~,'

Republic of the Philippines

ENERGY REGULATORY COMMISSION
San Miguel Avenue, Pasig City

',', 'my"""'<,

~<n;

'!Approved for ~
Posting

~)lh

,
;

IN THE
MATTER
OF' THE
APPLICATION FOR AUTHORITY
TO
DEVELOP,
OWN,'
AND
OPERATE A 34.5 KV DEDICATED
POINT-TO-POINT
LINE rAND
ASSOCIATED
ASSETS
FROM
THE 30 MW SOLAR PV POWER
,
PLANT
OF ATN
PHILIPINES
SOLAR ENERGY GROUP, IN C. IN
RODRIGUEZ,
RIZAL TO THE
DISTRIBUTION
LINES
,
NOVALICHES
44YJ,
DILJMAN
435VU AND PARANG 412YL OF
MANILA ELECTRIC COMPANY,
WITH
PRAYER
, FOR
PROVISIONAL AUTHORITY;
I'

ERC CASE NO. 2014-120 MC

ATN
PHILIPPINES
ENERGY GROUP, INC.

SOLAR
0 C';aJlli:1,

Applicant.

x---------------------------x

LlIOte:

llzoVs

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__
..__

DECISION
Before the Commission for resolution is the application filed on
December 18, 2014 by the ATN Philippines Solar Energy Group, Inc.
(ATN Solar) for authority to develop, own and operate a 34.5 kV
dedicated point-to-point line and associated assets from its 30 MW
Solar PV Power Plant in Rodriguez, Rizal to the distribution lines
Novaliches 44YJ, Diliman 435VU and Parang 412YL of Manila
Electric Company (MERALCO),: with prayer for provisional authority.
I,

,
I

In the said application, ATN Solar alleged, among others, the

following:

I,
r

1.

It is a corporation duly organized and existing under and by

virtue of the laws of the Republic of the Philippines, with

..
;

ERC CASE NO. 2014-120 MC

DECISION/June 8,2015
Page 2 of 19
office address at 9th Floor, Summit One Building, Shaw
Boulevard, Mandaluyong City;
2. In its 2013 Supply-Demand Outlook, the Department of
Energy (DOE) recognized the growing demand for power in
the Philippines. For the Luzon Grid, the DOE projected the
energy demand to increase at an average annual growth
rate (AAGR) of 4.13%, from 7,969 MW in 2012 to 10,693
MW in 2020 and will increase further to 16,477 MW in 2030.
Based on the 2013 Supply-Demand Outlook, the grid still
needs 8,100 MW of additional capacities of 6,000 MW
base-load plant and 2,100 MW peaking plants to meet the
electricity demand and the required reserve margin of the
grid;
3. To help address the need for additional capacity in the
Luzon Grid, ATN Solar has undertaken to construct, own
and operate the (jeneration plant together with its
associated ancillary and auxiliary equipment and associated
switchyards and transformers;
4. The Department of Environment and Natural Resources
(DENR) has already Issued an Environmental Compliance
Certificate (ECC) ECC-R4A-111-0571 which is underway
and scheduled for completion in 2016. A copy of the ECC is
attached to the applic<\tion as Annex "I";
I

5.

The National Commission

on Indigenous People (NCIP)
,
has already issued a Certificate of Non-Overlap (CNO)
RIV-RIZ-2012-12-048
for the project site. A copy of the
NCIP-CNO is attached to the application as Annex "J";

6.

It has secured the approval

of the Sanggunian
Panla/awigan of the Province of Rizal as well as the
Provincial Development Council of Rizal, as shown by the
Ordinance and Resolution attached to the application as
Annexes "K" and "L", respectively;

7.

It has also secured the approval of the Sanggunian Bayan

of the Municipality :of Rodriguez, Rizal converting the
project site to Industrial Zone, as shown by the Resolution
"Kapasiyahan Big. 1.4-27" attached to the application as
Annex "M";
I

8.

To test, commissio~ and dispatch the generation plant

soon after the completion of the project, there is a need for
ATN Solar to connect, the power plant to the Luzon Grid

'.

ERC CASE NO. 2014-120 MC

DECISION/June 8,2015
Page 3 of 19
through the Connection Assets and for these Connection
Assets to be constructed soonest. Since it will be utilizing
the distribution assets of MERALCO, the latter has already
approved ATN Solar's Distribution Impact Study (DIS) and
has determined the technical feasibility of connecting the
Generation Plant to the Luzon Grid radially to three (3)
feeder lines of MERALCO. Copy of the approved DIS is
also attached to the application as Annex "N";
9.

MERALCO also performed the Distribution Asset Study

(DAS) to determine the Connection Asset and the cost
required to connect the ATN Solar to the MERALCO's
distribution system, in accordance with the Distribution
Service Open Access Rules (DSOAR). The DAS showed
that interconnection of ATN Solar radially to three (3) 34.5
kV feeder lines of MERALCO's Novaliches 44Y J, Diliman
435VU and Parang 412YL distribution lines is feasible,
subject to compliance with the following requirements:
a. Synchronism check relay shall be installed at Parang
Substation for circuit 412YL, while the synchro-check
function of the relays of Diliman 435VU and Novaliches
44Y J shall be enabled to detect live line condition and
to control manual and automatic closing of the
respective power circuit breakers;
b. MERALCO shall 'wire and commission synchronism
status/indication and control in the respective Remote
Terminal Units (RTU) in Parang, Diliman and Novaliches
Substations, in conjunction with the installation of
synchronism check relay or enabling of synchro-check
functions;
c. Three (3) independent Direct Transfer
schemes shall be implemented in order
respective circuit breakers of ATN when
feeders Parang 412YL, Diliman 435VU or
44Y J trips due to fault;

Trip (OTT)
to trip the
any of the
Novaliches

d. MERALCO shall wire and commission the teleprotection

equipment status and direct transfer trip status/indication
in the respective RTU's in Novaliches, Diliman and
Parang Substations, in conjunction with the installation
of teleprotection equipment and communication links for
direct transfer trip of the feeder breakers of ATN Solar;

ERC CASE NO. 2014-120 MC

DECISIONIJune 8, 2015
Page 4 of 19
e. Installation
of teleprotection
equipment
and
a
communication link for Direct Transfer Trip (DTT) at
ATN Solar's Generation Plant main breakers. This will
involve the installation of two (2) sets of 4RF Aprisa XE
microwave radio with built-in multiplexer to provide the
necessary radio communications link between power
plant and Parang Substation. RFL GARD 8000
teleprotection equipment is recommended to provide
DTT protection schemes. ATN Solar is may explore
other brands of radio and teleprotection equipment,
provided it will comply with the interface requirements,
and that the vendor of the radio equipment can secure
the necessary operating frequencies. Any proposed
alternative
shall
undergo
MERALCO's
technical
evaluation. Also, it will provide suitable interface from
their equipment to the teleprotection equipment;
f. It shall provide a miniRTU with uninterruptible power
supply (UPS) at each tapping point for monitoring of its
connection status, real power output, reactive power
output, and voltage, as well as its reactive and real
energy input and output at each feeder. The miniRTU
shall be installed with an Intelligent Electronic Device
(lED) meter to measure the analogue parameters while
the statuslindications shall be hardwired to the miniRTU.
The miniRTU shall be reporting to Parang Substation via
wireless radio;
g. The specifications of the protection and disconnect
devices on the first private pole of ATN Solar shall be in
accordance with MERALCO's standards;
h. Three (3) sets of pole mounted 34.5 kV primary metering
shall be installed, one (1) for each feeder. These export
meters shall be bidirectional to measure the miniscule
load that may be drawn by the solar PV generators at
night. A separate self-contained import meter shall be
installed for the house loads;
I.

To ensure the proper coordination of the operation of the

existing sectionalizing devices on circuits Parang 412YL,
Diliman 435VU and Novaliches 44Y J against the
operation of the respective protective relays at Parang
Substation,
Diliman
Substation
and
Novaliches
Substation,
it is necessary to replace with the
appropriate current ratings the fuse links installed at

ERC CASE NO. 2014-120 MC

DECISION/June 8, 2015
Page 5 of 19
fused cut outs affected by the changes in the fault
magnitudes at the area;
j. To accommodate the connection of the power plant to
Parang 412YL, approximately 19 km. of new three-phase lines shall be constructed;
k. 5.5 km. of three-phase lines shall be reconductored
using 1336.4 MCM ACSR per phase. To connect the
power plant to Diliman 435VU, 8 km. of new three-phase
lines shall be constructed and 0.5 km. of three-phase
lines shall be reconductored using 1336.4 MCM ACSR
per phase. To connect the power plant to Novaliches
44YJ, approximately 10 km. of three-phase lines shall
be constructed using 1336.4 MCM ACSR per phase;
and
I. To provide visible disconnect, a Load Break Switch shall
be installed near each of the connection points to
Parang 412YL, Diiiman
435VU and Novaliches 44YJ;
,
10. The total estimated cost of the Connection Assets based
on the DAS of ME~ALCO is One Hundred Thirty One
Million Eighty Nine Thousand Six Hundred Eighty Six and
81/100 (PhP131,089,686.81).
The above costs were
derived using MERALCO's
project
cost estimating system
,
and are subject to change prior to the implementation of
the project. A copy of the approved DAS is attached to the
application as Annex "0";

,
11. On December 8, 2014, MERALCO and ATN Solar
executed an Interconnection Agreement for the said
Generation Plant. Copy of the Interconnection Agreement
is attached to the application as Annex "P";
12. Under the Interconnection Agreement, ATN Solar shall be
responsible for the financing and construction of the
Connection Assets, and shall also own, operate and
maintain them unless ATN Solar later decides to
commission the services of MERALCO for their operation
and maintenance. f\ copy of the ATN Solar's SEC
Certificate of Approval of Increase of Capital Stock to
accommodate additional subscription for the project is
attached to the application as Annex "Q";

ERC CASE NO. 2014-120 MC

DECISION/June 8, 2015
Page 6 of 19
13. The ATN Solar being situated in the distribution franchise
area of MERALCO is the shortest, most viable and best
option to connect its Generation Plant to the Luzon Grid
system;
14. Based on ATN Solar's Financial Feasibility Study submitted
to the DOE in support of its application for declaration of
commerciality, the project cost is estimated at $42 Million,
which is funded 30% by equity and 70% by debt;
15. Once completed, it undertakes to execute an Operation,
Service and Maintenance Agreement with a reputable
entity for the operation, service, and maintenance of the
Connection Assets to MERALCO's distribution lines which
shall invoive the regular patrolling of these lines, checking
the pole and guy wire conditions, and trimming over-grown
bushes and conduct tree and grass-cutting operations;
I

16. In support of the instant application,

following documents:,

it submitted

the

,
ANNEX
A
B
C
D
E
F
G
H
I
J
K
L
M
N

0
P

DOCUMENT
SEC Certificate of Registration
Articles of Incorporation
Bv-Laws
Latest Audited Financial Statements, with
Audited Balance Sheet and Income Statement
Detailed Project Description and Financial
Feasibilitv Studv
Service Contract
Confirmation of Commercialitv
DOE list of RE project
Environmental Compliance Certificate
NCIP Certificate of Non-Overlap
Sangguniang
Panlalawigan
Resolution No.
041, Series of 2013
Provincial Development Council Resolution No.
01, Series of 2013
Sa~niano
Bavan Kapasivahan Blo. 14-27
MERALCO's Distribution Impact Study of ATN
Solar
MERALCO's Distribution Asset Study of ATN
Solar
Interconnection AQreement

..
ERC CASE NO. 2014-120 MC
DECISION/June 8, 2015
Page 7 of 19
Q
R

T
U
V

SEC Certificate of A roval of Ca itaI Increase

Affidavit executed by Paul B. Saria dated
December 17, 2014 in support of the prayer for
issuance of rovisional authorit
Secretary's Certificate containing resolutions of
the Board of Directors of ATN Solar approving
the construction of the transmission line
Conce tual En ineerin Designs and Drawin s
Gantt Chart Construction Schedule
Pro'ect Cost Estimates

17. The requirement

that proof of public information
dissemination of the proposed capital expenditure was
conducted within MERALCO's franchise area is not
applicable to the instant application because it is not a
distribution utility but a generation company and, therefore,
has no franchise area to speak of;
18. The requirement that a copy of the Commission's
Certificate of Compliance (COC) for the Generation Plant
be submitted is also not applicable because the Generation
Plant is still in the early stages of construction and that the
Implementing Rules and Regulation (IRR) of Republic Act
No. 9136 (R.A. 9136) only requires a generation company
to obtain a COC for a new generation facility before that
facility commences commercial operations. It is of the view
that the documentary requirement for the issuance of a
COC presupposes that such facility has been completed or
nearing completion. Nevertheless, it undertakes to apply for
a COC prior to the Generation Plant's commencement of
operations
and will comply with the Commission's
requirements for the issuance of a COC;

ALLEGATIONS IN SUPPORT OF
PRAYER FOR PROVISIONAL AUTHORITY

19. Rule 14 of the Commission's Rules of Practice and

Procedure authorize the issuance of a provisional authority
or an interim relief prior to a final decision, provided that the
facts and circumstances warrant the issuance of the same;
20. The urgent need for additional capacity in the Metro Manila
and Luzon Grid and the insufficient levels of power reserve
and supply merit the issuance of the provisional authority

ERC CASE NO. 2014-120 MC

DECISION/June 8, 2015
Page 8 of 19
so that the Connection Assets may be constructed in
conjunction with the construction of the Generation Plant;
21. The Affidavit of Mr. Saria attesting to the necessity of the
issuance of a provisional authority is attached to the
application as Annex "R"; and
22. It prays that the Commission:
a.

Issue a provisional authority for the development and

construction of the proposed transmission line and
Connection Assets and authorizing ATN Solar to
implement and develop, own and operate the
proposed transmission line and Connection Assets;
and

b.

After due notice, and hearing, judgment

approving the instant application.

be rendered

Having found said application sufficient in form and in

substance with the required fees
, having been paid, an Order and a
Notice of Public Hearing, both dated January 20, 2015, were issued
setting the same for jurisdicti6nal
hearing, expository presentation,
,
pre-trial conference and evidentiary hearing on February 18, 2015.

In the same Order, ATN, Solar was directed to cause the

publication of the Notice of Public Hearing, at its own expense, once
(1x) in a newspaper of general circulation in the Philippines, with
the date of the publication to be made not later than ten (10) days
before the scheduled date of initial hearing.
The Office of the Solicitor General (OSG), the Commission on
Audit (COA), and the Committees on Energy of both Houses of
Congress were furnished with copies of the Order and Notice of
Public Hearing and were requested to have their duly authorized
representatives present at the scheduled hearing.
Likewise, the Offices of the Mayors of Pasig City and
Mandaluyong City were furnished with copies of the Order and the
Notice of Public Hearing for the appropriate posting thereof on their
respective bulletin boards.
i
On February 12 and 13, 2015, the Manila Electric Company
(MERALCO) filed its "Petition for Intervention (with Entry of
Appearance)" and "Pre-Trial Brief', respectively.

'.'

ERC CASE NO. 2014-120 MC

DECISION/June 8,2015
Page 9 of 19

On February 16, 2015, ATN Solar filed its "Pre-Trial Brief'.

During the February 18, !2015 initial hearing, ATN Solar and
MERALCO appeared.

i
I
,

At the said hearing, ATN Solar presented its proofs of

compliance with the Commission's posting and publication of notice
requirements which were duly marked as Exhibits "A" to "H",
inclusive.
MERALCO interposed no objection on the submission
made by ATN Solar. The Commission found that ATN Solar has
complied with posting and publication of notice requirements.
Thereafter, it conducted an expository presentation of its application.

Upon termination of thel expository presentation,

propounded clarificatory questions.

MERALCO

The Commission conducted a pre-trial conference were ATN

Solar and MERALCO stipulate~ on facts and issues relative to the
application.
ATN Solar presented its lone witness, Mr. Paul B. Saria, its
Vice President, who testified in support of the application.
In the
course his direct examination,1 several documents were presented
and identified by the witness, which were duly marked as exhibits.

The direct examination of the witness having been terminated,

the Commission propounded c1~rificatory questions. ATN was, then,
directed to file its formal offer oflevidence and several documents.
On March 2 and 4, 2015, ATN Solar filed its "Formal Offer of
Evidence" and "Compliance wiih Motion for Confidential Treatment",
respectively.
On March 20, 2015, ATN Solar filed a "Manifestation
Motion for Early Resolution".

with

On June 1, 2015, the Commission issued an Order admitting

the said formal offer of evidencE!land declaring this case submitted for
resolution.

..'
ERC CASE NO. 2014-120 MC
DECISION/June 8,2015
Page 10 of 19
DISCUSSION

Project Description
ATN Solar was incorporated in 2010 with a SEC authorized
capital stock of PhP100,000,000 and a planned capital stock increase
to PhP1.5 billion in 2014.
ATN Solar applied for interconnection of its proposed 30 MW
Solar PV Power Plant to the MERALCO's 34.5 kV distribution system.
The project will be located at Barangay Macabud, Rodriguez, Rizal.
Its power generation system will consist of PV arrays connected to 33
units of SMA SC900CP inverters, each with PV ratings of 900 kW. It
proposes to sell the generated power to the grid through its
connection to MERALCO's 34.5 kV distribution system.
I

The power plant will be, interconnected to three (3) 34.5 kV

feeders, namely, Novaliches 44Y J, Diliman 435VU, and Parang
412YL at an initial aggregate generation of 25.2 MW, which is based
on the present minimum demand
of these feeders when solar output
,
is at maximum. The power plant's
generation output may increase up
,
to 29.7 MW as the demand in these feeders increases upon periodic
evaluation.
i
,,

The interconnection shall be made at the standard nominal

voltage of 34.5 kV, 3-wire, 3-phase and 60 hertz, and MERALCO's
facilities reserved for the interconnection will have a maximum 30
MW capacity.

Necessity and Benefits of the Project

The solar project is desighed to have gross generation capacity
of 30 MW at inception, distributed through MERALCO's franchise
distribution area via a 34.5 kV distribution line connected to the (1)
Diliman (2) Novaliches, and (3),Parang circuits.
I

On top of the US$ 16 Million equity, ATN Solar's stakeholders

infused an additional US$ I 6 Million pre-development
equity
investment (RE service contract,
permitting cost, engineering design,
,
grid connection studies, LGU approvals, land-use conversion, etc,).

The project involves site development and civil works,

installation of 124,000 solar photovoltaic panels rated at 260 Wp per
panel, and a control buiiding, construction of 34.5 kV switch yards at
connection points, solar panel foundations, equipment mounting

ERC CASE NO. 2014-120 MC

DECISION/June 8, 2015
Page 11 of 19
structures, roads and drainage systems, electrical cables, and
Supervisory Control and Data Acquisition (SCADA) system. The civil
works and electrical installations will occupy 42 of the available 256
hectares land area.
The project is in line with the government's call for additional
capacity in the Luzon Grid.
The A TN Solar's 30 MW project is intended alleviate the electric
power supply crisis in Metro Manila, which is expected by the DOE to
worsen in 2015. The lack and insufficient power supply in Metro
Manila will have an adverse effect to the economy, especially to the
business industries in Metro Manila. Prices of electricity may
significantly increase and opportunity losses from shutdowns
manufacturing facilities will be imminent and will affect the country's
gross domestic product (GDP)'I
In compliance with the Renewable Energy Act, ATN Solar is
allocating 1% for social development fund intended to its host
community. The fund shall be used to support scholarships of
deserving elementary to college level students residing in the host
community. ATN Soiar supports employment opportunities for
resident families in accordance with Participatory Rural Appraisal
(PRA).
The ATN Solar Community Based Employment Program aims
to improve community conditions through community-based
employment, revenue sharing of 1% to the government from the
Solar PV plant, educational infrastructure, increased educational
scholarships, enhance medical and dental missions.
,

During its planning and pre-construction stages, it is estimated

to create employment revenue of about PhP600 Million over the 25year estimated project life of the power plant.
Technical Configuration and DISIDAS
On December 27,2013, MERALCO approved the DIS of ATN
Solar. Following the issuance of the DIS, in July 2014, both parties
executed the Connection Agreement, Transmission Agreement, and
Metering Service Agreement. i,
The DIS provides that ATN Solar can be connected to three (3)
tapping points of MERALCO's distribution system. The study
considered the power interruptions in terms of the frequency and
duration of recorded interruptions in 2013 in the existing and
expected peak load conditions of circuits Novaliches 44Y J

ERC CASE NO. 2014-120 MC

DECISION/June 8,2015
Page 12 of 19
(Novaliches Bank # 1), Diliman 435VU (Diliman Bank # 3) and
Parang 412YL (Parang Bank # 1) as well as the performance of these
circuits. The DIS, likewise, specified the number of inverters that will
be assigned to each circuit, the distance of transmission line, the size
of wires, and the geographic areas of the circuits.
1.

Novaliches

44Y J

Ten (10) ATN inverters, with combined capacity of 9.0 MW, will
be connected to Novaliches 44Y J through a new 34.5 kV 3-phase line
with total length of 8.5 km. using 1-336.4 MCM ACSR per phase. The
new lines will traverse along Gregorio Araneta Avenue and Payatas
Road and cross-country. Around 6.8 km. of 3-phase lines along
Gregorio Araneta Avenue will also be reconductored to reduce line
losses. Shown below is the line re-configuration and connection point
of Novealiches 44Y J:

2.

Diliman 435VU

Eight (8) ATN inverters, with combined capacity of 7.2 MW, will
be connected to Dilian 435 VU through a new 34.5 kV 3-phase line
with a total length of 10 km. using 1-336.4 MCM ACSR per phase.
The new lines will traverse along Litex Road, Mayon Avenue and
Payatas Road. Around 0.5 km. of 3-phase lines along Litex Road
must also be reconductored tb, reduce line losses. Shown below is
the connection point of Diliman.435VU:

ERC CASE NO. 2014-120 MC

DECISION/June 8, 2015
Page 13 of 19

3.

Parang 412YL

Ten (10) ATN inverters, with combined capacity of 9.0 MW, will
be connected to Parang 412YL through a new 34.5 kV 3-phase line
with a total length of 16 km. using 1-336.4 MCM ACSR per phase.
The new lines will traverse along Gen. A. Luna Avenue, Rizal
Avenue, E. Rodriguez Avenue, Mayon Avenue and Payatas Road as
shown in the diagram below. Around 5.5 km. of 3-phase lines along
Bagong Silang and Gen. Antonio Luna Ave. will also be reconductored to reduce line losses. Shown below is the line reconfiguration and connection point of Parang 412YL:
,
I

Line Re-configuration ,and Connection Point of Parang 412YL

~vJ

I"~'''''j
L/'4]):._'--'-TI
".~-"-"'''~-''
1~~
_
...
",
..
(

-"""1;

",,<l~.A'

~J"~~'!!.~

,
'7

Based on the documents submitted, the Commission believes

that the installation of 336 MCM ACSR is capable of accommodating
the 30 MW power generation of the solar power plan\.

ERC CASE NO. 2014-120 MC

DECISION/June 8, 2015
Page 14 of 19

The single line diagram submitted disclosed that the proposed

project shall be used solely by ATN Solar and no other users will
utilize these facilities consistent with Section 2.9.2 (Connection Asset)
of the DSOAR, to wit:
"A generation company may develop and own or operate
dedicated point-to-point limited facilities provided, that
such facilities are required only for the purpose of
connecting to the distribution system, and are used solely
by the generating facility, subject to prior authorization by
the ERC. xxx"
The conduct and the interconnection requirements that will be
imposed to ATN Solar aim to ~nsure the safe and reliable operation
of parallel generation with ME~ALCO's electric distribution system.
Hence, ATN Solar shall be required to take all necessary measures
to ensure that its proposed interconnection shall not result in the
degradation of MERALCO's distribution system. This includes the
installation of a protection system to automatically disconnect its
generator in the event of system or generator faults or other unusual
conditions that may cause voltage or current disturbances on the
system.
i

Technical

and Financial Capability

of ATN Solar

ATN Solar has tapped se~eral contractors and suppliers for the
project. CMEC has submitted an
EPC contract proposal with bridge
,
financing of US$ 25 Million while
Yingli Solar has proposed a US$ 5
,
Million supplier's credit as against its prospect of supplying US$ 20
Million worth of solar PV panelS.
Guangdong Electric GroLp
, is also interested to provide EPC
financing for either Phase 1 (30 MW) or Phase 2 (30 MW) of the
project. In addition to securing project financing from contractors and
suppliers, ATN Holdings intends to source US$10 Million in the form
of preference shares convertible to common, or convertible debt, or
private placement of common at ATN Holdings level to finance the
solar project.
The fund of US$ 10 Million at ATN Holdings level will augment
the EPC bridge financing, as follows:

ERC CASE NO. 2014-120 MC

DECISION/June 8, 2015
Page 15 of 19

EPC Contractor

Fund Source

China Machinery Engineering

Corooration
Guangdong Electric Power
Grouo

Amount
US$ 25
Million
US$ 25
Million

Form of
Financina
EPC Loan
EPC Loan

While the total prospective fund sources of US$ 60 Million

exceeds the capital expenditure budget of US$ 36 Million for Phase
1, 30 MW, ATN Solar intends to secure a US$ 4.0 Million omnibus
credit line from banks, or from! ATN Group, to forestall any delay in
release of funds from EPC, and ensure the completion of the project.
The bank ioan will be secured by an RE trust fund to be established
by the National Transmissibn
Corporation (TRANSCO)
in a
government bank, in accordanpe with the provision of Republic Act
No. 9513 (RA 9513) that authorizes TRANSCO to collect FIT-all
revenues of RE projects under Feed-in-Tariff program.
The construction of the broject shall commence in November
2014 upon signing of the Connection Agreement with MERALCO.
The US$ 4.0 Million bank loan facility will augment the US$ 5.0
Million supplier's credit of Yingli Solar to the project. The CMEC
bridge loan will become available in late 2014, to fund a portion of the
30 MW total plant capacity under Phase 1.
ATN Holdings will raise US$ 10 Million from new investors at
ATN Holdings level to partially ~und
the equity portion of financing 30
,
MW solar project. ATN Holdings intends to issue any of the following
investment instruments: (a) preference shares convertible to
common; (b) convertible debt; or (c) private placement of common,
given the following information from its balance sheet.
'I

Particulars
Total Assets
Total Liabilities
Stockholders' Equity
(includina RIEl
Retained EarninQs
Debt-to-Eauitv Ratio
Outstandina Share
Authorized Caoital Stock

2014
2,490,586,680
670,181,705

2013
1,808,516,463
452,513,943

!,

1,820,404,975

1,356,002,520

1,298,525,726
0.37
450,000,000
1,200,000,000

834,874,476
0.33
450,000,000
1,200,000,000

I
I

,
I,

ERC CASE NO. 2014.120 MC

DECISION/June 8, 2015
Page 16 of 19
ATN Holdings authorized capital stock in 2014 amounted to
PhP1.2 Billion which wili be increased to PhP3.0 Billion in 2015 to
accommodate the entry of new equity investors and expand the solar
PV business in the Philippines. The solar energy solution is the
appropriate technology to address the projected peak power deficit of
3,000 MW in Luzon, and mitigate the high WESM traded prices of
PhP15-20/kWh based on diesel power.
It offers a high-growth
opportunity for new strategic RE investors of ATN Holdings.
Shown below are the ATN Solar statements
conditions ending December 2012 and 2013:

Total Assets
Total Liabilities
Stockholders' EaultV
Authorized Caoitalization

Dec. 31, 2012

(in PhP)
5,852,210

5,852,210
100,000,000

of financial

Dec. 31, 2013

(in PhP)
101,900,831
78,439,232
23,461,599
100,000,000

The ATN Solar 30 MW Solar PV project is commercialiy

feasible. On June 27, 2013; the DOE issued a Certificate of
Commerciality for ATN Solar's 30MW Project in Rodriguez, Rizal.
Based on the DOE evaluation and the letter dated May 29,
2013, ATN Solar's application was found sufficient for the issuance of
the Declaration of Commerciality (DOC). Hence, the DOE confirmed
ATN Solar's DOC and approved the conversion of its SESC #201105-002 from Pre-development Stage to Development/Commercial
Stage.
It is worthy to note that the Board of Investments (BOI)
approved on December 17, 2013 the ATN Solar's request for tax-free
importation of equipment until end of 2014. BOI, likewise, approved
the ATN Solar availment of 7-year income tax holiday (ITH).
ATN Solar manifested that it intends to secure a 3,d party O&M
services. In the absence of an assurance that the subject facilities wili
be operated without adverse effect to the reliability of the
grid/distribution system, the operation and maintenance of said
facilities wili be performed by MERALCO which was granted the
exclusive franchise to operate imd maintain the distribution system in
the area.
!

ERC CASE NO. 2014-120 MC

DECISION/June 8. 2015
Page 17 of 19
Permit Fees
The approved permit fee for the ATN Solar power project was
computed based on the Commission's existing Schedule of Fees and
Charges, as follows:

Permit Fee

Permit Fee

Total Project Cost x 0.75

100

131,089,686.00 x 0.75
100

PhP983,180.00

WHEREFORE,
the foregoing
premises considered,
the
application filed by ATN Philippines Solar Energy Group, Inc. (ATN
Solar) for authority to develop,lown and operate a 34.5 kV dedicated
point-to-point line and associated assets from its 30 MW Solar PV
Power Plant in Rodriguez, Rital to the distribution lines Novaliches
44YJ, Diliman 435VU and Pardng 412YL of Manila Electric Company
(MERALCO) is hereby APPROVED, subject to the following
conditions:

a) The Operation and Maintenance (O&M) of the subject

facilities shall be peAtormed by MERALCO, subject to
applicable charges as agreed upon by the parties;
b) The Connection Assets shall be used solely by ATN
Solar and should not be used directly to serve the endusers;
c) ATN Solar shall take all necessary measures to ensure
that its proposed int~rconnection shall not result in the
degradation of the distribution system;

d) ATN Solar shall be required to transfer the ownership of

interconnection facilities to MERALCO at a fair market
price in the event those assets are required for
competitive purposes: or to be utilized by other users;
Provided that, the prices of connection assets covered by
the FIT rate shall be excluded in the computation of the
fair market price of the assets; and

'

ERC CASE NO. 2014-120 MC

DECISION/June 8,2015
Page 18 of 19
e) ATN Solar is directed to remit to the Commission the
permit fee amounting to PhP983,180,OO, within fifteen
(15) days from receipt hereof
SO ORDERED,
Pasig City, June 8,2015,

~1

~, (~

ENAIDA G. CRUZ - DUCUT

Chairperson rU

Q..

t~

~t-

GiORIA VICTORIA
. YAP-TARUC
C
miss ner

JOSEFINA PATR
_ Comm

'A. MAGPALE-ASIRIT

ERONIMO D. ST A. ANA
Commissioner

ERC CASE NO. 2014-120 MC

DECISION/June 8, 2015
Page 19 of 19

Copy Furnished:

1. ORBOS CABUSORA & TAGUIAM

Counsel for ATN Philippines Solar
Energy Group, Inc.
!
Unit 211, Quadstar Building'
Ortigas Avenue, Greenhills I
San Juan City, Metro Manil~
2. The Office of the Solicitor ~eneral
134 Amorsolo Street, Legaspi Village. Makati City
Metro Manila
3. The Commission on Audit
Don Mariano Marcos Avenue
Diliman, Quezon City
4. The Senate Committee on Energy
Senate of the Philippines
GSIS Building, Roxas Blvd., Pasay City
5. The House Committee 6n Energy
House of Representatives
Batasan Hills, Quezon City
6. The Office of the City Mayor
Pasig City
7. The Office of the City Mayor
Mandaluyong City
8. Atty. Francis Dino S. Antonio
Counsel for MERALCO
7'" Floor, Lopez Bldg.
Ortigas Avenue, Pasig City