Php3,076,742.00, respectively. The Billing
Determinants for computing the sharing of the Levelized Monthly Payment for the
WESM/PSC and ASPA transactions are 3,725,920 kWh per month and
2,676,667 kWh per month, respectively (See Annex "0-1").
18.
Billing Determinants. The billing determinants used in the
recovery of the Levelized Monthly payment from WESM/PSC and ASPA
transactions were computed as follows:

Rated Capacity, MW
Dependable Output Capacity, MW
Available Factor
Billing Determinant (kwh/Monthly)
Percent of dependable output
capacity
Equivalent capacity, MW

WESM/PSC

ASPA

12.27%

42.31%

54.58%

6.38

22.00

28.38

[41

TOTAL
66.2
52
80%

Equivalent kwh per month

3,725,920

2,676,667
(assuming average
5-hr/day utilization)

6,402,587

19.
Power Plant's Fuel Oil Consumption Rate. As provided in Annex
"B" of the PSC, SIPC's Fuel Oil Consumption Rate, FOCR (in liIKWnr) is the
average fuel consumption rate needed to generate one (1) KWhr of energy
during every billing period based on the actual total fuel consumption of the
Power Plant used to deliver the total metered quantity (MQ), as measured in the
WESM. As mentioned, attached hereto as Annex "N" is the plant performance
data and Annex "0" is the Plant Statistics in support of the foregoing.
20.

WESM Membership. Both applicants are members of WESM.

21
Sources of Funds. SIPC's purchase of the Panay Diesel Plant in
2009 was made with 100% equity of the company. The entire purchase price of
the sale was fully paid on March 25, 2009.
22.
Computation of Return on Investment! Weighted Average Cost
of Capital. The average Return on Investment ("ROI") is 15%. Weighted
Average Cost of Capital or WACC is not relevant in the instant application since
the project is 100% equity.
23.
Cash Flow. The cash flow analysis related to the operations of the
power plant is attached hereto as Annex "Q".

PENDING APPLICATIONS AND ACTUAL COST OF GENERATION

24.
On various dates, applicant SIPC filed applications for the approval
of its Power Sales Contract with various electric cooperatives, namely: AKELCO
(ERC Case No. 2013-091 RC); ILECO I (ERC Case No. 2012-030 RC); ILECO II
(ERC Case No. 2012-031 RC); NOCECO (2013-168 RC); NORECO 1(2013-175
RC); VRESCO (ERC Case No. 2014-026RC) and ANTECO (ERC Case No.
2014-114 RC). On various dates, hearings were conducted on the applications
and, afterwards, applicants formally offered their evidence - the latest of which
was in the ANTECO application (ERC Case No. 2-014-114RC) on December 15,
2014.
25.
On January 13, 2015, SIPC filed a Motion to Resolve all its
applications based on the applied rate of PhP2.50/kwh. Applicant SIPC
manifested that based on its 2012 and 2013 Financial Statements, its true cost of
operations showed that the applied rate of PhP2.50/kWh is way below the actual
cost of generation, which were: 2.9695 in January to November 2014, 3.1069 in
2013, and 3.0572 in 2012. Applicant SIPC respectfully adopts to form part of its
evidence in this instant application its January 13, 2015 Motion to Resolve and
the documents attached thereto.
26.
Environmental Compliance Certificate. In 2004, the Department
of Environment and Natural Resources issued an Environmental Compliance
Certificate (ECC) for the power plant, a copy of which is attached hereto as
Annex "R".
27.
Details of the Procurement Process. SIPC follows its standard
policy and procedure in the procurement of its fuel for the Panay Diesel Power
Plant 3. A copy of SIPC's procurement procedure is attached hereto as Annex

28.
ILECO Ill's Procurement Process (Annex "T"). ILECO Ill's
Transition Supply Contract expired last December 25, 2014. PSALM advised
ILECO Ill that the Transition Supply Contract will no longer be renewed and that
ILECO Ill should explore contracting its energy requirements with power
suppliers in the Visayas Grid.
In compliance with this Honorable Commission's "Guidelines for the
Recovery of Costs for the Generation Component of Distribution Utility Rates"
which took effect on May 8, 2014, the Panay-Guimaras Power Supply
Consortium where ILECO Ill is a member, invited potential Offerors-Existing or
New Generation Companies to submit offers for the supply of their electricity
requirements. The Invitation to Bid was published on August 15 and 22, 2014.
Power suppliers Green Core Geothermal Inc, Solexas Energy
International, NV Vogt Philippines, SIPC and Panay Energy Development
Corporation responded to the invitation and submitted heir offers last September
24, 2014. After a comprehensive evaluation and deliberation of the economic and
financial impact of each proposal, the technical working group of the consortium
decided to award the supply of peaking power requirements of ILECO III, among
others, to herein SIPC.
29.
PSALM Letter on the availability of capacity and energy during
the contractual period is attached hereto as Annex "U".
RATE IMPLICATIONS OF THE POWER SALES CONTRACT
30.
The following table (herein Annex "V") shows the impact of the
PSC on the generation rates paid by the prospective Buyers of SIPC in the
Visayas:

WESM Prices During Peak (Panay) vs. PSC Price Offer

(1800H - 2100K; January to December 2012)

MAXIMUM WESM PRICE

BILLING
PERIOD
From: Dec.
2011
To: Jan.
2012

From: Jan.
2012
To: Feb.
2012

From: Feb.
2012
To: Mar.
2012

From: Mar.
2012

HOUR

DATE

PRICE

PROPOSED
PSC NET
PRICE

PRICE
DIFFERENCE

1800H

10-Jan-12

34.09

10.83

23.26

1900H

10-Jan-12

38.72

10.83

27.90

2000H

25-Jan-12

11.20

10.83

0.37

2100H

30-Dec-11

9.89

10.79

-0.90

1800H

12-Feb-12

10.83

10.83

0.00

1900H

2-Feb-12

12.66

10.83

1.83

200014

12-Feb-12

10.83

10.83

0.00

2100H

30-Jan-12

10.65

10.83

-0.17

1800H

24-Mar-12

5.27

11.59

-6.32

1900H

2-Mar-12

13.48

11.23

2.25

200014

2-Mar-12

11.12

11.23

-0.11

210014

2-Mar-12

11.23

11.23

0.00

1800H

21-Apr-12

4.61

11.31

-6.71

1900H

21-Apr-12

11.42

11.31

0.11

To: Apr.
2012

From: Apr.
2012
To: May
2012

From: May
2012
To: Jun.
2012

From: Jun.
2012
To: Jul.
2012

From: Jul.
2012
To: Aug.
2012

From: Aug.
2012
To: Sep.
2012

From: Sep.
2012
To: Oct.
2012

From: Oct.
2012
To Nov.
2012

From: Nov.
2012
To: Dec.
2012

2000H

21-Apr-12

10.41

11.31

-0.90

2100K

25-Apr-12

11.31

11.31

0.00

1800H

10-May-12

7.99

11.43

-3.44

1900K

9-May-12

32.42

11.43

21.00

2000H

30-Apr-12

13.83

11.40

2.42

2100K

9-May-12

32.93

11.43

21.50

1800K

9-Jun-12

14.70

11.43

3.27

1900K

10-Jun-12

35.26

11.43

23.83

2000K

20-Jun-12

45.86

11.44

34.42

2100K

21-Jun-12

43.30

11.44

31.86

1800K

5-Jul-12

12.98

11.07

1.91

1900H

8-Jul-12

22.18

11.07

11.11

2000H

11-Jul-12

20.84

2100K

7-Jul-12

16.09

1800H

27-Jul-12

7.30

1900H

26-Jul-12

11.95

10.61

1.34

2000K

26-Jul-12

11.10

10.61

0.49

2100K

26-Jul-12

9.82

10.61

-0.79

1800K

25-Sep-12

32.63

10.10

22.53

1900K

25-Sep-12

63.63

10.10

53.53

2000K

25-Sep-12

17.84

10.10

7.74

2100K

25-Sep-12

24.07

10.10

13.97

1800K

19-Oct-12

26.72

10.43

18.29

1900K

9-Oct-12

31.34

10.32

21.03

2000H

18-Oct-12

17.55

10.43

7.12

2100H

18-Oct-12

10.74

10.43

0.31

1800K

23-Nov-12

24.74

10.53

14.21

1900K

26-Oct-12

18.60

10.41

8.20

2000H

26-Oct-12

17.12

10.41

6.71

2100K

20-Nov-12

17.17

10.53

6.64

1800K

10-Dec-12

29.00

10.37

18.63

1900K

3-Dec-21

36.08

10.39

25.69

2000K

3-Dec-12

18.46

1029

8.06

2100K

9-Dec-12

13.71

10.39

3.31

11.01

11.07

10.61

9.83
5.02
-3.31

31.
ILECO Ill's Load Forecast. Also attached hereto as Annex "W" is
ILECO Ill's power requirements with supplier allocation as Ibliows:

HISTORICAL DATA (WHOLE SYSIEL

PARTICULAR
MAXIMUM DEMAND

MW

1 2016 1 2017
16.020 1 16.970 1 18.050

2015

32.

2018
19160

2008

12.499

2019
20.590

2009

11026

2011

2012

13.729

2013

13.731

14.535

II

2014
15.180

FORECASTED DATA (WHOLE SYSTEM)

2020

2021

2022

2023

22.070

23.660

25.410

21.310

1 2025 1 2026
29.360 1 31560 1 33.030
2024

I 2028 I 2029
36.450 1 39.130 1 42.000
2021

ILECO Ill's Rate Impact Analysis. Herein Annex "X"

RAW DATA OF

CONTRACTTO FNFR(Wl

PEDC

G001

SALON

BASE LOAD

BASE LOAD

PEAKING

WESM

Purchased

PURCHASED

Actual rate

Cost

Hour 1

8,41840

4,000

5,500

(1,082)

2.11

(2,279)

Hour?

8,136.14

4,000

5,500

(1,364)

2.29

(3,117)

Hour 3

7,951.93

4,000

5,500

(1,548)

2.30

(3,559)

7,649.26

4,000

5,500

(1,851)

229

(4,247)

Hour 5

7,821.95

4,000

5,500

(1,678)

2.49

(4,179)

Hour 6

8,015.25

4,000

5,500

(1,485)

2.55

(3,780)

Hour 7

7,289.84

4,000

5,500

(2,210)

1.77

(3,905)

Hour 8

7,699.61

4,000

5,500

(1,800)

3.79

(6,832)

Hour 9

9,162.51

4,000

5,500

(337)

3.96

(1,335)

5,500

9,866.09

4,000

366

3.48

1,274

Hour 11

10,711.36

4,000

5,500

1,211

11.93

14,448

Hour 12

10,914.82

4,000

51 500

1,415

17.29

24,459

Hour 13

10,931.65

4,000

5,500

1,432

26.56

38,019

Hour 14

11,172.81

4,000

5,500

1,673

26.65

44.572

Hour 15

8,770.95

4,000

5,500

(729)

32.67

(23,816)

Hour 16

10,685.53

4,000

5,500

1,186

20.86

24,728

Hour 17

10,685.53

4,000

5,500

1,186

6.62

7,853

Hour 18

505

6.73

3,402

Hour 10

10,005.11

4,000

5,500

Hour 19

9,283.06

4,000

5,500

1,000

(1,217)

28.34

(34,486)

Hour 20

12,298.60

4,000

5,500

1,000

1,799

29.51

53,075

Hour 21

14475.69

4,000

5.500

1,000

3,976

27.12

107,828

Hour 22

14,695.83

4,000

5,500

1,000

4,196

25.50

107,009

Hour 23

13,356.17

4,000

5,500

3,856

25.00

96,390

Hour 24

11,075.24

4,000

5,500

1,575

3.74

5,886

TOTAL

241,073

96,000

132,000

4,000

9,073

13.1468

437,407

AVER. RATE

Power Supply

PEDC

G00l

SALON

BASE

BASE

PEAK

6.334

5.050

10.968

KWHR PURCHASED

96,000.00

132,000.00

4,000.00

TOTAL COST

608,064.00

PRICE

WESM

Total

13.147
9,072.92

241,072.92

1 666,600.00 1 43,873.20 1 119,279.83 1 1,437,817.03

AVERAGE RATE

5.964

Note:
With
SA ICC N

33. SIMULATION OF THE NUMBER OF OPERATING UNITS

NECESSARY TO MEET THE ENERGY REQUIREMENTS OF SIPC's
CUSTOMERS. Attached hereto as Annex "Y" is the simulation of the number of
operating units necessary to meet the energy requirements of SIPC's customers.
34. Connection and Grid Projects/Agreements. The Panay Diesel
Power Plant Complex that will supply electric power to SIPC's customers is an
existing power plant and already connected to the Visayas Grid. The power plant
is connected through the National Grid Corporation of the Philippines ("NGCP")
prior to its privatization and transfer to SIPC on March 25, 2009. There is no grid
connection project associated with the instant PSC. Copies of the Connection
Agreement, Transmission Service Agreement and Metering Service Agreement,
all between NGCP and SIPC, are attached hereto as Annexes "Z", "AA" and
"BB", respectively.
35.
Delivery Point SIPC shall deliver or cause the delivery of the total
energy as prescribed on the Contract Quantity in accordance with good utility
practice and in compliance with appropriate rules and regulations such as the
Grid Code and the Distribution Code, the WESM Rules and the Open Access
Transmission Service Rules.
36.
The Electricity Delivery Requirements as provided in Annex A of
the PSC are as follows:
Electricity Delivery Requirements:
a) The Seller shall deliver or cause the delivery of electricity at the high voltage
side of its main transformer.

b) The active power delivered to the Buyer must be within the system frequency
range of 59.7 to 60.3Hz and a reactive power output under steady state
conditions within the voltage range + 5% of nominal value at the connection
point in accordance with the Grid Code.
The Seller shall cooperate with NGCP and the Buyer in establishing emergency
plans including, but not limited to, recovery from local or widespread electrical
blackout; voltage regulation to effect load curtailment; and such other plans as
may be necessary.
37. Payment Commencing on the Agreed Date and continuing
throughout the Term, ILECO Ill shall pay to the SIPC an amount (the "Monthly
Payment") calculated in accordance with the formula set out in Annex "D" of the
PSC after reconciliation & settlement, including Value-Added Tax. Pursuant to
WESM Rules, the Seller shall issue monthly billing to the Buyer as stated in
Article 6.2(a) of this Contract. All transmission and WESM-related charges shall
not form part of the settlement between the SIPC and the ANTECO. The
Computation of Monthly Payment under Annex "D" of the PSC provides:
COMPUTATION OF MONTHLY PAYMENT
TOTAL ENERGY FEE:
Energy Fee (in P/kwh) = RBCQ) x (Basic Rate + FF)1 + VAT

11

Where:
1) BCQ is the total Bilateral Contract Quantity in kwh (either the Monthly
Contract Quantity or the accumulated confirmed Final HCQ within the
Billing Period, whichever is higher).
2) FF is the Fuel Fee in P/kwh, as determined in Annex "B".
3) Basic Rate is set at P2.50/kwh (subject to ERC approval).
4) VATi512%
38.
Board Approval of the PSC and the Filing of the Application.
Herein PSC had been approved by the board of directors of applicant ILECO Ill.
Copies of ILECO Ill's Resolution for the approval of the PSC is attached hereto
as Annex "CC". Also attached as Annex "CC-I" is ILECO Ill's Resolution on
the joint filing of the instant application and the appointment of undersigned
counsel to prosecute the case. Also attached hereto as Annex "DD" is the
secretary's certificate attesting to the approval of the PSC for applicant SIPC.
39.
DOE Certificate of Endorsement. A Certificate of Endorsement
from the Department of Energy is no longer needed for the PDPP since this
power plant was previously issued a Certificate of Compliance from this
honorable Commission. The letter confirmation from the Department of Energy,
dated May 2, 2011, is attached hereto as Annex "EE".
MOTION FOR THE ISSUANCE OF PROVISIONAL AUTHORITY
40.
As mentioned above, ILECO Ill's Transition Supply Contract
expired last December 25, 2014. PSALM advised ILECO III that the Transition
Supply Contract will no longer be renewed and that ILECO III should explore
contracting its energy requirements with power suppliers in the Visayas Grid. The
subject PSC is in compliance with this Honorable Commission's "Guidelines for
theRecovery of Costs for the Generation Component of Distribution Utility Rates"
and after a thorough technical, economic and financial evaluation by the PanayGuimaras Power Supply Consortium. To address the urgent need of ILECO Ill for
a reliable and economically feasible peaking power, applicants are constrained to
ask for a provisional authority allowing the parties to buy and sell electricity
pursuant to their PSC during the pendency of the instant application.
PRAYER
WHEREFORE, in view of all the foregoing, it is most respectfully prayed of
this Honorable Commission that an order be issued:
1.
Granting applicants request for a provisional authority to allow SIPC
to sell electricity to ILECO III prior to the final approval of the application at the
rate being applied for; and
2.
ILECO Ill.

Approving the Power Sales Contract between applicants SIPC and

Other reliefs just and equitable are likewise prayed for.

Makati City for Pasig City, September 4, 2015

12

ALABADO & PARTNERS LAW OFFICES

Counsel for Applicants
3rd Floor, Builder's Center Building
170 Salcedo St., Legaspi Village,
Makati City 1229, Philippines
Tel No. (+632) 9541720
Email: alabadolaw@yahoo.com
By:

R
LS.ALA DO
Rollo
e
0.49114
IBP No. 981819/1.5.15/RSM
PTR No. 4748519/1.5.15/Makati City
MCLE No. '1-0001723, 313/2014

Copy furnished by registered mail:

is

NATIONAL POWER CORPORATION

NPC Building Complex,
BIR Road corner Quezon Ave,
Diliman, Quezon City

EXPLANATION
Due to lack of messengerial services and distance, a copy of the foregoing
pleading was served upon the National Power Corporation through registered
mail instead of the preferred mode of personal service.

BAD?

13

LI

VERIFICATION &
CERTIFICATION AGAINST FORUM SHOPPING
I, Engr. Antonio P. Lazarraga, of legal age, and with office address at ILECO ifi
inBrgy. Preciosa, Sara, bib, Philippines. after having been duly sworn in accordance
with law, hereby depose and state that:
1.

I am the General Manager of applicant ILECO ifi;

I caused the preparation and have read the foregoing pleading, the factual
2.
allegations of which are true and correct of my own personal knowledge and based on
authentic records;

I hereby certify thatILECO illhas not commenced any other action or

3.
proceeding involving the same issue before this Honorable Commission, or any other
tribunal or agency of the government; to the best of my knowledge, there is no such
action or proceeding pending in this Honorable Commission, or any other tribunal or
agency, including any Regional Trial Court, the Court of Appeals and the Supreme
Court; that if I will hereafter learn that a similar action or proceeding has been filed or is
pending before this Honorable Commission, or any othr tribunal or agency, I
undertake to inform this Honorable Commission of such fact within five (5) days
therefrom.
Affiant further says none.
[j

47~1
t7

Affiant
W Fa -a2

cKnzc1/LccD

SUBSCRIBED AND SWORN to before me, in the 5i, MKA 7 t OJ C this f) day
ofsrmnt2, 2015, affiant exhibiting to me his CTC with number 10472412 issued
on February 3,2015.
-

Doc. No.
Page No. .iLs
Book No. JVI
Series of 2015.

IMESG.t
r.yiubtC
09
fl" Pro
joT

plUn, DsC-osion eg Ho, 2014

9.15, aara.
pip No. 4Q6G19/

VERIFICATION &
CERTIFICATION AGAINST FORUM SHOPPING
I, Mr. DENNIS T. VILLAREAL of legal age, and with office address at SPC
Island Power Corporation, 7th Floor of the Citibank Center, 8741 Paseo de Roxas,
Makati City, after having been duly sworn in accordance with law, hereby depose
and state that:
1.

I am the President of SPC Island Power Corporation;

I caused the preparation and have read the foregoing pleading, the
2.
factual allegations of which are true and correct of my own personal knowledge and
based on authentic records;
I hereby certify that the Corporation has not commenced any other
3.
action or proceeding involving the same issue before this Honorable Commission, or
any other tribunal or agency of the government; to the best of my knowledge, there
is no such action or proceeding pending in this Honorable Commission, or any other
tribunal or agency, including any Regional Trial Court, the Court of Appeals and the
Supreme Court; that if I will hereafter learn that a similar action or proceeding has
been ified or is pending before this Honorable Commission, or any other tribunal or
agency, I undertake to inform this Honorable Commission of such fact within five (5)
days therefrom.
Affiant further says none.

DZcVILLA
Affiant
SEP 15 2015
SUBSCRIBED AND SWORN to before me, in the Makati City, this day of
September, 2015, affiant exhibiting to me his Passport No. EC0806090 issued at DFA
Manila on April 10, 2014 and expiring on April 9, 2019.

Doc. No.
Page No.
Book No. t
Series of 2015.

AS J.T.F. DE CASTRO
Notary Public for Makati City
int' flcw'ernbrr 11,2016
AppI. No. M-2
71h Hr. Citibank Center
Paseo do Roxas, Makati City
IBP No.978859; 12110/14; Makati Chapter
PTR No.4753712; 01/07/1 5; Makati City
Roll No. 57068
MCLE Compliance # 0008214; 09/27/12