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ORIGINAL
Republic of the Philippines
ENERGY REGULATORY COMMISSION
r ENERGY REGUYCOSS1ON
Y jD
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20 CK! 1 /RECORD$
PROJECTS, WITH PRAYER FOR
PROVISIONAL AUTHORITY,
x -------------------------------
- 0
APPLICATION
Page 11
Application by its General Manager MS. ELENITA D. GO. A copy of the
Secretary's Certificate is attached as Annex "B". APEC is the
Concessionaire for the operations and maintenance of the distribution
business of ALECO, under a Concession Agreement signed and executed
by and between SMC Global Power Holdings Corp. ("SMC Global") and
ALECO on October 29, 2013. Effective January 02, 2014 SMC Global
assigned all its rights and obligations under the Concession Agreement to
APEC. APEC thereafter formally assumed the operations and
management of the ALECO Franchise Area on February 26, 2014.
is A. NETWORK PROJECTS
A.1. Substation
Page 12
A.2 Distribution Lines
Project
Project Description Project Cost
Type
Installation of line recloser at Brgy. Naga, Tiwi,
12 Reliability 477,393
Albay
Installation of line recloser at Brgy. Salvacion, Sto.
13 Reliability 559,805
Domingo, Albay
Installation of line recloser at Brgy. San Vicente,
14 Reliability 628,815
Sto. Domingo, Albay
Installation of line recloser at Brgy. Bantayan,
15 Reliability 477,393
Tabaco City
16 Installation of line recloser at Taysan, Legazpi City Reliability 477,393
Installation of line recloser at Cabacongan,
17 Reliability 477,393
Manito, Albay
Installation of line recloser at Brgy. Salvacion,
18 Reliability 840,500
Daraga, Albay
Installation of line recloser at Brgy. Baligang,
19 Reliability 463,488
Camalig, Albay
Installation of line recloser at Brgy. San Joaquin,
20 Reliability 648,500
Legazpi City
Installation of line recloser at Brgy. Buyuan,
21 Reliability 477,393
Legazpi City
Installation of line recloser at Brgy. Quitago,
22 Reliability 463,488
Guinobatan, Albay
Installation of line recloser at Brgy. Pistola, Oas,
23 Reliability 477,393
Albay
Installation of line recloser at Brgy. Palpas, Ligao
24 Reliability 648,500
City
.
Installation of line recloser at Brgy. Bonbon,
25 Reliability 667,955
Libon, Albay
Installation of line recloser at Brgy. Sugcad,
26 Reliability 477,393
Polangui, Albay
Mitigation of Power Failure through Vegetation
27 Reliability 8,333,148
Management
Power
28 Installation of Line Capacitors 4,269,906
Quality
Uprating of Primary Line - Sta. Misericordia
29 Feeder 1 & 2: 4/0 & 1/0 ACSR to 2 Double Circuit Capacity 15,226,073
333 6ACSR
Uprating of Primary Line - Ligao Feeder 2: #3/0
30 Capacity 10,716,674
ACSR to Double Circuit 333.6 ACSR
Uprating of Primary Line - Polangul Feeder 1:
31 Capacity 10,199,067
#3/0 ACSR to Duble Circuit 333.6 ACSR
Uprating of Primary Line - Polangui Feeder 2:
32 Capacity 10,294,954
#3/0 ACSR to Double Circuit 333.6 ACSR
Uprating of Primary Line - Bitano Feeder 2: #4/0
Capacity 5,064,550
ACSR to Double Circuit 333.6 ACSR
Page 13
Uprating of Primary Line Bitano Feeder 4: #4/0
-
Capacity 14,695,571
ACSR to Double Circuit 333.6 ACSR
Uprating of Primary Line Tabaco Feeder 3: #4/0
-
Capacity 21,001,033
ACSR to Double Circuit 333.6 ACSR
Uprating of Primary Line Washington Feeder 1:
-
36 Capacity 2,676,592
#4/0 ACSR to Double Circuit 333.6 ACSR
Uprating of Primary Line Washington Feeder 2:
-
Capacity 7,708,378
#4/0 ACSR to Double Circuit 333.6 ACSR
Uprating of Primary Line Washington Feeder 3:
-
38 Capacity 7,402,754
#4/0 ACSR to Double Circuit 333.6 ACSR
Construction of 2 Double Circuit Line 336.4 ACSR
39 for the proposed new location of Tabaco Capacity 9,940,313
substation
Conversion of Jovellar line from Single Phase to Power
40 13,421,840
Three Phase Line, #2/0 ACSR Quality
Conversion of Manito Line Single Phase Line to Power
41 39,618,220
Three Phase Line #3/0 ACSR Quality
Installation of AVR at Brgys. Allang and Malama Power
42 7,380,000
at Ligao City Quality
.
Power
43 Installation of AVR at Brgy. Burabod, Libon, Albay 3,690,000
Quality
Installation of AVR at Brgys. Taysan and Imalnod Power
3,690,000
of Legazpi City and Cabacongan, Manito, Albay Quality
Installation of AVR at Brgy. Quibongbongan, Power
3,690,000
Guinobatan, Albay Quality T__
Sub-total (Distribution Lines) 207,281,875
B. NON-NETWORK PROJECTS
Page 14
Non-
52 Information Communication Equipment 19,152,990
Network
Non-
53 Office Furniture & Equipment 9,275,302
Network
Non-
54 Construction of Meter Lab - Legazpi Branch 630,000
Network
Construction of Multi-purpose Building at Non-
3,840,000
Ligao Network
Construction of TSD Building, Meter Lab and Non-
56 4,800,000
Transformer Testing Area (Ligao) Network
Construction of Multi-purpose Building Non-
57 20,350,000
(Legazpi) Network
Construction of TSD and Warehouse Building Non-
6,760,000
(Matagbac, Tabaco) Network
Construction of Warehouse (Legazpi Br. Non-
4,320,000
Office) Network
Construction of Payment Center and Non-
60 4,800,000
Frontline Services at Ligao Network
Non-
61 Acquisition of Vehicles and Boom Truck 66,391,950
Network
. Non-
Acquisition of Software for Technical Analysis
62 2,883,600
and Database Creation Network
Enterprise Asset Management for asset
Non-
63 lifecycle and maintenance management 30,000,000
Network
software
Replacement of APEC Legacy/Defective PABX
Non-
64 Communication System with iPBX 1,200,000
Network
Communication System
Acquisition of Integrated Accounting, Non-
65 4,500,000
Warehousing and Collection system Network
Acquisition of billing mobile invoice printer Non-
66 4,100,000
and mobile device Network
Non-
67 Acquisition of Tools and Equipment 13,760,196
Network
Customer Mapping and Database Non-
13,732,000
Development Network
[Sub-total (Non-Network Projects) 213,675,057
C. FORCE MAJEURE
D. EMERGENCY
Project
Project Description Project Cost
Type
Replacement of Busted 20 MVA Wagner
70 Capacity 20,603,982
Power Transformer in Bitano substation
Page 1 5
Replacement of Busted 5 MVA IEEC Power
71 Capacity 10,500,000
Transformer in Washington Substation
SUMMARY OF PROJECTS
Category 2014 2015 2016 2017 2018 2019 2020 TOTAL COST
Substation
10,331,675 147,945,535 - 236,353,131 - - 394,630,341
Distributio
n Line - - 3,624,281 160,349,374 43,308,220 - 207,281,875
Other
201,637,80
Network 86,895,417 67,548,989 61,002,969 203,115,528 211,164,838 195,282,844 1,026,648,387
3
Non-
Network 1 825,080 4,169,082 2,883,600 95,644,086 77,815,000 29,159,,190 1 210,496,038
Force
Majeure - - - - - - - -
Emergency
31,103,982 - - - - - 31,103,982
129,156,15 201,637,80
Total 219,663,606 67,510,850 695,462,119 332,288,058 224,442,034 1,870,160,623
4 3
7. The above CAPEX projects are implemented over a period from 2014
to 2020, and are intended to improve the safety and reliability of the
power system, power quality and system efficiency. The details and
justifications for each of the proposed CAPEX projects are discussed in
Annex "C" and its supporting documents.
10. The total cost of the project is PhP 1,870,160,623.00 The project will
be initially funded through advances from APEC's parent company,
SMC Global, and payable at an interest equivalent to the prevailing
Philippine Dealing System ("PDS") rate. Amortizations shall be taken
from the cooperative's Reinvestment Fund for Sustainable Capital
Expenditures ("RFSC") after the approval of the CAPEX. All assets
acquired by APEC shall be transferred to ALECO in good condition at
the end of the Concession Period.
1
Page6
PARTICULAR 2014 2015 2016 2017 2018 2019 2020 TOTAL
Energy Sales Forecast, kWh 255,034,963 285,078,867 317,735,133 323,315,855 335,549,032 347,864,319 360,174,729 2224,752,898
Approve RFSC Rate. Php/kWh 0.2178 0.2178 0.2178 0.2178 0.2178 0.2178 0.2178 0.2178
CASH INFLOW
Qirrent year RFSC Collection, P 21,129,957 45,623,176 72,018,176 70,418,193 73,082,579 75,764,849 78,446,056 436,482,987
Qirrent year RFSC Collection-From Anears, Php 21,630,688 21,630,688 43,261,375
50% income on leased propertie 2,128,300 2,168,509 2,276,934 2,390,781 2,510,320 2,635,836 2,767,628 16,878,309
Government Subsidy, Php 31,644,400 31,644,400
Total Cash Inflows 23,258257 47,791,685 74,295,111 126,084,062 97,223,587 78,400,685 81213,684 528267,071
Cash available fordisbursement 23,258,257 47,791,685 74295,111 126,084,062 97,223,587 78,400,685 81,213,684 528,267,071
CASH OUTFLOW
Applied CAPEX Requirement, P 129,221,450 219,663,606 67,510,850 695,396,823 332,288,058 224,442,034 201,637,803 1,870,160,623
ERC permit fees, Php 969,161 1 2647,477 506,331 5,215,476 2,492,160 1,683,315 1,512,284 14,026,205
Total Cash Outflows 130,190,611 221,311,083 68,017,182 700,612,299 334,780,219 226,125,349 203,150,086 1,884,186,827
Cash Balance, End. Php, eessi (106,932,354) (173,519,397) 6277,929 (574,528,237) (237,556,632) (147,724,664) (121,936,402) (1,355,919,757)
IndicatiwRFSC 0.4193 0.6087 (0.0198) 1.7770 0.7080 0.4247 0.3385 0.6095
Enisting Rate 0.2178 0.2178 0.2178 0.2178 0.2178 0.2178 0.2178 0.2178
Total RFSCRate 0.6371 0.8265 0.1980 1.9948 0.9258 0.6425 0.5563 0.8273
13. In compliance with ERC Resolution No. 26, Series of 2009, information
on the proposed capital projects were widely disseminated through
the posting of notices in conspicuous places in the cities of Legazpi,
Tabaco and Ligao, and in the municipalities of Daraga, Camalig,
Manito, Rapu-rapu, Tiwi, Malinao, Malilipot, Bacacay, Sto. Domingo,
Libon, Polangui, Guinobatan, Oas, Jovellar and Pio Duran. The notices
posted in the aforementioned areas contained the following
information:
15. Accordingly, on November 5, 2009 ALECO filed ERC Case No. 2009-106
RC ["In the Matter of the Application for Approval of an Adjustment in
Rates under the Rules forSetting Electric Cooperatives' Wheeling Rates
(RSEC-WR), with Pro yerfor Provisional Authority"]. In its Order dated
Page 17
January 11, 2010, the Honorable Commission provisionally authorized
ALECO to implement the Revised Rate Schedule and the MCC of
PhP/kWhO.2178 (which is the current Reinvestment Fund for
Sustainable CAPEX or "RFSC") beginning January 2010.
16. Thereafter, ALECO filed ERC Case No. 2010-147 RC ("In the Matter of
the Application for Approval of Capital Expenditure Program for the
Years 2010 to 2014 with Prayer for Provisional Authority"), but was
subsequently withdrawn upon motion of the applicant. Therefore
since the implementation of the MCC/RFSC in 2010 there is no
approved capital expenditure program of ALECO, either under ERC
Resolution No. 13 Series of 2006 or under ERC Resolution No. 26 Series
of 2009.
17. Under the circumstances, ALECO could not implement big ticket
CAPEX projects such as the replacement or upgrading of its ageing
• substation transformers and other distribution facilities, with the
result that:
a. On May 28, 2014 the old 20 MVA Wagner transformer at the Bitano
substation in Legazpi City broke down, causing power interruptions
in Legazpi City, Manito and a portion of Sto. Domingo
municipalities. The transformer was 25 years old and loaded at
83.15% prior to the incident. APEC had to replace it in order to
restore power to the service areas.
PageI8
I
e. One of the transformers in Ligao substation is the 38-year old 5
MVA Hanyung transformer, with a loading of 56.24%.
18. There being no ERC-approved CAPEX plan, the collected RFSC could
not be utilized. In order to ensure the continuous supply of power
within the province of Albay SMC Global, APEC's parent company has
allowed APEC to advance the cost of the CAPEX projects for CY 2014,
2015 and 2016 from its general fund, to be subsequently amortized
from the collections under the RFSC after the approval of the CAPEX
subject of this Application by the ERC and by the member-consumers.
19. Applicant therefore prays for the urgent approval of the Application
and the authority to implement the CAPEX. An early approval will
enable APEC to proceed with the urgent network projects to ensure
continuous and reliable power supply to the customers in the ALECO
franchise area, as well as allow APEC to amortize the advances from
the general fund for the 2014, 2015 and 2016 CAPEX. Further, APEC
can no longer continue to advance the project cost from the general
fund as this will seriously affect APEC's compliance with its obligations
under the Concession Agreement.
L
PRE-FILING AND
OTHER DOCUMENTARY REQUIREMENTS
Page9
1
Candsub-
Capital Expenditure Projects and supporting annexes
markings
Page1O
Proof of service of copies of the Application to the Mayor of
T
Manito
Page 111
Proof of service of copies of the Application to the Secretary
KK
of the Sangguniang Bayan of Guinobatan
I RR
Proof of service of copies of the Application to the Mayor of
Pio Duran
PRAYER
Legazpi City and Mandaluyong City for Pasig City, April 5, 2017.
Page 112
IAN LL
MCIE-Ex.Thption o. lV-0 0228; July 18, 2012
IBP OR No. 10521 ; Dec. , 2016; Albay Chapter
PTR OR No. 0516 & n. 4, 2017; Daraga, Albay
ESTAIVIO
IBP OR No. 1071007 / 01-31-17/ Bulacan Chapter
PTR OR No. 3015965 / 01-04-17 / Mandaluyong City
•
MCLE Compliance No. V-0012600, 12-3-15
Roll No. 39024
4 G. CEDO III
IBP OR No. 010380 / 01-06-12 / PPLM Chapter
PTR OR No. 3015962 / 0 1-04-17 / Mandaluyong City
MCLE No. V-0020574, 04-20-16
Roll No. 54500
S
Counsels for Albay Power and Energy Corporation
23rd Floor San Miguel Properties Centre
No. 7 St. Francis St., Mandaluyong City
Page 113
Republic of the Philippines)
MANDALUYONG Clii
s•s•
C AMON U. AY
Affiant
MANDALUYONG TY
SUBSCRIBED AND SWORN to before me in this day
of APR 2 52017 2017, by the affiant who exhibited to me her Passport
No. P2129014A issued on MARCH 4, 2017 at DFA NCR East.
- I
4L
Doc No JULIE ANN . DOMINO.PABLO
Page No &?, APPOitI1*NTNO.Q470.16
Notary Pubitc*vJr Mandaktjorj City
'-BookNo. Unth December31, 2017
1 .Series of 2017:
No.155 EDSA, Brgy. WadJNack, Manda1ong City
RoH No, 57163
FIR No.3015964; 114117; Msndaluyong City
D lifetime Member No. 012880; 6117114; Quezon City Char
Page 114
Republic of the Philippines)
I, Ian LI. Macasinag, of legal age, Filipino and with office address at
Albay Electric Cooperative Inc. Office, W. Vinzons St., Old Albay District,
Legaspi City, after being sworn to according to law, depose and state that:
Page 115