35th Epira Status Report

35th Electric Power Industry Reform Act (EPIRA)
Implementation Status Report

(For the Report Period October 2019)
Prepared by the
Department of Energy
With Contributions from
Energy Regulatory Commission

Philippine Electricity Market Corporation
National Power Corporation
National Electrification Administration
Power Sector Assets and Liabilities Management Corporation
National Transmission Corporation
TABLE OF CONTENTS
I. EXECUTIVE SUMMARY ................................................................................................... 2

II. PRIVATIZATION ............................................................................................................... 3
A. Generating Assets and Independent Power Producer (IPP) Contracts ........................... 3
B. Other Disposable Assets................................................................................................ 5
C. Privatization Proceeds ................................................................................................... 7
D. Concession of the National Transmission Network ........................................................ 8
A. Sale of Sub-Transmission Assets (STAs)....................................................................... 8
III. PSALM LIABILITY MANAGEMENT ................................................................................. 10
IV. ELECTRICITY RATES ..................................................................................................... 12
V. COMPETITION……………………………………………………………………………………21
A. WESM Operational Highlights ...................................................................................... 21
B. Updates on WESM Governance Activities ................................................................... 24
C. Market Development Updates ...................................................................................... 34
D. Retail Competition and Open Access (RCOA) ............................................................. 36
E. Generating Capacity Market Share and Concentration ................................................ 39
F. Market Concentration ................................................................................................... 41
VI. POWER SUPPLY SECURITY AND RELIABILITY.............................................................. 43
A. Peak Demand .............................................................................................................. 43
B. Installed and Dependable Capacity .............................................................................. 43
C. Power Projects ............................................................................................................. 46
D. Significant Incidents in Luzon, Visayas, and Mindanao ................................................ 48
E. Distribution Infrastructure Projects ............................................................................... 49
VII. TOTAL ELECTRIFICATION ............................................................................................. 50
VIII. PROMOTION OF RURAL ELECTRIFICATION ................................................................ 57
ANNEXES
Annex 1. TRANSCO and PSALM TRFLAT Confirmation Report on NGCP’s Compliance with
the Concession Agreement for CY 2017………………………………………………. 61
Annex 2. TransCo Inspection Report Based on Concession Agreement ................................ 78
Annex 3. NGCP Related Petitions to ERC as of October 2019…………………………………..81
Annex 3. ERC Approved Capital Expenditure Projects ............................................................ 89
35th Status Report on EPIRA Implementation

As of October 2019
i
I. EXECUTIVE SUMMARY
The 35th Status Report on Electric Power Industry Reform Act (EPIRA) of 2001 implementation
covers the period May to October 2019 which includes significant accomplishments, developments
and continuing challenges undertaken by the attached agencies as mandated under the EPIRA.
The Power Sector Assests and Liabilities Management Corporation (PSALM) will commence the
second round of bidding tentatively in November 2019 held for the privatization of the Malaya
Thermal Power Plant and continue to privatization activities other remaining plants and National
Power Corporation-Independent Power Producer (NPC-IPP) contracts, and the disposal of other
disposable assets to include real estate and unserviceable assets, and waste and junk materials.
With regard to the reduction in PSALM’s foreign debts, as of September 2019, the remaining
balance is down to PhP425 billion from the peak of PhP1.23 Trillion as of year 2003 or a decrease
of PhP816 billion from the enactment of the EPIRA in 2001.
The Independent Electricity Market Operator of the Philippines (IEMOP) continuously accepts
registration requirements from Wholesale Electricity Spot Market (WESM) Mindanao participants.
Further, all Mindanao Stakeholders, PEMC, IEMOP (as Market Operator), NGCP (as System
Operator and Metering Service Provider), Generation Companies, Private Distribution Utilities,
Electric Cooperatives, and Directly Connected Customers are being assessed for their respective
readiness to implement WESM in Mindanao.
With regard to the implementation of the Retail Competition and Open Access, the DOE
promulgated further adopted policies thru Department Circular No. DC2019-07-0011, entitled
“Amending Various Issuances on the implementation of RCOA” which provides for the voluntary
registration of the CCs in the WESM as Trading Participants and designating the IMO as the
Central Registration Body.
In terms of the electricity pricing as of June 2019, the country’s average electricity rates is around
PhP8.71/kWh, PhP0.14 centavos higher compared with the March 2019 national average systems
rate. For Luzon grid, as of June 2019, the rate was around PhP9.28/kWh compared in March 2019
at PhP8.66/kWh. For Visayas, it increased by 6 centavos/kwh while in Mindanao grid, there was a
decrease by 43 centavos/kWh.
The country’s total peak demand in the first half of 2019 was recorded at 15,713 MW, which is 931
MW or 6.3% higher than the 14,782 MW in 2018. The Luzon grid contributed 11,476 MW or 73.0%
of the total demand with an increase of 600 MW or 5.5% from the 2018 peak demand of 10,876
MW, while Visayas and Mindanao contributed a share of 14.2% (2,224 MW) and 12.8% (2,013
MW), respectively.
The household electrification level as of September 2019 is around 98.33%. Said level
corresponds to 22.60 million energized HHs out of 22.98 million identified and targeted HH
population based from the 2015 Census of the Philippine Statistics Authority (PSA).

As of October 2019
2
II. PRIVATIZATION
A. Generating Assets and Independent Power Producer (IPP) Contracts
During the report period, the Final Asset Purchase Agreement (APA) for the privatization or
sale of the Malaya Thermal Power Plant (MTPP) was revised based on the review done by the
Office of the Government Corporate Counsel’s (OGCC).
 On 26 June 2019, PSALM received Governance Commission’s (GCG) letter dated 10

June 2019 transmitting OGCC’s letter dated 06 May 2019 regarding the parameters of
contracts requiring the review of the OGCC, pursuant to Section 4.3 of GCG MC No.
2018-02.
 On 01 July 2019, in compliance with the above MC, PSALM transmitted the APA for the
sale of Malaya plant to OGCC for review and on 24 July 2019, PSALM received OGCC
comments and suggestions to Malaya APA.
 On 29 July 2019, the Technical Working Group for Malaya privatization met with OGCC
to clarify OGCC comments and discuss revisions made in the APA. Thereafter, the
Privatization, Bids and Awards Committee reviewed and approved revisions to APA
consistent with OGCC comments and suggestions.
 On 06 August 2019, PSALM sent a letter to Philippine Competition Commission (PCC)

informing the latter of the Malaya privatization. On 07 August 2019, PSALM had a pre-
notification consultation with PCC on the implication of the upcoming Malaya
privatization on PCC’s mandate, guidelines and processes.
According to PCC, Malaya privatization falls under mergers and acquisitions and shall be
covered by PCC’s compulsory notification requirements if the value of the transaction exceeds
PhP2.2 Billion and if the aggregate annual gross revenue of the ultimate parent entity (UPE) of
at least one of the acquiring or acquired entities, including that of all entities that the UPE
controls, directly or indirectly exceeds PhP5.6B. Compulsory notification should be done only
after the contracting party have been identified (i.e. upon determination of the highest-ranking
bidder or issuance of the notice of award).
In view of the mandatory review by OGCC on the Malaya privatization agreement, PSALM
issued a revised timeline for the privatization of Malaya TPP as follows:
Activity Date
Board Approval and Confirmation of the Revised 28 August 2019
General Terms and Conditions of the APA and
Issuance of the APA to Qualified Bidders
Issuance of the Final APA to Qualified Bidders 06 September 2019 or earlier date
Board Setting of the Reserve Price 18 September 2019
Bid Submission & Opening and Declaration of 18 September 2019
the Highest-Ranking Bidder
Board Approval of the Notice of Award and 25 September 2019
Certificate of Effectivity
Issuance of NOA and COE to Winning Bidder Within 30 days from declaration of the
Highest-Ranking Bidder
Closing At least 30 days from Effective Date
Joint Inventory of Purchased Assets Within 3 days from receipt of notice of
intended delivery of closing deliveries
Closing Date/Turnover of Purchased Assets 2 days from Closing or earlier set by
Parties

As of October 2019
3
On 18 September 2019, the PSALM Bids and Awards Committee declared failure of the first
round of bidding for the sale of MTPP and its underlying land, with only AC Energy Inc.
formally submitting a bid. The declaration is in accordance with the bidding rules.
Consequently, PSALM identified a new timetable for the second round of bidding for MTPP, as
approved by its Board, as follows:
Activity Inclusive Dates

Publication of ITB 6,7,8 October 2019
Submission of Letter of Interest 7 October 2019 until 1 day prior to Documentary
Deliverables Deadline
Submission of Confidentiality Agreement and Undertaking 7 October 2019 until 1 day prior to Documentary
and Payment of Participation Fee Deliverables Deadline
Issuance of the Bidding Package 7 October 2019 until 1 day prior to Documentary
Deliverables Deadline
Due Diligence Period 7 October 2019 until 2 business days prior to Bid
Submission Deadline
Pre-Bid Conference 24 October 2019
Submission of Documentary Deliverables Deadline for Initial 25 October 2019
Checking
Notice to Bidders on its compliance based on initial 29 October 2019
submission of Documentary Deliverables
Consortium Request Deadline 29 October 2019
Submission of Final Documentary Deliverables Deadline 07 November 2019
Evaluation of Documentary Deliverables 08 November 2019
Presentation of Final APA to BRC ** 12 November 2019
Board approval of Final APA and issuance of APA to 12 November 2019
Qualified Bidders **
Setting of the Reserve Price by the Board ** 12 November 2019
Release of Final APA to Qualified Bidders 13 November 2019 or not later than 7 days prior
to Bid Submission Deadline
Release of Reserve Price to Qualified Bidders through a 18 November 2019
SBB
Bid Submission Deadline 22 November 2019
Bid Opening and Evaluation; Declaration of Highest-Ranking 22 November 2019
Bidder
Board approval of the Award ** 28 November 2019
Issuance of Notice of Award, signing of APA, issuance of 29 November 2019 or within 30 days from
APA to Winning Bidder declaration of the Highest-Ranking Bidder
Submission to PCC 29 November 2019
Issuance of the Certificate of Effectivity of the APA 19 December 2019 (tentative) or 2 business
days from receipt of PCC clearance
Closing 20 December 2019 or within 30 days from
receipt of certificated of effectivity
Closing Date 2 business days from Closing
Note: ** Activities that need BRC/Board’s presence
For the second round of bidding, PSALM maintains the same terms and conditions of the
bidding procedures and Asset Purchase Agreement as in the first round of bidding.
Meanwhile, disclosure of the Reserve Price through a Supplemental Bid Bulletin (SBB) will be
made not earlier than five (5) days prior to Bid Submission Deadline. This is an exemption to
PSALM’s general practice for privatization activities.
In case of failure of the second round of bidding due to only one bid received, at a price not
lower than the Reserve Price, the Negotiated Sale with the lone bidder will immediately be
undertaken.

As of October 2019
4
For the remaining generating assets, the latest privatization target is indicated in Table 1.
Table 1. Schedule of Privatization for Generating Assets as of 30 September 2019

Asset Type/ Rated Capacity
Bid Date Turnover Date
Plant Name (MW)
Owned Generating Plants
Malaya
Thermal
650.00 2019
Power
Plant
Agus 1 & 2
260.00
Hydro
Agus 4 & 5
213.10 For Rehabiltiation
Hydro
Privatization is subject to consultation with Congress
Agus 6 & 7
273.00* and PSALM Board’s policy direction
Hydro
Pulangi
255.00
Hydro
*Capacity increased by 19 MW as a result of Agus VI Units 1 & 2 Uprating

Source: PSALM
Meanwhile, for the selection and appointment of IPP Administrators, the latest privatization
target is indicated in Table 2.
Table 2. Indicative Privatization Schedule for the Appointment of IPPAs as of 30 September 2019
Contracted
Grid Capacity
Plant Name Bid Date Turnover Date
(MW)/Energy
(GWh)
Luzon Casecnan Multi-Purpose
228.00 GWh 2021
Grid Hydro
Caliraya-Botocan-
797.92 MW 2022
Kalayaan Hydro
Mindanao
Mindanao Coal-Fired 200.00 MW 2023
Grid
Source: PSALM
Relatedly, PSALM sought the services of the Asian Development Bank (ADB) in the
conduct of a study that will determine sound privatization options for PSALM’s remaining
IPP contracts. The proposed terms of reference for the proposed technical assistance by
ADB was presented by PSALM to ADB and DOF and the same was finalized last 11
October 2019. The said TOR covers the study on privatization of CBK and Casecnan IPP
plants. Pending agreement of the conduct of the study, PSALM has revised the privatization
schedule for the CBK HEPPs from 2019 to 2020/2021.
B. Other Disposable Assets
For the sale of other disposable assets which include real estate and unserviceable assets,
waste and junk materials, following are the updates on PSALM’s bidding activities:
1. PSALM’s Real Estate Assets (REA)
 Disposal of REA (lands underlying sold power assets)
On 06 May 2019, PSALM held a meeting with Masinloc Power Partners Co., Ltd.
(MPPCL) regarding the required documents to effect the assignment of the optioned
assets to MPPCL’s affiliate/intended assignee.

As of October 2019
5
2. Disposal of REA through Public Bidding
 Bauang Diesel Power Plant (BDPP) Land
On 16 May 2019, a meeting was conducted with NPC that discussed the updated
master list of BDPP Land. PSALM subsequently sent a letter to DENR Region 1 on 20
May 2019 requesting for cadastral map of BDPP Land. The finalization of the MOA
between PSALM and Provincial Government of La Union is currently ongoing.
 Cebu Diesel Power Plant (DDP) Land
On 22 May 2019, a PBAC meeting was held and had discussed the minimum bid price
for the sale of Cebu DPP land. On 29 May 2019, PSALM sent a letter to DENR Cebu
requesting for the cadastral map of Cebu DPP Land.
 Aplaya DPP Land
On 22 May 2019, a PBAC meeting was held and had discussed the minimum bid price
for the sale of Aplaya DPP land. PSALM subsequently sent a letter to DENR Cagayan
de Oro on 29 May 2019 requesting for cadastral map of Aplaya DPP Land.
 Puerto Azul Condominium Units and Club Share
On 27 May 2019, PSALM published the Invitation to Bid (ITB) for the procurement of
third party appraiser.
 Architectural Concept Design Competition for Diliman Property
On 03-05 July 2019, PSALM held the selection process on the designs submitted by
WTA Design Studio as the winning conceptual design for PSALM’s Diliman property.
The WTA Design Studio’s conceptual design entry entitled “The East Grid” was
selected for its multi-dimensional people-oriented concept of developing a new
environmentally friendly business center that integrates energy efficient systems and
innovative and sustainable design ideas. This design entry assimilates pedestrian
friendly spaces, interactive installations, bike trails, green promenades, alfresco
spaces, and play areas into a development that will ensure a net leasable space of
about 400,000 square meters.
This winning conceptual design of WTA Design Studio will be utilized by PSALM as
the basis for the master planning and the privatization options for the Diliman Property,
a 5.195-hectare asset of PSALM located at Quezon Avenue corner BIR Road, Quezon
City. The architectural conceptual design competition is a critical component of the
company’s privatization program.
The plan is to develop the Diliman property into a commercial center with high-rise
mixed-use development, offering both office spaces and retail spaces. It will be an
accredited economic zone that will also provide offices for PSALM, the National Power
Corporation, TRANSCO and other members of the Energy family that would like to
move to the said location. The design contest specifically required that the design
entries would have to integrate into such development the existing two (2) buildings
designed by the National Artist Leandro V. Locsin, in compliance with the
requirements of the National Cultural Heritage Act of 2009.
The selection committee is composed of representatives from the United Architects of

the Philippines, the Philippine Institute of Environmental Planners, the UP College of
35 Status Report on EPIRA Implementation
th
As of October 2019
6
Architecture, the National Commission for Culture and the Arts, the Quezon City
Planning Development Office, the Bases Conversion and Development Authority, and
officials of the Department of Energy and Department of Finance, and PSALM.
 Bagac Property
The DOE expressed concerns on the privatization of the Bagac Property that there are
potential uses for the Bagac Property in relation to the nuclear power program that the
DOE seeks to pursue. Thus, PSALM suspended the design contest for the master
planning of Bagac property.
 Sale of Land Underlying Defunct Laoag Diesel Power Plant located in Brgy. 21, P.
Gomez St., Laoag City Ilocos Norte
On 22 May 2019, the PBAC’s approval of the terms and conditions of the sale, timeline
and setting of the minimum bid price was sought, however, it was decided that the
matter will be elevated to the PSALM Board.
Top Consult, Inc. (TCI) and Value Metrics, Inc. (VMI) submitted to PSALM their revised
valuation report on 17 May 2019 and 27 May 2019, respectively.
3. Disposal of REA through Other Modes
 Tiwi Geothermal Power Plant Land
On 21 May 2019, PSALM sent a letter to the Mayor’s Office of Tiwi, Albay pertaining to
the Omnibus Request for Certain Documentary Certifications for the Acquisition of
PSALM’s Parcels of Land. Accordingly, a letter was sent to National Housing Authority
(NHA) on 21 May 2019 requesting for certain documentary certifications relative to
Putsan, Tiwi, Albay Property.
 Paranaque Properties
The PSALM Board authorized the PSALM Management to negotiate with the NHA the
disposal of the 4.1-hectare lots in line with the implementation of E.O. 68, S. 2002. In
this regard, PSALM sent a letter to NHA and City Governor of Parañaque on 02 May
2019 relative to certain requisites and documentary certification.
C. Privatization Proceeds
As of 30 September 2019, PSALM, through the privatization of generation assets, the

transmission business, and the IPP contracted capacities, has generated a total of PhP909
billion. Also, the actual collection amounted to PhP582 billion.
Table 3. Privatization Proceeds as of 30 September 2019, (in PhP Billion)

Privatization Assets Generated Collected Balance
Generating Assets 162.791/ 162.79 -
Decommissioned Plants 0.64 0.64 -
Transmission Asset (TransCo) 264.802/ 182.00 80.71
Appointment of IPPAs 481.09 234.763/ 229.084/
TOTAL 909.32 582.29 306.79
1/ Includes priva related account such as interest on deferred payments, lease rental, land settlement price and option
prices.
2/Privatization Proceeds relative to concession fees are inclusive of Interest on deferred payment
3/ Collections include adjustments in IPPA proceeds based on IPP plant operation
4/ Remaining IPPA receivable at June booking rate PhP42.750 = $1
Source: PSALM
As of October 2019
7
PSALM utilizes its privatization proceeds to cover Table 4. Privatization Proceeds Utilization
as of 30 September 2019
maturing obligations such as regular debt
Particulars In US$ Billion
service, debt prepayment, IPP obligations,
Debt Prepayment 66.19
TransCo operating expenses, and other
Regular Debt Service 383.47
privatization-related expenses.
Lease Obligations 187.99
Total collections of PhP582 billion as of Subtotal 637.65
September 2019, including interest income on Others 5.02
placements, were exclusively utilized for the TRANSCO Opex 0.05
liquidation of financial obligations amounting to TOTAL 642.72
PhP638 billion as of September 2019. USD1:PhP51.013 (BSP Guiding Rate dated
31 July 2019)
Source: PSALM
D. Concession of the National Transmission Network
Pursuant to the Concession Agreement (CA) between the Government and the National Grid
Corporation of the Philippines (NGCP), Republic Act No. 9511 or the Franchise Law and the
Construction Management Agreement (CMA), the National Transmission Company (TransCo)
continues to monitor the performance and compliance of NGCP to these Agreements.
For the report period, the Joint PSALM-TransCo Technical, Regulatory, Financial and Legal
Compliance Assessment Team (TRFLAT) reported that there were 16 provisions in the CA that
were not complied by NGCP covering CY 2017. On 19 January 2019, the TRFLAT wrote
NGCP on this matter requiring them to respond and act to avoid any occurrence of events of
default by the Concessionaire. On 22 April 2019, NGCP provided their response to the said
non-complaince of 16 provisions in the CA. On 15 August 2019, the TRFLAT wrote NGCP
providing corresponding confirmation on said NGCP’s responses as reflected in Annex 1.
Meanwhile, TransCo continues on the conduct of inspection of the assets condition and
Project Under Construction (PUC) accomplishments consistent with the inspection protocol
established with the concessionaire. Annex 2 shows the summary of TransCo Inspection
Report based on CA.
A. Sale of Sub-Transmission Assets (STAs)
The sale of TransCo’s sub-transmission assets involves 198 sale contracts with 107 interested
distribution utilities (DUs), most of which are electric cooperatives. The sub-transmission assets
include around 4,092 ckt-km. of mostly 69 kV transmission lines and 860 MVA of substation
capacity.
As of 31 October 2019, TransCo has signed 116 sale contracts with 95 DUs/ECs/consortia
amounting to PhP6 billion. These sales cover an aggregate length of 3,836 ckt-kms of sub-
transmission lines and 34,184 sub-transmission structures and 835 MVA of substation
capacity. Of the 116 sale contracts, 64 contracts with total sale price of PhP4.1 1billion have
1
The total ERC approved amount of PhP3.005 Billion is lower compared to the total approved/disapproved/dismissed
contract amount of PhP4.074 Billion due to the following reasons:
a. Exclusion of some assets from the ERC approval due to reclassification from sub-transmission to transmission
assets;
b. The lower amount of valuation was used as basis of the ERC approval;
c. Exclusion of some assets from the ERC approval since said assets are not yet connected to the sold assets;
d. Exclusion of some assets from the ERC approval due to decommissioning;
e. DU withdrawal from the Joint Application pertaining to the divestment of sub-transmission assets; and
As of October 2019
8
been approved, approved with modification, and disapproved. Included in the said 64 contracts
are nine (9) contracts amounting to PhP373.3 million disapproved as of October 31, 2019 and
posted at the ERC website. The rest of the sale contracts are for filing with the ERC for
evaluation and approval.
Following the EPIRA provision to extend concessional financing to ECs, TransCo implemented
Lease Purchase Agreements (LPAs) with an amortization period of 20 years. Of the 116 sale
contracts already signed, 79 are mostly under LPAs with 68 ECs/consortia, valued at around
PhP4.136 billion. The remaining 37 involved sales to private DUs/consortia.
f. The STAs in the sale contract/s should have been sold to a consortium instead of a single DU because the
STAs were in a super loop configuration.
As of October 2019
9
III. PSALM LIABILITY MANAGEMENT
As of September 30, 2019, PSALM’s financial obligations was reduced to PhP425 billion or a
decrease of PhP816 billion from 2003 peak level of PhP1.2 trillion. In terms of currency, more
than half (72.2%) of PSALM’s Financial Obligations (FOs) is denominated in dollars, amounting
to PhP314.98 billion. Peso-denominated FOs of PhP91.88 billion accounts to 21.1%, while the
remaining FOs amounting to PhP29.44 billion equivalent to 6.7% is in Japanese Yen.
Figure 1 below shows the movement of the financial obligations of PSALM from 2000 to June
2019.
Figure 1 - PSALM’s Outstanding Financial Obligations Assumed from NPC
Outstanding Financial Obligations Assumed from NPC

As of September2019
1400
1200
1000
800
600
400
200
0
Sep-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
19
Debts 319.1327.6 396 483.4368.6374.4376.5320.4 326 322 307 348.1364.7357.1 324 305.4275.4263.3264.5 265
IPP Lease Obligations 511.6535.4630.4757.2724.7637.1 575 453.1487.9441.5394.2348.4297.4289.7258.2245.4230.9202.8184.6159.8
IPP Lease Obligations Debts
Source: PSALM
Table 5. Financial Obligations (FOs) as of 30 September 2019

PhP Equivalent (In Billions)
Debts 264.97
IPP Lease Obligations 159.78
Total 424.75
Source: PSALM
Table 6. Financial Obligations by Currency as of 30 September 2019

Currency Amount in PhP Equivalent % to Total
(In Millions)
USD 301,708.34 71.0%
PHP 93,298.59 22.0%
JPY 29,744.03 7.0%
Total 424,750.96 100%
Exchange Rates Used: BSP Guiding Rate dated 30 September 2019
USD : PhP 1.00 = 52.0420: JPY: PhP 1.00 = 0.4820
Source: PSALM
Debt Financing/Loan Financing
On 16 May 2019, PSALM received the net drawn amount of USD1,093,359,350.53 after
the deduction of the applicable fees. The syndicated loan is payable within five (5) years
and 1 day with an interest of three (3)-month US Libor plus 70 bps. On 28 June 2019,

As of October 2019
10
the amount of PhP3.0 Billion was drawn from the PhP30 Billion Loan Agreement
payable for seven (7) years. The repayment of this particular drawdown is only until 01
June 2026.

As of October 2019
11
IV. ELECTRICITY RATES
This Section provides updates on electricity price data and other significant related developments
based on information from the ERC, TransCo, PSALM, NPC, NEA and distribution utilities, among
others. Some of submissions particularly on electricity rates submitted by elecgtric cooperatives lag
by three months as the NEA have to collect them from the ECs on a monthlhy basis and process in
accordance with their preferred format.
Figure 2 - National Average Systems Rate
A. Average Electricity Rates National Average Systems Rate
Mar 2019 vs Jun 2019
The country’s average electricity rates as of 12.00
June 2019 is around PhP8.71/kWh, 14
10.00
centavos higher compared with the March
8.00
Peso/kWh
2019 national average systems rate. Biggest
6.00
increase in rate was posted in the Luzon
4.00
Grid from PhP8.66/kWh in March 2019 to
2.00
PhP9.28/kWh in June 2019 or an increase of
0.00
62 centavos/kWh. Visayas average systems Luzon Visayas Mindanao Philippines
Mar-19 8.66 7.44 9.59 8.57
rates also increased by 6 centavos/kWh
Jun-19 9.28 7.50 9.16 8.71
while Mindanao grid decreased by 43
centavos/kWh. Mar-19 Jun-19
Figure 3 - Electric Cooperatives’ Average Systems Rate

Meanwhile, the ECs’ average systems rate
for June 2019 is at PhP9.97/kWh, 5
Electric Cooperatives' Average Systems Rate
centavos higher compared to March 2019 Mar 2019 vs Jun 2019
rate. Among the three grids, Luzon and
10.4
Visayas grids recorded higher rates for June 10.2
2019 billing month with increase of 13
Php/kWh
10
centavos/kwh and 17 centavos/kwh, 9.8
respectively, while Mindanao grid average 9.6
9.4
systems rate decreased by 13 9.2
centavos/kWh. Luzon Visayas Mindanao
Philippine
s
19-Mar 9.84 9.65 10.26 9.92
As shown in Table 7, the ECs’ national 19-Jun 9.97 9.82 10.13 9.97
average unbundled residential electricity rate
for June 2019 was PhP9.87/kWh. Visayas 19-Mar 19-Jun
grid still has the highest average unbundled

Figure 4 - Private Distribution Utilities' Average
residential electricity rates at around Systems Rate
National Average Systems Rate
PhP10.15/kWh of which generation costs Mar 2019 vs Jun 2019
comprise 59%. On the average, generation
10.00
costs comprise the bulk of ECs residential 9.00
rates at around 57% with Mindanao EC 8.00
7.00
residential customers paying the lowest
Peso/kWh
6.00
generation costs at PhP5.12/kWh. 5.00
4.00
Distribution, supply and metering charges 3.00
2.00
(DSM) was the second largest component of 1.00
EC residential rates at 18%. 0.00
Luzon Visayas Mindanao Philippines
Mar-19 7.47 5.23 8.92 7.21
The national average systems rates of Jun-19 8.59 5.18 8.19 7.45
PIOUs posted an overall increase of 24 Mar-19 Jun-19
centavos/kWh from PhP7.21 per kWh in
March 2019 to PhP7.45/kWh in June 2019. While compared to ECs, the average PIOU rates are
lower due to several economiz zones rates which are highly industrial rates. Luzon grid posted the

As of October 2019
12
highest increase 1.12 centavos/kwh while the Visayas and Mindanao grids decreased by 5
centavos/kWh and 73 centavos/kwh, respectively.
Table 7. EC's Unbundled Average Residential Electricity Rates, June 2019
LUZON VISAYAS MINDANAO NATIONAL
Bill Subgroup % % % %
PhP/kWh PhP/kWh PhP/kWh PhP/kWh
share share share share
Generation 5.76 57.89 5.94 58.54 5.12 54.59 5.64 57.12
Transmission 0.89 8.91 0.68 6.71 0.93 9.92 0.84 8.53
System Loss 0.79 7.87 0.71 6.98 0.76 8.04 0.76 7.66
DSM1 1.71 17.12 1.82 17.93 1.69 18.02 1.73 17.56
RFSC2 0.36 3.62 0.36 3.55 0.49 5.25 0.40 4.01
Other Charges3 (0.05) (0.53) 0.10 1.02 (0.08) (0.87) (0.00) (0.01)
Subsidy 0.05 0.54 0.02 0.25 0.03 0.27
0.01 0.11
Charges4
Universal 0.45 4.39 0.43 4.57 0.46 4.61
0.48 4.80
Charges5
Other Taxes6 0.02 0.21 0.03 0.34 0.02 0.23 0.02 0.25
Total 9.98 100 10.15 100 9.39 100 9.87 100
Source: NEA
Notes:
1
Distribution, Supply and Metering Charges
2
Reinvestment Fund for Sustainable CAPEX
3
Loan Condonation & PEMC-SPA Charge
4
Lifeline & Senior Citizen Subsidy/Discount
5
Missionary Electrification, Environmental Charges, NPC Stranded Cost
6
Local Franchise &Business Taxes, Real Property Tax
Among the PIOUs, Cagayan Electric Power and Light Company in Mindanao posted the highest
average power rates for the billing month of June 2019 PhP10.12/kWh followed by Olongapo
Electricity Distribution Company (OEDC) in Luzon at PhP 10.07/kWh. On the other hand, the
lowest average rate was noted for Balamban Enerzone in Visayas at PhP5.47/kWh which is still
lower by 30 centavos compared to its March 2019 average systems rate.
The highest increase in rates was noted for Mactan Electric Company at 16.9% from PhP7.83/kWh
in March 2019 to PHP9.15/kWh in June 2019. On the other hand, Iligan Light and Power Company
posted the highest decline of PhP1.19/kWh from its June 2019 average systems rate of
PhP9.84/kWh.
Figure 5 – Private Investor-Owned Distribution Utilities Average Electricity Rates

As of October 2019
13
The average systems rate of MERALCO, the largest distribution utility in the country, went down by
3.7% from PhP9.41/kWh in March 2019 to PhP9.00/kWh in June 2019. Further in September 2019,
MERALCO’s average rates continued its downward movement at Ph8.01/kWh due mainly to lower
generation costs.
Among the different customer classes, MERALCO’s residential customers pay the highest
electricity rates at PhP9.44/kWh followed by commercial at PhP7.86/kWh and industrial customers
with PhP6.73/kWh.
Table 8. MERALCO Unbundled Power Rates per Customer Class, September 2019 (PhP/kWh)
Bill Sub-Group Residential % Commercial % Industrial %
Generation 4.5 48 4.5 57 4.5 67
Transmission 0.7 7 0.8 10 0.6 9
Systems Loss 0.4 4 0.3 4 0.2 3
DSM 2.5 27 1.1 14 0.6 9
Cross Subsidies (0.2) -2 0.1 1 0.1 1
Universal 0.3 3 0.3 3 0.3 4
Charges
Gov’t Taxes 1.0 10 0.3 8 0.3 4
Fit-All Charges 0.2 2 0.2 3 0.2 3
TOTAL 9.4 100 7.9 100 6.7 100
Source: MERALCO
Meralco’s average residential electricity rates in the amount of PhP9.04/kWh was lower by
PhP0.99/kWh compared to its year ago level of PhP10.42/kWh brought mainly by lower
generation, transmission and universal charges as well as taxes and subsidies. MERALCO’s
average effective residential rates in September 2019 ranged from PhP9.04/kWh to PhP10.25/kWh
of which the highest component was generation costs at PhP4.52/kWh. Meanwhile, MERALCO
distribution charges for its different residential customer classes comprised 22-30% of the total
effective residential rates equivalent to about PhP1.96/kWh and PhP3.03/kWh, respectively.
Systems loss charges on the other hand was 40-centavos/kWh.
Table 9. Summary of MERALCO Residential Unbundled Power Rates, September 2019 (PhP/kWh)
BILL SUBGROUP 0 to 200 % Share 201 to 300 % Share % Share Over 400 % Share
kWh kWh 301 to kWh
400 kWh
Generation 4.52 50% 4.52 48% 4.52 47% 4.52 44%
Transmission 0.69 8% 0.69 7% 0.69 7% 0.69 7%
System Loss 0.40 4% 0.40 4% 0.40 4% 0.40 4%
Distribution 1.96 22% 2.24 24% 2.52 26% 3.03 30%
Subsidies* 0.08 1% 0.08 1% 0.08 1% 0.08 1%
Universal Charge 0.26 3% 0.26 3% 0.26 3% 0.26 2%
Fit-All Renewable 0.22 2% 0.22 2% 0.22 2% 0.22 2%
Government Taxes 0.92 10% 0.95 10% 0.99 10% 1.05 10%
TOTAL 9.04 100% 9.36 100% 9.67 100% 10.25 100%
* Lifeline Rate Charges (applicable to 101 kWh consumption and up) + Cross Subsidy Charge
** For fixed 200, 300, 400 & 500 kWh consumption respectively
Source: http://www.meralco.com.ph
Table 10 provides information on generation costs in reference with MERALCO power supply
agreements, WESM procurement and the regulated generation costs of PSALM. Meralcos’s
blended generation costs showed a declining trend from April 2019 to October 2019 which can be
largely attributed to lower WESM prices specifically during the month of September and October.
During these months, MERALCO’s WESM purchases was around 17% of its total supply,
significantly lowering MERALCO’s blended generation charges.

As of October 2019
14
Table 10. MERALCO/PSALM Generation Costs
Particular Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19
MERALCO BLENDED
GENERATION COST 5.63 5.54 5.41 5.42 4.95 4.51 4.53
QPPL 6.32 5.22 5.32 5.30 5.44 6.66 7.55
FGPC - STA.RITA 5.64 4.99 5.00 4.63 4.85 5.22 4.90
FGP - SAN LORENZO 5.39 4.75 4.85 4.74 4.56 4.88 4.69
MPPCL 4.91 4.82 4.41 4.39 4.97 5.09 4.96
TLI 5.55 32.45 4.83 5.16 5.40 5.56
SMEC 5.98 5.16 5.04 5.82 5.88 6.63
SPPC (baseload) 5.35 4.78 4.87 4.85 5.33 5.46 5.68

Panay Energy Dev. Corp
(PEDC) 6.31 4.57 4.37 4.73 4.74
TMO 11.32 9.65 17.59

First Natural Gas - San Gabriel
(FNG) 4.48 4.38 4.26 4.18 4.25 5.15 5.55
Philippine Power &
Development Co. (PPDC) 5.01 5.01 5.01 4.92
San Buenaventura Power Ltd.
Co. (SBPL) 3.32 2.79 1.81 1.79 1.74
WESM 6.94 10.47 10.16 12.04 5.83 2.18 1.66
Millenium Energy Inc. (MEI) 22.04 18.63 45.95
Others 7.30 8.36

Export Energy from Net
Metering Customers 5.60 5.63 5.55 5.41 5.42 4.88 4.50
WESM ESSP 8.18 7.15 8.38 4.99 3.00 2.18 4.74
NPC/PSALM Generation Cost -
LUZON 4.39 4.39 4.39 4.39 4.39 4.39 4.39
VISAYAS 3.74 3.74 3.74 3.74 3.74 3.74 3.74
MINDANAO 2.85 2.85 2.85 2.85 2.85 2.85 2.85
Sources: MERALCO and PSALM Websites; values were rounded off.
MERALCO’s bulk purchase come from First Gas Power Corp. (FGPC) - Sta. Rita, South
Premier Power Corporation (SPPC), and First Gas Power Corp. (FGP) – San Lorenzo, which
are all natural gas powered plants. Further, MERALCO also sources a considerable amount
of supply from WESM.
As also provided in Table 10, MERALCO’s average bulk power purchase for the month of
September 2019 came from First Gas Power Corp. (FGPC) - Sta. Rita at 20.80%, South
Premier Power Corporation (SPPC) at 9.10%, and First Gas Power Corp. (FGP) – San
Lorenzo at 11.00% which are all natural gas powered plants. About 16.90% of MERALCO’s
power supply requirement is bought from the WESM.
MERALCO has an existing bilateral contract with Quezon Power Phils Ltd. Co.’s (QPPL)
Coal-Fired Power Plant for a contracted capacity of 460 MW for a period of 25 years fom 30

As of October 2019
15
May 2000 until 30 May 2025. Though no Application/Order/Decision was posted at the ERC
website, Guaranteed MEOT as declared in its PSA is 3,288,341,000 kWh which is to be
delivered until 25 Dec. 2023. Another contract is between Sta Rita NatGas Power Plant of
First Gas Power Corporation (FGPC) for a contracted capacity of 1,000 MW which was
granted with Final Authority. The bilateral contract with San Lorenzo NatGas Power Plant
owned by FGP Corp. (FGP) has a contracted capacity of 500 MW. It is valid for 25 years by
the virtrue of ERC Case No. 2004-074 RC where it was granted with Final authority. San
Miguel Energy Corp.’s (SMEC) Sual Coal fired Power Plant has a contract duration of 7
years or until 2019 for a contracted capacity of 500 MW. Final authority was vested in ERC
Case No. 2012-087 RC. Further, Panay Energy Development Corporation’s (PEDC) Coal-
fired Power Plant has a cooperation period of 20 years from 26 August 2016 unitl 2036 for a
contracted capacity starting from 28 to 70 MW.
Meanwhile, transmission charges, on the average, comprise around 7% to 9% of a DU’s

average electricity rates. Transmission charges has two major components, namely, power
delivery charges (PDS) and Ancillary Service (AS) charges. The PDS share around ---
percent on the average of the total transmission costs.
For the period April 2019 to September 2019, Mindanao Grid recorded the highest
transmission charges at PhP0.94/kWh of which 55 centavos was paid for the power delivery
service while 39 centavos/kWh went to ancillary services. The Visayas grid has the lowest
average transmission cost in June 2019 at 59 centavos of which power delivery service was
around 39 centavos/kWh while ancillary services cost 19 centavos/kWh. The highest
transmission cost for the report period was noted in Mindanao Grid at about PhP0.94/kWh in
July 2019.
Figure 6 – NGCP Average Effective Transmission Charges
For Luzon, Total AS cost increased in February 2019 by PhP84.12Mn which is around 6.20% of
the previous month’s AS cost due to the increase in the scheduled AS capacity of thermal plants.
For Visayas, AS cost decreased in February 2019 by PhP22.59Mn or 8.97% as compared to the
previous month’s AS cost due to the decrease in the dispatched AS capacity.The AS cost in
Mindanao decreased in February 2019 by PhP11.43Mn which is about 4.05% of the previous
month’s AS cost due to the decrease in the scheduled AS capacity of hydro plants.

As of October 2019
16
B. Administration of Universal Charge (UC)
This section provides development on the implementation of UC pursuant to Section 34 of the

EPIRA. Highlights include status of collection and disbursements, updates on PSALM’s application
for the recovery of stranded contract costs and stranded debts, and the implementation of UC
collection from self-generating facilities.
As of 30 September 2019, the total collections of Universal Charge amounted to PhP182.6 billion
with interest earnings from deposits and placements of UC funds amounting to PhP0.25 Billion. On
the other hand, UC fund disbursement amounted to PhP181.4 Billion. Accounting for the inflows
and outflows of the UC fund leaves it with a balance of about PhP1.5 billion. Meanwhile, for the
period May 2019 to September 2019, PSALM received PhP7.9 Billion in UC remittances broken
down with details reflected in Table 11.
Table 11. UC Collections as of 30 September 2019 (in Billion PHP)
Particulars Remittances Interests Disbursements Balance

Special Trust Fund – Missionary
Electrification (ME) NPC-SPUG 96.19 0.05 96.22 0.01
Special Trust Fund – ME
Renewable Energy Developer
0.70 0.01 0.29 0.42
Cash Incentive (REDCI)
Special Trust Fund –
Environmental Charge (EC) 2.39 0.13 1.49 1.02
Special Trust Fund – Stranded
Contract Cost (SCC) 78.51 0.06 78.57 0.00
Stranded Debts 4.85 0.00 4.85 0.00
TOTAL 182.63 0.25 181.43 1.46
Source: PSALM
Table 12. UC Remittances to PSALM for the period May 2019-September 2019 (In Billion PhP)
UC-ME UC-ME
Month EC SCC SD Total/Month
(NPC-SPUG) (REDCI)
May 2019 1.02 0.01 0.02 0.02 0.20 1.27
June 2019 1.19 0.01 0.02 0.01 0.32 1.54

July 2019 1.14 0.01 0.02 0.02 0.31 1.50
August 2019 1.25 0.01 0.02 0.11 0.34 1.74
September 2019 1.14 0.01 0.02 0.36 0.32 1.84
Total 5.74 0.05 0.10 0.52 1.49 7.89
Source: PSALM
Table 13. UC Disbursements of PSALM for the Period May 2019 to September 2019 (in PhP Billion)
ME
Month ME (REDCI)1/ SCC SD Total/Month
(NPC-SPUG) EC2/
May 2019 1.01 - - - 0.20 1.21
June 2019 1.21 0.00 - 0.32 1.53
July 2019 1.12 0.00 0.31 1.44
August 2019 1.25 - - 0.34 1.59
September 2019 1.14 0.00 3.29 0.32 4.75
Total 0.00 - 3.29 1.49 10.52
1/
No REDCI claim with complete documentary requirements was received during the month
2/
Awaiting ERC Order/Decision on the disbursement of UC-EC.
Source: PSALM

As of October 2019
17
For the period May 2019 to ERC Case No. Date Approved Particulars
June 2019, PSALM disbursed 2012-085 RC 12 August 2013 ERC Decision on CY 2011 True-
PhP2.7 billion to NPC-SPUG up Adjustments (PhP4.651 billion)
to fund the missionary 2012-046 RC 10 October 2013 ERC Decision on CY 2010 True-
electrification functions, up Adjustments (PhP2.566 billion)
2014-135 RC 03 November ERC Order on CY 2015 UC-ME
chargeable against the UC-ME 2013 & 17 August Subsidy
fund. The above UC 2015
disbursement is pursuant to 2012-085 RC 20 April 2015 ERC Order on CY 2014 UC-ME
the ERC Decisions/Orders. Subsidy (PhP2.763 billion)
In accordance with the ERC decision Type of UC PhP/kWh

dated 28 January 2013 under Case No. UC-ME 0.1561
2011-091 RC, the amount of PhP0.319  UC-ME Subsidy
 Cash Incentive for RE
billion was transferred from the UC-SD to
Developers
the UC-SD Special Fund Account for the  True-up Adjustment (2011)
period June 2019.  True-up Adjustment (2010)
UC-EC 0.0025
As of September 2019, the total UC being UC-SCC 0.05431/
charged to customers per kilowatt hour UC-SD 0.04282/
Total 0.2557
amounts to PhP0.2557 as approved by the Note:
ERC. 1/
Per ERC Case No. 2016-139RC, newly-approved rate by ERC on the
implementation of UC SCC is in the amount of PhP0.0543 to be collected
by Collecting Entities from consumers.
2/ Per ERC Case No. 2013-195RC on the effectivity of the implementation
of the new UC SD rate is in the amount of PhP0.0428/kWh to be collected

by Collecting Entities from consumers.
C. Lifeline Rate Subsidy Program
For the period January to June 2019, the total amount of subsidy provided by non- lifeline
consumers was PhP399 million which extended an average of 2.80Php/kWh amount of subsidy to
lifeline customers, the amount of subsidy paid for by the non-lifeline customers of all DUs is at
PhP0.68/kWh. The cost of lifeline subsidy is about 2.30 percent of the total electricity consumption
of all types of electricity consumers with an average subsidy per customer of P36.08 per month. In
MERALCO franchise area, the average lifeline rates subsidy paid by the non-lifeline customers
was P0.076/kWh providing at least P2.88/kWh subsidy to lifeline customers or to an average of
P66.30 per month per lifeline customer.
Table 14. Discount and Subsidy for Lifeline Rates

Other OFF-GRID
Particulars MERALCO ON-GRID ECs Total
PDUs ECs
Average Monthly Amount of
Subsidy Provided by Non- 297,240,742 27,271,890 66,829,161 8,316,556 399,658,349
Lifeline Customers (in PhP)
Average Monthly Consumption
103,204,983 12,311,834 25,632,894 1,441,611 142,591,322
of Lifeline Customers (kWh)
Average Monthly Consumption
of Non-Lifeline Customers 3,936,963,476 563,679,599 1,307,344,285 79,056,979 5,887,044,339
(kWh)
Average Number of Non-Lifeline
4,483,605 858,904 5,347,065 387,031 11,076,605
Customer per Month
Average Monthly Subsidy to
66.30 31.7scree5 12.50 21.49 36.08
Lifeline Customers (PhP/Mo.)

As of October 2019
18
Other OFF-GRID
Particulars MERALCO ON-GRID ECs Total
PDUs ECs
Average Amount of Subsidy
Provided to Lifeline 2.88 2.22 2.61 5.77 2.80
Customers (PhP/kWh)
Average Amount of Subsidy
Paid by Non-Lifeline 0.076 0.048 0.051 0.105 0.068
Customers (PhP/kWh)
Source: ERC, MERALCO-URR
Per records, Palawan Electric Cooperative (PALECO) provided the biggest discount to lifeline
consumers at P12.63/kWh while among the private distribution utilities, Subic Enerzone (SECZ)
provided the biggest lifeline discount at P8.49/kWh. Based on the number of consumers, SECZ has
only 74 lifeline customers with equivalent average consumption of 3,887 kWhs while PALECO has
average monthly customers of 28,868 consuming about 493,709 on average per month. The
average consumption of PALECO lifeline customers is 17 kWhs per month while 52 kWh at SECZ.
Figure 7 - Lifeline Rate Subsidy vs. ifeline Rate Discount per kWh
D. Mandatory Rate Reduction (MRR)
Pursuant to Section 72 of the EPIRA, NPC is continuously granting to residential customers the
mandatory discount of 30-centavos/kWh. For this report period, mandated rate reduction for Luzon
and Visayas including SPUG areas is considered in the report. However, the report will be based
only in the available data as some areas were not able to submit particulalrly for Palawan area for
months of October 2018, June and July 2019.
Table 15. NPC-Incurred Amount on Grant of Mandatory Rate Reduction

Year LUZON MINDANAO TOTAL
2001 – June 2018 3,340,904,944.34 5,556,611,305.53 31,373,316,093.32
July-18 1,349,096.87 2,323,936.79 3,673,033.66
August-18 1,294,312.91 2,028,742.02 3,323,054.93
September-18 1,327,499.24 2,122,050.87 3,449,550.11
October-18 37,014.76 2,115,004.95 2,152,019.71
November-18 2,846,817.70 2,170,326.44 5,017,144.14
December-18 2,661,347.06 2,162,058.11 4,823,405.17
January-19 1,796,337.15 2,250,402.96 4,046,740.11
February-19 2,485,554.96 2,217,345.56 4,702,900.52

As of October 2019
19
Year LUZON MINDANAO TOTAL
March-19 2,367,213.36 2,231,253.02 4,598,466.38
April-19 2,510,071.49 2,476,926.76 4,986,998.25
May-19 2,538,031.56 2,382,612.55 4,920,644.11
June-19 2,129,649.15 951,881.13 3,081,530.28
July-19 1,935,325.81 2,454,950.33 4,390,276.14
TOTAL 3,343,526,756.49 5,602,215,095.44 31,472,616,815.75
Source: NPC
For the period starting 2001 to July 2019, a total of PhP31,472,616,815.75 amount of MRR has
already been granted to consumers in Luzon and Mindanao areas. Considering that most of the
government’s remaining power plants are located in Mindanao, bigger portion equal to 52% of the
total MRR is provided to consumers therein while the remaining portion is in Luzon. Visayas
consumers were not able to benefit from the MRR since most of NPC power plants in the region
have been privatized. From 2007 when the first major NPC power Plant was privatized, the total
amount of MRR has a negative growth rate of 13% per year.. The biggest amount of MRR
recorded per year was in 2009 with PhP3.7 Billion while records show that the smallest amount of
MRR was in 2018 at PhP58 Million. The amount is expected to further go smaller due to continuing
privatization and retirement of NPC power plants.

As of October 2019
20
V. COMPETITION
This section provides an update on key areas of competition covering the period May to October
2019 on the operation of the Wholesale Electricity Spot Market (WESM), commercial operations of
Retail Competition and Open Access (RCOA), implementation of the Reserve Market, and
monitoring of compliance to Section 45 of the EPIRA.
A. WESM Operational Highlights
On April 2019, two (2) generation company participants, namely Therma Mobile, Inc. and
Millennium Energy, Inc. ceased their trading operations; but on the following month of May 2019,
two (2) new generation companies namely Solar Philippines Tarlac Corporation and Therma
Power Visayas, Inc. registered as new traders in WESM.
For the month of August 2019, another two (2) new participants registered in the WESM namely
North Negros Biopower, Inc. in Visayas and Majayjay Hydropower Company, Inc.in Luzon while
one (1) participant ceased membership which is the Central Azucarera de Tarlac.
In September 2019, there are three (3) newly registered renewable generation companies, the
Cagayan Biomass Energy Corporation in Luzon and the South Negros Biopower, Inc. and Grass
Gold Renewable Energy Corporation in Visayas.
Lastly, in October 2019, more renewable generation companies registered in the market. The
Cleangreen Energy Corporation and VS Gripal Power Corporation in Luzon and the Central
Azucarera de Bais, Inc.in Visayas.
The breakdown of the Generation Companies and Customer Trading Participants is shown in the
table below
Table 16. Registration Update as of 25 October 2019 (Luzon and Visayas)

REGISTERED
CATEGORY DIRECT INDIRECT
TOTAL
LUZ VIS LUZ/VIS LUZ VIS LUZ/VIS
Generation
126 82 40 3 1 0 0
Companies
Customers
Private
distribution
utilities & Local 17 8 4 0 5 0 0
government
utilities
Electric
71 29 28 0 14 0 0
cooperatives
Directly
Connected 56 7 6 1 33 7 2
Customers
Wholesale
4 0 0 4 0 0 0
aggregators
Total Customer
Trading 148 44 38 5 52 7 2
Participants
TOTAL
274 126 78 8 53 7 2
PARTICIPANTS
Source: PEMC

As of October 2019
21
Supply and Demand and Market Price Outcome
During the report period, May to October 2019, average effective supply and supply margin in
the market is at 13,333MW and 1,718MW respectively. Low supply levels were observed in the
May and June 2019 billing months which is due to the hot temperatures that continued to prevail
during the summer months. Driven by the higher rate of increase in demand, supply margin
tightened up to an average of 955MW in June 2019.
Thereafter, as cooler temperatures occurred during the rainy season and lower level of capacity
were on outage, the average supply started to increase in July 2019 at 13,167MW and reached
up to 13,720MW on October 2019. This is an increase of 5.3% compared to the May 2019
average at 1,141MW.
Meanwhile, the average market price for October 2019 billing month is at PhP4,209/MWh and
the average market price during the report period is at PhP4,739/MWh. The highest price was
recorded in June 2019 at PhP7,770/MWh following the tight supply margin in the grid,,while the
lowest price was recorded at PhP2,139/MWh in September 2019. This is the lowest average
price in the electricity market for year 2019.
The details of the demand and supply situation and the Average Market Prices are shown in the
table below.
Table 17. Demand and Supply Situation for May 2019 to October 2019
Demand + Reserve Effective Supply Supply Margin Average Market
Month
(MW) (MW) (MW) Price (Php/MWh)
May 2019 11,890 13,031 1,141 6,647
June 2019 12,030 12,998 955 7,770
July 2019 11,572 13,167 1,596 4,657
August 2019 11,205 13,187 1,982 3,004
September 2019 11,154 13,894 2,735 2,139
October 2019 11,819 13,720 1,901 4,219
Average 11,612 13,333 1,718 4,739
Source: PEMC
Market Transactions
Customer Spot market transactions (spot market volume) in Luzon and Visayas for the report
period were at an average of 737.73 GWH. Eighty-four percent (84%) of these transactions is for
Luzon while sixteen percent (16%) is for the Visayas. It can be noted that the lowest level of
transaction was recorded in the month of July 2019 at 579.99 GWH while the highest occurred in
October 2019 with 905.82 GWH. Lastly, from May to October 2019, there is thirty-two percent
(32%) increase in spot market volume in the Luzon-Visayas grids.
Meanwhile the customer spot market transactions for the month of October 2019 translates to
only 13% of the total energy consumed in Luzon and Visayas. The remaining 87% of the total
volume was transacted and settled outside the market. Luzon spot market transactions were
recorded at 731.422 GWH while for Visayas spot transactions were at 174.402 GWH. Luzon
generator payments amounted to Php3,645.94 Million while Visayas generator payments were
recorded at Php1,280.88. There is a decrease of twenty-seven percent (27%) from Php6,705.08
Million in May to Php4,926.82 Million in October in the Luzon and Visayas generator payments.

As of October 2019
22
Summary of Market Transactions are shown in the following table.
Table 18. Summary of Market Transactions for May 2019 to October 2019
Spot Market
Spot Market Spot Market Luzon Visayas
Transactions
Transactions Transactions Generator Generator
Month for Luzon &
for Luzon for Visayas Payments Payments
Visayas
(GWH) (GWH) (Million Php) (Million Php)
(GWH)
May 2019 688.40 530.24 158.16 4393.35 2311.73
June 2019 642.79 497.37 145.42 5143.44 2214.76
July 2019 579.99 557.86 22.12 2832.87 1002.73
August 2019 705.39 664.31 41.08 1784.87 773.07
September 904.00 744.50 159.50 1583.32 642.80
2019
October 905.82 731.42 174.40 3645.94 1280.88
2019
Average 737.73 620.95 116.78 3230.63 1371.00
Source: PEMC
Capacity Profile
The WESM registered capacity for the month of October 2019 is recorded at 19,967.3 MW, an
increase of 65.3 MW from 19,902 MW in the month of May 2019. Of the said total capacity, only
about 66 percent or an average of 13,139 MW were offered in the market.
During the report period, the following are the sources of additional capacities in the market:
 25-MW North Negros Biopower, Inc. biomass plant

 15-MW Cagayan Biomass Energy Corporation biomass plant
 2.2 MW Majayjay Hydropower Company, Inc. hydro plant
 19.2 MW hydro plant of HEDCOR
 7.4-MW oil-based facility (units 1 to 6) of Therma Power Visayas, Inc.
Outage Capacity
During the report period, about the average of 12% of the total registered capacity equivalent to
2,422 MW was on outage.Highest level of outage was experienced in June 2019 attributable to
the forced outage of Calaca 1 and Mariveles 2 and maintenance outage of Pagbilao 2 due to due
to the 6.1 magnitude earthquake that struck in Luzon.
For the month of October 2019, about 12% of the total registered capacity or an average of
2,400 MW was on outage. Majority of these were classified as planned and forced, with almost
the same level, averaging at 968 MW and 996 MW or about 39% and 40% of the total outage
capacity, respectively. Maintenance outages, averaging at 479 MW, accounted for 19% of the
total outage capacity while the remaining 2% or an average of 55 MW was on the account of
plants on deactivated shutdown.
Based on type of resource, 41% or an average of 973 MW was attributable to coal plants
namely: the maintenance outage of Mariveles CFTPP unit 1 and forced outages of Masinloc
CFTPP unit 3 and SLPGC CFTPP unit 2. Also, it was noted that outage of natural gas plants
rose by 119 percent this billing month due to the conduct of Malampaya maintenance shutdown
from 12 to 15 October which affected 1,200-MW Ilijan NGPP Blocks A and B, 255.7-MW Sta.
Rita NGPP unit 2, 265.5-MW Sta. Rita NGPP unit 3, and 420-MW San Gabriel NGPP.

As of October 2019
23
Table 19. Summary of Capacity Profile for May 2019 to October 2019
Preferential and
Registered Offered Outage Capacity Must Run Unit
Non-Scheduled
Month Capacity Capacity Capacity Not Offered Capacity
Capacity
(MW) (MW / %) (MW / %) (MW / %) (MW / %)
(MW / %)
12,438 / 2,099 / 3,693 / 1,573 / 300 /
May 2019 19,902
62 % 11% 19% 8% 2%
12,564 / 2,941 / 2,775 / 1,632 / 350 /
June 2019 19,941
63 % 15% 14% 8% 0%
12,427 / 2,592 / 2,960 / 1,650 / 350 /
July 2019 19,964
62% 13% 15% 8% 2%
12,654/ 2,652/ 2,648/ 1,662/ 350/
August 2019 19,967
63% 13% 13% 8% 2%
September 13,628/ 1,838/ 2,480/ 1,665/ 350/
19,967
2019 68% 9% 12% 8% 2%
October 13,139/ 2,408/ 2,393/ 1,678/ 350/
19,992.3
2019 66% 12% 12% 8% 2%
12,808.33 / 2,422 / 2,825 / 1,643 / 342 /
Average 19,956
64% 12% 14% 8% 2%
Source: PEMC
B. Updates on WESM Governance Activities
The DOE monitors the governance of the WESM through its representation from the different
technical committees which undertake regular meetings relative to WESM rules changes,
operational audit, conduct of technical evaluation and studies, investigation of breach of the
WESM Rules, and management of dispute resolution process. For the covered report period, the
following are the activities accomplished by each WESM Governance Committees:
1. Market Surveillance Committee (MSC)
During the covered period, the MSC accomplished the following:
a. Assessment of Market Outcomes
During the report period, the MSC assessed the results of the WESM operations for the
period 26 February to 25 August 2019, as provided under the Monthly Market Assessment
Highlights of the MAG (MMAR-2019-03 to 08). The MMARs were all submitted to the PEM
Board, the DOE and the ERC and were also published in the PEMC website.
Further, following their review of the MAG’s Quarterly Market Assessment Reports
(QMAR) covering the periods 26 December 2018 to 25 March 2019 (QMAR-2019-01), and
26 March to 25 June 2019 (QMAR-2019-02), the Reports were then submitted for the
information of the PEM Board and subsequently published in the PEMC website.
In addition, the MSC presented its Special Market Assessment Report covering the April
2019 billing month during the PEM Board Meeting on 29 May 2019, where they discussed
their analysis on the high prices that were observed from 10 to 15 April 2019, due to the
overlapping forced outages of various plants in the Luzon region.
b. Review of Compliance Monitoring and Assessment
For the months of May to October 2019, the MSC issued 50 requests for investigations
(RFI) for possible non-compliance with the RTD schedule, the MOR and the NOM, which
covers the billing months of March to August 2019.

As of October 2019
24
c. Assessment of the Retail Market
The Retail Market Assessment Report (RMAR) for the Q1 2019 was submitted by the
MSC to the PEM Board on 03 July 2019, and to the DOE and the ERC on 04 July 2019.
The Report was also published in the PEMC website on 05 July 2019.
On June 2019, the MSC assessed the performance of the retail market for the first quarter
of billing year 2019, as provided under the Quarterly RMAR covering the period 26
December 2018 to 25 March 2019 (MAG-RMAR-2019-01).
The assessment of the performance of the retail market for billing year 2018 was
submitted to the PEM Board on 29 April 2019 through the Annual Retail Market
Assessment Report covering the period 26 December 2017 to 25 December 2018 (MAG-
ARMAR-2018).
The RMAR discusses the results of monitoring indices and provides indications on how
the retail market performed during the period in review and how it fared with the previous
quarter’s performance.
d. Assessment of Over-Riding Constraints
During the report period, the MSC analyzed the over-riding constraints imposed on
generators for the six (6) billing months of March to August 2019.
For October 2019, the MSC assessed the over-riding constraints imposed on generator-
trading participants for the period 26 July to 25 August 2019. For this month, a total of
6,058 over-riding events were imposed on 25 Luzon generators and 8 Visayas generators.
For July 2019 billing month, a total of 6,968 over-riding events were imposed on 38 Luzon
generators and 14 Visayas generators by the NGCP-SO.
In June 2019 billing month, a total of 4,596 over-riding events involving 23 Luzon
generators and 12 Visayas generators were recorded. There were 81 events categorized
under security limit events, and majority or 4,515 events that remained were categorized
under non-security limit events.
For 26 April to 25 May 2019, a total of 4,858 over-riding events were imposed on 32
Luzon generators and 8 Visayas generators by the NGCP-SO. This followed the decrease
in the number of security limit events by 73.8%, mostly related to the designation of
Malaya TPP unit 1 as a must-run-unit.
For the preceding billing month, 26 March to 25 April 2019, a total of 4,906 over-riding
events were imposed on 36 Luzon generators and 14 Visayas generators by the NGCP-
SO. This followed the decrease in the number of non-security limit events in April, which
were mostly related to commercial testing, from 5,017 events in March to 4,452 events.
For the billing month of 26 February to 25 March 2019, a total of 5,018 over-riding events
were imposed on 25 Luzon generators and 9 Visayas generators by the NGCP-SO. The
increase was due to the higher number of non-security limit events in March, which were
mostly related to commercial testing, from 3,934 events in April to 5,017 events.
In addition, having noted the continued prolonged testing and commissioning of identified
generator-TPs in the WESM, particularly those that were on T&C from as early as 2015,
the MSC presented to the PEM Board during its October 31, 2019 Meeting its
recommendation to consider possible suspension and deregistration from the WESM of
generator-TPs on prolonged T&C, as provided for in the WESM Registration Manual.
As of October 2019
25
The MSC likewise agreed to continue sending letters of inquiries to said generator-TPs, to
clarify the reason for their prolonged conduct of T&C.
e. Review and Approval of the Proposed Amendments to the Catalogue of Market Monitoring
Data and Indices
The MSC presented to the PEM Board for comments during its October 31, 2019 Meeting
its proposal for the amendments to the Catalogue of Market Monitoring Data and Indices
(CMMDI).
The amendments incorporated the updates aligned with the implementation of the 5-
minute dispatch in the enhanced market design, and also incorporate the new indices, i.e.
spot price index and offer pattern index, that were discussed by the MSC in previous
meetings.
MSC’s review of the CMMDI Issue 1.0 started in May 2019.
f. Deliberation on the Proposed WESM Industry Code of Ethics
On July 2019, the MSC reviewed the consolidated comments that they received upon
publication on the proposed WESM Industry Code of Ethics (WICOE). They agreed to
conduct further review on the Code of Ethics in other jurisdictions particularly on the
possible penalties/ sanctions for non-compliance of the Code.
The thorough discussions and public consultations to the proposed WICOE were
conducted by the MSC on May to June 2019.
The MSC agreed that the WICOE should be couched in general terms, since existing rules
already apply to specific acts and omissions. The MSC likewise agreed that breach of the
WICOE provisions should correspond to specific penalties.
g. Deliberation on the MSC Response to the DOE Comments re: Proposed Penalty Manual
On July 12, 2019, the result of the MSC’s review of the DOE’s comments to the Proposed
Penalty Manual was presented to the DOE.
In particular, the MSC concurred with the general comments of the DOE that appeal cases
regarding the abuse of discretion on the part of ECO, shall be filed with the MSC.
h. Submission of MSC Recommendations on ECO Investigation Reports
The MSC presented to the PEM Board during its September meeting its review and
recommendation on 109 consolidated ECO Investigation Reports (IRs), involving the non-
compliance with the WESM Rules of some 23 generator-TPs.
On 15 August 2019, the MSC submitted to the PEM Board its Review Report on the
consolidated ECO Investigation Reports (IRs) involving nine (9) generator-trading
participants, all of which were received by the MSC during the second quarter of 2019.
The MSC reviewed the ECO IRs with respect to: (a) the ECO’s compliance with the
procedures set forth in the MSCEM for the conduct of investigation, and (b) the validity
and completeness of the data and documents upon which factual findings are based,
pursuant to Section 10.7 of the MSCEM Manual.

As of October 2019
26
i. Review of the Initial Mindanao Market Assessment Report
The MSC discussed the result of the MAG’s initial market assessment report on Mindanao,
and approved the same for submission to the PEM Board.
Likewise, the MSC participated in the PEMC Consultation on Embedded Generation in

Mindanao on 14 August 2019. The MSC Chairman presented the result of the MSC’s
assessment of the Mindanao Market in terms of demand and supply, capacity mix, and
market concentration.
j. Review of Interesting Pricing Events
In October 2019, the MSC discussed the sole interesting pricing event noted last August
2019 billing month and observed that it was driven by the forced outages. High price were
noted last 12 September 2019.
For the month of September 2019, the MSC deliberated upon 11 interesting pricing events
for the period 26 June to 25 July 2019, and observed that these were mainly driven by the
forced outages of major generating plants. High prices were noted last 3, 8, 11-13, 20-21
July 2019.
In August 2019, the MSC deliberated upon 40 interesting pricing events, and observed that
these were mainly driven by forced outages of major generating plants. High prices were
noted last 31 May, 1-3, 5-8, 11, 14, 16-20, 22 June 2019.
The MSC noted that the MI events that were declared by the System Operator (SO) from
June 7-8, were on account of manual load dropping (MLD) due to reserve insufficiency.
The MSC then agreed to invite the SO for a discussion on the SO-initiated MI events not
only as reported in the June 2019 IPER, but for all the SO-initiated MI events during the
year. The MSC also agreed to discuss with the SO protocol on its MLD implementation.
For the month of July 2019, the MSC deliberated upon 12 interesting pricing events, and
observed that these were mainly driven by forced outages of major generating plants. High
prices were noted last 29 April, 03, 14 and 15 May 2019.
In addition, fifty-nine (59) interesting pricing events for the period 26 March to 25 April 2019
were deliberated in May to June 2019 by the MSC. They observed that these were mainly
driven by forced outages of major generating plants. In particular, high outage capacity due
to the 6.1 magnitude earthquake in Luzon influenced the interesting pricing events from 22
to 24 April.
k. Review of the Market Intervention Events
The MSC met with representatives of the Luzon-System Operations (LSO), which
presented an overview of its internal procedure on Manual Load Dropping (MLD). The
meeting was held at the request of the MSC, following its observation that majority of the
SO-initiated MI events in 2019 were on account of MLD. The MSC requested the NGCP-
LSO to provide detailed information on the SO-initiated MIs in 2019, to assist the MSC in its
review of MI events.
Likewise, the MSC met with IEMOP representatives on 09 May 2019, to discuss the Market
Operator (MO)-initiated market intervention (MI) events on 27 March 2019 at 2100H, on 15
April 2019 at 1300H and on 19 April 2019 at 0400H.
The MSC took note of the report presented and agreed to prepare its Review Report on the
subject events for submission to the PEM Board, the DOE and the ERC.
As of October 2019
27
l. Deliberation on the Study on Offer Pattern
The MSC continued its discussion on the Study on Offer Pattern, with the objective of
establishing an index on offers that will determine the offer behavior of generator-trading
participants, as well as the change in their offers.
After its deliberation on the matter, the MSC approved the proposed methodology on the
Offer Pattern Index, for inclusion in the Catalogue of Market Monitoring Data and Indices.
m. Training on Ancillary Services with the NGCP-SO
The MSC invited the NGCP-SO to conduct a Training on Ancillary Services (A/S) on 13 June
2019 with MAG and ECO, the purpose of which is to better understand the A/S activities
being implemented by the NGCP-SO, since these are included in the MAG’s market
monitoring, as well as the ECO’s compliance monitoring activities.
n. Meeting with NGCP-SO re: Data Validation Issues on ECO Investigation Cases
The MSC discussed with NGCP-SO representatives the data validation concerns raised by
the ECO relative to investigation cases.
Representatives from the NGCP-SO and the ECO mutually agreed on ways forward to
address the specific issues that were raised during the meeting.
o. Meeting with NGCP-SO regarding the Samboan-Amlan Line Congestion
The MSC met representatives of the NGCP Visayas System Operations (VSO), to seek
clarification on the frequent congestion at the Samboan-Amlan Transmission Line.
The NGCP-SO discussed the ongoing development on the Cebu-Negros-Panay 230kV

Backbone project that will address the congestion, and confirmed that the target completion
for the same is on December 2020.
p. Meeting with the Phinma Group regarding its Offer for Settlement
The MSC met with representatives of the Phinma Group for a discussion on its Offer for
Settlement relative to its possible non-compliances with the WESM Rules.
The Phinma Group was requested to revisit its Offer for Settlement and re-submit the same
to the MSC.
q. Meeting with Central Azucarera de San Antonio (CASA)
On 09 October 2019, the MSC met with the WESM Compliance Officer of Central Azucarera
de San Antonio (CASA), to discuss CASA’s non-compliance with the rule on the nomination
of loading level and projected output (NOM), for the period January to March, and May 2019.
2. Technical Committee (TC)
During the covered period, the TC accomplished the following:
a. The TC continued its study and assessment on the issues concerning the embedded
generation for Mindanao with a meeting with distribution utilities, NGCP-SO, IEMOP and
DOE representatives to the TC held on 04 October 2019 at the PEMC Board Room. The
discussion focused on the following issues:

As of October 2019
28
 Market Network Modelling;
 Asset reclassification (ERC Resolution No. 23 Series of 2016); and
 Distribution Network Protocol (MO-SO-DU Interface).
Based on the results of the Meeting with DUs, the TC narrowed down their next steps into
2 items, as follows:
 Initiate a review of the ERC Resolution No. 23 Series of 2016; and

 Develop a Proposed Framework for Distribution Network Protocol (MO-SO-DU
Interface) consistent with the DOE’s mandate to the NGCP-SO under the DOE
Circular No 2019-02-003 “Providing for the Framework Governing the
operations of Embedded Generators”.
b. Study on the Integration of Variable Renewable Energy (VRE) Resources and other
Technologies into the WESM
As part of the TC study on the integration of VRE resources into the WESM, the TC
assessed the current operations of the Battery and Energy Storage Systems (BESS) in
the Philippines specifically on the BESS policies and implementation, registration in the
WESM and pending applications before the DOE, and best practices in other
jurisdictions.
Further, the TC reviewed and submitted on 06 August 2019 its comments to IEMOP’s
proposed amendments to the WESM Rules, WESM Manual on Registration, Suspension
and De-Registration Criteria and Procedures Issue 5.0 and WESM Manual on Constraint
Violation Coefficients (CVC) and Pricing Re-Runs.
On 25 September 2019, the TC presented before the PEM Board their work plan on the
Study on the Integration of VRE Resources and other Technologies into the WESM. The
work plan aims to guide the TC and PEMC on how to adequately and comprehensively
cover the areas for consideration in providing recommendations in furthering the effective
integration of VRE and other new technologies into the WESM.
Based on their work plan, the TC identified the following as priority studies for 2020:
 Proposed framework for energy storage system including requirements for VRE
– Q2 2020;
 Development of a Proposed Framework for Distribution Network Protocol (MO-
SO-DU Interface) – Q3 2020; and
 Reserve Market benefit projection/analysis – Q4 2020.
a. Review of Proposed WESM Industry Code of Ethics
The TC reviewed and submitted its comments to the proposed WESM Industry Code of
Ethics to the Market Surveillance Committee (MSC) on 28 June 2019.
b. Review of Proposed Rules Changes and Draft Policy Proposal
The TC reviewed and submitted on 06 August 2019 its comments to IEMOP’s proposed
amendments to the WESM Rules, WESM Manual on Registration, Suspension and De-
Registration Criteria and Procedures Issue 5.0 and WESM Manual on Constraint
Violation Coefficients (CVC) and Pricing Re-Runs.

As of October 2019
29
The following proposals from the RCC were approved by the PEM Board on 31 July 2019
for endorsement to the DOE:
 Proposed Amendments to the WESM Manual on Metering Standards and

Procedures; and
 Proposed Amendments to the WESM Manual on Procedures for the Monitoring
of Forecast Accuracy Standards for Must-Dispatch Generating Units.
Also, on 29 May 2019, the TC submitted comments on NGCP’s Proposed Amendments

to the WESM Manual on Metering Standards and Procedures Issue 12.0 and PEMC’s
Proposed Amendments to the WESM Manual on Procedures for the Monitoring of
Forecast Accuracy Standards for Must Dispatch Generating Units Issue 1.0.
Lastly, on 16 May 2019, the TC submitted comments to DOE’s draft Circular on “Adopting
a General Framework Governing the Provision and Utilization of Ancillary Services in The
Grid”.
3. Rules Change Committee (RCC)
During the report period, the RCC approved the following proposals and thereby submitted to
the PEM Board:
Proposal Description
Seeks to revise the timing of dispatch scheduling
activities considering actual system performance from
Amendments to the WESM Manual
parallel operations and the System Operator’s (SO)
1 on Dispatch Protocol for the Optimal
requirements for the day-ahead projection (DAP),
Timing of Market Runs
hour-ahead projection (HAP) and real-time dispatch
(RTD) market runs.
Intends to clarify procedures for the registration of a
Amendments to WESM Manuals
new load facility of a registered WESM Member, and
2 to Clarify Procedures for the
to add a new provision stating that new facilities shall
Registration of a New Load Facility
be energized only after being registered in the WESM.
Aims to align the Retail Rules and the Retail Manuals
with the relevant provisions of the Energy Regulatory
Commission (ERC) Rules Supplementing the
Amendments to the Retails Rules and Switching and Billing Process and Adopting a
Various Retail Manuals to Harmonize Disconnection Policy for the Contestable Customers
with ERC Rules Supplementing the under ERC Resolution No. 9, Series of 2018.
3
Switching and Billing Process and Specifically, the proposed change is to specify that no
Adopting a Disconnection Policy for Contestable Customer shall be allowed to switch to a
Contestable Customers new Retail Electricity Supplier (RES) if it has
outstanding obligation with its Network Service
Provider (in case of initial switch) or its incumbent
RES.
Amendments to the WESM Rules Aims to incorporate relevant provisions of DOE
and WESM Manuals Providing the DC2019-02-0003 (Providing for the Framework
4
Framework Governing the Operations Governing the Operations of Embedded Generators)
of Embedded Generators to the WESM Rules and Manuals.
Amendments to the WESM Rules Aims to harmonize provisions on allowed timeframe
and WESM Manual on Registration to for market operator to release actions on applications
Harmonize with R.A. 11234 (“Energy as specified in Section 13 under RA 11234 (EVOSS)
5
Virtual One-Stop Shop Act”) and for the purpose of streamlining the Permitting Process
Additional Requirements for De- of Power Generation, Transmission, and Distribution
Registration Cessation Projects.
General Amendments to the WESM The proposal aims to improve the accuracy of initial
Rules and WESM Billing and prudential requirements of new trading participants.
6
Settlement Manual for Enhancements The proponent, IEMOP, deemed that accurate
to the Determination of the Initial estimation of prudential requirements would better
As of October 2019
30
Prudential Requirements ensure the ability of trading participants to meet their
obligations and, in some cases, result in lower WESM
participation costs.
The revisions to WESM CVC and Pricing Re-runs are
proposed to include additional CVCs to reflect the
Amendments to the WESM
dispatch and curtailment hierarchy for must-dispatch,
Constraint Violation Coefficient (CVC)
priority-dispatch, and non-scheduled generating unit
and Pricing Re-run Manual to Include
7 classifications - collectively called self-scheduled
Additional CVCs to Reflect the
generating units. Since the three classifications are
Dispatch Hierarchy of Self-Scheduled
treated differently in the dispatch and dispatch
Generation
curtailment process, it is proposed that the
classifications be associated with separate CVCs.
Amendments to the WESM Rules Incorporates in the WESM Rules and market manuals
and WESM Manuals Providing the the relevant provisions of DC2019-02-0003, which
8
Framework Governing the Operations provides for the framework governing the operations
of Embedded Generators of embedded generators.
The proposal which aims to provide for the
Amendments to the WESM Rules implementation of the WESM Compliance Officer
9 regarding WESM Compliance Officer Accreditation Program. The program being proposed
Accreditation Program shall assist the WESM Members attain a higher level
of compliance with their obligations in the WESM.
The proposal was submitted by the NGCP-MSP to the
RCC in response to the DOE’s directive in December
2018 for the NGCP to submit a proposal that
harmonizes the WESM Rules and WESM Metering
Manual with the Philippine Grid Code (PGC) and the
Philippine Distribution Code (PDC). Significant
proposed changes include:
Amendments to the WESM Manual (i) clarification on the appropriate location of the
on Metering Standards and metering point;
10
Procedures (ii) harmonization of the technical requirements for
the Metering Facilities in accordance with PGC
2016 Edition, PDC 2017 Edition, and other
applicable reference;
(iii) provision of a transitory period to allow existing
revenue meters with non-compliant mass memory
requirement to remain in service until such time
that it is due for replacement; and
(iv) enhancement of provisions in Data Validation,
Estimation and Editing (DVEE)
Initiated by PEMC, the proposal seeks to amend the
calculation of the Forecast Percentage Error to (i)
Amendments to the WESM Manual
align with the 5-minute dispatch interval, and (ii) to
on Procedures for the Monitoring of
provide a more appropriate calculation and exclusions
11 Forecast Accuracy Standards for
for forecast percentage error (FPE) which
Must-Dispatch Generating Units
consequently affects the mean absolute percentage
error (MAPE) and Percentile 95 (Perc95).
Covers the dispatch scheduling and pricing to be

applied in cases of prolonged market system failure.
Said proposal incorporates revisions from the original
proposal submitted by the Technical Working Group
New Market Manual on Prolonged composed of representatives from PEMC and IEMOP,
12 Market System Failure to address the concerns of the System Operator on
the use of unconstrained solution for dispatch
schedule. The revised proposal uses the new Market
Management System to produce an hour-ahead
projection (HAP) for those intervals experiencing
prolonged market system failure.
As of October 2019
31
The RCC approved the erratum on the urgent
amendments to the Billing and Settlements Manual
recently approved by the PEM Board for the
calculation of prudential requirements. Below is the
correction approved by the RCC, for endorsement to
the PEM Board:
Urgent Amendments to the Billing
and Settlements Manual on the Initial
Section 7.4.1 (h)
13 Prudential Requirement (PR)
The projected final energy dispatch price associated
Calculation
with a bilateral contract quantity from a counterparty
for a dispatch interval shall be equal to the final
energy dispatch price of the reference node of the
contract identified during enrollment of the bilateral
contract at the same dispatch interval and most recent
same date.

Includes additional modelling requirements and
Registration Manual to Include
14 procedures when registering a new facility in the
Additional Modelling Requirements
WESM or registering as an ancillary services provide
and Procedures
Aims to align the subject Market Manual with relevant
provisions in the WESM Rules, specifically to:
a) reflect the WESM Rules basis for registration
15 Registration Manual to Harmonize
process timelines (i.e., working days instead of
with the WESM Rules
business days); and
b) generalize the data security approach for
participant access to the market systems
Clarifies the basis of the Market Operator for the
16 Registration Manual to Clarify Basis
registered capacities of generating units in the WESM
for Registered Capacities
Proposed Amendments to the WESM
Clarifies that the wholesale Metering Service Provider
Rules and WESM Registration
17 (MSP) performance monitoring will be performed by
Manual on MSP Performance
the WESM Governing Body, PEMC.
Monitoring
4. Dispute Resolution Administrator (DRA)
During the covered period, the DRA supervised the Arbitral Tribunal’s resolution of the two
(2) ongoing arbitration cases, Case Nos. WESM-Arb-18-01 and WESM-Arb-18-02.
On 15 August 2019, the Arbitral Tribunal rendered the final awards for the said cases in favor
of the Respondents. In response to the Awards, Claimants intend to file a formal complaint
with the ERC against Respondents to recover the RTD underpayment and claims for the
times they were made to run as MRU but were not paid.
In September 2019, the Arbitral Tribunal issued the Final Awards for the two cases. The DRA
then submitted the Arbitral Tribunal’s summary report on the resolution of the said cases to
the PEM Board, DOE, and ERC on 26 September 2019. A public version of the report was
also published in the market information website.
In October 2019, the DRA had undertaken the completion of the post-award activities such
as the finalization of the total expenses incurred during the arbitration and the endorsement
of the remaining balance to the Claimant.
Moreover, the DRA reviewed and updated its internal guidelines on the ad hoc Secretariat
support and cost of arbitration in view of the actual experience during the arbitration.
As of October 2019
32
5. PEM Audit Committee (PAC)
During the report period, the PAC has provided oversight on the activities relating to the
conduct of Market Readiness Assessment (MRA) for the Implementation of the Enhanced
WESM Design and Operations in Luzon and Visayas and WESM in Mindanao and the Pre-
Certification Audit of the New Market Management System (NMMS).
The MRA activity is being conducted to assess the readiness of the PEMC, Market Operator
(MO), System Operator (SO), Metering Services Providers (MSPs) and WESM participants,
identify issues for resolution as well as to provide necessary recommendations to ensure the
effective transition to and implementation of the enhanced WESM design and operations in
Luzon and Visayas, and WESM in Mindanao.
Shown in the table below is the detailed list of activities undertaken by the PAC.
Table 20. MRA Activities in May to October 2019

Date Activity
The results of the market readiness assessment were presented by
22 October 2019
Sapere and PAC to the DOE.
08 October 2019 PAC submitted to the DOE, the Final MRA Report for Mindanao.
04 September 2019 PAC submitted to the DOE the Final MRA Report for Luzon and Visayas.
Sapere submitted the Final MRA Report for Luzon and Visayas, as
30 August 2019 revised to accurately reflect the accuracy rating for real-time dispatch
(RTD).
PAC presented the key findings and recommendations of Sapere on the
readiness of Mindanao to the PEM Board, who approved the PAC’s
28 August 2019
request for authority to submit the Final MRA Report for Mindanao to the
DOE.
Sapere submitted the draft MRA Report for Mindanao, which was
20 August 2019
provided to the PEMC, IEMOP, and NGCP for comments.
19 August 2019. The draft report was reviewed and accepted by the PAC.
16 August 2019 A revised draft was submitted by Sapere.
The draft MRA Report for Luzon and Visayas was presented to the PEM
31 July 2019
Board.
The draft MRA Report for Luzon and Visayas report was provided to the
27 July 2019
NGCP and IEMOP for comments.
26 July 2019 Sapere submitted the revised draft MRA Report for Luzon and Visayas.
18 July 2019 3rd Market Readiness Steering Committee
03 July 2019 2nd Market Readiness Steering Committee
26 June 2019 1st Market Readiness Steering Committee
24 June 2019 Meeting on POP Timeline and Steering Committee/TWG Action Plan
20 June 2019 Teleconference Meeting on Sapere Weekly Report (7th Week)
17 June 2019 Meeting with DOE on Readiness Issues and Action Plans
 Meeting with IEMOP on Sapere’s proposed Project Management
14 June 2019 Structure and meeting with DOE on 17 June 2019.
 Teleconference Meeting on Phase 1 and Phase 2 Timelines
 High-level meeting/s with Management of Mindanao Generators
11 June 2019
 17th WESM Mindanao Readiness Assessment Meeting
 Meeting with NGCP-SO
10 June 2019  Meeting with PEMC on Sapere’s proposed Project Management
Structure
Teleconference Meeting on Sapere’s Weekly MRA Update Report
29 May 2019
(dated 27 May)
23 May 2019 High-level meeting/s with Management of Visayas Generators
22 May 2019 High-level meeting/s with Management of Luzon Generators
16-17, 20 May 2019 Meeting with trading teams of various generators
 Meeting with Distribution Utilities/Retail Metering Service Providers
15 May 2019  Meeting on Sapere’s 2nd Weekly MRA Update Report (dated 13
May)
 Initial Meeting with NGCP-SO and NGCP-MSP
09 May 2019
(Mr. David Reeve of Sapere & PEMC/IEMOP)

As of October 2019
33
Date Activity
 16th WESM Mindanao Readiness Assessment Meeting (Mr. Dave
Carlson & PEMC/IEMOP)
08 May 2019 Follow-up Meetings with Stakeholders on Parallel Operations Program
07 May 2019 Meeting on Sapere’s 1st Weekly MRA update Report (dated 06 May)
03 May 2019 Meeting with DOE and ERC regarding updates on MRA
02 May 2019 Sapere Meeting with PEMC on their market systems readiness
Source: PEMC
PAC also continued its supervision on the NMMS certification audit in which the Revised
RTD Load Forecasting Report and draft software certification were provided by IES. Testing
for the Financial Transmission Right (FTR) module shall proceed on November 2019.
In accordance with the provision of the PEM Audit Manual Section 10.2.3 which mandated
the PAC to undertake the conduct of pre-deployment tests of new software, the PAC
recommended to PEMC the conduct of a pre-certification audit of the enhancements and
fixes to the NMMS and CRSS, and other tools to be used by the Market Operator in
preparation for the enhanced WESM design. On 25 October, the PAC, on its special meeting
with Stuart Thorncraft of IES, deliberated the Inception Report for the Audit on NMMS and
CRSS enhancements and fixes.
PAC continuously provided oversight on the conduct of the NMMS software certification audit
on the remaining modules ─ Compliance Monitoring Module (CMON) and Load Forecasting.
C. Market Development Updates
Establishment of the Wholesale Electricity Spot Market (WESM) in Mindanao
For its part, the DOE duly conducted preparatory activities for the establishment of WESM in
Mindanao. During the report period, four (4) Readiness Assessment Meetings were conducted to
evaluate readiness for WESM Mindanao based on updates presented by various energy
agencies tasked to undertake preparatory activities.
Likewise, a Consultative Meeting with Lanao del Sur Electric Cooperative (LASURECO) was
held on 30 July 2019 and the Basic WESM Training for Zamboanga City Electric Cooperative
(ZAMCELCO) was conducted on August 2, 2020.
On the market operations side, IEMOP continued to accept and evaluated registration
requirements from WESM Mindanao participants. As of 25 October 2019, 82 out of the expected
87 participants (94.25%) have started their registration for WESM Mindanao.
The table below shows the breakdown of the WESM registration status in Mindanao.
Table 21. WESM Registration Status in Mindanao

No application On-going
Membership Type Expected Registered
submitted registration
Grid Connected Generator 15 10 5
Embedded Generator 27 26 1
Electric Cooperative 28 1 27
Private Distribution Utility 4 4
Directly Connected Customer 13 4 8 1
Total Participants 87 5 75 7
Source: PEMC

As of October 2019
34
 Following are the five (5) grid-connected Generators registered as WESM Members:
a. Power Sector Assets and Liabilities Management (PSALM) Corporation

b. GN Power Kauswagan
c. Therma South, Inc. (TSI)
d. Alterpower Digos Solar, Inc. (APDIGOS)
e. Hedcor Tudaya, Inc. (HTI2)
 EUROHYDRO is the only embedded generator now registered in the WESM.
 Listed below are the seven (7) companies that were able to submit their complete
requirements. However, there are still corrections necessary for them to be fully
registered as WESM Members.
a. FDC Misamis Power Corporation

b. HEDCOR Bukidnon, Inc.
c. LAMSAN Power Corporation
d. San Miguel Consolidated Power Corporation
e. MPC
f. WMPC
g. AGECO
h. EEIPC
 There are five (5) participants that should register (mandatory) in the WESM but have
yet to file their applications. Said participants are as follows:
a. PNOC Exploration Corporation

b. BUSCO Sugar Milling Company
c. MENZI Agricultural Corporation
d. Mindanao State University
e. Lanao del Sur Electric Cooperative, Inc.
For the facility registration, IEMOP had evaluated a total of 149 facilities in order to be registered
in the WESM. The details of these facilities’ registration status is shown in the table below.
Table 22. Facility Registration Status, October 2019

Grid-
Embedded
Status Connected Customers
Generators
Generators
No Submission of Facility Requirements 1 2 12
Submitted Partial Requirements 5 28 9
Approved TP but with Partial Requirements 8 -- 44
Submitted Complete Requirements for Final
15 1 23
Assessment
Submitted Complete Requirements & Approved 5 1 --
Total of Expected Facilities 29 32 88
Source: PEMC
With regard to the application for the approval of the price determination methodology (PDM) for
the enhanced WESM design, the next evidentiary hearing is scheduled by the ERC on 04-05
December 2019, with the objective of discussing the audit results of the remaining components
of the New Market Management System (NMMS), specifically the Compliance Monitoring and
Load Forecasting.

As of October 2019
35
D. Retail Competition and Open Access (RCOA)
The Government, despite the challenges restraining the full implementation of RCOA,
continuously exerts its effort in strenghtening competition in the retail market and empower the
contestable customers.
As of October 2019, the total RCOA prospective participants climbed up to 2,035 from a total of
961 in June 2013 or an increase of 112%. The increase was mainly attributable to the entry of
more Contestable Customers, including those with average demand of 750 kW, from 892 in June
2013 to 1,884 in September 2019. The total Contestable Customer comprised 93% of the total
RCOA Participants while the number of Suppliers made up 3% of the total. Within the period,
total prospective CCs were observed to have a 111% increase while Suppliers increased by
75%.
Actual participation in the RCOA, i.e. registration in the Central Registration Body (CRB),
increased by 480% from 275 registered participants in June 2013 to 1,596 as of September
2019. The total registered participants are composed of 94% Contestable Customers, 3%
Suppliers, 2% SOLR and about 2% RMSP.
Table 23. Summary of RCOA Registration

Prospective
Membership Category
Jun Sep 2019 Jun
Increase Sep 2019 Increase
2013 2013
Contestable D ≥ 1MW 892 1,356 52% 239 1,077 351%
Customers 750kW ≥ D > 1MW 0 528 0 296
Total 892 1,884 111% 239 1,495 526%
Suppliers RES 19 31 63% 15 31 107%
LRES 13 25 92% 3 14 367%
Total 32 56 75% 18 45 150%
SOLR 9 47 422% 0 25
RMSP 28 48 71% 18 31 72%
Grand Total 961 2,035 112% 275 1,596 480%
Source: ERC, PEMC
Figure below illustrates that the majority of the CCs are situated within the franchise area of
MERALCO at 71%. Six percent (6%) is in the franchise area of VECO, while NGCP has
accounted for the 2% of the Directly Connected Contestable Customers (DCCC). The Clark
Electric Distribution Corporation (CEDC) have 2% as well, and the remaining 19% were
distributed among the 44 other franchises.

As of October 2019
36
Figure 8 - Registered Contestable Customers per Franchise Area as of October 2019
Of the 45 registered Suppliers, 29 are currently transacting with CCs, which include the four
biggest group of companies affiliated with more than one RES or Local RES. This is 66% of the
total registered suppliers.
Table 24. List of Suppliers with Contestable Customers

Aboitiz Group
Aboitiz Energy Soutions, Inc.
AdventEnergy, Inc.
SN Aboitiz Power – RES Inc.
San Fernando Light & Power
PRISM Energy, Inc.
Mazzaraty Energy Corporation
Ayala Group
Econzone Power Management, Inc.
DirectPower Management, Inc.
AC Energy, Inc.
San Miguel Group
San Miguel Electric Corp.
SMC Consolidated Power Corp.
MERALCO Group
Manila Electric Co. (MPower)
Vantage Energy Solution and Management, Inc.
Clark Electric Distribution Corporation
Others
First Gen Energy Solutions
Global Energy Supply Corp.
GNPower Ltd. Co.
TEAM (Phils.) Energy Corp.
Masinloc Power Partners Co., Ltd.
Phinma Energy Corp.
Manta Energy, Inc.
KEPCO SPC Power Corporation
Premier Energy Resource Corp.
FDC Retail Electricity Sales Corporation
Kratos RES Inc.
Bac-Man Geothermal, Inc.
Citicore Energy Solutions
Corenergy, Inc.
Anda Power Corporation
As of October 2019
37
MERALCO group has the most number of CCs with 35% percent of the total share. Consolidated
number of CCs of the Aboitiz group ranked second with 24% and followed by the Ayala Group with
14%. San Miguel Group garnered 12% while the remaining 15% were accounted to other
suppliers.
Figure 9 - Number of CCs per Suppliers Group as of October 2019
Similarly, MERALCO group has the largest share of energy sales with 34 percent for the 1st
quarter of 2019. Aboitiz group has a total 22% share while San Miguel Group accounted for 19%.
Ayala group has 9% of the total sales to CCs while other Supplier combined for the remaining
12%.
Figure 10 - Sales per Supplier Groups’ from May to October 2019
The average monthly metered quantities during the report period is recorded at 1,679 GWh of
which more than contracted energy was accounted and 8% were sold through the spot market.
The highest metered quantity was in June 2019 at 1,728 GWh.

As of October 2019
38
The monthly switching rate was at the period was recorded to be about 4 customer switches. The
largest number of switches approved was 12 in June 2019.
Department Circular No. DC2017-12-0013 provides for the timeline of lowering the demand
threshold level in voluntary participation of the CCs on the retail market. In the said circular, it is
expected to increase the number of eligible CCs which requires the updating and simplifying
RCOA processes. Also, the DOE promulgated Department Circular No. DC2018-01-0002
providing the policies for the efficient transition of the WESM to the IMO which assumed the
functions of the Market Operator while PEMC shall be the governing arm of the WESM. In
cognizant of these concerns, the DOE further adopted policies for the implementation of the RCOA
thru Department Circular No. DC2019-07-0011, entitled “Amending Various Issuances on the
implementation of RCOA” which provides for the voluntary registration of the CCs in the WESM as
Trading Participants and designating the IMO as the Central Registration Body.
E. Generating Capacity Market Share and Concentration
Section 45 of the EPIRA provide cross-ownership and market share limitations as follows:
a. No generation company, distribution utility, or its respective subsidiary or affiliate or

stockholder or official of a generation company or distribution utility, or other entity engaged
in generating and supplying electricity specified by ERC within the fourth civil degree of
consanguinity or affinity, shall be allowed to hold any interest, directly or indirectly, in
TRANSCO or its concessionaire.
b. No company or related group can own, operate or control more than thirty percent (30%) of
the installed generating capacity of a grid and/or twenty-five percent (25%) of the national
installed generating capacity
c. No distribution utility shall be allowed to source from bilateral power supply contracts more
than fifty percent (50%) of its total demand from an associated firm engaged in generation
Relative to above, following are the updates on the compliances of the electric power industry
participants:
Table 25. Market Share Determination per Grid and National Grid
% Market Share Installed
Grid Installed Generating Capacity (kW) Limitation as per Generating
R.A. 9136 Capacity Limit (kW)
Luzon 15,350,824 30% 4,605,247
Visayas 3,031,458 30% 909,437
Mindanao 3,420,818 30% 1,026,245
National 21,803,100 25% 5,450,775
Source: ERC Resolution No.05, Series of 2019

As of October 2019
39
Below is the graphical presentation of the dominant power market players with their respective
percentage market share.
Figure 11 - Market Share Determination per Grid and National Grid
In Luzon Grid wherein the total installed generating capacity (IGC) for 2019 is 15,350,824.00 kW,
the SMC Global Power Holdings Corp. (SMC Global Power) holds the portion of 4,137,000 kW
which is equivalent to 27% of the total IGC of Luzon Grid and dominates the market. SMC Global
Power’s IGC is composed of coal, natural gas, and hydropower. Their power assets are under
Independent Power Producer Administrators (IPPAs) Agreements with PSALM, or are owned/
under joint-venture agreements and are classified as Independent Power Producers (IPPs). The
Aboitiz Power gained the second largest share of the market having an IGC of 3,460,250 kW or
25% of the total IGC of Luzon Grid. Majority of its energy portfolio comes from thermal and
renewable as an IPP and IPPA. The FirstGen ranks third with IGC of 2,518,000 kW or 17% of the
total IGC of Luzon. Meanwhile, PSALM still covers 10% of IGC of Luzon which is equal to
1,586,800 kW.

As of October 2019
40
In Visayas Grid with 3,031,458 kW total IGC, FirstGen exceeded the market share limitation (MSL)
of 30%. FirstGen covers 31% of the total IGC of Visayas which is equal to 928,070 kW. As an IPP
and IPPA, FirstGen major source for energy production is geothermal. The Global Business Power
Corp (GBPC) with 20% share or 605,700 kW IGC ranks as the second largest market shareholder.
GBPC operated the majority of coal power plants in Iloilo, Aklan and Cebu. The third largest
shareholder in Visayas is the Aboitiz Power having an IGC of 376,900 kW or 12% of the total IGC.
In Mindanao Grid with 3,420,818 kW total IGC, PSALM still holds largest portion amounting to
847,100 kW or 25% market share. Aboitiz Power covers 24% market share that is equivalent to
816,470 kW and fallowed by Alsons Power having an IGC of 420,411 or 12%.
In the National Grid, Aboitiz Power dominates the market at 21% total share or equal to 4,653,620
kW IGC. The second largest contributor to the IGC is the SMC Global Power at 20% equivalent to
4,437,000 kW. FirstGen positioned at the third rank having 16% share or 3,554,470 kW. PSALM
still holds 11% of the total market share at 2,433,900 kW.
F. Market Concentration
To measure the current Philippine power market concentration, the DOE uses the Herfindahl-
Hirschman index (HHI) computation. HHI is the most common measure used to assess
concentration from shares of industry participants. In the US, the market with an HHI of less than
1,500 is considered to be a competitive marketplace, an HHI of 1,500 to 2,500 to be a moderately
concentrated marketplace, and an HHI of 2,500 or greater to be a highly concentrated
marketplace. The closer a market is to a monopoly, the higher the market's concentration (and the
lower its competition).
HHI for Luzon, Visayas and Mindanao is less than 2500 which means that there is a moderate
competition in the energy market per grid. The result is the same in the national grid with an HHI of
2179.
Luzon
Installed
Generating % Share
Ranking Market Players Capacity Market Share (squared)
1 SMC GLOBAL POWER 4,137,000 27% 729
2 ABOTIZ 3,460,250 23% 529
3 FIRSTGEN 2,518,000 16% 256
4 PSALM 1,586,800 10% 100
5 OTHERS 3,648,774 24% 576
TOTAL 15,350,824 HHI 2190
Visayas
Installed
Generating % Share
1 FIRSTGEN 928,070 31% 961
2 GBPC 605,700 20% 400
3 ABOITIZ 376,900 12% 144
4 SPC POWER 344,200 11% 121
5 OTHERS 776,588 26% 676
TOTAL 3,031,458 HHI 2302

As of October 2019
41
Mindanao
Installed
Generating % Share
1 PSALM 847,100 25% 625
2 ABOITIZ 816,470 24% 576
3 ALSONS POWER 420,411 12% 144
4 FDC 405,000 12% 144
5 OTHERS 931,837 27% 729
TOTAL 3,420,818 HHI 2218
National
Installed
Generating % Share
1 ABOITIZ 4,653,620 21% 441
2 SMC GLOBAL POWER 4,437,000 20% 400
3 FIRSTGEN 3,554,470 16% 256
4 PSALM 2,433,900 11% 121
5 OTHERS 6,724,110 31% 961
TOTAL 21,803,100 HHI 2179

As of October 2019
42
VI. POWER SUPPLY SECURITY AND RELIABILITY
A. Peak Demand
For the first half of 2019, the country’s total peak demand2 was recorded at 15,713 MW,
which is 931 MW or 6.3% higher than the 14,782 MW in 2018.
The Luzon grid contributed 11,476 MW or 73.0% of the total demand with an increase of 600
MW or 5.5% from the 2018 peak demand of 10,876 MW. The peak demand registered by the
system operator occurred on 21 June 2019, with Luzon peak at 11,344 MW. During that
interval, a red alert notice was issued and a portion of the demand of the Manila Electric
Company (MERALCO) was de-loaded through the Interruptible Load Program (ILP). To
capture the actual peak demand of Luzon, the recorded compensable de-loaded ILP
participants amounting to 132 MW was added to the system peak demand that resulted to a
total of 11,476 MW.
Visayas and Mindanao contributed a share of 14.2% (2,224 MW) and 12.8% (2,013 MW),
respectively. With reference to year 2018, the peak demand of Visayas grew by 8.3%, while
the peak demand of Mindanao grew by 8.6%. The demand in these regions may still
continue to increase by the latter part of the year since their peak demand, based on
historical data, usually occurs in November or December.
Figure 12 - 2017 vs. 2018 Peak Demand per Grid (in MW)
B. Installed and Dependable Capacity
Table 26. Total Installed and Dependable Capacity Per Technology, Philippines, as of 30 June 2019
PHILIPPINES
FUEL TYPE Capacity (MW) Percent Share (%)
Installed Dependable Installed Dependable
Coal 9,314 8,760 38.3 40.4
Oil Based 4,278 3,024 17.6 14.0
Natural Gas 3,453 3,286 14.2 15.2
Renewable Energy (RE) 7,245 6,605 29.8 30.5
Geothermal 1,944 1,770 8.0 8.2
Hydro 3,719 3,486 15.3 16.1
Biomass 258 182 1.1 0.8
2
Total non-coincidental peak demand of Luzon, Visayas and Mindanao grids.
As of October 2019
43
PHILIPPINES
FUEL TYPE Capacity (MW) Percent Share (%)
Installed Dependable Installed Dependable
Solar 896 740 3.7 3.4
Wind 427 427 1.8 2.0
TOTAL 24,289 21,675 100.0 100.0
Source: DOE
Table 27. Newly Operational Power Plants for 1st Half 2019
POWER PLANT CAPACITY, MW LOCATION Commercial
Municipality/ OPERATOR Operation
Facility Name Subtype Installed Dependable Date
Province
LUZON 0 0
VISAYAS 158.0 141.4
Coal 150.0 135.0
Circulating Fluidized Toledo City, Therma Visayas,
Therma Visayas U1 150.0 135.0 April 2019
Bed (CFB) Coal Cebu Inc. (TVI)
Diesel 8.0 6.4
Bago City, Central Negros
CALUMANGAN DPP Bunker/Diesel Internal
8.0 6.4 Negros Power Reliability, March 2019
U5 Combustion Engine
Occidental Inc. (CENPRI)
MINDANAO 300.0 276.0
Coal 300.0 276.0
GNPOWER Circulating Fluidized
150.0 138.0 Kauswagan, GNPower May 2019
KAUSAWAGAN U1 Bed (CFB) Coal
Lanao Del Kauswagan Ltd.
GNPOWER Circulating Fluidized
150.0 138.0 Norte Co. May 2019
KAUSAWAGAN U2 Bed (CFB) Coal
TOTAL NEW CAPACITY FOR

458 417.4
1H 2019 (MW)
Source: DOE
The total installed capacity in the first half of 2019 grew by 2.0% from 23,815 MW in 2018 to
24,289 MW. As shown in Table 31, a total of 458 MW newly installed capacities were added
to the country’s supply which included coal-fired (450 MW) and oil-based (8 MW)
technologies. In terms of share by grid, Visayas contributed 158 MW or 34.5% and Mindanao
at 300 MW or 65.5% while Luzon has not developed any additional capacities for the first half
of 2019.
The installed and dependable capacities in Luzon were updated to account the changes in
the capacities of some power plants, particularly coal, oil-based, and hydroelectric power
plants due to quality of fuel and operational constraints. The Luzon grid recorded an installed
capacity of 16,554 MW and a dependable capacity of 14,973 MW. As shown in Figure 2,
coal-fired power plants still dominated the Luzon installed capacity mix with 37.8% followed
by natural gas at 20.9%. On the other hand, various renewable energy sources contributed
25.6% in the mix while oil-based is at 15.7%.

As of October 2019
44
Figure 18 - Luzon Capacity Mix as of 30 June 2019
Visayas grid has a total installed capacity of 3,588 MW with majority share from fossil-based
power plants at 54%, 38.8% of which comes from coal-fired power plants. The RE share in
the region is at 46% with large percentages coming from geothermal power plants at 26.9%
and solar generating facilities at 13.3%, as shown in Figure 3.
In terms of absolute numbers, these capacities should be enough to cover the current
demand level of Visayas. However, there are still a lot of occasions where the region
experiences tight supply conditions due to simultaneous outages of power plants and
transmission line congestions being experienced in the area.
There are power projects in the region that are ready to provide power but are not able to
proceed at the moment due to the ongoing completion of the 230 kV Cebu-Negros-Panay
Transmission Project which is scheduled to be commissioned in December 2020.
Figure 19 - Visayas Capacity Mix as of 30 June 2019

As of October 2019
45
For Mindanao, the grid further increased in terms of supply due to the operation of the first
two units (150 MW per unit) of GNPower Kauswagan coal-fired power plant in Lanao del
Norte. With the operation of these plants, Mindanao currently has 4,109 MW total installed
capacity and 3,541 MW dependable capacity wherein coal-fired power plants continuously
dominates the capacity mix having more than 44.3% and 46.1% of installed and dependable
capacity, respectively. This is followed by the share coming from hydroelectric power plants,
majority of which is from the Agus-Pulangi complex of NPC, with about 27.6%, both for
installed and dependable capacity, as shown in figure below.
Figure 20 - Mindanao Capacity Mix as of 30 June
C. Power Projects
To address the increasing demand brought about by economic development and climate
change, DOE encourages the private sector to invest in power generation to augment the
needed capacity in the power system. With the promulgation of Republic Act No. 11234,
establishing the Energy Virtual One-Stop Shop or the EVOSS Act, the processing and
approval of power projects will be hastened. This system is envisioned to streamline
government processes which will allow efficiency in existing procedures and monitoring
activities. As shown in Table 5, capacities from committed power projects reached 6,280 MW
by the end of July 2019. About 80% of these capacities are from coal-fired power projects
that will provide baseload capacity in the system in the coming years.
The indicative power projects capacity amounted to 38,702 MW by the end of July 2019.
Coal-fired power projects contributed 28.1%, while 53.1% is expected to come from
renewable energy technologies.
Table 28. Committed and Indicative Capacities, Philippines, as of 31 July 2019 (in MW)
Committed Indicative
Type of Power
Plant No. of Capacity % No. of Capacity %
Proponents (MW) Share Proponents (MW) Share
Coal 9 4,921.0 78.4 17 10,868.0 28.1
Oil-Based 2 114.6 1.8 10 1,104.8 2.9
Natural Gas 1 650.0 10.3 7 6,160.0 15.9

As of October 2019
46
Type of Power
Renewable
35 594.6 9.5 176 20,569.2 53.1
Energy
Geothermal 2 81.0 1.3 6 416.0 1.1
Hydro 13 79.5 1.3 61 5,080.3 13.1
Biomass 18 294.1 4.7 21 279.8 0.7
Solar 2 140.0 2.2 69 11,036.8 28.5
Wind 0 0.0 0.0 19 3,756.4 9.7
TOTAL 47 6,280.2 100.0 210 38,702.0 100.0

Source: DOE
Table 29. Committed and Indicative Capacities, Luzon, as of 31 July 2019 (in MW)
Type of Power
Coal 5 3,936.0 81.6 11 8,935.0 28.3
Oil-Based 0 0.0 0.0 4 966.0 3.1
Natural Gas 1 650.0 13.5 6 6,160.0 19.5

Renewable
18 235.6 4.9 99 15,505.2 49.1
Energy
Geothermal 1 31.0 0.6 3 310.0 1.0
Hydro 9 23.4 0.5 35 3,498.9 11.1
Biomass 7 66.2 1.4 11 128.4 0.4
Solar 1 115.0 2.4 40 9,529.5 30.2
Wind 0 0.0 0.0 10 2,038.4 6.5
TOTAL 24 4,821.6 100.0 123 31,566.2 100.0

Source: DOE
Table 30. Committed and Indicative Capacities, Visayas, as of 31 July 2019 (in MW)
Type of Power
Coal 2 285.0 42.0 2 600.0 15.0
Oil-Based 2 114.6 16.9 5 132.9 3.3
Natural Gas 0 0.0 0.0 1 0.0 0.0

Renewable
11 279.7 41.2 36 3,257.5 81.6
Energy
Geothermal 1 50.0 7.4 2 76.0 1.9
Hydro 2 23.1 3.4 11 728.2 18.2
Biomass 8 206.6 30.4 3 32.0 0.8
Solar 0 0.0 0.0 11 703.3 17.6

As of October 2019
47
Type of Power
Wind 0 0.0 0.0 9 1,718.0 43.1
TOTAL 15 679.3 100.0 44 3,990.4 100.0

Source: DOE
Table 31. Committed and Indicative Capacities, Mindanao, as of 31 July 2019 (in MW)
Type of Power
Coal 2 700.0 89.8 4 1,333.0 42.4
Oil-Based 0 0.0 0.0 1 5.9 0.2
Natural Gas 0 0.0 0.0 0 0.0 0.0

Renewable
6 79.4 10.2 41 1,806.6 57.4
Energy
Geothermal 0 0.0 0.0 1 30.0 1.0
Hydro 2 33.0 4.2 15 853.2 27.1
Biomass 3 21.4 2.7 7 119.4 3.8
Solar 1 25.0 3.2 18 804.0 25.6
Wind 0 0.0 0.0 0 0.0 0.0
TOTAL 8 779.4 100.0 46 3,145.4 100.0

Source: DOE
D. Significant Incidents in Luzon, Visayas, and Mindanao
LUZON
During the report period, Luzon grid experienced 42 Yellow Alerts and 15 Red Alerts notices.
The red and yellow alerts were mainly attributed to the high demand coupled with the mild El
Niño condition that further increased the demand and also brought down the available
capacity of hydroelectric power plants in the grid. Series of unplanned outages, extended
outages, and capacity deration of power plants also contributed to the initiation of these
alerts. Furthermore, expected capacity from committed power projects were not able to ease
the power situation due to their delayed commissioning and commercial operation, such as
the 300 MW Masinloc Expansion and the 150 MW SMC Limay Power Projects. The red alert
occurrences resulted to series of automatic and manual load dropping incidents which led to
the implementation of ILP.
Another striking incident in the Luzon grid was the 6.1 magnitude earthquake at 5:11 PM of
22 April 2019 with epicenter located 18 kilometers east of Castillejos, Zambales. After the
earthquake, several power plants and some transmission lines in central Luzon tripped
leaving Luzon with 10,059 MW available capacity which was insufficient to supply the system
demand. Power in the affected areas were immediately restored, however, few power plants
were isolated due to sustained transmission line outages and equipment problems in the
power plant facilities.

As of October 2019
48
VISAYAS
Visayas grid has been a recipient of a lot of yellow alerts and a few red alerts this first half of
2019, having 95 Yellow alert notices and 5 Red alert notices. These alerts usually occurred in
the evening and was amplified on occasions where a significant amount of capacity is
unavailable due to plant outages and reduction of output from solar plants. These issuances
have been more frequent this year due to increasing demand and the existing transmission
line congestions being experienced in the region.
There were a couple of new power plants that went on commercial operation this year in the
Visayas and the completion of ongoing transmission projects is expected to alleviate the
situation in the grid and help provide the necessary highways where electricity can pass
through and be delivered in various parts of the island region.
MINDANAO
There was no recorded significant incident that disrupted the operation of the Mindanao grid,
despite the occurrence of several natural calamities such as earthquakes and typhoons.
E. Distribution Infrastructure Projects
ERC-Approved Capital Expenditure (CAPEX) Projects
Section 43 (f) of the Republic Act No. 9136, otherwise known as the EPIRA, provides that
any significant operating costs or projects investment of DU which shall become part of the
rate base shall be subject to verification by the ERC to ensure that the contracting and
procurement of the equipment, assets and services have been subjected to transparent
and accepted industry procurement and purchasing practices to protect the public interest.
On the other hand, the accompanying application for authority to secure loan from the NEA
in connection with the funding source for the proposed projects, is being filed pursuant to
Section 20 e) of Commonwealth Act No. 146 otherwise known as the Public Service Act,
which requires every public service to secure the approval and authorization of the
Commission for issuance of any bonds or other evidence of indebtedness payable in more
than one year.
For this period, the ERC granted approval to the CAPEX Projects applications filed by
sixteen (16) Distribution Utilities namely: Aurora Electric Cooperative, Inc. (AURELCO),
Bohol Light Company, Inc. (BLCI), Biliran Electric Cooperative, Inc. (BILECO), Cabanatuan
Electric Corporation (CELCOR), Cagayan II Electric Cooperative, Inc. (CAGELCO II), Don
Orestes Romualdez Electric Cooperative, Inc. (DORELCO), First Laguna Electric
Cooperative, Inc. (FLECO), Ilocos Norte Electric Cooperative, Inc. (INEC), Ilocos Sur
Electric Cooperative, Inc. (ISECO), Kalinga Apayao Electric Cooperative, Inc. (KAELCO),
Lanao del Norte Electric Cooperative, Inc. (LANECO), Sorsogon I Electric Cooperative, Inc.
(SORECO I), Sorsogon II Electric Cooperative, Inc. (SORECO II), Tarlac Electric, Inc.
(TEI), Visayan Electric Company, Inc. (VECO) and Zamboanga del Norte Electric
Cooperative, Inc. (ZANECO). Details of the project is shown in Annex 3.

As of October 2019
49
VII. TOTAL ELECTRIFICATION
Under Sec. 2(a) of the EPIRA 2001, it is the declared policy of the State to ensure and accelerate
the total electrification of the country. Said law also mandates the DUs to provide universal service
in their franchise areas including unviable areas at a reasonable time. The Government has
implemented a massive and focused action to increase and accelerate access to electricity
services by the country’s unenergized communities and households while contributing to poverty
alleviation. Previous programs and activities of the Government resulted to almost 100% barangay
electrification, with only six (6) barangays out of the total of 41,974 potential barangays remaining
as unenergized due to geographical and security reasons. The current program of the Government
aims to attain 90% household electrification by 2017.
1. Status of Household Electrification
For the report period, the household electrification level of the country is estimated at 98.33%
based on the latest status of energization provided by the NEA, LGUOUs and PIOUs as of 30 June
2019. Said level corresponds to 22.60 million energized HHs out of 22.98 million identified and
targeted HH population based from the 2015 Census of the Philippine Statistics Authority (PSA).
Table 32. Household Electrification Level

Household
Distribution Utility Total Household Population
Served HHs %HH Level
(2015 Census)
Electric Cooperatives 14,373,161 13,236,271 92.32%
MERALCO 6,476,870 7,280,733 100.00%
Other PIOUs/LGU Owned
2,171,316 2,083,031 95.93%
Utilities
Total 22,984,971 22,600,035 98.33%
Source: DOE
2. On-going and Planned Programs and Activities
 Grid Electrifrication
a. NEA’s Expanded Sitio Electrification Program (Expanded SEP)
This refers to NEA’s program of attaining 100 percent sitio electrification in the country
while providing house wiring and connection assistance to eligible HHs. With 1,259
unenergized sitios targeted for CY2019, NEA have completed to energized 469 sitios as of
30 June 2019 with corresponding project cost amounting to PhP703,500,000.00.
b. NEA’s Barangay Line Enhancement Program (BLEP)
This aims to rehabilitate those barangays previously energized by off-grid solutions but
deemed unsustainable. To enhance the program, it shall only cover those off-grid
barangays that are already economically feasible for distribution line extension. NEA shall
assist in recovering the existing off-grid electrification facilities still owned by the
Government for reconfiguration and transfer to other far-flung areas that can be best
served by off-gid solutions.
For the report period, no budget is allocated on BLEP Projects for CY2018-2019 hence,
NEA has no targets for CY2019. However, as of 31 December 2019, there are 72
barangays nationwide that needs for enhancement. NEA managed to complete 3 BLEP
projects as of 30 June 2019 amounting to PhP4,279,137.84.

As of October 2019
50
c. Rationalization of Implementation of Energy Regulations 1-94 Electrification Funds
Under this concept, DOE shall effectively administer ER 1-94 EF to support the total
electrification of the identified host barangays and municipalities consistent with the policies
set forth under the guidelines. This aims of bringing electricity to all households in the
communities hosting the power generating facilities and/or energy resources following the
radiating order, prioritizing the host cities/municipalities project proposal for DOE’s funding
approval under the ER 1-94 Electrification Fund.
As part of the DC2018-08-0021 “Providing for the Amendments of Rule 29 Part (A) of the
Implementing Rules and Regulations of Republic Act No. 9136”, the DOE have conducted
Information, Education and Communication (IEC) Campaigns in Cagayan de Oro City and
Davao City on 15 August 2019 and 11-12 September 2019, respectively. The discussion on
the said IEC mainly focus on the computation and allocation of financial benefits,
requirements to facilitate the transfer of financial benefits and the projects to be
covered/funded under electrification fund.
For the period of May 2019 to October 2019, fourteen (14) DLF projects were completed
and inspected amounting to PhP2.54 Million, fourteen (14) RWMHEEF projects were
completed and inspected amounting to PhP7.55 Million, and one (1) EF project was
completed and inspected amounting to PhP12.46 Million.
No. of Total Approved

Fund Type
Projects Project Cost
Electrification Fund 1 12.46 M
Development and Livelihood Fund 14 2.54 M

Reforestation, Watershed Management,
Health and/or Environment Enhancement 14 7.55 M
Fund
d. Nationwide Intensification of Household Electrification (NIHE) Program
Approved in 2014, the NIHE project is 3-year program that aims to implement measures
and grant assistance to intensify household electrification. Under NIHE, DUs are
encouraged to adopt more pro-active and innovative marketing strategies to fast-track
electrification of the remaining unelectrified households both in rural and urban areas of the
country. Technical assistance to be undertaken by the NIHE Project include streamlining of
connection process, LGU-DU partnership for assistance in connection permits, and policy
support to address the issue of slum electrification and flying connections, among others.
However, during the Budget Deliberations in Congress, the House of Representatives has
allotted another budget for the program under General Appropriations Act CY2018 to
accommodate more requests amounting to PhP300,000,000.00.
For the 2015 NIHE Program, 23,106 household are reported energized out of 30,512
approved and allocated with house-wiring and KWH meter subsidy as of 15 September
2019.
For the 2016 NIHE Program, 59,313 household are reported energized out of 116,592
2019.

As of October 2019
51
For 2017 NIHE Program, 26,566 household are reported energized out of 115,216
2019.
For 2018 NIHE Program, 289 households are reported energized out of 81,770 approved
and allocated with house-wiring and KWH meter subsidy as of 15 September 2019.
 Off-Grid Electrification
1. PV Mainstreaming’s ASEP and GOP Counterpart
The access to Sustainable Energy Program aims to support the Government of the
Philippines in achieving inclusive growth through access to electricity and energy services
by greater number of Filipinos as specified under the Philippine Development Plan and
DOE’s Household Electrification Development Plan.
EU Provided a grant amounting to EUR60 million, which was signed and made effective on
December 15, 2015. The total program cost was PhP4.89 billion consisting of PhP2.82
billion EU Grant and a GOP Counterpart of PhP2.03 billion (broken down as PhP364.99
million as national counterpart; PhP18.87 million as LGU Contribution; and PhP1,646
million private sector contribution).
PV Mainstreaming is the program of the Government and part of Component 2: Investment

Support/Grants. In this off grid electrification scheme, the ECs shall install operates and
maintain 50-watt peak solar home systems to remote areas in electric cooperatives
franchise area as a new business line. Over project implementation period ASEP PVM
aims to accomplish/ energize 40,500 potential households and 11,113 households under
the GOP Counterpart.
ASEP GOP 2018

Distribution Utility No. of HHs Total Amount (Php) Status
QUEZELCO II 1,333 31,325,500.00 Completed
BISELCO 3,711 87,208,500.00 Completed
Systems already delivered.
BOHECO II 530 12,455,000.00
Installation on hold
TOTAL 5,575 130,989,000.00
ASEP GOP 2018

Distribution
No. of HHs Total Amount (Php) Status
Utility
On-going installation of SHS.
SULECO 2,575 60,512,500.00 Target to completion date: January
2020.
ILECO II 706 16,591,000.00 Target to completion date: Feb.
2020.
ZAMSURECO
1,129 26,531,500.00 Target to completion date: March
I
2020.
TOTAL 4,410 103,635,000.00
ASEP GOP 2019

Distribution
No. of HHs Total Amount (Php) Status
Utility
BISELCO 1,129 26,531,500.00 For Endorsement for Approval
TOTAL 1,129 26,531,500.00

As of October 2019
52
3. Qualified Third Party (QTP) Approach
With the issuance of the Department Order No. 2018-05-0010 in May 2018, “Creation of a Task
Force to Ensure Access to Electricity for the Communities that Remain Unserved and
Underserved by Distribution Utilities,” all ECs were required to submit their Electrification Plan
to include areas that are proposed for alternative service providers or QTPs and National
Power Corporation’s Small Power Utilities Group (NPC-SPUG). Based on this submission, the
DOE and NEA shall conduct site verification to determine which among the proposed sites
have potential for private sector investment. Thereafter will be the posting of these sites inviting
potential investors to provide electricity services on the same through a competitive selection
process to be undertaken by the DOE.
Meanwhile, the DOE issued Department Circular No. 2019-01-0001 “Prescribing the Omnibus
Guidelines on Enhancing Off-grid Power Development and Operation,” in 25 January 2019.
These Omnibus Guidelines apply to entities such as the QTPs that are engaged in the
provision of electricity services in offgrid areas. Apart from ensuring power reliability, stability,
efficiency and accountability in electricity services in off-grid areas, the Circular also indicated
the need to rationalize the use of the universal charge for missionary electrification, in which
the supplementary Circular to this effect will be issued sometime third quarter of 2019. This is
foreseen that such rationalization policy will impact on the attractiveness of the QTP program
for private sector investment.
Following are the updates on the QTP Program:
a. Rio Tuba QTP Project in Bataraza, Palawan
To date, PowerSource Philippines, Inc. (PSPI) is providing round the clock electricity
service to 1,967 households for a subsidized rate of 8.50 pesos per kilowatt-hour. The mini-
grid system in Brgy. Rio Tuba have an overall installed capacity of 1.505 MW (3x250 kW +
1x455 kW diesel gensets) with a recorded peak and off-peak load of 816 kWh and 458
kWh, respectively. PSPI maintains its system load within the acceptable value.
Line rehabilitation and extension will be done this year in the grid to capture the unserved
areas and improve the system loss. Also, sub-station upgrade to cover the increasing
demand of the barangay.
Currently, PSPI is in the process of amending and extending the QTP Service and Subsidy
Contract with NPC-SPUG and securing its Solar Energy Service Contract to continue its
operation as QTP and to change its existing renewable technology from biomass to solar
PV and battery system. This is in compliance with QTPs mandate to maintain a minimum
RE share in their energy portfolio as per DOE Circular 2018-08-0024 or the “RPS Off-grid
Rules.”
b. Malapascua QTP Project in Malapascua Island, Logon, DaanBantayan, Cebu
For the reporting period, PSPI continues to operate its existing diesel gensets with total
capacity of 1.54 MW in the Island charging PHP12.00/kWh for consumers with monthly
consumption of 40kWh or less and PHP15.00/kWh for monthly consumption greater than
40kWh. The average system loss is 6.4%.
For the reporting period, 14 additional households were electrified and 15 households were
disconnected due to unpaid electricity bills. Based on the barangay records, out of 1,227
households in the island, 1,132 are connected to the mini grid system, achieving 92.26%
electrification level.

As of October 2019
53
Relocation of poles and upgrading of sub-station are among those in the project pipeline of
Malapascua in order to accommodate the increasing demand in one of the most visited
spots in Northern Cebu.
c. Liminangcong, Taytay, Palawan
Residents of Bgy. Liminangcong are among those beneficial to the QTP program enjoying
the 24/7 access to electricity provided by PSPI. The installed capacity in the coastal
barangay of Liminangcong is 675kW (3x225 kW gensets) with a recorded peak and off-
peak demand of 250 kWh and 135 kWh, respectively. PSPI is charging PHP8.50/kWh to its
943 customers.
PSPI will upgrade the sub-stations, distribution lines and extend lines to supply the demand
of nearby establishments.
On 25 April 2019, Energy Regulatory Commission conducted an expository hearing in Brgy.

Tumbod in relation to PSPI’s request to extend its existing QTP service from Brgy.
Liminangcong to Brgy. Tumbod. PSPI is planning to extend its overhead distribution line to
provide electricity to about 395 households.
d. Brgys. Candawaga and Culasian in Rizal, Palawan
In Candawaga-Culasian grid, PSPI will upgrade the existing distribution line and extend it to
unreached areas in Rizal within the year to accommodate the still large number of
unconnected households in the area.
The system has an installed capacity of 460 kW with a recorded peak and off-peak demand
of 104 kWh and 44 kWh, respectively. PSPI is authorized by the ERC through interim relief
issued on April 2018 to collect Subsidized Approved Retail Rate (SARR) of 9.9082 pesos
per kilowatt-hour to its existing 896 household consumers.
e. Brgy. Cabayugan , Puerto Princesa City, Palawan
Sabang Renewable Energy Corporation (SREC) started to provide 24/7 electricity service
on 21 August 2019 to about 219 consumers charging PhP12/kWh for residential and public
buildings while PhP15/kWh for commercial establisments. SREC is targeting to connect
another 125 consumers within September.
To date, SREC recorded an average daily load of 1.6 MWh with 3 unscheduled power
outages since the start of its operation due to strong rain and winds causing tree branches
to fall onto the primary line. Mounting of consumer meter is currently on-going while
erection of secondary poles is scheduled to commence on 3rd week of September 2019.
The Genset, control and expo buildings are scheduled to be completed in October 2019.
SREC is scheduled to conduct an inauguration of the system on 09 October 2019.
f. Lahuy and Haponan Islands in Caramoan and Quinalasag Island in Garchitorena,

Camarines Sur
The Energy Regulatory Commission (ERC) issued Provisional Authority to Operate to the
First Philippine Island Energy Corporation (FPIEC) on 18 June 2019. Under its PA, ERC
approved Blended Full Cost Recovery Rate (FCRR) per kWh are PhP30.3831, PhP30.8141
and PhP41.7991 for Quisalag, Lahuy and Haponan, respectively. The SARR are at
PhP12.00/kWh and PhP15.00/kWh for the residential/public buildings and commercial
consumers, respectively for same areas.

As of October 2019
54
Relevant to the latter’s application for Authority to Operate and approval of its QTP Service
and Subsidy Contract, ERC conducted the Public Hearing on 5 September 2019 at the
multipurpose hall of Barangay Gata, Lahuy Island, Caramoan, Camarines Sur for the
determination of its jurisdictional requirements, expository presentation, pre-trial conference
and presentation of evidences.
During the public hearing, FPIEC targets to complete the Project by 3rd quarter of 2020. To
date, FPIEC is preparing its procurement documents for the fuel supply and materials. The
trial was concluded with the ERC requiring FPIEC to submit additional documents within 30
days to support its application.
Below is the summary status of the QTP projects:
PROJECT TARGET
TECHNOLOGY PROPONENT STATUS Tariff
LOCATION HHs
Rio Tuba, 1.05 MW Diesel - 1744 PSPI Operational, FCRR =
Bataraza, Biomass Authority to Php24.4449/kWh
Palawan Operate SARR =
(ATO) PhP8.50/kWh
issued by
ERC ,
2010
Malapascua, 750 kW Diesel 771 PSPI Operational, FCRR =
Daan- Permanent PhP24.6137/kWh
Bantayan, ATO issued SARR= <=40kWh
Cebu by = PhP12/kWh
ERC, 2016 >40kWh =
PhP15/kWh
Sabang, Hybrid : 1.4 MW 683 SREC Authority to SARR =

Puerto Solar + 1.2 MW Operate PhP12/kWh
Princesa City, Diesel + 2.3 MWh (ATO) |Residential &
Palawan Battery issued by Public Bldgs
ERC PhP15/kWh |
05 October Commercial Bldg
2016
Candawaga & 268 kW Diesel 998 PSPI Interim Relief FCRR =
Culasian, , PhP30.4868/kWh
Rizal, April 2018 SARR =
Palawan PhP9.9082/kWh
Balut Island, 690 kW Diesel 3570 PSPI Interim Relief FCRR =
Saranggani, , PhP33.9905/kWh
Davao April 2018 SARR =
Occidental PhP9.5530/kWh
Liminang 108 kW Diesel 709 PSPI Provisional FCRR =
cong, ATO issued PhP36.25kWh
Taytay, by ERC, SARR = 9.12kWh
Palawan 2016
Tumbod, Line extension 395 PSPI ERC
Taytay, from Brgy. conducted
Palawan Liminangcong expository
hearing on
25 April 2019
Lahuy 246 kWp Solar + 550 FPIEC Endorsed to FCRR:
Island, 400 kW Diesel + ERC (23 Jan PhP30.8141/kWh
Caramoan 79kWh Battery 2019)
Camarines SARR =
Sur Provisional PhP12/kWh
ATO issued [Residential &
by ERC, 18 Public Bldgs]
June 2019
PhP15/kWh
[Commercial Bldg]

As of October 2019
55
PROJECT TARGET
TECHNOLOGY PROPONENT STATUS Tariff
LOCATION HHs
Haponan 51.4 kWp Solar + 87 FPIEC Endorsed to FCRR:
Island, 100 kW Diesel + ERC (23 Jan PhP41.7991/kWh
Caramoan 19 kWh Battery 2019)
Camarines SARR =
Sur Provisional PhP12/kWh
ATO issued [Residential &
by ERC, 18 Public Bldgs]
June 2019
PhP15/kWh
[Commercial Bldg]
and 331 kWp Solar + 705 FPIEC Endorsed to FCRR:
Quinasalag 500 kW Diesel + ERC (23 Jan PhP30.3831/kWh
Island in the 80kWh Battery 2019)
Municipality SARR =
of Provisional PhP12/kWh
Garchitoren ATO issued [Residential &
a, by ERC, 18 Public Bldgs]
June 2019
PhP15/kWh
[Commercial Bldg]
Bgy. Hybrid: 132.8 331 PSPI Endorsed to
Poblacion, kWp Solar + 144 ERC (18
Dumaran, kW March
Palawan Diesel + 351.1 2019)
kWh Battery
Bgy. 216 kW Diesel 560 PSPI Endorsed to
Manamoc, ERC (18
Cuyo, March
Palawan 2019)
Bgy. Port Hybrid: 200 kWp 900 PSPI Endorsed to
Barton, San Solar + 609.5 kW ERC (18
Vicente, Diesel + 200 kWh March
Palawan Battery 2019)

As of October 2019
56
VIII. PROMOTION OF RURAL ELECTRIFICATION
Pursuant to Section 58 of the EPIRA, as additional mandate, the National Electrification

Administration (NEA) shall develop and implement programs in strengthening the technical
capability and financial viability of the rural ECs as electric utilities and to prepare the said ECs to
operate and compete in deregulated electricity market, specifically in environment open access and
retail wheeling.
1. Financial Assistance
As of August 2019, the agency released a total of PHP 516.42 million loans to 28 electric
cooperatives (ECs) for capital projects, modular generator set, and standby credit facility. In
addition, the agency was able to release PHP 10 million calamity loan to one (1) EC affected by
Typhoon Ompong.
2. Competency Seminars and Training Programs for EC Personnel
In increasing the learning curve of NEA and ECs through competency programs for EC
personnel, NEA conducted the following activities accordingly:
Date Title of Training/Seminar No. of Participants

Seminar-Workshop on Work Attitude and
Values Enhancement at Workplace
May 6 - 7 36
(WAVE-W) for EC Employees - PENELCO
(Batch 6)
Seminar on Data Privacy Act and
May 7 - 8 38
Freedom of Information - Visayas ECs
Values Enhancement at Workplace
May 9 - 10 64
(WAVE-W) for EC Employees - PENELCO
(Batch 7)
Electric Power Distribution Line
May 14 - June 11 Construction 16
NC II for BATELEC I
Training Course on Construction
May 21 - May 24 Occupational Safety and Health (COSH) - 37
Luzon ECs
May 21 - June 18 Construction 37
NC II for INEC
Seminar-Workshop on Leadership in a
June 18 - 19 Positive Environment with Emotional 47
Intelligence
June 18 - 20 Personality Development Training 40
Seminar-Workshop on Work Order
June 19 - 20 33
Procedures
Seminar-Workshop on Implementing Net
June 20 - 21 Metering Rules and Interconnection 29
Standards
Basic Occupational Safety and Health
June 25 - 28 28
(BOSH)
July 2 - 30 Construction 37
NC II - ISECO
July 8 - August 6 Construction 29
NC II - BATELEC II
Seminar on Data Privacy Act and
July 9 - 10 79
Freedom of Information
July 9 - 10 Seminar-Workshop on Leadership in a 49

As of October 2019
57
Date Title of Training/Seminar No. of Participants
Positive Environment with Emotional
Intelligence
Seminar-Workshop on Parliamentary
July 9 - 10 55
Procedures and Policy Formulation
July 16 - 19 Values Enhancement at Workplace - 101
NEECO II-A1
Power Distribution System Lineworker
August 13 - 17 30
Enhancement Course - ZAMECO II
Seminar-Workshop on Parliamentary
August 27 - 28 48
Procedures and Policy Formulation
Basic Occupational Safety and Health
August 27 - 30 32
(BOSH) Training Course
August 30 - 31 Values Enhancement at Workplace - 113
QUEZELCO I
3. Renewable Energy Development
NEA conducted a series of Information Education and Communication (IEC) campaign for the 1st
quarter of 2019 to capacitate the ECs and enable them to adhere to the policy, implementing rules,
and guidelines on renewable energy programs.
Seminar-workshop on Net-Metering Program was conducted to help ECs gain understanding on

solar rooftop installations, and other RE technologies under the net-metering scheme and its
implications to ECs on both technical and administrative processes. Through this seminar-
workshop, ECs will be able to implement their own net-metering implementation plans.
Net-Metering
Date (2019) No. of Participants
Seminar-Workshop
CANORECO June 20 - 21 29
4. Approved Policies/Guidelines
In accordance with its expanded powers, functions and privileges under Section 5 of Republic
Act 10531 and Section 5 of the IRR, the NEA has formulated several policies and guidelines
geared towards the fulfillment of NEA's mandate and to provide assistance and guidance to the
ECs in the performance of their franchise obligations as distribution utilities:
a. IRR and Rates of Expenses and Allowances for Official Local and Foreign Travels pursuant to
Executive Order No. 77, Series of 2019;
b. EC Member-Consumer-Owners’ Program for Empowerment (MCOPE);
c. Revised EC Model Organizational Structure; and
d. Amended Enhanced Policy/Guidelines on EC Overall Performance Assessment Criteria.

As of October 2019
58
ANNEXES

As of October 2019
59
Annex 1.TRANSCO and PSALM TRFLAT Confirmation Report on NGCP’s Compliance with the Concession Agreement for CY 2017
TRFLAT Assessment NGCP Response TRFLAT Confirmation
CA PROVISIONS NOT COMPLIED BY NGCP
Section 2.01 As of December 31, 2017, there were 1,114 There are only 569 items of which only 173 items tagged as open, TRFLAT maintains its position that
Concession in CA uncorrected observations and it was observed contrary to the statement that there were 1,114 uncorrected there were 1,114 uncorrected
that as of November 30, 2018, there were still observations as of 31 December 2017, and 301 open observations observations as of 31 December 2017.
301 open observations. as on 30 November 2018. Our records show that as of 01 March
2019, we have been able to further decrease the number of open
items to 96. Moreover, we have provided Transco with our
compliance plans and programs with regard to the remaining open
items.
On cited incidents 2. Explosion of 115kV Phase C Current Explosion of the current transformer can be attributed to internal The TRFLAT report merely made a
Transformer (CT) Metering at Tayabas SS on fault where excessive pressure was generated inside, causing the statement of fact that said incidents
10 April 2017 core and winding to be separated from its porcelain support happened.
insulator. Insulation failure happened only during the separation of
the CT head and its porcelain support insulator. Based on electrical
test result on 11 October 2015, the insulation and accuracy test
were satisfactory.
Note: Per PGC 2016 Section 9.2.5.2.1, Insulation Integrity Test

shall be done at least once every five (5) years.
3. Explosion of 115kV Phase B Lightning There were no signs of external flashover on the busted LA. The
Arrester (LA) at Currimao S/S on 12 July busted LA is designed with a pressure relief diaphragm. This
2017 pressure relief diaphragm burst during the terminal overload of the
LA preventing the breaking of the porcelain housing.
Possible root cause of the failure of LA is dielectric/insulation

breakdown, which may due to moisture ingress and partial
discharges inside the LA, which in turn might have started during
the onset of rainy season.
Previous test results prior to equipment failure for Insulation Power

Factor Testing and Leakage Current Monitoring (3rd Harmonic) did
not indicate any abnormality of the LA, while recent IR Thermal
scanning conducted also did not show any abnormal heating.
The equipment was scheduled for maintenance during the

shutdown of Bantay-Currimao 115V line under the Grid Operation
and Maintenance Program (GOMP) on May 26, 2017. However, it
was deferred and was moved to October 25, 2017 due to system
constraint.
Note: Per NGCP Standards Maintenance and Test Volume 1

As of October 2019
60
(Chapter 10 Surge Arrester or Lightning Arrester), the frequency of
testing for Insulation Power Factor of LA is once every three (3)
years.
4. Explosion of Power Circuit Breaker (PCB) 7- Last 26 February 2017, Panit-an-Nabas 138kV line was de-
02CB24PNT during isolation process at energized to facilitate planned P&E Upgrading of Transmission
Panit-an S/S 0n 26 February 2017 Project per approved shutdown, PCB’s 7-D2CBDBPNT and 7-
02CB24PNT were opened at Panit-an-Nabas line. After the
opening 7-02CB24PNT, its phase B exploded.
The PCB 7-02CB24PNT opened but the arc at Phase B was not
quenched because the SF6 gas remaining was not sufficient. This
led to the buildup of heat pressure inside the pole until it failed.
The one-way valve at the filing port of phase B pole did not open.
The phase B pole was isolated from the common SF6 gas piping
system. Development of SF6 gas pressure at the phase B pole
could not therefore be monitored and protected by the alarm and
lock out of the common SF6 pressure gauge with density switch.
The fittings of the SF6 gas pipe to the filling port of Phase B pole
were not aligned properly causing it not to be fully threaded in of
fitted in, which is a possible defect during installation.
The test conducted on 28 September 2016 on 7-02CB24PNT for

Contact Resistance, Insulation Power Factor, Insulation
Resistance, SF6 Gas Analysis and Timing Analysis, resulted in
satisfactory rating.
5. Explosion of PCB 801CB08DAA at On 3 May 2017 at 1119H, the 30MVAR Shunt Reactor no. 1
Daanbantayan S/S on May 3, 2017 (8XR01DAA) was about to be denergized as required by the
system. The associated PCB 8-01CB24DAA was first opened then
followed by the PCB-8-01CB08DAA. At 1122H, the pole B of 8-
01CB08DAA suddenly exploded.
The root cause of the outage was the wear and tear of Phase B
contact fingers due to frequent switching operations and old age,
which affected the motion of the moving contact tube with respect
to the blast piston. This resulted to insufficient SF6 gas pressure
build up inside the blast cylinder which is required for arc-
quenching. Instead, the arc persisted and affected the dielectric
strength of the SF6, resulting to the explosion of the interrupting
chamber. All test results for 8-01CB08DAA conducted on 15
February 2016 was posted at satisfactory rating.

As of October 2019
61
Note: Per NGCP Standards Maintenance and Test Volume 1

(Chapter 3 High Voltage Power Circuit Breaker) the frequency of
test for Insulation Resistance, Contact Resistance, Insulation
Power Factor and Timing Test of PCB is once every three (3) years
for equipment that posted satisfactory rating in previous testing.
Notwithstanding this, 8-01CB08DAA was tested on 7 December
2017.
6. Explosion of Phase A CT 7-A05CT09VLN at CT 7A-05CT09VLN did not explode. Flashover was observed on
Villanueva S/S on December 12, 2017 the CT during the inspection conducted after the outage incident of
Villanueva-FDCMPC 138kV line and Villanueva S/S 138 kV Bus B.
Test was conducted on the CT after its replacement on 23

December 2017 and yielded satisfactory results.
In CY 2017, no TDP was prepared by NGCP. The preparation of the TDP is not required on an annual basis. Transco and PSALM would like to
During the 5 October 2018 meeting organized by the DOE, the reiterate Section 8 (b) of the EPIRA
Composite Team which includes Transco agreed on the IRR which clearly states to wit: “Submit
Transmission Development Plan (TDP) timeline. Considering the an updated TDP for approval to the
timetable required for the preparation of the TDP updates for 2017 DOE on a timely basis each year for
and 2018, the Composite Team decided that the TDP updates for integration with the PDP and PEP”
these years need not to be pursued by NGCP. Instead, the actual (emphasis supplied) Thus, Transco
project developments and actual operational data for these years and PSALM maintain their position that
will form part of the TDP 2019-2040. NGCP did not comply with the
preparation of TDP for CY 2017 as
This was again discussed during the meeting at the DOE on 11 required by law.
January 2019 in which the NGCP presented the TDP 2019-2040.
The DOE confirmed the agreement that there is no need for
separate TDP updates for 2017 and 2018, and that the actual
project developments and actual operationall data in 2017 and
2018 will form part of TDP 2019-2040, in its letters to NGCP dated
15 October 2018 and 14 February 2019.
NGCP failed to procure schedule and dispatch Ancillary Services (AS) are under the Philippine Grid Code. Thus, Transco and PSALM maintain their
sufficient Ancillary Services for Luzon, Visayas, the regulatory authority for AS is exercised by the ERC and not by position that for CY 2017 assessment,
and Mindanao Grids. Transco and PSALM. NGCP failed to procure, schedule and
dispatch sufficient AS for Luzon,
NGCP has not wavered in its efforts to procure AS through Visayas, Mindanao Grids. Section 9 of
newspaper advertising and communication with generation the IRR of the EPIRA states, “Transco
companies. However, since the provision of AS is dependent on or its Buyer or Concessionaire shall
the technical capabilities of power plants, not all existing power comply with the provisions of the Grid
plants do not have available capacity to offer AS. Code in the process of improving and
expanding its transmission facilities in
order to maintain the reliability,

As of October 2019
62
adequacy, security, stability and
integrity of the Grid and adequately
serve Electric Power Industry
Participants requiring transmission
service or Ancillary Services through
the Grid.
Section 3.03 The team adopts the findings of TRFLAT in 2012. A. This has been addressed in NGCP’s letter to PSALM and A. Transco and PSALM reiterate that
Nature of Transco dated 21 May 2018. NGCP should not have impleaded
Concession A. NGCP did not file any motion to drop Transco as unwilling co-plaintiff
Rights Transco as party defendant in CEB-38817. thus, a defendant in CEB-38817.
Transco was impleaded as an unwilling plaintiff in CEB-38817 as
the owner of the transmission assets. Section 3.03 (c) states that NGCP
In addition, on 09 January 2013, Transco was shall during the Concession
impleaded as a party defendant in an arbitration In the arbitration case, there was no finding of liability against Period assume all of the
case docketed as CIAC Case No. 01-2013 Transco. The case against NGCP was dropped for not being a responsibilities as if it is the owner
entitled, Consortium of Hyundai Engineering and party to the arbitration. Subsequently, the case against Transco of the transmission assets
Hyundai Corp. vs. NGCP and Transco in was likewise dropped for failure to get complete relief. including Transco and hold it
connection with the Contract for the Survey, harmless against any liabilities,
Design, Supply of Materials/Equipment and claims, losses, costs, and
Erection/Installation of 230 kV Maramag- expenses including attorney’s
Bunawan Transmission Backbone Project which fees. The act of NGCP in
is a PUC contract. impleading Transco opens the
latter to liabilities contrary to the
CA.
This also applies to the Hyundai case

which still has related cases pending in
the Court of Appeals and the Supreme
Court.
NGCP provided an Assignability Clause in its 64 Section 3.03 (h) of the CA has not been violated as NGCP’s Transco and PSALM reiterate that
contracts however, for the following contracts, covered contracts include an assignability clause. NGCP’s while NGCP claimed it provided an
the Assignability Clause could not be verified certification issued in compliance with Section 10.02 of the CA Assignability Clause in its 64 contracts,
because NGCP failed to provide Transco with includes a representation of compliance with this provision. Transco has no way of verifying the
copies of said contracts: accuracy of said assertion unless
Transco furnished copies of said
 Antipolo S/S Project contracts.
 Balsik-San Jose T/L Project
 Bataan Reinforcement Project
 Calamba S/S Project

As of October 2019
63
 Castillejos-Hermosa Project
 Clark-Mabiga T/L Project
 Eastern Albay T/L Project (Stage 2)
 Hermosa-Florida Blanca T/L Project
 Manila (Navotas) S/S Project
 Mariveles-Balsik T/L Project
 Pagbilao S/S Project
 Relocation of Hermosa-Duhat T/L Project
 Tuguegarao-Lal-lo T/L Project
 Tuy-Dasmarinas T/L Project
 Naga (Cebu) S/S Upgrading Project
 Agus 2 Swithcyard Upgrading Rehab Project
 Balo-i-Kauswagan-Aurora T/L Project (Balo-i

S/S Project)
 Matanao-Toril-Bunawan T/L Project
Section 4.02. As of November 30, 2018, NGCP failed to NGCP responded to the inquiry of Transco with regard to the
Project Under complete four (4) out of 42 PUCs as listed below Dasmarinas-Rosario Transmission Line Project in a letter dated 27
Construction and canceled one (1) project, the Dasmarinas- December 2018 received by Transco on 11 January 2019.
Rosario TL Project.
Also with regard to:
Transco repeatedly asked NGCP thru letters but
received no response on the status of the project A. Luzon PCB Replacement Project A. Luzon PCB Replacement Project
(copies of letters earlier provided to NGCP).
There are four (4) PUCs that are not yet The delay in project completion was due to shutdown Transco and PSALM would like to
completed as follows: schedules. The project requires the shutdown of the San Jose stress that the delay of the PCB
Station. NGCP Management decided to include the remaining replacement is exposing the Grid to
scope of work in the North Luzon SS Upgrading Project 1 with safety hazards. NGCP is very much
target completion in December 2019. aware that the purpose of the
replacement of old circuit breakers is
As of October 2019
64
Project Required to upgrade the capability of the
Completion equipment to withstand and effectively
Date under break faulted circuits with already high
the CA magnitude of short circuit and ground
A. Luzon April 2010 fault current. Given that this project
PCB was decided more than 10 years ago,
Replacement the hazards increases as new power
Project plants are being added in the Grid.
B. Negros V June 2009 B. Negros V Transmission Project B. Aurora-Polanco 138 kV

Transmission Transmission Line Project
Project The delays was due to Right-of-Way (ROW) issues which The response of NGCP is noted
resulted to several re-routings and protracted expropriation by Transco and PSALM.
C. Aurora May 2010
cases. The completion of one (1) tower site and six (6) in-
Polanco TL
between spans still awaits the resolution of the expropriation
Project cases. The target completion date of the project is December
2019.
D. Sulatan July 2010
Kudarat SS (SKM
C. Aurora-Polanco 138 kV Transmission Line Project C. Sultan Kudarat Substation
Capacitor Completion
Date) no Capacitor Project (replacement for
Project
mentioned Tacurong-Nuling TL)
(Replacement The delay in the completion of the transmission line and
for Tacurong target in the substation was likewise due to ROW problems at the tower
CA The Capacitor Project, as planned
Nuling T/L sites, which incurred re-routing of the transmission line more than 10 years ago, was
segments. The project was completed on 22 July 2018. meant to address undervoltage
problems in the service area, has
D. Sultan Kudarat Substation Capacitor Project (replacement for been complaining of
Tacurong-Nuling TL) undervoltages. NGCP-Mindanao-
SO is even asking the EC in
Due to security conditions in the area, only civil works are Mindanao to own their embedded
being handled by the contractor. The installation and power plants to support the
commissioning of the 2 7.5 MVAR, 69 kV capacitor bank at reactive power requirement of the
Nuling Substation shall be undertaken by NGCP. The project grid (at the expense of the ECs).
is targeted to be completed in December 2019. NGCP must complete this project
as soon as possible to help
address the power quality
problems in Mindanao Grid.
Section 4.05 NGCP failed to provide copies of its contracts for NGCP has no such construction contract (New Projects) that The response of NGCP is noted but
Intellectual New Projects that involve the use of intellectual involves the use of intellectual property rights where the contractor the assessment of Transco and
Property Rights property rights in order for Transco to verify has a title to transfer. PSALM remains.
whether these contracts contain provisions on

As of October 2019
65
transferability to Transco as required by Section
5.04 ( c) of the CA.
NGCP failed to remit the collected CY 2007 The subject charges and amounts are already in the pending Transco and PSALM take note of the
CC/RSTC from the Power Customers in the arbitration case among the parties. response of NGCP.
amount of PhP199.29 Million. The amount
remains unremitted as of 31 December 2017.
Section 4.09 Per CY 2012 Assessment, NGCP’s act of See response on item No. 2 (Section 3.03) above. Transco and PSALM reiterate that
Concessionaire impleading Transco as a defendant in Civil Case NGCP should not have impleaded
Indemnity No. CEB-38817 for “Declaratory relief” with This has been in NGCP’s letter to PSALM and Transco dated 21 Transco as unwilling co-plaintiff thus, a
Prayer for Cancellation of Tax Declaration” May 2018. defendant in CEB-38817. Section 3.03
relative to the Real Property Tax Assessment (c) state that NGCP shall during the
and Collection by the Province of Cebu against Transco was impleaded as an unwilling plaintiff in CEB-38817 as Concession Period assume all of the
NGCP is a clear violation of such provisions of the owner of the transmission assets. responsibilities as if it is the owner of
the CA. In the said civil case, the period of the transmission assets including the
assessment and collection involved in the said obligation to pay taxes and shall
case pertains to calendar year 2009 until 2011 is defend and indemnify Transco and
well within the Concession Period and therefore hold it harmless against any liabilities,
the sole accountability of NGCP under the CA. claims, losses, costs, and expenses
While NGCP clarified that Transco was included including attorney’s fees. The act of
in the case as an “unwilling co-plaintiff” to assist NGCP in impleading Transco opens
NGCP on matter of payment of taxes, although the latter to liabilities contrary to the
all liabilities shall be the NGCP’s responsibility, CA.
however, clearly, NGCP is in clear violation of the
abovementioned provisions of the CA. This also applies to the Hyundai case,
which still has related cases pending in
The proposed protocol has been commented by the Court of Appeals and the Supreme
Transco and PSALM and has been submitted to Court.
NGCP for further comments prior to finalization.
To date, Transco and PSALM are awaiting

NGCP’s final comment on the protocol.
Section 5.01 Title Notwithstanding anything in this Agreement, This has been addressed in NGCP’s letter to PSALM and Transco Transco and PSALM take note of the
TRANSCO shall retain title to: dated 21 May 2018. This is also among Transco’s non-monetary response of NGCP.
claims which were subject to the dispute resolution mechanism
“(i) all of Transmission Assets, Intellectual under the CA.
Property Rights, (ii) all assets comprising Project
Under Construction or New Projects”
“(iii) all easements, ROW or other real estate

interests, including Documented Property Rights
acquired by the Concessionaire in accordance
with Section 5.06 (Documented Property

As of October 2019
66
Rights)”.
The updating of master list and consolidation of

ROW-related documents is a continuing activity
all ROW claims and cases are closed and
terminated. However, the Titles, ROW Grants,
Deed of Sale (DOS)/Compromise Agreement
(CA) and Expropriation Cases are all in the name
of NGCP instead of Transco as provided for in
the CA.
Section 5.04. NGCP failed to provide copies of its contracts for NGCP has no such construction contract (New Projects) that Transco and PSALM reiterate that
New Projects New Projects in order for Transco to verify involves the use of intellectual property rights where the contractor NGCP did not provide copies of its
whether these contracts contain provisions on has a title to transfer. contracts for new projects, thus, there
transferability of title to Transco as required by is no basis to verify if these contracts
Section (c) of the CA. provide for the contractor to transfer
title for each new project.
Section 5.07. NGCP filed a Complaint for Expropriation (Civil Section 5.07 does not apply here. NGCP also responded to this Transco and PSALM maintain their
Adverse Claims Case No. 4747-2014-C) against National Power finding in its 12 October 2017 letter. This is also among Transco’s position and reiterate that the
Corporation and PSALM pertaining to properties non-monetary claims which were subject to the dispute resolution execution of protocol soonest is
situated in Barangay Bitin, Bay, Laguna in mechanism under the CA. necessary to avoid involving PSALM
connection with the Lumban EHV-Bay 230 kV and Transco in any case or proceeding
Transmission Line Project. Subject properties are in relation to the Transmission Assets.
declared for taxation purposes under the name of
NPC. NGCP’s filing of the aforesaid complaint
constitutes a clear violation of this provision of
the CA.
In this regard, the execution of protocol is

necessary to avoid involving PSALM or Transco
in any case or proceeding in relation to the
Transmission Assets. The proposed protocol has
been commented by Transco and PSALM and
has been submitted to NGCP for further
comments prior to finalization.
Section 5.08. NGCP did not remit the WACC recovery with the This claim is already in the pending arbitration case among the Transco and PSALM maintain their
Retained profit component. Furthermore, partial remittance parties. position on this matter.
Obligation has been made by NGCP beyond 15 days.
We retain the position in our letter dated 11 May 2017 that the
obligation of NGCP is to reimburse Transco for expenses approved
by the ERC. Thus, the reimbursement of ROW-related charges is
limited to ERC-approved amounts only.
Section 7.0. 7.01 Transmission Development Plan (TDP) See item C (pages 4 to 5) above. Same TRFLAT response on item C

As of October 2019
67
Concessionaire’s (pages 4 to 5) above.
Positive In CY 2017, no TDP was prepared by NGCP. The preparation of the TDP is not required on an annual basis.
Continuing Also, no consultation was made with Transco as
Covenants there was no TDP prepared for CY 2017.
Section 7.04 NGCP failed to obtain and maintain all permits, NGCP has already acquired the Permit to Operate for one (1) Transco and PSALM take note of the
Permits Licenses licenses, and other governmental approvals genset in Binga Substation (OR-A-16-3609). We are currently response of NGCP. NGCP is reminded
and Government required in the performance of its obligations. In preparing action plans to address all permit, license and other that it should observe the
Approvals CY2017, NGCP failed to obtain/maintain Permit governmental approval concerns. timeline/validity of the permits,
to Operate of one (1) genset in Binga Substation licenses, etc. at all time.
(OR-A-16-3609). Also, for the National
Telecommunication Commission (NTC) Radio
Station License (RSL), NGCP failed to
obtain/maintain license for one (1) MW radio
station in Olongapo SS facing Hanjin SS (OR-A-
17-1954).
Section 7.08 A. RA 9136 (EPIRA) and its IRR See item C above. Same TRFLAT response on pages 4
Applicable Laws to 5 above.
The preparation of the TDP is not required on an annual basis
Specifically, NGCP did not prepare TDP in 2017
which is a requirement under the IRR of RA 9136
(EPIRA that it should be prepared annually.
B. Philippine Grid Code This is a matter subject of the ERC’s regulatory authority.
The Year 6 Inspection of Books and Records-Philippine Grid Code Transco and PSALM maintain their
Under PGC-IBR Summary of Observations for (IBR-PGC) checklist prepared by PSALM and Transco inspectors position that there were records not
CY 2017, there were 115 records not available at for the Year 6-2018 inspection, composed of 643 items from 64 available at the time of inspection.
the NGCP’s Technical Document Center (TDC). items in the previous year’s checklist was based on the new PGC
2016 Ed.
NGCP underscores the following:
i. During the second day of inspection, PSALM/Transco

inspectors announced that the requirements for acceptability of
documents and records shall include signatures, hard or
printed copies of records with the (10) pages or fewer,
reference number, and NGCP logo.
ii. Some of the findings involve documents and records of

customers which pertain to their own compliance with the
PGC;

As of October 2019
68
iii. With regard to NGCP’s own PGC compliance, Transco stated
that its standards are separate from the PGC;
iv. There are no established guidelines with regard to the extent of

information that Transco will require; and
v. There were varying standards depending on the Transco

inspector present during each meeting.
C. Also, NGCP failed to procure, schedule and Despite the apparent arbitrariness in the PGC inspection, NGCP Same TRFLAT response on item D.
dispatch sufficient Ancillary Services for committed to fulfill its planned actions for Available Incomplete and
Luzon, Visayas, and Mindanao Grids. Unavailable records summarized as follows:
Timeline AI U Remarks
In Mindanao Grid, there was no Dispatchable 2018 5 Documents are available
Reserve capacities for CY2017. Likewise in 2019 193 111 To be completed/submitted
Visayas Grid, the deficiency for Contingency within 2019
Reserve was 98.75%. The table below shows the 2020 16 4 Ongoing compliance
average deficiencies in the required capacity of Total 214 115
ancillary services for CY2017. Given, the Grid
was operated at great risk of blackouts. Ancillary Services are under the Philippine Grid Code. Thus, the
regulatory authority for Ancillary Services is exercised by the ERC
Type of AS Average Deficiencies in the and not by Transco and PSALM.
Required Capacity of AS for
CY2017*
LuzonVisayas Mindanao
Regulating 1.57%86.63% 0.00%
Reserve
Contingency 50.51% 98.75 18.55%
Reserve
Dispatchable 12.88% 23.83% 100.00%
Reserve
*Based on NGCP’s Day-Ahead Ancillary
Services Schedule
D. RA 9511 – NGCP Franchise
NGCP is required to be publicly-listed company NGCP had done nothing to list and
and it has to be done within 10 years from the conduct an IPO for at least 20% of its
Commencement Date of January 15, 2009. As of shares within the statutory period as
December 31, 2017, NGCP is not yet a publicly- required by RA 9511.

As of October 2019
69
listed company.
E. NGCP likewise violated Section 4 when it This is now the subject of a petition filed by NGCP with the ERC. The right of NGCP to exercise the
filed an expropriation case against SSS for power of eminent domain was granted
the acquisition of its property in Pasay. The to it by RA 9511 which clearly defined
SSS challenged NGCP’s authority before the its scope by inserting a qualification
Supreme Court which temporarily enjoined that said power may only be used to
NGCP’s acquisition pending resolution of the acquire such “private property” as is
actually necessary for the realization of
issue by the court.
the purposes for which the franchise
was granted.
F. There were forty seven (47) uncorrected
observations pertaining to DENR This is now the subject of cases pending in the courts. NGCP is Transco and PSALM maintain their
also among Transco’s non-monetary claims which were subject to position on these observations/findings
Administrative Order and one (1)
the dispute resolution mechanism under the CA. in 2017.
observation pertaining to the failure to
secure a Genset Permit to Operate (OR-A-
16-3609: The 562 kVA stand by Generator
Set has expired (March 5, 2015) Permit-to-
Operate issued by DENR at Binga
Substation, Ref.: RA 8749 “Clean Air Act”
G. National Telecommunication Commission As of 01 March 2019, 39 of the 48 items pertaining to DENR

(NTC) Policy Administrative Orders have already been closed, while two (2)
have been corrected. See also item 12 above. NGCP continue to
For permits pertaining to NTC Licenses, NGCP address issues with regard to applicable environmental laws and
failed to obtain/maintain license for one (1) facility NTC policies.
(OR-A-17-1964: MW Radio Station License for
Subic (Hanjin) SS is not presented/posted at
Olongapo SS.
H. ERC Rules and Regulations
NGCP has not filed its Business Separation and Business Separation and Unbundling Plan and Accounting Cost
Unbundling Plan and Accounting and Cost Allocation Manual concerns have been addressed in NGCP’s Transco and PSALM underscore Rule
Allocation Manual (ACAM) before the ERC. letter dated 21 May 2018. We reiterate our position that NGCP 10, Section 2 of the EPIRA IRR which
does not have to submit an application for BSUP and ACAM states, to wit: “This Rule shall apply to
considering that NGCP is only engaged in the business of all Electric Power Industry Participants
providing transmission services. that are currently engaged or will be
engaged in any of the following
business activities:

As of October 2019
70
1. Power generation;
2. Transmission;
3. Distribution;
4. Supply of Electricity including

collection and metering;
5. Related businesses which utilize

the generation, transmission,
distribution or supply assets for
non-electricity related services;
and
6. Other electricity related services

that may be identified and
authorized by the ERC.
The ERC may relax or eliminate the

unbundling requirements for
specified business activities if such
activity operates in a competitive
market”. (emphasis supplied)
The ERC promulgated the BSUP in

September 2003 and issued
Resolution No. 49 series of 2006 to
amend the same. The BSUP sets out
the rules and principles for the
separation of accounts necessary to
satisfy the requirements of the
EPIRA and the IRR.
Considering that NGCP is the lone

transmission provider in Luzon,
Visayas, and Mindanao grids.
Transco and PSALM maintain their
position that NGCP should comply
with the filing of the BSUP and
ACAM with the ERC.

As of October 2019
71
Section 8.05 NGCP still continues to borrow in the absence of This has already been addressed in NGCP’s letter dated 11 July Transco and PSALM reiterate their
Indebtedness acceptability requirement from PSALM. 2018 received by PSALM on 18 July 2018. position that NGCP should secure
from PSALM a listing of acceptable
As requested by PSALM in a letter dated 21 financial institutions before entering
March 2018, NGCP submitted the following per into a loan agreement.
its letter dated 16 April 2018 which was received
by PSALM on 26 April 2018. It is worthy to note that NGCP made
the following f=borrowings in 2017
1. Certification of NGCP’s Actual Debt-Equity without informing PSALM:
Ratic (DER) for year 2017;
a). September 15, 2017 – Philippine
2. Indicative terms and conditions of the National Bank Loan (PhP5B)
proposed 2018 borrowings; b) December 5, 2017 – Banco De Oro
(PhP10B)
3. Statement of Information of Actual
Indebtedness in 2016-2017 as to the creditor As such, PSALM was deprived of the
maturity date interest and relevant terms and opportunity to signify its acceptance of
conditions; NGCP’s creditor banks on the above
loans.
4. List of new projects that have been approved
by ERC and are proposed for financing by
2018 borrowings;
5. Progress Report to date of NGCP’s projects

which were financed by prior year’s
borrowings
6. Audited Financial Statements as of

December 31, 2017.
In a letter dated 17 May 2018, PSALM informed

NGCP of the following observations and
deficiencies noted in the above-mentioned
submission:
1. The Debt-Equity ratio was not properly

certified and should be certified by the Chief
Finance Officer;
2. The information on previous year’s

borrowings does not contain the details i.e.

As of October 2019
72
amount of drawdown/s, outstanding balance
to date, effective interest rate and maturity
date. Copy of the loan agreement was not
provided to PSALM;
3. The list of projects should have new CAPEX

projects only;
4. The list includes completed projects:
i. Expenditures for the completed projects

should have been disclosed to PSALM;
ii. Previous years’ drawdowns include

projects labeled as “on-going construction”
which shows inefficiency on NGCP’s part
aside from the fact that such projects were
already approved by the ERC, and it is
being recovered through the transmission
charges;
iii. Several projects already listed as

“completed” are included in various
drawdown years e.g. Calong-Calong-
Toledo-Colon 138 kV TLP; Luzon
Substation Expansion Project -2, Luzon
Substation Expansion Project-3 to name a
few.
Based on the above, PSALM deems it

unnecessary to issue a credit rating list of
financial institutions for purposes of NGCP’s
2018 borrowings. It was noted that per submitted
Audited Financial Statements for the year ended
2017, NGCP’s financial position shows liquidity
or awash with cash enough to fund the proposed
projects.
Hence, incurrence of additional debt has no valid

basis to warrant its necessity.
Section 10.01 NGCP has not fully and completely satisfied this Contrary to PSALM and Transco’s position, Section 10.01 pertains PSALM and Transco underscore

As of October 2019
73
Records provision. Refer to IBR 2017 Report. to financial records only. Section 10.01 Records of the CA
which states: “The Concessionaire
shall maintain complete and accurate
books and records…including records
of the operating and financial history
and condition of the Transmission
Assets. xxx”. Thus, it is very clear that
the provisions does not refer to
financial records only as posited by
NGCP.
Section 10.03 NGCP did not provide the requested documents NGCP replied to the PSALM letters dated 25 and 27 September NGCP did not provide the requested
Financial to complete the evaluation of its proposed 2017 in its letter dated 11 October 2017, citing the following prior documents to PSALM. The NGCP
Information borrowings despite PSALM letters dated 25 and submissions in response to their requests: letter dated 11 October 2017 did not
27 September 2017 regarding 2017 NGCP provide the supporting documents as
borrowings. i. Letter on 2017 NGCP Borrowings dated 15 September 2017 required by PSALM.
ii. Audited Financial Statements as of 31 December 2016 and

2015; and
iii. Letter of new financial institutions for confirmation by PSALM

dated 04 August 2017.
Section 10.05 NGCP failed to provide PSALM and Transco with NGCP has complied with Section 10.05, and TRANCO and Transco and PSALM maintain their
Regulatory Filings copies of all notices it receives from ERC and all PSALM have to specify what documents they were not furnished. position.
written applications, pleadings, reports, and other
documents that it files with the ERC at the same PSALM and Transco concede that NGCP provides them with
time as they are filed. copies of its applications and petitions filed with the ERC. Section
10.05, by the use of the word “file” in relation to the obligation to
While NGCP provided Transco/PSALM copies of provide PSALM and Transco with copies of NGCP’s regulatory
pleadings/filings before the ERC (but at times, no filings, limited the obligation only to those documents that pertain to
attachments were included) it has also not applications and petitions in relation to a case, and subsequent
furnished Transco documents/correspondences documents, such as comments, compliances, motions, and the
with ERC related to its forthcoming like, all of which are part of a case file with a specific case number.
applications/filings. Hence, the phrase “other documents” cannot be loosely construed
as to include correspondence “related to forthcoming
applications/filings and other related matter”.
CA PROVISIONS PARTIALLY COMPLIED WITH BY NGCP
Section 2.01 A. All 365 customers of NGCP have The requirements under Section 2.01 (3) is for NGCP to enter into Transco/PSALM reiterate that NGCP
Concession Transmission Service Agreements. Connection Agreements with Transmission Customers, which it failed to complete the required
However, during the 2017 IBR, NGCP did. Any perceived deficiency is a regulatory matter under the Schedules as attachment to the
confirmed that only Schedule A has been authority of the ERC, and not Transco. Transmission Service Agreements for
completed and attached to the 365 TSAs. 2017. Only Schedule “A” was available
Further, during the closeout meeting with the inspectors in and the rest of the schedules
35thStatus Report on EPIRA Implementation
As of October 2019
74
Thus, NGCP failed to complete the required November 2018, the open items were already resolved and tagged (Schedules B to R) are pending
Schedules. as “Closed”. Inspectors were also informed that in Q1 of 2018, compliance.
NGCP conducted another round of fora for all its customers
focusing only on the TSA schedules.
B. All the collected UC were remitted to PSALM The reconfiguration of the Billing System of NGCP for the NGCP was still not substantially
in 2017. However, NGCP failed to segregation of UC-ME SPUG and UC-ME REDCI was compliant for the 2017 assessment.
reconfigure its billing system as of 31 implemented starting with the August 2018 Billing Month. Prior to
December 2017 segregating the UC-ME for this billing month, the UC Remittance Report provided by NGCP
NPC and UC-ME for Renewable Energy Finance to PSALM already segregated the UC-ME SPUG and UC-
ME REDCI.
Developers Cash Incentive.
Section 5.06 “NGCP at its own cost shall:

Documented i. Commence and pursue eminent domain
Property Rights proceedings to acquire DPR in its own name
(DPR) or under TRANSCO’s name.
A. While NGCP is allowed to commence and This has been addressed in the letters dated 07 March 2017 and Transco and PSALM maintain their
pursue eminent domain proceedings for the 21 May 2018. We reiterate that the NGCP Franchise allows NGCP position. DPR is included in the
purpose of acquiring DPR since the same is to acquire property and property rights through the exercise of the coverage of Section 5.01 of the CA
granted to it by its franchise. Section 5.06 right of eminent domain, not as an agent of Transco but in its own which provides that Transco shall
must be read in conjunction with 5.01 which name. Accordingly, properties and easements acquired by NGCP retain title to all of the transmission
explicitly and unequivocally states that in its own name are likewise registered in its own name. The assets including Documented Property
obligation to transfer the tile to the properties that NGCP had Rights acquired by NGCP during the
notwithstanding anything in the CA (which
acquired in the exercise of its right of eminent domain arises only Concession Period.
includes 5.06). TRANSCO shall retain title to at the end of the Concession Period when PSALM shall take over
all Transmission Assets, Intellectual Property NGCP’s business as a going concern.
Rights, all assets comprising the PUC or
New Projects, and all easements, rights of
way or other real estate interests, including
DPR acquired by the Concessionaire under
Section 5.06. Notice the language used in
Section 5.01 as all encompassing and
provided not even a single exception or
condition that would support NGCP’s claim
of title to DPR.
B. ERC Rules and regulations such as RTWR, NGCP continues to comply with all applicable regulations. Same TRFLAT comment on the issue
OATS, ASPP, AS-CRM under item H.
Section 10.03 A. CY 2009-2016 – Submission of Reports to: PSALM and Transco did not require NGCP to submit the annual Transco and PSALM reiterate that
Financial reports to Congress in their inspection checklists from 2009 to despite NGCP’s submission to

As of October 2019
75
Information 2015. The inspection checklists and/or Close Out of Previous appropriate Governmental, the
1. Congress and Senate Observations Report for said years signed by the PSALM and requirement under Section 10.03 of
“NGCP shall Transco inspectors with NGCP’s conformity show that this item had CA is for NGCP to deliver to PSALM
deliver to PSALM been complied with and made available at the TDCs. It was only the financial statements that
the Financial For CYs 2009-2015, still only NGCP’s during the IBR for 2014 and 2015 that PSALM and Transco noted Applicable Law requires.
Statements that transmittal letters of its submissions of that only the transmittal letters were available in the TDCs.
Applicable Law annual reports to the Houses of Congress of Nonetheless, this checklist item was indicated as “Available”. In the Section 10.03 Financial Information of
requires it to the Philippines are available in the TDCs 2016 IBR, PSALM and Transco started to require NGCP to make the CA specifically provides that
prepare as well and no attached reports are kept in the available in the TDCs copies of the full reports as received by both “Throughout the Concession Period,
as the financial TDCs. Houses of Congress. NGCP has complied. the Concessionaire shall deliver to
statements PSALM the Financial Statements that
required by the CY 2016 full copy of reports is now available Applicable Laws requires it to prepare
appropriate at the TDCs. as well as the financial statements
Governmental required by the appropriate
Authority 2. Energy Regulatory Commission Governmental Authority including the
including the Congress of the Republic of the
Congress of the Philippines, ERC, IBR, and the SEC to
Republic of the CYs 2009 to 2013 – only copies of proofs of be submitted..”
Philippines, ERC, NGCP’s submissions (transmittal letters) to
BIR, and the SEC the ERC in accordance with the Philippine
to be submitted. Grid Code (PGC) are provided in the TDC.
B. CYs 2014-2015- no proof of submission of Similarly, as shown in the inspection checklists from 2009 to 2013, Throughout the inspection of books
the Annual Audited FS. PSALM and Transco did not require NGCP to make available in and records, Transco and PSALM
the TDCs copies of the Annual Audited Financial Statement as have been continuously providing the
submitted to the ERC. The inspection checklists and/or Close Out Report on the Observations with the
Note: As per NGCP response dated 11 May Previous Observations Report for said years signed by the PSALM comment that “only proofs of
2017 “The provision in the Philippines Grid Code and Transco Inspectors with NGCP’s conformity show that had submissions to Congress and ERC
2001 Edition requiring the Grid Owner/System been complied with and made available at the TDCs. It should be (without attachments) are available at
Operator to submit to the ERC true copies of the noted that copies of the Annual AFS are submitted at the TDCs as the TDC” for NGCP’s compliance and
audited balance sheet and financial statement a separate checklist item, hence, PSALM and Transco may refer to appropriate action. The Observations
was not included/provided in the PGC the same. See also our letter date 11 May 2017. have been conveyed to NGCP thru the
Amendment No. 1 dated 02 April 2017. Hence, IBR checklists specifically under the
NGCP is not required to submit to ERC the comments section of the Inspection of
Annual Audited FS CY 2014 to 2015. However, Summary of Reports and Close-Out of
with the PGC 2016 Edition, NGCP is now observation Reports.
required to submit to ERC the audited balance
sheet and FS starting 2016.” In the latest IBR conducted in 2018,
full copy of reports to Congress for CY
2016 were provided, but still, only
copies of NGCP’s proof of
submissions to the Congress for the
years 2009 to 2015.

As of October 2019
76
Since these are considered part of

permanent records, Transco and
PSALM will still assess the status of
these items in the upcoming IBR.
C. CY 2016 – For re-inspection. For 2016, copies of the signed annual calculation of the Debt to Based on the checklist, remarks
Equity Ratio (DER) and Debt Service Coverage Ratio (DSCR) indeed pertain to TDC 2. Thus, NGCP
were made available at the TDCs. In reply to the IBR 2016 joint must ensure that the documents
The semestral calculations of Debt-Equity (DE) assessment, NGCP requested PSALM and Transco to clarify the available in TDC 1 are also available in
Ration and Debt Service Coverage Ratio (DSCR) matter as this has been assessed by the inspectors as “Available” TDC 2. Nonetheless, since these are
for CY 2016 are in soft copies only, no printed file at TDC 1 without issue, but with remark for TDC 2 that only soft considered part of the permanent
and the 2nd semester is unsigned. copies are available and that the 2nd semester is unsigned. This, records, these would still be among
considering that NGCP submitted an annual calculation for 2016 the items to be checked in the
and not semestral calculations. Notably, PSALM and Transco only upcoming IBR. Notably, the 2018
required NGCP to submit the semestral calculations during the IBR semestral calculations should also be
for 2017. signed.

As of October 2019
77
Annex 2. TransCo Inspection Report Based on Concession Agreement (May 2019 to October 2019)
Inspection
No. Location Name of Project/ Transmission Facilities Inspection Date
Report No.
LUZON
NLR-D6-19-27 District 6 North Luzon Mexico, Cabanatuan, San Rafael & May 6-10, 2019
Concepcion S/S, Pantabangan HEP
1
Switchyard, Pantabangan LES and Fatima
Repeater Station
SLR-D1-19-28 District 1 South Luzon Dasmariñas, Biñan,Muntinlupa, Las Piñas, May 6-10, 2019
2 Batangas, Salong, Ternate, Calaca & Rosario
S/S, Bolbok and Taal Load End Substation
Bauang, Bacnotan, San Esteban, Bantay,
3 NLR-D1-19-29 District 1 North Luzon May 27-31, 2019
Currimao, and Laoag Substations
Ramon (Magat), Enrile (Roma Norte), and
4 NLR-RS-19-33 North Luzon June 3-7, 2019
Baligatan (Ilagan) Repeater Stations
La Trinidad, Ambuklao, Binga HEP, and Itogon
5 NLR-D2-19-34 District 2 North Luzon June 3-7, 2019
Substation
6 SLR-MB-19-40 South Luzon South Luzon MTD-B Office in Daraga, Albay July 1-5, 2019
San Manuel, Nagsaag, Bolo, Labrador, and
7 NLR-D3-19-42 District 3 North Luzon July 1-5, 2019
Balingueo Substations
Pinamalayan, Calapan and San Aquilino
8 SLR-RS-19-43 South Luzon July 1-5, 2019
Repeater Stations
North Luzon ACC, Tuba and Ampicao
9 NLR-AC-19-44 North Luzon July 15-19, 2019
Repeater Stations
Hermosa-Mexico-San Rafael Transmission
10 NLR-D6-19-48 District 6 North Luzon July 15-19, 2019
Line
San Jose, Malaya, Quezon, Doña Imelda,
July 29-August 2,
11 NLR-D7-19-49 District 7 North Luzon Taytay Substations, Angat & San Mateo
2019
Repeater Stations, and Angat Power House
National Control Center (NCC) and Luzon August 27-September 2,
12 NLR-NC-19-53 North Luzon
System Operation ((LSO) 2019
Southern Tagalog Area and Laguna-Quezon
13 SLR-MA-19-56 South Luzon September 9-13, 2019
Area
Tayabas, Gumaca, Lumban, San Juan,
Caliraya and Bay Substations, Famy,
14 SLR-D2-19-58 District 2 South Luzon September 23-27, 2019
Calamba, Los Baños, Pitogo, Mulanay and
Lopez LES and Maunong RS
Hermosa, Limay, Olongapo, Botolan, SBMA &
15 NLR-D5-19-59 District 5 North Luzon Subic Substations and BCCPP Switching October 7-11, 2019
Station
VISAYAS
Ormoc, Maasin, Tabango, Babatngon,
Calbayog, Paranas (Wright) & Sta. Rita
(Bagolibas) S/S, Guadalupe CTS, Hilongos
1 VIS-D1-19-30 District 1 Visayas May 27-31, 2019
PCB Station, Albuera Electrode Station,
Tolosa Capacitor Bank Station and Ormoc
HVDC Station
Visayas MTD-B Office in Bacolod City, Negros
2 VIS-MB-19-35 Visayas June 3-7, 2019
Occidental
Panay Area Control Center, Jordan Repeater
3 VIS-AC-19-36 Visayas June 17-21, 2019
Station and Buenavista Substation
Corella, Tagbilaran, & Ubay Substations, West
Poblacion & Trinidad Capacitor Bank Stations,
4 VIS-D2-19-45 District 2 Visayas July 15-19, 2019
Garcia Hernandez Load End Station and C.P.
Garcia Cable Terminal Station
Sta. Barbara, Barotac Viejo, Dingle, Panit-an,
Nabas, Concepcion & San Jose Substations,
5 VIS-D4-19-50 District 4 Visayas July 29-August 2, 2019
Barotac Viejo Cable Terminal Station and
Boracay Load-End Station
Cebu, Carcon, Naga, Colon, Quiot, Toledo,
Calong-calong, Compostela & Daanbantayan
6 VIS-D2-19-52 District 2 Visayas August 12-16, 2019
Substations, Lapu-Lapu & Mactan GIS, Danao
Load End Substation, and Samboan CTS
7 VIS-RS-19-54 Visayas Ivisan and Tangalan Repeater Stations September 9-13, 2019
Bacolod, Cadiz, Kabankalan, Sipalay, Amlan,
Mabinay Substations, Victorias Capacitor Bank
8 VIS-D3-19-63 District 3 Visayas
Station and E. B. Magalona, Pondol Cable
Terminal Stations
MINDANAO
1 MIN-D5-19-26 District 5 Mindanao Davao-Toril-Matanao-Kidapawan 138kV T/L May 6-10, 2019
Mindanao MTD-A Office in Iligan City, Lanao
2 MIN-MA-19-31 Mindanao May 27-31, 2019
del Norte

As of October 2019
78
Inspection
No. Location Name of Project/ Transmission Facilities Inspection Date
Report No.
Mindanao System Operations and Cugman
3 MIN-RC-19-32 Mindanao June 3-7, 2019
Repeater Station
Butuan, Nasipit, Bislig, San Francisco and
4 MIN-D4-19-37 District 4 Mindanao June 17-21, 2019
Placer Substations
North Western Mindanao Repeater Stations
5 MIN-RS-19-41 Mindanao July 1-5, 2019
(Dinas, Ozamiz, and Lopez Jaena)
Iligan, Balo-i, Agus 6/7 & Lugait Substations
6 MIN-D2-19-46 District 2 Mindanao July 15-19, 2019
and Agus 5 HEP & Switchyard
General Santos Area Control Center, Malalag,
7 MIN-AC-19-47 Mindanao July 15-19, 2019
Calumpang, and Tupi Repeater Stations
Pitogo, Zamboanga, Naga & Aurora
8 MIN-D1-19-51 District 1 Mindanao Substations and Tumaga (Lunzuran) Capacitor August 12-16, 2019
Bank Station
Cagayan De Oro, Opol, Tagoloan, Jasaan,
9 MIN-D3-19-55 District 3 Mindanao September 9-13, 2019
Villanueva Maramag and Kibawe Substations
Davao, Culaman, Matanao, Nabunturan,
10 MIN-D5-19-57 District 5 Mindanao September 23-27, 2019
Maco, Bunawan, and Toril Substations
11 MIN-AC-19-60 Mindanao Zamboanga Area Control Center October 7-11, 2019
12 MIN-AC-19-61 Mindanao Butuan ACC Mainit Repeater Station October 7-11, 2019
Western Visayas Repeater Stations (Carmen ,
13 MIN-RS-19-62 Mindanao October 21-25, 2019
San Isidro & Salvacion)
14 MIN-MB-19-64 Mindanao Mindanao O&M MTD-B October 21-25, 2019
Source: Transco

As of October 2019
79
Annex 3.. NGCP Related Petitions to ERC as of October 2019
DECISION/CASE NO./ DATE OF FILING NATURE OF PETITION GROUNDS FOR FILING STATUS
Interim Maximum Annual Revenue for CY  Immediately ISSUE an Order provisionally Awaiting ERC Order/Notice of Hearing
ERC Case No. 2019-086RC/October 29, 2020 with Prayer for the Urgent Issuance of approving the collection of the iMAR202o
2019 Provisional Authority in the amount of PhP58,846Mn effective
January 2020 billing month (December 26,
2019 to January 25, 2020); and
 APPROVE, after notice and hearing, the
authority to collect the iMAR2020 in the
amount of PhP58,846Mn.
Application for Approval of the Ancillary  Immediately ISSUE a provisional authority Awaiting ERC Order/Notice of Hearing
ERC Case No. 2019-077RC/ October 15, Services Procurement Agreement Between to implement the subject ASPA executed
2019 the National Grid Corporation of the on 3 July 2019; and
Philippines and King Energy Generation, Inc.  APPROVE, after notice and hearing, the
(Misamis Occidental Power Plant 2 – subject ASPA.
Panaon).
Application for Approval of the Ancillary  Immediately ISSUE a provisional authority Awaiting ERC Order/Notice of Hearing
ERC Case No. 2019-076RC/ October 15, Services Procurement Agreement Between to implement the subject ASPA executed
2019 the National Grid Corporation of the on 3 July 2019; and
Philippines and King Energy Generation, Inc.  APPROVE, after notice and hearing, the
(Misamis Occidental Power Plant 3 - subject ASPA.
Jimenez).
Application for the Approval of Force Majeure  DECLARE the occurrence of Typhoon As per ERC order dated 21 September 2019
ERC Case No. 2019-071 RC/ September 13, Event Regulated FM Pass - Through for "0mpong" in Luzon which resulted in an The Commission set the jurisdictional
2019 Typhoon "Ompong" in Luzon, in Accordance increase in costs incurred by the NGCP to requirements, expository presentation, pre-
with the Rules for Setting Transmission restore, repair and rehabilitate various trial and evidentiary hearing on 06 November
affected transmission assets and facilities 2019 (Wed) at 2:00 PM at the 15th floor, ERC
in the NGCP North Luzon Operations and Pasig City.
Maintenance District 4 and NGCP North
Luzon System Operations, as a Force
Majeure Event (FME);
 Immediately GRANT Provisional Authority

to implement and bill the following FM
Pass-Through Amounts to Luzon
customers starting the billing month of
November 2019 to 2020, or until such time
that the amounts incurred are fully
recovered;
 APPROVE the FME CAPEX and OPEX

amounting to Nineteen Million Six Hundred
Forty-Four Thousand Seven Hundred Fifty-
Six Pesos and Eighty-Five Centavos
(Php19,644,756.85) incurred by NGCP for
the repair, restoration and rehabilitation of
the damaged transmission assets and
facilities due to FME Typhoon "0mpong";
 APPROVE and ALLOW the recovery of the

As of October 2019
80
Net Fixed Asset Value of the transmission
assets and facilities damaged by the FME
Typhoon "0mpong" amounting to Fourteen
Million Two Hundred Fifty Three Thousand
Three Hundred Seventy Nine Pesos and
Sixteen Centavos (Php14,253,379.16),
given that it would have been fully
recovered by NGCP if these transmission
assets and facilities have not been
damaged or destroyed by the said FME;
 APPROVE, after due notice and hearing,

the proposed FM Pass-Through Amounts
to be collected from the Luzon customers
starting November 2019 billing month to
December 2020, or until such time that the
amounts incurred are fully recovered; and
 EXCLUDE the proposed Pass-Through

Amounts from the side constraint
calculation.
Application for Approval of the Ancillary  Immediately ISSUE a provisional authority Pursuant to ERC order dated 24 September
ERC Case No. 2019-061/ August 16, 2019 Services Procurement Agreement Between to implement the subject ASPA executed 2019 the Commision conducted on hearing
the National Grid Corporation of the on 3 July 2019; and on 23 October 2019 at Seda Atria, Pison
Philippines and SPC Island Power Avenue, Atria Park District San Rafael,
Corporation.  APPROVE, after notice and hearing, the Mandurriao Iloilo City
subject ASPA.
Application for the Approval of Force Majeure  DECLARE the flood due to enhanced Awaiting ERC Order/Notice of Hearing
ERC Case No. 2019-055RC/ July 19, 2019 Event Regulated FM Pass - Through for southwest monsoon rain caused by
Flood Due to Enhanced Southwest Monsoon tropical depression “Josie” in Luzon as
Rain Caused by Tropical Depression "Josie" Force Majeure Events (FME);
in Luzon, in Accordance with the Rules for  Immediately GRANT Provisional Authority
Setting Transmission Wheeling Rates, with to implement and bill the following FM
Prayer for Provisional Authority Pass-Through Amounts to Luzon
customers starting the billing month of
October 2019 to December 2020, or until
such time that the amount incurred is fully
recovered;
 APPROVE the FME CAPEX/OPEX
amounting to Ten Million Six Hundred
Twenty-Six Thousand Eighty-Five Pesos
and Seventy-One Centavos
(Php10,626,085.71) incurred by NGCP for
the repair, restoration, and rehabilitation of
the damage transmission assets and
facilities due FME flood due to enhanced
southwest monsoon rain caused by tropical
depression “Josie”;

As of October 2019
81
assets and facilities damaged by the FME
southwest monsoon rains and tropical
depression “Josie” amounting to Twenty
Thousand Pesos (Php20,000.00), given
that it would have been fully recovered by
NGCP if these transmission assets and
other related facilities have not been
damaged or destroyed by the said FME;
the proposed FM Pass Through Amount to
be collected from the Luzon customers
starting October 2019 billing month to
December 2020 or until such time that the
amount incurred is fully recovered; and
calculation.
ERC Case No. 2019-016 RC/ February 22, Application for Approval of the Ancillary  Immediately ISSUE a provisional authority As per ERC Order dated 4 April 2019, the
2019 Services Procurement Agreement Between to implement the subject ASPA executed Commission set hearing for determination of
the National Grid Corporation of the on 14 January 2019; and compliance with the jurisdictional
Philippines and SN Aboitiz Power Magat Inc.  APPROVE, after notice and hearing, the requirements, expository presentation, pre-
subject ASPA. trial conference, and presentation of evidence
on 22 May 2019, 10:00 AM, at the Mango
Suites City Road, Brgy. Calao East, Santiago
City.
ERC Case No. 2019-015 RC/ February 22, Application for Approval of the Ancillary  Immediately ISSUE a provisional authority As per ERC Order dated 12 March 2019, the
Philippines and SN Aboitiz Power - Benguet  APPROVE, after notice and hearing, the requirements, expository Presentation, pre-
Inc. (for Binga). subject ASPA. trial conference, and presentation of evidence
on 29 May 2019 (Wednesday), at ten o'clock
in the morning (02:00 P.M.), at Azalea
Residences 7 Leonard Wood Road,Baguio
City.
ERC Case No. 2019-014 RC/ February 22, Application for Approval of the Ancillary  Immediately ISSUE a provisional authority As per ERC Order dated 12 March 2019, the
Philippines and SN Aboitiz Power - Benguet  APPROVE, after notice and hearing, the requirements, expository presentation, pre-
Inc. (for Ambuklao). subject ASPA. trial conference, and presentation of evidence
on 29 May 2019 (Wednesday), at ten o'clock
in the morning (10:00 A.M.), at Azalea
Residences 7 Leonard Wood Road,Baguio
City.

As of October 2019
82
ERC Case No. 2019-011RC/ February 14, Application for Approval of the Ancillary  Immediately ISSUE a provisional authority Awaiting ERC Order/Notice of hearing
2019 Services Procurement Agreement Between to implement the subject ASPA executed
the National Grid Corporation of the on 18 December 2018; and
Philippines and SPC Power Corporation.  APPROVE, after notice and hearing, the
subject ASPA.
ERC Case No. 2018-120RC/ December 19, In the Matter of the Application for Approval of  Immediately ISSUE a provisional authority Provisionally Approved per ERC Order dated
2018 the Ancillary Services Procurement to implement the subject ASPA executed 26 February 2019.
Agreement Between the National Grid on 20 November 2018; and
Corporation of the Philippines (NGCP) and  APPROVE, after notice and hearing, the
SPC Island Power Corporation (SIPC) (Filed subject ASPA.
December 19, 2018)
ERC Case No. 2018-117RC/ December 19, Application of the National Grid Corporation of  DECLARE Severe Tropical Storm Urduja Pursuant to ERC Order dated 16 January
2018 the Philippines for the Approval of Force in the Visayas, Typhoon Vinta in 2019 the Commission conducted hearings on
Majeure (FM) Event Regulated FM Pass Mindanao, Tropical Storm Basyang in the the following dates and venue:
Through for Severe Tropical Storm Urduja in Visayas and Mindanao, and flash flood in
the Visayas, Typhoon Vinta in Mindanao, Minclanao as Force Majeure Events  Feb. 21, 2019 – Jurisdictional and
Tropical Storm Basyang in the Visayas and (FME); Expository Presentation at ERC Pasig
Mindanao, and Flash Flood in Mindanao in  Feb. 28, 2019 – Expository and Pre-Trial
Accordance with the Rules for Setting  Immediately GRANT PROVISIONAL Conference at ERC Visayas Field Office.
Transmission Wheeling Rates APPROVAL to implement and bill the  March 07, 2019 – Pre-Trial Conference
following FM Pass-Through Amounts to and Evidentiary at ERC Mindanao Field
Visayas and Mindanao customers starting Office in Davao.
January 2019 billing month to December
2020 billing month or until such time that
the amount incurred is fully recovered;
 APPROVE the FME CAPEX/OPEX

amounting to Sixty-Three Million Eight
Hundred Seventy Thousand Seven
Hundred Eighty-Six Pesos and 10/100
(PhP63,870,786.10) incurred by NGCP for
the repair, restoration, and rehabilitation of
the damaged transmission assets and
other related facilities due to Severe
Tropical Storm Urduja in the Visayas,
Typhoon Vinta in Mindanao, Tropical
Storm Basyang in the Visayas and
Mindanao, and flash flood in Mindanao;

the proposed FM Pass Through Amount to
be collected from the Visayas and
Mindanao customers starting January 2019
billing month to December 2020 billing
month or until such time that the amount
incurred is fully recovered;

As of October 2019
83
assets and other related facilities damaged
by Severe Tropical Storm Urduja in the
Visayas, Typhoon Vinta in Mindanao,
Tropical Storm Basyang in the Visayas and
Mindanao, and flash flood in Mindanao,
amounting to Two Million Fourteen
Thousand Five Hundred Sixty-Five and
43/100 (PhP2,014,565.43). given that it
would have been fully recovered by NGCP
if these transmission assets and other
related facilities have not been damaged or
destroyed by the Subject Force Majeure
Events; and

calculation.
ERC Case No. 2018-109RC/November 16, Application for Approval of the Ancillary  Immediately ISSUE a provisional authority Pursuant to ERC Order dated 7 January
2018 Services Procurement Agreement Between to implement the subject ASPA; and 2019, the Commission conducted the hearing
the National Grid Corporation of the on 31 January 2019 at Toledo city Cebu.
Philippines and Toledo Power Company  APPROVE, after notice and hearing, the
subject ASPA. The hearing was likewise concluded and Co-
Applicants were directed to submit its Formal
Offer or Evidence.
ERC Case No. 2018-108 RC/ November 9, Application for Approval of the Ancillary  Immediately ISSUE a provisional authority Pursuant to ERC Order dated 7 January
2018 Services Procurement Agreement Between to implement the subject ASPA; and 2019, the Commission set the hearing on 7
the National Grid Corporation of the February 2019 at Boracay Island, Malay
Philippines and Panay Power Corporation  APPROVE, after notice and hearing, the Aklan.
subject ASPA.
ERC Case 2018-100-RC/ October 2, 2018 Application for the Approval of Force Majeure  DECLARE the Bombing/Sabotage Pursuant to ERC Order dated 15 November
(FM) Event Regulated FM Pass Through for Incidents in Mindanao and Luzon, as well 2018 the Commission conducted the following
the Bombing /Sabotage Incidents in as the Lightning/Thunder Incident in Luzon hearings:
Mindanao and Luzon, and Lightning/ Thunder as Force Majeure Events (FME);
Incident  Jan. 15, 2019 -Jurisdictional and
 GRANT PROVISIONAL APPROVAL to Expository Presentation at ERC Pasig
implement and bill the FM Pass-Through  Jan. 16, 2019 – Expository presentation
Amounts to Mindanao and Luzon at ERC Mindanao Field Office.
customers starting November 2018 billing  Jan. 24, 2019 – Pre-Trial Conference
month to December 2020 billing month or and Evidentiary at ERC Pasig.
until such time that the amount incurred is
fully recovered;  March 12, 2019 - Continuance of
evidentiary hearing.
 APPROVE the FME CAPEX amounting to
Three Million Four Hundred Sixteen
Thousand Seven Hundred Twelve Pesos
and 11/100 (PhP3,416,712.11) incurred by
NGCP for the repair, restoration , and
rehabilitation of the damaged transmission

As of October 2019
84
assets and other related facilities due to
the Subject Force Majeure Events;

the proposed FM PassThrough Amount to
be collected from the Mindanao and Luzon
customers starting November 2018 billing
month to December 2020 billing month or
until such time that the amount incurred is
fully recovered;

by the Subject Force Majeure Events
amounting to Four Million Three Hundred
Thirty One Thousand Eighty Nine Pesos
and77/100(PhP4,331,089.77) given that it
would have been fully recovered by NGCP
if these transmission assets and other
destroyed by the Subject Force Majeure
Events; and

calculation.
ERC Case No. 2018-094 RC/ September 20, Application for Approval of the Ancillary  Immediately ISSUE a provisional authority Provisionally Approved per ERC Order dated
2018 Services Procurement Agreement Between to implement the ASPA between NGCP 8 January 2019 (docketed April 22, 2019)
the National Grid Corporation of the and WMPC; and
Philippines and Western Mindanao Power
Corporation  APPROVE, after notice and hearing, the
ASPA between NGCP and WMPC.
ERC Case 2018-073 RC/ July 5, 2018 Application for the aaproval of Force Majeure  DECLARE the earthquake in Leyte in the On March 18, 2019, NGCP filed a motion
Event Regulated FM Pass-Through for Visayas region as Force Majeure Events requesting the Commission to set
Eartquake in Leyte in the Visayas Region In (FME); continuance of hearing on April 23, 2019.
Accordance with the Rules for Setting
Transmission Wheeling Rates  Immediately GRANT Provisional Approval
to implement and bill the following FM
Pass-Through Amounts starting August
2018 billing month to December 2020 for
Visayas, or until such time that the
amounts incurred are fully recovered;
 APPROVE the FME CAPEX and OPEX

amounting to One Hundred Fifty-Four
Million Eight Hundred Fifty-Three
Thousand Forty Pesos and 16/100
(PhP154,853,040.16) incurred by NGCP

As of October 2019
85
for the repair, restoration and rehabilitation
of the damaged transmission assets and
other related facilities due to FME
Earthquake in Leyte;

the proposed FM Pass-Through amounts
to be collected from the Visayas customers
starting August 2018 billing month or until
such time that the amounts incurred are
fully recovered;

by the FME Earthquake in Leyte
amounting to Thirty-Nine Million Two
Hundred Ninety Thousand Five Hundred
Thirty-Four Pesos and 84/100
(PhP39,290,534.84) given that it would
have been fully recovered by NGCP if
these transmission assets and other
destroyed by the said FME; and

calculation.
ERC Case No. 2017-100 RC/ Oct. 26, 2017 In the Matter of Application for the Approval of  ISSUE a Provisional Authority to On February 21, 2019 at ERC Visayas Field
the Connection Charges and Residual implement and commence the billing and Office in Cebu city the Commission
Subtransmission Charges for Calendar Years collection of the proposed CY 2015 conducted the continuance of the evidentiary
2014 and 2015 on Subtransmission Assets of CC/RSTC beginning the billing month of hearing.
the National Grid Corporation of the January 2018;
Philippines, with Prayer for Provisional On March 14, 2019 (2:00PM), the
Authority  APPROVE the recovery of the computed continuance of the evidentiary hearing was
CY 2014 and 2015 CC/RSTC provided in conducted at ERC Pasig City.
this application from all Transmission
Customers;
 ALLOW NGCP to bill and collect under-

recoveries resulting from the difference in
the actual collection made by NGCP for CY
2015 and 2016 vis-a-vis the proposed
CY2014 and 2015 CC/RSTC which should
have been collected for the years CY2015
and 2016; and DIRECT NGCP to refund
any over-recovery arising from such
difference;

As of October 2019
86
 ALLOW NGCP to bill and collect the

deferred CC/RSTC for disposed sub-
transmission assets; and
 ALLOW NGCP to impose a 3% Franchise

Tax on CC/RSTC to be reflected as a
separate line item in the Power Bill.
ERC Case No. 2017-093RC/ October 13, Application for Approval of the  Immediately ISSUE a Provisional Authority As per ERC Order dated 14 August 2019 the
2017 Implementation of the Cebu-Bohol 230 kV to implement the Cebu-Bohol 230 kV Commission granted TransCo’s petition for
Interconnection Project and Nabas-Caticlan- Interconnection & Nabas-Caticlan-Boracay intervention. Likewise, pre-trial and
Boracay Transmission Line Projects; and evidentiary hearings were conducted on
Transmission Project. September 4, 11 and 18, 2019.
 APPROVE, after notice and hearing, the
projects. On October 2, 2019, intervenor Aklan Electric
Cooperative, Inc. (AKELCO) conducted its
expository and evidentiary hearing.
Source: Transco

As of October 2019
87
Annex 4. ERC Approved Capital Expenditure Projects
PROJECT COST
DATE FILED/
APPLICANT PROJECT DESCRIPTION RATIONALE (PhP)
APPROVED
UNPLANNED CAPITAL EXPENDITURE PROJECTS
Zamboanga del Norte Electric
The main building was constructed sometime
Cooperative, Inc. Design, planning and construction of a
in 1932, and has deteriorated significantly, its 15 December 2016/
(ZANECO) new building that will serve as the main
present state poses danger to the transacting 112,432,902.20 7 May 2019
ERC CASE NO. office of ZANECO located in Dipolog
public and the member-consumers of
2016-198 RC City, Zamboanga del Norte.
ZANECO.
CAPITAL PROJECTS
Construction of new 69kV The project provides CELCOR with N-1
52,689,711.30
Subtransmission Line (N-1). capability in case of system contingency.
Relocation and rehabilitation of lines and poles
Project Pole Relocation. affected by the Road Widening Projects of 28,065,312.43
DPWH.
Cabanatuan Electric Corporation (CELCOR) Installation of Cable Tray along Cesar This project covers the laying of power cables 7 August 2015/
ERC CASE NO. Vergara Bridge (Primary Line Bridge at Cesar Vergara bridge complementing the 8,208,240.00 4 June 2019
2015-150 RC Attach). approved capital expenditure for RY 2014.
The proposed modern building shall be the

Restoration of CELCOR’s Century-Old new face of CELCOR; the new building for
building into a new two-storey office employees will provide a convenient,
25,831,605.16
building and construction of wing stimulating and dynamic working environment;
extension. and the office shall give the clients a new
customer service experience.
FORCE MAJEURE PROJECT
Tarlac Electric, Inc. (TEI) Repair and restoration of the damaged
25 March 2015
ERC CASE NO. facilities including poles, distribution To comply with its duty to restore service
36,775,216.88 11 June 2019
2015-052 RC transformers and pole line hardware and within the shortest time possible.
metering accessories.
Cagayan II Electric EMERGENCY CAPITAL EXPENDITURE PROJECT
Cooperative, Inc. To accommodate the sudden load growth in
Uprating the Mission substation in Sta. 22 March 2018/
(CAGELCO II) the franchise area, specifically in the
Teresita, Cagayan from 5 MVA to 15 47,048,496.46 16 July 2019
ERC CASE NO. municipalities of Baguey, Sta. Teresita, and
MVA.
2018-015 RC part of Gonzaga, Cagayan.
EMERGENCY CAPITAL EXPENDITURE PROJECTS
Purchase, Installation and
Davao Oriental Electric To address the reliability problem on the
Commissioning of 5 MVA Power
Cooperative, Inc. existing three (3) units 833 kVA (2.5 MVA) 24,100,000.00
Substation and Accessories for Cateel 25 October 2018/
(DORECO) power transformer in Cateel Substation.
Substation. 16 July 2019
ERC CASE NO.
Replaced the damaged 10 MVA Power
2018-104 RC Purchase of new 10 MVA Power
Transformer of Lupon Substation. 12,550,000.00
Transformer for Lupon Substation.

As of October 2019
88
PROJECT COST
DATE FILED/
APPROVED
FORCE MAJEURE CAPITAL EXPENDITURE PROJECT
Visayan Electric Company, Inc.
Repair and re-installation of 100 MVA
(VECO) To restore VECO’s reliability without incurring 28 June 2013/
Transformers located at the NGCP Cebu
ERC CASE NO. rental charges to be charged to the 24,935,512.00 24 June 2019
Substation which was heavily damaged
2013-138 RC consumers.
by a thunderstorm.
EMERGENCY CAPITAL EXPENDITURE PROJECT
Bohol Light Company, Inc.
To replace the defective SF6 Circuit Breaker of
(BLCI) 13 May 2016/
Replacement of one (1) unit of SF6 Dampas Substation located in Tagbilaran City
ERC CASE NO. 1,402,200.00 24 June 2019
Circuit Breaker at Dampas Substation. to ensure the safety and stability of power
2016-132 RC
supply.
EMERGENCY CAPITAL EXPENDITURE PROJECTS
To meet the present and future load
requirement in the area;
To ensure safety in the operation of the

Removal of the defective 5 MVA power facilities;
transformer of Lumban 1 Substation and
installation of a new 10 MVA power To enhance the reliability of delivery of power
First Laguna Electric
transformer. to customers being supplied by the substation;
Cooperative, Inc.
1 December 2017/
(FLECO)
Installation of a 69 kV power circuit To have an accessible capacity that could 12,881,778.00 24 June 2019
ERC CASE NO.
breaker at Lumban 1 Substation. accommodate emergency requirements on
2017-109 RC
transferring loads, from other substations or
Installation of the necessary foundations feeders; and
and steel structures for the Lumban 1
Substation. To have continuously available distribution
services and a substation that will provide
reserve capacity margins for future interruption
contingency to meet the reliability performance
standards.
Aurora Electric EMERGENCY ELECTRIC CAPITAL EXPENDITURE PROJECT
Cooperative, Inc. Installation of new 10 MVA substation in
5 October 2018/
(AURELCO) Brgy. Alcala, Ma. Aurora, Aurora and the To address the capacity issue of the San Isidro
34,695,085.00 24 June 2019
ERC CASE NO. upgrading of associated controls and Substation.
2018-102 RC protection.
CAPITAL EXPENDITURE PROJECTS
The 3-km old distribution line could not
withstand the incoming loads and needs
Lanao del Norte Electric Double Circuiting of Backbone Line from
rehabilitation by being converted into double-
Cooperative, Inc. Kauswagan Substation to Larapan 407,908.79
circuits construction wherein revisions on pole 7 December 2015/
(LANECO) bridge, Linamon.
height, spanning/distances and construction 25 June 2019
ERC CASE NO.
assemblies must be done.
2015-206 RC
Construction of 69 kV subtransmission To address present and future load
line from Curvada, Kapatagan to requirements as well as to energize the 10 72,846,460.18
LANECO Main Office. MVA Sagada Substation.

As of October 2019
89
PROJECT COST
DATE FILED/
APPROVED
CAPITAL EXPENDITURE PROGRAM
Replacement of Rotten Wood Poles and
To maintain a safe and reliable distribution
Cross Arms into Steel Poles/Cross 11,871,366.10
network.
Arms.
Installation of eight (8) units vacuum
To maintain the safety level and proper
circuit reclosers with single phase 7,496,200.00
monitoring of the distribution network.
tripping.
Relocation of three-phase primary
To maintain a safe and reliable distribution
distribution line situated along the old 573, 251.51
network.
Pasunglao Bridge, Calanan, Tabuk City.
Procurement of new distribution To address the increasing demand of
3,168,105.80
transformers. KAELCO.
Procurement of new kWh meters and To accommodate the new customers of
5,616,484.45
service drop wires. KAELCO.
Kalinga Apayao
Cooperative, Inc. Replacement of defective and To accommodate the demand requirement of
3,800,564.30 14 March 2016/
(KAELCO) overloaded distribution transformers. KAELCO’s consumer.
25 June 2019
ERC CASE NO.
2016-018 RC Replacement of old/defective kWh To provide accurate measurement of energy
3,381,505.80
meters. consumed by each member-consumers.
Computerization projects. To improve service efficiency. 5,565,231.54
Procurement of read and bill gadgets
To improve service efficiency. 1,962,500.00
and line printers.
Construction of multi-purpose hall;
concreting of the main office ground and
access road towards motorpool, To improve service efficiency. 631,236.00
substation and warehouse; and
improvement of sub-offices.
Procurement of service vehicles and
To improve service efficiency. 20,000,000.00
rehabilitation of Telelec/Terex.
Procurement of tools and testing
To improve service efficiency. 644,730.46
equipment.
Ilocos Norte Electric EMERGENCY CAPITAL EXPENDITURE PROJECT
Cooperative, Inc.
To provide continuous supply, efficient, safe 9 June 2016/
(INEC) Replacement of 10 MVA Batac
and reliable service specifically foe customers 122,362.23 25 June 2019
ERC CASE NO. Substation.
served by Batac Substation.
2016-138 RC
Ilocos Sur Electric CAPITAL EXPENDITURE PROJECT
Cooperative, Inc.
Replacement of the 10 MVA Power 5 July 2016/
(ISECO) To address the load capacity build-up in Vigan
Transformer in Vigan Substation with a 17,144,548.00 25 June 2016
ERC CASE NO. Substation.
brand new 15 MVA transformer.
2016-153 RC
Sorsogon II Electric FORCE MAJEURE EVENT CAPITAL EXPENDITURE PROJECT
7 October 2016/
Cooperative, Inc. Replacement of damaged poles, line To ensure power restoration in the entire
80,319,456.00 25 June 2019
(SORECO II) hardware, damaged kWh meters, coverage area of SORECO II and delivery of

As of October 2019
90
PROJECT COST
DATE FILED/
APPROVED
ERC CASE NO. transformer and its protection, service more reliable and efficient service to its
2016-178 RC drop wires and distribution and office consumers.
equipment; and replacement of vehicles
and repair of devastated buildings and
offices.
FORCE MAJEURE EVENT CAPITAL EXPENDITURE PROJECT
Sorsogon I Electric Repair, restoration, replacement and/or
To ensure power restoration in the entire
Cooperative, Inc. rehabilitation of SORECO I’s distribution
coverage area of SORECO II and delivery of 17 November 2016/
(SORECO I) lines, distribution transformers, hardware
more reliable and efficient service to its 60,331,181.48 25 June 2019
ERC CASE NO. and accessories, service dropwires, kWh
consumers; and to restore the safety and
2016-187 RC meters, buildings and equipment
protection of SORECO I’s distribution system.
damaged by Typhoon Nona.
EMERGENCY CAPITAL EXPENDITURE PROJECT
Lanao del Norte Electric
Cooperative, Inc. Procurement and installation of the new To immediately restore and provide as safe,
18 May 2017/
(LANECO) 10 MVA Power Transformer to replace adequate, efficient, and reliable electric service
19,297,311.84 25 June 2019
ERC CASE NO. the damaged 5 MVA Brush Transformer to the consumers being served by Kapatagan
2017-043 RC at Kapatagan Substation. Substation.
Zamboanga del Norte Electric FORCE MAJEURE EVENT CAPITAL EXPENDITURE PROJECT
25 May 2017/
Cooperative, Inc. Repair, restoration, replacement and To restore electric power in the areas of
25 June 2019
(ZANECO) rehabilitation of distribution lines and Katipunan, President Manuel Roxas and
3,900,436.77
ERC CASE NO. facilities damaged due to flood brought Manukan, all within the franchise area of
2017-046 RC by the Tail-End of the Cold Front. ZANECO.
Zamboanga del Norte Electric FORCE MAJEURE EVENT CAPITAL EXPENDITURE PROJECT
Cooperative, Inc. Replacement of the damaged
To restore the electricity service and ensure 3 April 2018/
(ZANECO) transformers, distribution poles,
the protection of ZANECO’s distribution 8,122,871.96 30 July 2019
ERC CASE NO. conductors, line hardware, and other
system.
2018-020 RC associated line accessories.
FORCE MAJEURE EVENT CAPITAL EXPENDITURE PROJECT
Biliran Electric
Repair, restoration, replacement and/or
Cooperative, Inc. 29 May 2018/
rehabilitation of BILECO’s damaged
(ZANECO) To provide a continuous, safe, reliable and 30 July 2019
distribution poles, transformers, and line 20,800,952.93
ERC CASE NO. efficient electric service to its customers.
materials caused by the Typhoon
2018-052 RC
Urduja.
Source: ERC

As of October 2019
91

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35th Electric Power Industry Reform Act (EPIRA)

Implementation Status Report

With Contributions from

Energy Regulatory Commission

I. EXECUTIVE SUMMARY ................................................................................................... 2

35th Status Report on EPIRA Implementation

35th Status Report on EPIRA Implementation

A. Generating Assets and Independent Power Producer (IPP) Contracts

 On 26 June 2019, PSALM received Governance Commission’s (GCG) letter dated 10

 On 06 August 2019, PSALM sent a letter to Philippine Competition Commission (PCC)

35th Status Report on EPIRA Implementation

Activity Inclusive Dates

35th Status Report on EPIRA Implementation

Table 1. Schedule of Privatization for Generating Assets as of 30 September 2019

*Capacity increased by 19 MW as a result of Agus VI Units 1 & 2 Uprating

B. Other Disposable Assets

1. PSALM’s Real Estate Assets (REA)

 Disposal of REA (lands underlying sold power assets)

35th Status Report on EPIRA Implementation

 Bauang Diesel Power Plant (BDPP) Land

 Cebu Diesel Power Plant (DDP) Land

 Aplaya DPP Land

 Puerto Azul Condominium Units and Club Share

 Architectural Concept Design Competition for Diliman Property

The selection committee is composed of representatives from the United Architects of

3. Disposal of REA through Other Modes

 Tiwi Geothermal Power Plant Land

As of 30 September 2019, PSALM, through the privatization of generation assets, the

Table 3. Privatization Proceeds as of 30 September 2019, (in PhP Billion)

D. Concession of the National Transmission Network

A. Sale of Sub-Transmission Assets (STAs)

Outstanding Financial Obligations Assumed from NPC

IPP Lease Obligations Debts

Table 5. Financial Obligations (FOs) as of 30 September 2019

Table 6. Financial Obligations by Currency as of 30 September 2019

Debt Financing/Loan Financing

35th Status Report on EPIRA Implementation

35th Status Report on EPIRA Implementation

Figure 3 - Electric Cooperatives’ Average Systems Rate

grid still has the highest average unbundled

35th Status Report on EPIRA Implementation

Figure 5 – Private Investor-Owned Distribution Utilities Average Electricity Rates

35th Status Report on EPIRA Implementation

35th Status Report on EPIRA Implementation

QPPL 6.32 5.22 5.32 5.30 5.44 6.66 7.55

FGPC - STA.RITA 5.64 4.99 5.00 4.63 4.85 5.22 4.90

MPPCL 4.91 4.82 4.41 4.39 4.97 5.09 4.96

TLI 5.55 32.45 4.83 5.16 5.40 5.56

SMEC 5.98 5.16 5.04 5.82 5.88 6.63

SPPC (baseload) 5.35 4.78 4.87 4.85 5.33 5.46 5.68

TMO 11.32 9.65 17.59

WESM 6.94 10.47 10.16 12.04 5.83 2.18 1.66

Millenium Energy Inc. (MEI) 22.04 18.63 45.95

Others 7.30 8.36

35th Status Report on EPIRA Implementation

Meanwhile, transmission charges, on the average, comprise around 7% to 9% of a DU’s

Figure 6 – NGCP Average Effective Transmission Charges