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Republic of the Philippines $ pprove or ~
ENERGY REGULATORY COMMISSION , Posting
San Miguel Avenue, Pasig City:, Myw.ert.goy~ph
,', Y

IN THE MATTER OF THE

JOINT APPLICATION FOR
APPROVAL OF THE
POWER SUPPLY
CONTRACT (PSC)
ENTERED INTO BY AND
BETWEEN NUEVA
VIZCAYA ELECTRIC
COOPERATIVE, INC.
(NUVELCO) AND SAN
MIGUEL ENERGY
CORPORATION (SMEC),
~TH PRAYER FOR
PROVISIONAL
AUTHORITY AND
CONFIDENTIAL
TREATMENT OF
INFORMATION,

ERC CASE NO. 2016-126 RC

NUEVA VIZCAYA
ELECTRIC COOPERATIVE,
INC. (NUVELCO) AND SAN
MIGUEL ENERGY
CORPORATION (SMEC),
Applicants.
J(- - - - - - - - - - - - - - - - - - - - --J(

ORDER

On 29 April 2016, Nueva Vizcaya Electric Cooperative, Inc.

(NUVELCO) and San Miguel Energy Corporation (SMEC) filed a
Joint Application dated 25 April 2016 seeking the Commission's
approval of their Power Supply Contract (PSC), with prayer for
provisional authority and confidential treatment of information.

NUVELCO and SMEC alleged the following in their application:

ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 2 Of26

The Joint Applicants

1. NUVELCO is an electric cooperative duly organized and

existing under and by virtue of the laws of the Republic of
the Philippines with principal office address at Barangay
Gabut, Dupax del Sur, Nueva Vizcaya. It holds a franchise to
operate light and power services in the Municipalities of
Ambaguio, Aritao, Bagabag, Bambang, Bayombong, Diadi,
Dupax del Norte, Dupax del Sur, Kasibu, Kayapa, Quezon,
Solano, 8ta. Fe, and Villaverde, all in the Province of Nueva
Vizcaya (Franchise Area). It shall also be herein referred to
as the "Buyer";

2. SMEC is a domestic corporation organized and existing

under the Philippine laws, with office addresses at the 2nd
Floor, 808 Building, MERALCO Avenue corner Gen. Lim
Street, Barangay San Antonio, Pasig City. It is the
Indepeudeut Power Producer (IPP) Administrator of the
1,000 Net Contracted Capacity of the Sual Coal-Fired
Thermal Power Plant located in Barangay Pangascasan, SuaI,
Pangasinan. It shall also be herein referred to as the "Seller";

3. The Joint Applicants may be served with the orders, notices

and other processes of the Honorable Commission through
their respective undersigned counsels at the addresses
indicated herein;

Nature ofthe Application

4. The Joint Application for approval of the Power Supply

Contract (PSC) entered into by and between NUVELCO and
SMEC, is being submitted to the Honorable Commission for
its review and approval pursuant to Sections 25 and 45(b) of
Republic Act No. 9136, otherwise known as the Electric
Power Industry Reform Act of 2001 or the EPIRA, Rules 5,
Section 4(e) and 11, Section 5 of its Implementing Rules and
Regulations (IRR), Rule 20(B) of its Rules of Practice and
Procedure, and other pertinent rules and regulations;

Statement of Facts

5. Competitive Selection Process (CSP). On 12 January

2016, NUVELCO's Bids and Awards Committee (BAC)
conducted a Pre-bid Conference whereby SMEC and SN
Aboitiz Power (SNAP) attended and purchased the Terms of
Reference (ToR) of the CSP;

5.1 On 22 January 2016, said BAC conducted the

Bidding/Selection Proper. Based on the proposals
submitted, it fouud that the offer of SMEC is
compliant and advantageous to NUVELCO. Thus, the
BAC recommended to award and enter into a PSC
with SMEC for a period of ten (10) years commencing
26 December 2016 to 25 December 2026 and to
conduct a technical evaluation and actual inspection
on the capability of the winning bidder;
ERC Case No. 2016-126 RC
ORDERJ27 June 2017
Page 3 of 26

5.2 On 3 February 2016, NUVELCO's Board issued

Resolution NO.3, Series of 2016 authorizing its
Chairman and General Manager to enter into aPse
with SMEC; and

5.3 On even date, said Board issued Resolution NO.3-A,

Series of 2016, authorizing and approving the filing of
an application for approval of the PSC with SMEC as
well as appointing its authorized representatives and
legal counsel during the proceedings before the
Honorable Commission;

6. Salient Features of the PSC.

6.1 Contract Capacity. The Contracted Capacity for the

duration ofthe PSC shall be as follows:

6.1.1 Base Load: 12,000 kW;

6.1.2 Load Following: 10,000 kW at the National

Power Corporation - Time-of-Use NPC-TOU) rates,
to wit:

(January to June) (July to

December)
Period Monday Sunday Monday Sunday
to aud to and
Saturday Holiday* Saturday Holiday'
1:00:00 AM"
(0000-0100)
2.3426 2.5022 2.3426 2.3426

2:oo:ooAM
(0100-0200)
2.3426 2.3426 2.3426 2.3426

3:00:00 AM
(0200-0300)
2.3426 2.3426 2.3426 2.3426

4:00:00 AM
(0300-0400) 2.3426 2.3426 2.3426 1.8649
5:00:00 AM
(0400-0500) 2.3426 2.3426 2.3426 1.8649
6:00:00 AM
(0500-0600)
2.3426 2.3426 2.3426 1.8649
7:00:00 AM
(0600-0700) 2.3426 2.3426 2.3426 1.8649
B:oo:ooAM
(0700-0800) 2.6256 2.3426 2.5022 2.3426
9:00:00 AM
(0800-0900) 5.7790 2.3426 2.6256 2.3426
10:00:00 AM
(0900-1000)
6.5283 2.5022 5.9872 2.5022

11:00:00 AM
(1000-1100)
6.5283 2.5022 6.5283 2.5022

12:00:00 PM
(1100-1200)
6.5283 2.5022 5.9872 2.5022
 ERC Case No. 2016-126 RC
ORDER /27 June 2017
"
Page40f26

l:oo:ooPM
(1200-1300)
6.5283 2.5022 5.9872 2.5022

2:00:00 PM
6.5283 2.5022 6.5283 2.5022
(1300-1400)
3:00:00 PM
6.5283 2.5022 5.9872 2.5022
(1400-1500)
4:00:00 PM
6.5283 2.5022 5.7790 2.5022
(1500-1600)
5:00:00 PM
(1600-1700) 5.9872 2.5022 5.5481 2.5022

6:00:00 PM
(1700-1800) 5.9872 2.5022 5.9872 2.6256

7:00:00 PM
6.5283 5.7790 6.5283 5.5481
(1800-1900)
8:00:00 PM
(1900-2000)
6.5283 5.7790 5.9872 5.5481

9:00:00 PM
(2000-2100)
5.9872 3.2594 5.7790 2.6256

10:00:00 PM
3.2594 2.6256 2.6256 2.5022
(2100-2200)

11:00:00 PM
2.6256 2.5022 2.522 2.3426
(2200-2300)
12:00:00 A1VI
2.5022 2.3426 2.3426 2.3426
(2300-2400)
*Holidays shall refer to those that are celebrated nationwide

a. Franchise and Benefits to Host

Communities (FBHC) ~ PhPo.0245/kWh

b. Automatic Cost Adjustments (ACA) as

posted in the website of the Power Sector
Assets and Liabilities Management
Corporation (PSALM)

c. Wholesale Electricity Spot Market (WESM)

Charges

d. Replacement Power Cost, if any

In the event that the NPC- TOU rates are no

longer in effect or abolished, SMEC and
NUVELCO will renegotiate a new rate for
load following capacity;

The Buyer shall maintain a minimum hourly

nomination of at least thirty-five percent (35%) of the
Contract Capacity for the duration of the said PSC.
The Contract Capacity shall be subject to a separate
Nomination Protocol;

6.2 Contract Term. The PSC shall take effect between

the Parties on the date of signing (Execution Date)
and shall remain effective until 25 December 2026;
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 50f26

6.3 Capacity and Energy Fees. Under the PSC,

NUVELCO shall pay the following Capacity and
Energy Fees to SMEC:

Period Covered Capacity Fees (PhPjkW-month) Energy Fees (PhP /kWh)

Variable Variable
Dollar Local Fixed Fuel
Contract Year 2017 O&M O&M
Portion Portion O&M Rate (Local)
(Dollar)
From To At A2 B C Dt D2
26-Dec~16 . 25-Jao-17 455.2793 1,067.9536 106.3830 2.0342 0.0626 0.0083
26-Jao-17 . 2s-Feb-17 456.1276 1,069.5023 106.3830 2.0342 0.0626 0,0083
26-Feb-17 . 25-Mar-17 456.9787 1,53.7243 106.3830 2.0342 0.0626 0.0083
26-Mar-17 . 2s-Apr-17 457.8327 1,072,6143 106.3830 2.0342 0.0626 0,0083
26-Apr-17 . 25-MaY-17 458.6896 1,068.4008 106.3830 2.0342 0.0626 0,0083
26-MaY-17 . 25-Jun-17 459.5492 1,075.7462 106.3830 2.0342 0.0626 0.0083
26-Jun 17 . 2S-Jul-17 460-4117 1,071.5435 106.3830 2.0342 0.0626 0.0083
26-Jul-17 . 25-Aug-17 461.2772 1,078.8999 106.3830 2.0342 0.0626 0.0083
26-Aug~17 . 25-Sep-17 462.1455 1,080-4834 106.3830 2.0342 0.0626 0.0083
26-Sep-17 . 25-0ct-17 463.0167 1,076.2978 106.3830 2.0342 0.0626 0.0083
26-0ct-17 . 25-Nov-17 463.8909 1,083.6691 106.3830 2.0342 0.0626 0.0083
26-Nov-17 . 25-Dec-17 464.7678 1,079-4927 106.3830 2.0342 0.0626 0.0083
Contract Year 2018
26-DeC-17 . 25-Jan-18 465.6477 1,086.6966 106.3830 2.0297 0.0626 0.0083
26-Jan-18 . 25-Feb-18 466.5306 1,088.3073 106.3830 2.0297 0.0626 0.0083
26~Feb-18 . 25-Mar-18 467-4146 1,072.6112 106.3830 2.0297 0.0626 0.0083
26-Mar-18 . 25-Apr 18 468.3052 1,091.5478 106.3830 2.0297 0.0626 0.0083
26-Apr-18 . 25-MaY-18 469.1968 1,087-4035 106.3830 2.0297 0.0626 0.0083
26-May-18 . 25-Jun-18 470.0916 1,094.8071 106.3830 2.0297 0.0626 0.0083
26-Jun-18 . 25-Jul~18 470.9893 1,090.6738 106.3830 2.0297 0.0626 0.0083
26-Jul-18 . 25-Aug-18 471.8899 1,098.0891 106.3830 2.0297 0.0626 0.0083
26-Aug-18 . 25 Sep 18 472.7936 1,099.7379 106.3830 2.0297 0.0626 0.0083
26-Sep-18 . 25-0cH8 473.7003 1,095.6221 106.3830 2.0297 0.0626 0.0083
26 Oct-18 . 25-Nov-18 474.6100 1,103.0531 106.3830 2.0297 0.0626 0.0083
26-Nov-18 . 25-Dec-18 475.5227 1,098.9466 106.3830 2.0297 0.0626 0.0083
Contract Year 2019
26-Dec-18 . 25-Jan-19 476-4385 1,107.1950 106.3830 2.0500 0.0626 0.0083
26-Jan-19 . 25-Feb-19 477.3574 1,108.8721 106.3830 2.0500 0.0626 0.0083
26-Feb-19 . 25-Mar-19 478.2793 1,093.1632 106.3830 2.0500 0.0626 0.0083
26-Mar-19 . 25-Apr-19 479.2042 1,112.2423 106.3830 2.0500 0.0626 0.0083
26-Apr-19 . 25-MaY-19 480.1323 1,108.1386 106.3830 2.0500 0.0626 0.0083
26-MaY-19 . 25-Jun-19 481.0634 1,115.6358 106.3830 2.0500 0.0626 0.0083
26-Jun-19 . 25-Jul-19 481.9977 1,111.5416 106.3830 2.0500 0.0626 0.0083
26-Jul-19 . 25-Aug-19 482.9351 1,119.0491 106.3830 2.0500 0.0626 0.0083
26-Aug-19 . 25-Sep-19 483.8755 1,120.7677 106.3830 2.0500 0.0626 0.0083
26-Sep-19 . 25-0ct-19 484.8191 1,116.6913 106.3830 2.0500 0.0626 0.0083
26-0ct-19 . 25-Nov-19 485.7659 1,124.2174 106.3830 2.0500 0.0626 0.0083
26-Nov-19 . 25-Dec-19 486.7159 1,120.1524 106.3830 2.0500 0.0626 0.0083
Contract Year 2020
26-Dec~19 . 25-Jan-20 576-4966 1,264.1748 106.3830 2.0060 0.0501 0.0083
26-Jan-20 . 25-Feb-20 577-4529 1,265.9207 106.3830 2.0060 0.0501 0.0083
26-Feb-20 . 25-Mar-20 578-4124 1,256.2175 106.3830 2.0060 0.0501 0.0083
26-Mar-20 . 25-Apr-20 579.3750 1,269-4254 106.3830 2.0060 0.0501 0.0083
26-Apr-20 . 25-MaY-20 580.3409 1,265-4620 106.3830 2.0060 0.0501 0.0083
26-MaY-20 . 25-Jun-20 581.3100 1,272.9562 106.3830 2.0060 0.0501 0.0083
26-Jun-20 . 25-Jul-20 582.2823 1,269.0060 106.3830 2.0060 0.0501 0.0083
26-Jul-20 - 25-Aug-2o 583.2578 1,276.5133 106.3830 2.0060 0.0501 0.0083
26-Aug-20 . 25-SeP-20 584.2367 1,278.2984 106.3830 2.0060 0.0501 0.0083
26-Sep-20 . 25-0ct-20 585.2187 1,274.3646 106.3830 2.0060 0.0501 0.0083
26-0ct-20 . 25-Nov-2O 586.2041 1,281.8895 106.3830 2.0060 0.0501 0.0083
26-Nov-20 . 25-Dec-20 587.1927 1,277.9672 106.3830 2.0060 0.0501 0.0083
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page60f26

Contract Year 2021

26-Dec-zo -
2s-Jan-21 588.1846 1,286.5482 106.3830 2.0264 0,0501 0,0083
26-Jan-21 - 2s-Feb-21 589.1798 1,288.3621 106.3830 2.0264 0,0501 0,0083
26-Feb-21 - 25-Mar-21 590,1784 1,272.9161 106.3830 2.0264 0.0501 0.0083

26-Mar-Zl - 2s-Apr-21 591.1803 1,292.0147 106.3830 2.0264 0,0501 0.0083

26-Apr-zl - 25-MaY-21 592.1855 1,288.0922 106.3830 2.0264 0,0501 0,0083
26-MaY-21 - 25-Juo-21 593.194 1,295.6887 106.3830 2.0264 0,0501 0,0083
26-JuO-21 - 2S-Jul-21 594.2060 1,291.7798 106.3830 2.0264 0.0501 0.0083

26-Jul-21 - 2S-Aug-21 595.2213 1,299.3881 106.3830 2.0264 0,0501 0,0083

26-Aug-21 - 25-Sep~21 596.2400 1,301.2466 106.3830 2.0264 0.0501 0.0083
26-Sep-21 - 2S-0ct-21 597.2620 1,297.3562 106.3830 2.0264 0.0501 0.0083
26-0ct-21 - 25-Nov-21 598.2876 1,304.9850 106.3830 2.0264 0.0501 0.0083
26-Nov-21 - 25-Dec-21 599.3164 1,301.1064 106.3830 2.0264 0.0501 0.0083
Contract Year 2022
26-Dec-21 - 25-Jan-22 600.3488 1,309.5509 106.3830 2.0468 0.0501 0.0083
26-Jan-22 - 25-Feb-22 601.3846 1,311.4429 106.3830 2.0468 0.0501 0.0083
26-Feb-22 - 25-Mar-22 602.4238 1,295.9911 106.3830 2.0468 0.0501 0.0083
26-Mar-22 - 25-Apr-22 603-4665 1,315.2413 106.3830 2.0468 0.0501 0.0083
26-Apr-22 - 25-May-22 604.5127 1,311.3673 106.3830 2.0468 0.0501 0.0083
26-May-22 - 25-Jun-22 605.5623 1,319.0656 106.3830 2.0468 0.0501 0.0083
26-Jun-22 - 25-Jul-22 606.6155 1,315.2055 106.3830 2.0468 0.0501 0.0083
26-Ju\-22 - 25-Aug-22 607-6722 1,322-9163 106.3830 2.0468 0.0501 0.0083
26-Aug-22 - 25-Sep-22 608.7324 1,324.8508 106.3830 2.0468 0.0501 0.0083
26-Sep-22 - 25-0ct-22 609.7961 1,321.0096 106.3830 2.0468 0.0501 0.0083
26-0ct-22 - 25-Nov-22 610.8633 1,328.7402 106.3830 2.0468 0.0501 0.0083
26-Nov-22 - 25-Dec-22 611.9341 1,324.9129 106.3830 2.0468 0.0501 0.0083
Contract Year 2023 to 2026
26-Dec-22 - 25-Jan-23 613.0086 1,333-4599 106.3830 2.0671 0.0501 0.0083
26-Jan-23 - 25~Feb-23 614.0865 1,335-4272 106.3830 2.0671 0.0501 0.0083
26-Feb-23 - 25-Mar-23 615.1681 1,319.9772 106.3830 2.0671 0.0501 0.0083
26-Mar 23 - 25-Apr-23 616.2533 1,339.3808 106.3830 2.0671 0.0501 0.0083
26-Apr-23 - 25-MaY-23 617.3421 1,335.5588 106.3830 2.0671 0.0501 0.0083
26-May-23 - 25-Jun-23 618-4345 1,343.3614 106.3830 2.0671 0.0501 0.0083
26-Jun-23 - 25-Jul-23 619.5306 1,339.5535 106.3830 2.0671 0.0501 0.0083
26-Jul-23 - 25-Aug-23 620.6303 1,347.3692 106.3830 2.0671 0.0501 0.0083
26-Aug-23 - 25-Sep-23 621.7337 1,349.3808 106.3830 2.0671 0.0501 0.0083
26-Sep-23 - 25-0ct-23 622.8407 1,345.5942 106.3830 2.0671 0.0501 0.0083
26-0ct-23 - 25-Nov-23 623.9515 1,353-4289 106.3830 2.0671 0.0501 0.0083
26-Nov-23 - 25-Dec-23 625.0659 1,349.6546 106.3830 2.0671 0.0501 0.0083

6-4 Adjustment Formula. The Capacity and Energy

Fees are subject to monthly adjustments based on the
following formula and indices (Annex II-A of the
PSC):

Capacity Fees

Monthly Capacity Paymeut (Dollar Portion

converted to PhP):

FOREXc
PhP/kW-mouth x
FOREXB

Where:

FOREXc Average of the daily exchange rate of the

Philippine Peso to the US Dollar, as
posted by the Bangko Sentral ng
ERC Case No. 2016-126 RC
ORDER/27 June 2017
Page70f26

Pilipinas (ESP) for the calendar month

within which the start of the current
Billing Period occurs

FOREXB ~ 41.749 PhP/USD

Monthly Capacity Payment (Local Portion in

PhP):

PhP/kW-Month = No Indexation

Monthly Fixed Operations and Maintenance:

PhP /kW-month X PUlL CPI c

PUlL CPl.

Where:

PHIL CPlc ~ Consumer Price Index (CPI) for All

Income Households in the
Philippines - All Items (2006 =
100), as posted by the Philippine
National Statistics Office (NSO) for
the calendar month within which the
start of the current Billing Period
occurs

PHIL CPIB = '31.40

Energy-Fees

Fuel Rate:

Global Coal Newcastle c FOREXc

PhP/kWh x x~----
Global Coal Newcastle. FOREX.

Where:

Global Coal Newcastle c~ Fuel Cost Index in USD/MT

based on the Global Coal
Newcastle posting
representing the average
index for the calendar
month within which the
start of the current billing
Period occurs

Global Newcastle B ~ 89-4' USD/MT

FOREXc ~ Average of the daily exchange rate ofthe

Philippine Peso to the US Dollar, as
posted by the BSP for the calendar
month within which the start of the
current Billing Period occurs
ERC Case No. 2016-126 RC
ORDER /27 June 2017
PageS of 26

FOREXB = 41.749 PhP(USD

Variable O&M (Dollar Portion):

PhP(kWh x FOREXc x EPIAVE

FOREXB
Where:

FOREXc = Average of the daily exchange rate of the

Philippine Peso to the US Dollar, as
posted by the BSP for the calendar
month within which the start of the
current Billing Period occurs

FOREXB = 41.749 PhP(USD

EPIAVE = Average Export Price Index (EPI) for

US, Japan and Europe

= JIc(JIB) + (USIc (USh) +

(EIc(EIB)](3

Where:

JIc = Japan EPI six (6) months immediately

preceding the adjustment date, taken from
the International Financial Statistics (IFS)
published by the International Monetary
Fund (IMF)

JiB = 93.93

USlc = US EPI six (6) months immediately

preceding the adjustment date, taken from
the IFS published by the IMF

USiB = 91.70

EIc EPI of a European country agreed between

the IPP Counter Party and the IPP and
notified to the Administrator six (6) months
immediately preceding the adjustment date,
taken from the IFS published by the IMF

EiB = 120.57

Variable O&M (Local Portion):

PhP(kWh x RPI c
RPIB

Where:

RPIc = Retail Price Index for All Items (2000=100)

in Metropolitan Manila six (6) months
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page90f26

immediately preceding the adjustment

date, as published by the NSO

RPIB = 75.90

Base Indices:

Particulars September 2012

Global Coal Newcastle Price USD/MT 89-41
Index
FOREXRate PhP/USD 41.749
US CPI (1982-84=100) Fixed 231.407
Philippine CPI (2006=100) Fixed 131.40
January 1994
Japan EPI (2010=100) Fixed 93.93
US EPI (2010=100) Fixed 91.70
Europe EPI (2005=100) Fixed 120.57
Retail Price Index - Metro Fixed 75.90
Manila (2000=100)

6.5 Other Charges. The Buyer shall bear all other costs
and charges occurring after the Delivery Point,
including but not limited to transmission line losses
and site specific loss adjustments, among others;

6.6 Discounts. The Seller provides for both Prompt

Payment Discount (PPD) and Collection Efficiency
Discount (CED);

a) PPD. The Buyer may avail of the PPD equivalent

to three percent (3%) of the total of the Capacity
and Energy Fees components of the current power
bill, provided that:

1, The Buyer has no arrears from previous power

billings including the Security Deposit or any
unpaid charges or penalties including VAT;

ll. The Buyer has submitted aU necessary Bureau

of Internal Revenue (EIR) Tax Certificates for
all taxes withheld;

iii. The Buyer pays the power bill in full on or

before the 10th day of the calendar month
followingthe current Billing Period; and

iv. The Buyer complies with other policies and

procedures as may be required by the Seller,
subject to prior notification by the Seller to the
Buyer;

b) CED. The Buyer sball be entitled to the following

CED:
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 10 Of26

Collection Discount,
Efficiency Levels PhP/kWh
Below 6,% None
66% to 7.",% 0.05

76% to 8,% 0.10

86% to 0'% 0.15

06% and above 0.20

In order for the Buyer to avail of the CED, it must

comply with the following conditions:

1. The Buyer has no outstanding obligations to

the Seller from previous power bills including
VAT; and

n. The Buyer shall submit to the Seller: a duly

accomplished CED Availment Form, a copy of
its Monthly Financial and Statistical Report
(MFSR)/Collection Efficiency Report signed by
its Finance Manager and General Manager,
stamped "received" by the NEA; Audited
Financial Statements (AFS) stamped "received"
by the BIR (to be submitted to the Seller within
three (3) calendar days from receipt of the BIR;
and zero (o)-rated VAT certificates as updated
monthly;

6.7 Outages.

6.7.1 Forced and Scheduled Outages

Allowance. During the term of the ten-(lO)
year PSC, the Seller is allowed Scheduled
Outages not to exceed seven hundred twenty
(720) hours cumulative hours (Scheduled
Outage Allowance) for each Contract Year,
during which times the Seller is not obligated
to deliver any energy from the Plant;

6.7.2 Major Maintenance Outage. The Seller

shall be allowed an additional outage allowance
of seven hundred twenty (720) cumulative
outage hours in case of Major Maintenance of
the Plant which is five (5) years connted from
the most recent Major Maintenance of the
Plant. The Seller is not obligated to deliver any
energy from the Plant during Major
Maintenance Outage. The Seller must notify
the Buyer at least one hundred eighty (180)
days prior to the start of the Major
Maintenance;

6.7.3 During Scheduled Outages within the

Scheduled Outage Allowance, or during Forced
Outages with the Forced Outage Allowance, or
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 11 Of26

during Major Maintenance Outages within the

Major Maintenance hours, the Seller shall not
be required supply the Buyer with Contract
Capacity and Associated Energy. In such
circumstances, the Buyer, at its own cost, shall
source the Replacement Power. The Seller may
also exert its best effort to source Replacement
Power and offer it to the Buyer, and if such
offer if acceptable, the Buyer shall be billed the
cost of such Replacement Power;

6.7-4 If during any Contract Year, the Scheduled

Outages exceed the Scheduled Outage
Allowance, or the Forced Outages exceed the
Forced Outage Allowance, or the Major
Maintenance Outages exceed the Major
Maintenance hours, the Seller shall procure at
its own cost, such supply of Contract Capacity
and Associated Energy from third parties
(including the WESM) to satisfy the relevant
day-ahead nominations of the Buyer. During
such period, the Buyer shall pay the Seller the
Contract Charges; and

6.7.5 Unutilized Scheduled Outage hours, Forced

Outage hours, and Major Maintenance Outages
hours shall not be carried forward to any
subsequent Contract Year;

Rate Impact on NUVELCO's Overall Generation Rate

7. The indicative rate impact on NUVELCO's overall generation

rate with the supply from SMEC is as follows:

Based on January 2016 Billing

Scenario A: Generation Rate and Supply Mix Using Load Fees with SMEC

Supply
Mix
Actual Total
Contracted Actual Based on
Peak Generation
Capacity/ kWh Actual
Demand Cost
Supplier Purchase kWh Generation
Energy (MW) Purchase (PhP) Rate
(MWjkWh) (kWh) (PhP/kWh)
b (%) e
a c f=e/c
d

SMEC 8,986,859 22,660 9,869,136 96-44% 64,663.439.39 6.55

FRENDAI
294,740 2.88% 1,326,328.30 4.50
Smith Bell

NEECO II 19,250 0.19% 171,155.85 8.89

AURELCO 50,465 0-49% 326,759.92 6-47

Total Blended Rate 10,233,591 1.00000 66,487,683.46 6.50

ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 12 Of26

Scenario B: Generation Rate and Supply Mix Using Capacity and Load Fees with SMEC
Supply
Mix Total
Contracted Actual Based on
Actual Generation
Capacity/ Peak Actual
kWh Cost Generation
Supplier Demand kWh
Energy (MW) Purchase Rate
Purchase (PhP)
(MWjkWh) (kWh) (PhPjkWh)
h (%) e
a e f=e/e
d
SMEC 8,986,859 22,660 9,869,136 96044% 57,702,61449 5.85
FRENDAj
Smith Bell 294,740 2.88% 1,326,328.30 4.50
NEECO II 19,250 0.19% 171,155.85 8.89
AURELCO 50,465 0049% 326,75982 6047

Total Blended Rate 10,233,591 59,526,858.56

Computation of Total
Amount

January 2016 Rate AInount

Peak Demand 22,660 1,629.6159 36,927,096.29
kWh Purchase 9,869,136 2.1051 20,775,518.19

57,702,614.49

Based on February 2016 Billing

Scenario A: Generation Rate and Supply Mix Using Load Fees with SMEC
Supply
Mix
Actual Total
Contracted Actual Based on
Peak Generation
Capacity/ kWh Actual Generation
Supplier Demand Cost
Energy Purchase kWh Rate
(MW) (PhP)
(MWjkWh) (kWh) Purchase (PhPjkWh)
h (%) e
a c f=e/c
d
SMEC 9.432,557 22,911 9,708,876 99.08% 60,23,74.11 6.20
FRENDAj
Smith Bell 14,330 0.1.5% 64.484.10 4.5
NEECOII 22.470 0.23% 180,26441 8.02
AURELCO 53,614 0.55% 372,26742 6.94

Total Blended Rate 9,799,290 1.00000 60,847,090,04 6.21

Scenario B: Generation Rate and Supply Mix Using Capacity and Load Fees with SMEC
Supply
Mix
Actual Total
Contracted Based on
Peak Actual kWh Generation
Capacity/ Actual Generation
Supplier Demand Purchase Cost
Energy kWh Rate
(MW) (kWh) Purchase (PhP)
(MWjkWh) (PhPjkWh)
h c (%) e
a f=e/c
d
SMEC 9.432,557 22,911 9,708,876 99.08% 57,829,20242 5.96
FRENDAj
Smith Bell 14,330 0.15% 64,484.10 4.5
NEECOII 22,470 0.23% 180,26441 8.02
AURELCO 53,61.4- 0.55% 372,26742 6.94
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 13 Of26

Total Blended Rate 10,233,591 59,526,858.56 5.82

Computation of Total
Amount

February 2016 Rate Amount

Peak Demand 22,911 1,632.013 37,391,047.55
kWh Purchase 9,708,876 2.1051 20,438,154.87

57,829,202.42

Based on March 2016 Billing

Scenario A: Generation Rate and Supply Mix Using Load Fees with SMEC
Supply
Mix Total
Contracted Actual Based on
Actual Generation
Capacity/ Peak Actual
kWh Cost Generation
Supplier Demand
Energy Purchase kWh Rate
(MW) Purchase (PhP)
(MWjkWh) (kWh) (PhPjkWh)
b (%) e
a e f=e/c
d
SMEC 9,484,615 25,576 10,510,513 97.94% 64,663.439.39 6.15
FRENDAj
Smith Bell 129,973 1.21% 584,879,40 4.50
NEECO II 20,510 0.19% 172,670.38 8,42
AURELCO 70,526 0.66% 411,686.75 5.84

Total Blended Rate 10,731,522 1.00000 65,832,675.92 6.13

Scenario B: Generation Rate and Supply Mix Using Capacity and Load Fees with SMEC
Supply
Mix
Actual Total
Contracted Actual Based on
Peak Generation
Capacity/ kWh Actual Generation
Supplier Demand Cost
Energy Purchase kWh Rate
(MW) Purchase (PhP)
(MWjkWh) (kWh) (PhPjkWh)
h (%) E
a C f~e/c
d
SMEC 9,484,615 25,576 10,510,513 97.94% 63,483,949.04 6.04
FRENDAj
Smith Bell 129,973 1.21% 584,879.40 4.50
NEECOII 20,510 0.19% 172,670.38 8,42
AURELCO 70,526 0.66% 411,686.75 5.84

Total Blended Rate 10,713,522 64,653,185.57 6,02

Computation of Tot a!
AInount

March 2016 Rate Amount

Peak Demand 25,578 1,617.0860 41,358,268.12
kWh Purchase 10,510,513 2.1051 22,125,680.92

63,483,949.04
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 14 Of26

8. Environmental Compliance Certificate (ECC). On 8

November 2004, the Department of Environment and
Natural Resources (DENR) issued an ECC with Reference
No. 9406-003-206 to Pangasinan Electric Corporation
(PEC) for the 1,200 MW Sual Coal-fired Power Project
located at Sitios Bangayao, Buyog and Paa of Barangay
Pangascasan, SuaI, Pangasinan covering 280 hectares land
area;

9. Board of Investments (BOI) Certificate. On 26

January 2011, the Power Plant Project was registered with
the BOI which issued Certificate of Registration No. 2011-
024;

10. Certificate of Compliance (COC). On 20 April 2009, the

Honorable Commission issued a COC registered under the
name of Team Sual for its 1,294 MW Coal-Fired Thermal
Power Plant. The said coe was a renewal of the previously
issued COC on 17 December 2003 under the name of the
power plant's former owner, Mirant Sual Corporation.

Compliance with the Pre.filing Requirements

11. Copies of the foregoing documents and/or information are

attached to the Joint Application as annexes and made
integral parts hereof:

Annex Documents/Information
A SMEC's Articles of Incorporation
B SMEC's Certificate of Registration issued by the
Securities and Exchange Commission (SEC)
C SMEC's Latest General Information Sheet (GIS)
D SMEC's Certificate of Registration with the BO!
E ECC issued by the DENR for the SuaI Coal-Fired
Thermal Power Plant
F PSC entered into by and between NUVELCO and
SMEC
Gand Details of the PSC:
Series
a. Executive Summary
b. Sources of Funds/Financial Plans
Debt/Equity Ratio
Project Cost
Computation of Return on Investment
(ROI)/Weighted Average Cost of Capital
(WACC)
Certification from the Bank/Lending
Institution specifying the principal
amortization, term and interest during
the cooperation period of the loan
agreement
ERC Case No. 2016-126 RC
ORDER /27 June 2017
PagelS Of26

c. Purchased Power Rate

Breakdovm of the base prices
Sample Computation of Power Rates
with the supporting documents on the
assumptions taken
Rate Impact Study/Simulation
Statement of impact on the overall rates
of NUVELCO once the contract is
approved
Basis/Rationale of indexation and level
of indexation
d. Cash Flow
Initial Costs
Breakdown of Operating and
Maintenance expenses
Minimum Energy Off-take (MEOT)
H Details of the Power Rate Calculations and
Financial Model (Confidential)
1,1-1 Contracts for the Supply, Construction and
and 1-2 Supervision for the Power Plant (Confidential)
J Details of the Fuel Procurement Process
K Transmission Service Agreement (TSA) between
the National Grid Corporation of the Philippines
(NGCP) and NUVELCO
Land Acknowledgment receipts by the Sangguniang
Series Pambayan of Dupax del Sur and the
Sangguniang Panlalawigan of Nueva Vizcaya,
of copies of the Joint Application (including
annexes)

12. Further, in compliance with Article VI, Sections 1 and 2 of

the Honorable Commission's Guidelines for the Recovery of
Costs for the Generation Component of the Distribution
Utilities' (DU) Rates, copies of the foregoing are, likewise,
attached to the Joint Application as annexes and made
integral parts hereof:

Annex Documents/Information
N Relevant technical and economic characteristics
of the generation capacity, installed capacity,
mode of operation, and dependable capacity
0 Costs analysis of the proposed pncmg
provisions of the PSC
Pand Details of the Competitive Selection Process
Series (CSP) undertaken by NUVELCO leading to the
selection of SMEC as its supplier, including
invitations to participate and submit proposals,
Terms of Reference (TOR), proposals and/or
tender offers received by NUVELCO,
NUVELCO's Special Bids and Awards
Committee (SBAC) Evaluation Report;
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 16 Of26

NUVELCO's Board Resolution confirming the

said SBAC Evaluation Report, and the Notice of
Award to SMEC
Qand Details of the interconnection facility of the Sual
Series Coal-Fired Thermal Power Plant
R NUVELCO's latest Distribution Development
Plan (DDP) and Load Forecast Projections
S Demand Side Management (DSM) Program that
conld be implemented by NUVELCO if approved
by the Honorable Commission
T SMEC's latest Andited Financial Statements
(AFS), Balance Sheet, Income Statement, and
Statement of Cash Flows
T-l Bank Certification of Long-term Loans,
including Schedule of Original Loan (principal
amount, interest payable and term of the loan)
and Updated Balances (principal amount,
interest payable and penalties, if any and
remaining term of the loan)
T-2 Operating Expenses for the Power Plant and
General and Administrative Expense
T-3 Certification from the engine manufacturer or
SMEC of the net heat rate in liters per kWh
T-4 Simulation on the number of operating units
necessary to meet the MEOT and/or additional
energy/demand requirements ofNUVELCO
T-5 Potential Cost (absolute amounts and
PhP jkWh) of Ancillary Services as and when
SMEC or NUVELCO is connected to the main
grid
U Judicial Affidavit in support of the motion for
provisional authority

13. Furthermore, the Joint Application is consistent and in

accordance with the first (1") and fifth (5'h) "Whereas
clauses" of the Department of Energy (DOE) Circnlar No.
2003-12-11 which are quoted hereunder:

"WHEREAS, Section 2 of Republic Act No.

9136, also known as the Electric Power
Industry Reform Act of 2001 or EPIRA,
declared as a policy of the State, among others,
[to ensure the quality. reliability. security and
affordability of the snpply of electric power;"
(first "whereas clause", Department of Energy
Circular No. 2003-12-11. Underscoring
supplied.)

"WHEREAS, pursuant to Section 23 of EPlRA,

all distribution utilities, as defined in the law,
SHALL HAVE THE OBLIGATION TO SUPPLY
ELECTRICITY IN THE LEAST COST
ERC Case No. 2016-126 RC
ORDER/27 June 2017
Page 170f26

MANNER TO ITS CAPTIVE MARKET subject

to the collection of retail rate duly approved by
the Energy Regulatory Commission;" (fifth
"whereas clause", ibid. Underscoring
supplied.]

14. The Joint Application is, likewise, consistent with Section 1

of the same Department Circular which declares as State
policy, that:

"All distribution utilities must henceforth take

cognizance and assume full responsibility to
forecast, assure and contract for the supply of
electric power in the respective franchise areas
to meet their obligations as a distribution
utility." (Underscoring supplied.)

15. By way of emphasis, Resolution No. 21, Series of 2005 of the

Honorable Commission dated 19 October 2005 had directed
all Distribution Utilities (DUs) "to enter into future bilateral
power supply contract with power producers to be subjected
to a review by the Commission." (Underscoring supplied.)

16. The PSC with SMEC was made to ensure the continuous
supply of power to NUVELCO and due to the former's
competitive pricing structure and other favorable terms of its
contract, which will redound to the benefit of the latter and
its end-consumers in terms of reliable and affordable power
supply;

Allegations in Support of the Motion for Provisional

Authority

17. NUVELCO and SMEC re-plead the foregoing allegations in

support of their prayer for the immediate issuance of
provisional authority, anchored on the following grounds:

17.1 Considering the current limitations on the available

capacity in the Luzon Grid, NUVELCO must source
power from SMEC immediately to avoid power outage
in its franchise area. As such, it was constrained to
implement the PSC under the belief that it will
redound to the benefit of its member-consumers
considering that the rates therein are lower than the
Commission-approved National Power Corporation -
Time-of-Use (NPC-TOU) rates;

17.2 Per its Actual/Forecasted Load Data and DDP,

NUVELCO is undergoing a significant increase and is
expecting a further increase in its energy
requirements due to a growth in the total demand of
its member-consumers; and

17.3 Without the supply of SMEC, NUVELCO will be

exposed to the unpredictable and expectedly higher
prices in the WESM or worse, be unable to supply the
ERC Case No. 2016-126 RC
ORDER /27 June 2017
PagelS Of26

required energy to its franchise area resulting in total

blackout;

18. In the interest of the public, there is a necessity for the

immediate and provisional approval of the Joint Application
in order that there will be no undue disruption in the power
supply to NUVELCO's member-consumers;

19. It bears stressing that pursuant to Rule 14, Section 3 of the

Honorable Commission's Rules of Practice and Procedure,
the Honorable Commission may issue a provisional authority
pending approval of the Joint Application, to wit:

(fSection 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 provided.)

20. To emphasize the necessity of the foregoing allegations, a

judicial affidavit in support of the motion for provisional
authority is attached to the Joint Application as Annex "U"
and made an integral part hereof;

Allegations in Support of the Confidential Treatment of

Annexes "H", and "I", "1-1", and "1-2"

21. Rule 4 of the Honorable Commission's Rules of Practice and

Procedure provides that NUVELCO and SMEC may reqnest
that information may not be disclosed;

22. SMEC prays for the confidential treatment of the

information contained in the following annexes, and not
disclosed except to the officers and staff of the Honorable
Commission and its staff:

Annex Documents and/or Information

H Details of the Power Rate Calculations and
Financial Model (Confidential)
1,1.1 and Contracts for the Supply, Construction and
1-2 Supervision for the Power Plant
(Confidential)

23. Annex "H" contains the details of SMEC's power rate

calculations and financial model as well as the manner by
which these were derived. These information are proprietary
in nature and should be protected as trade secrets as
contemplated by law and jurisprudence. In the case of Air
ERC Case No. 2016-126 RC
ORDER /23 June 2017
Page 19 of 26

Philippines Corporation vs. Pennswell, Inc'!, the Supreme

Court defined a trade secret, as follows:

"A trade secret may consist of any formula,

pattern, device, or compilation of information
that: Cd is used in one's business; and
(2) gives the employer an opportunity to
obtain an advantage over competitors
who do not possess the information.
Generally, a trade secret is a process or device
intended for continuous use in the operation of
the business, for example, a machine or
formula, but can be a price list or
catalogue or specialized customer list. It
is indubitable that trade secrets constitute
proprietary rights. The inventor, discoverer, or
possessor of a trade secret or similar
innovation has rights therein which may be
treated as property, and ordinarily an
injunction will be granted to prevent the
disclosure of the trade secret by one who
obtained the information "in confidence" or
through a "confidential relationship".
American jurisprudence has utilized the
following factors to determine if an
information is a trade secret, to wit:

(1) the extent to which the information is

known outside of the employer's
business;

(2) the extent to which the information is

known by employees and others
involved in the business;

(3) the extent of measures taken by the

employer to guard the secrecy of the
information;

(4)the value of the information to the

employer and to competitors;

(5) the amount of effort or money expended

by the company in developing the
information; and

(6) the extent to which the information

could be easily or readily obtained
through an independent source."
(citations omitted, emphasis supplied]

24. The interest of the consuming public is sufficiently protected

by the review and evaluation of the rates under the PSC by
the Honorable Commission, without the need to disclose the

G.R. No. 172835, December 13, 2007

ERC Case No. 2016-126 RC
ORDER /23 June 2017
Page 20 Of26

contents of Annex "H". The reasonableness and

transparency of the prices of electricity is to be assured by
the Honorable Commission through its own review and
verification of SMEC's operating costs and expenses;

25. More importantly, SMEC's competitors, should they obtain

the information in Annex "H", will gain undue advantage
thereon and have the opportunity to use the same in their
operations. The negotiating power of SMEC with parties it
plans to contract with or who it is currently doing business
with, will clearly be thwarted if it is compelled to disclose
such information;

26. Further, Annexes "I", "1-1", and "1-2" pertain to the

Supply, Construction, and Supervision Contracts,
respectively, for the Power Plant. These contracts have
counter-parties who are not parties to the Joint Application.
They contain highly technical designs, dravvings and other
information which are the intellectual property and trade
secrets of the counter-parties, and therefore should not be
disclosed to the public. NUVELCO and SMEC, likewise, pray
for the confidential treatment of Annexes "I", "1-1", and
"1-2", under the same premises above; and

27. Accordiugly, NUVELCO and SMEC submit one (1) copy each
of Annexes "H" , "I" " "1-1" and "1-2" , in a sealed
envelope, vvith the said envelope and each page of the
documents and/or information stamped vvith the word
"Confidential".

Prayer

WHEREFORE, the foregoing premises considered, the

Joint Applicants Nueva Vizcaya Electric Cooperative, Incorporated
(NUVELCO) and San Miguel Energy Corporation (SMEC) most
respectfully pray that the Honorable Commission:

1. Pending hearing, ISSUE an Order provisionally

approving the Joint Application and the PSC thereby
authorizing NUVELCO and SMEC to immediately
implement the rate structures therein;

2. ISSUE an Order treating Annexes "H", "I", "1-1",

and "1-2", and all the information contained therein
as confidential, directing their non-disclosure to
persons other than the officers and staff of the
Honorable Commission, continuously protecting
the said information from public disclosure by
maintaining the same separate and apart from
the records of the case, and ensuring that these
are not divulged to unauthorized persons, pursuant to
Rule 4 of its Rules of Practice and Procedure; and

3. After due notice and hearing, ISSUE a Decision

approving the Joint Application and the PSC between
NUVELCO and SMEC, and authorizing NUVELCO to
ERC Case No. 2016-126 RC
ORDER /23 June 2017
Page 21 Of26

charge and collect the fees therein from its memher-

consumers.

Other reliefs just and equitable under the premises are,

likewise, prayed for.

On 6 September 2016, the Commission issued an Order

dismissing the application without prejudice, for non-compliance
with the requirements on Verification and Certification on Non-
Forum Shopping as provided under the Commission's Rules of
Practice and Procedure, the Rules of Court, and existing
jurisprudence.

On 29 September 2016, NUVELCO and SMEC filed their

Motion for Reconsideration dated 28 September 2016, praying for the
Commission to 1) admit joint applicant's Verification and
Certification on Non-forum Shopping and to set aside the Order
dated 6 September 2016 which dismissed the joint application; and 2)
schedule the joint application for the determination of compliance
with the jurisdictional requirements, expository presentation, pre-
trial conference, and presentation of evidence, inclusive of the
issuance of the corresponding Notice of Public Hearing, for a hearing
to be held at the soonest possible time to expedite the resolution or
approval and the consequent implementation of the joint applicants'
PSC.

On 21 December 2016, the Commission issued an Order

granting the applicants' Motion for Reconsideration. In the same
Order, NUVELCO and SMEC were directed to submit a written
Manifestation to explain their failure to attach a valid Verification and
Certification against Forum Shopping. Likewise, applicants
NUVELCO and SMEC were directed to submit a valid Verification
and Certification against Forum Shopping executed by their duly
authorized representatives within 7 days from receipt of the Order.
Finally, the Commission imposed the penalty of Php 100,000.00 on
Applicants pursuant to Resolution NO.3, Series of 2009, for the
violation of Section 4, Rule 3 of the Commission's 2006 Rules of
Practice and Procedure.

On 13 February 2017, NUVELCO and SMEC filed their

Manifestation and Compliance (On the Order dated 21" December
2016) dated 10 February 2017. The Applicants submitted the
Verification/Certifications of Narciso S. Salunat, General Manager of
NUVELCO,and Elenita D. Go, General Manager of SMEC.
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 22 Of26

On 5 May 2017, NUVELCO and SMEC filed a letter dated 3 May

2017, informing the Commission of the applicants' compliance with
the directives in the Order dated 21 December 2016, through 1)
Manifestation and Compliance dated 10 February 2017 and 2)
payment ofthe prescribed penalty on 3 May 2017, as evidenced by an
attached official receipt.

Finding the said Joint Application to be sufficient in form and

in substance with the required fees having been paid, the same is
hereby set for determination of compliance with the jurisdictional
requirements, expository presentation, Pre-Trial Conference, and
presentation of evidence on 10 October 2017 (Tuesday) at ten
o'clock in the morning (10:00 A.M.) at the NUVELCO Office,
Barangay Gabut, Dupax del Sur, Nueva Vizcaya.

Accordingly, NlNELCO and SMEC are hereby directed to:

1) Cause the publication of the attached Notice of Public

Hearing in two (2) newspapers of nationwide circulation in
the Philippines at their own expense, twice (2X) within two
(2) successive weeks, the dates of publication not being less
than seven (7) days apart and the date of the last
publication to be made not later than ten (10) days before
the date of the scheduled initial hearing;

2) Furnish with copies of this Order and the attached Notice

of Public Hearing the Offices of the Provincial Governors,
the City and Municipal Mayors, and the Local Government
Unit (LGU) legislative bodies within the affected franchise
area for the appropriate posting thereof on their respective
bulletin boards;

3) Inform of the filing of the Joint Application, its reasons

therefor, and of the scheduled hearing thereon, the
consumers within the affected franchise area, by any other
means available and appropriate;

4) Furnish with copies of this Order and the attached Notice

of Public Hearing, the Office of the Solicitor General (OSG),
the Commission on Audit (COA), and the Committees on
Energy of both Houses of Congress. They are hereby
requested, if they so desire to send their duly authorized
representatives at the scheduled hearing; and
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 23 Of26

5) Furnish with copies of the Joint Application and its

attachments all those making requests therefor, subject to
reimbursement of reasonable photocopying costs.

On the date of the scheduled hearing, Applicants must submit

to the Commission its written compliance with the aforementioned
jurisdictional requirements attaching therewith, methodically
arranged and duly marked the following:

1) The evidence of publication of the attached Notice of Public

Hearing consisting of affidavits of the Editors or Business
Managers of the newspapers where the said Notice of
Public Hearing were published, and the complete issues of
the said newspapers;

2) The evidence of actual posting of this Order and the

attached Notice of Public Hearing consisting of
certifications issued to that effect, signed by the
aforementioned Governors, Mayors, and LGU legislative
bodies or their duly authorized representatives, bearing the
seals of their offices;

3) The evidence of other means employed by the Applicants to

inform of the filing of the Joint Application, its reasons
therefor, and of the scheduled hearing thereon, the
consumers within the affected franchise area;

4) The evidence of receipt of copies of this Order and the

attached Notice of Public Hearing by the Office of the
Solicitor General (OSG), the Commission on Audit (COA),
and the Committees on Energy of both Houses of Congress;

5) The evidence of receipt of copies of the Joint Application

and its attachments by all those making requests therefor,
if any; and

6) Such other proofs of compliance with the requirements of

the Commission.

Applicants NUVELCO and SMEC and all interested parties are

also required to submit, at least five (5) days before the date of initial
hearing and Pre-Trial Conference, their respective Pre-Trial Briefs
containing, among others:

1) A summary of admitted facts and proposed stipulation of

facts;
ERC Case No. 2016-126 RC
ORDER /27 June 2017
Page 240f26

2) The issues to be tried or resolved;

3) The documents or exhibits to be presented, stating the

purposes and proposed markings therefore; and

4) The number and names ofthe witnesses, with their written

testimonies in a Judicial Affidavit form attached to the Pre-
trial Brief.

Failure of NUVELCO and SMEC to comply with the above

requirements within the prescribed period shall be a ground for
cancellation ofthe scheduled hearing, and the resetting of which shall
be six (6) months from the said date of cancellation.

NUVELCO and SMEC must also be prepared to make an

expository presentation of the instant Joint Application, aided by
whatever communication medium they may deem appropriate for the
purpose, in order to put in plain words and explain, for the benefit of
the consumers and other concerned parties, what the Joint
Application is all about and the reasons and justifications being cited
in support thereof.

SO ORDERED.

Pasig City, 27 June 2017.

FORAND BYAUTHORITY
OFT COMMISSION:

COMM. ALFREDO J. NON

Officer-in-Charge of ERC
 ERC Case No. 2016-126 RC
ORDER /27 June 2017
"
Page 25 Of26
Copy furnished:

1. Atty. Edmon B. Evangelista

Counselfor Applicant NUVELCO
Suite 707, 7th Floor, OMM-CITRA Building,
San Miguel Avenue, Ortigas Center, Pasig City 1605

2. Atty. Jupiter M. Cabaguio and Atty. Avelino G. Cedo III

Counsel for Applicant SMEC
23rd Floor, San Miguel Properties Centre,
NO.7 St. Francis Street, Mandaluyong City

3. Nueva Vizcaya Electric Cooperative, Incorporated (NUVELCO)

Barangay Gabut, Dupax del Sur, Nueva Vizcaya

4. San Miguel Energy Corporation (SMEC)

2nd Floor, 808 Building,
MERALCO Avenue corner Gen. Lim Street,
Barangay San Antonio, Pasig City

5. Office of the Solicitor General

134 Amorsolo Street, Legaspi Village
Makati City, Metro Manila

6. Commission on Audit
Commonwealth Avenue
Quezon City, Metro Manila

7. Senate Committee on Energy

GSIS Building, Roxas Boulevard
Pasay City, Metro Manila

8. House Committee on Energy

Batasan Hills
Quezon City, Metro Manila

9. Office of the Municipal Mayor

Municipality of Ambaguio, Nueva Vizcaya

10. Office of the LGU Legislative Body

Municipality of Ambaguio, Nueva Vizcaya

11. Office of the Municipal Mayor

Municipality of Aritao, Nueva Vizcaya

12. Office of the LCU Legislative Body

Municipality of Aritao, Nueva Vizcaya

13. Office of the Municipal Mayor

Municipality of Bagabag, Nueva Vizcaya

14. Office of the LCU Legislative Body

Municipality of Bagabag, Nueva Vizcaya

15. Office of the Municipal Mayor

Municipality of Bambang, Nueva Vizcaya

16. Office of the LGU Legislative Body

Municipality of Bambang, Nueva Vizcaya

17. Office ofthe Municipal Mayor

Municipality of Bayombong, Nueva Vizcaya

18. Office of the LGU Legislative Body

Municipality of Bayombong, Nueva Vizcaya
.. ERC Case No. 2016-126 RC
ORDER /27 June 2017
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19. Office ofthe Municipal Mayor
Municipality of Diadi, Nueva Vizcaya

20. Office of the LGU Legislative Body

Municipality of Diadi, Nueva Vizcaya

21. Office of the Municipal Mayor

Municipality of Dupax del Norte, Nueva Vizcaya

22. Office of the LGU Legislative Body

Municipality of Dupax del Norte, Nueva Vizcaya

23. Office of the Municipal Mayor

Municipality of Dupax del Sur, Nueva Vizcaya

24. Office of the LGU Legislative Body

Municipality of Dupax del Sur, Nueva Vizcaya

25. Office of the Municipal Mayor

Municipality of Kasibu, Nueva Vizcaya

26. Office of the LGU Legislative Body

Municipality of Kasibu, Nueva Vizcaya

27. Office of the Municipal Mayor

Municipality of Kayapa, Nueva Vizcaya

28. Office of the LGU Legislative Body

Municipality of Kayapa, Nueva Vizcaya

29. Office of the Municipal Mayor

Municipality of Quezon, Nueva Vizcaya

30. Office of the LGU Legislative Body

Municipality of Quezon, Nueva Vizcaya

31. Office of the Municipal Mayor

Municipality of Solano, Nueva Vizcaya

32. Office of the LGU Legislative Body

Municipality of Solano, Nueva Vizcaya

33. Office ofthe Municipal Mayor

Municipality of Sta. Fe, Nueva Vizcaya

34. Office of the LGU Legislative Body

Municipality of Sta. Fe, Nueva Vizcaya

35. Office of the Municipal Mayor

Municipality of Villaverde, Nueva Vizcaya

36. Office of the LGU Legislative Body

Municipality of Villaverde, Nueva Vizcaya

37. Office of the Provincial Governor

Province of Nueva Vizcaya

38. Office of the LGU Legislative Body

Province of Nueva Vizcaya

39. PSATWG2
17th floor, Pacific Center,
San Miguel Avenue, Pasig City