1. society
2. work
3. contracts

Republic of the Philippines
ENERGY REGULATORY COMMISSION
San Miguel Avenue, Pasig City
IN
THE
MATTER
OF
THE
APPLICATION FOR APPROVAL
OF THE AMENDMENT TO THE
POWER
SALES
CONTRACT
(APSC) BETWEEN KEPCO SPC
POWER CORPORATION (KSPC)
AND
CEBU
I
ELECTRIC
COOPERATIVE, INCORPORATED
(CEBECO I), WITH MOTION FOR
THE
ISSUANCE
OF
PROVISIONAL AUTHORITY
ERC CASE NO. 2014-116 RC
KEPCO
SPC
POWER
CORPORATION
(KSPC),
AND
CEBU
I
ELECTRIC
COOPERATIVE, INCORPORATED
(CEBECO I),
Applicants.
)(
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)(
NOTICE OF PUBLIC HEARING
TO ALL INTERESTED PARTIES:
Notice is hereby given that on August 12, 2014, KEPCO SPC
Power Corporation (KSPC) and Cebu I Electric Cooperative,
Incorporated (CEBECO I) filed a joint application for approval of
their Amendment to the Power Sales Contract (APSC), with motion
for the issuance of provisional authority.
In the said application, KSPC and CEBECO I alleged, among
others, that:
1.
KSPC' is a duly authorized generation company and
existing under and by virtue of the laws of the Republic
of the Philippines, with principal address at ih Floor,
Cebu Holdi,ngs Center, Cebu Business Park, Cebu City;
J.
ERC Case No. 2014-116 RC
NOTICE/October 22, 2014
Page 2 of 22
2.
CEBECO I is a franchised electric cooperative organized
and existing under the laws of the Republic of the
Philippines with principal office at Bitoon, Dumanjug,
Cebu. It has been granted a franchise by the National
Electrification Administration (NEA) to distribute electric
service in the following city and municipalities: Carcar
City, Sibonga, Argao, Dalaguete, Alcoy, Boljoon, Oslob,
Santander, Samboan, Ginatilan, Malabuyoc, Alegria,
Badian, Moalboal, Alcantara, Ronda, Dumanjug and
Barili, all in the province of Cebu (the Franchise Area);
Nature of the Application
3.
Pursuant to Rule 20 (B) of the Commission's Rules of
Practice and Procedure, approved on June 22, 2006 in
Resolution No. 38, Series of 2006, the instant application
is submitted to the Commission for approval of their
APSC dated April 26, 2014. A copy of the said APSC is
attached to the instant application.
Moreover, their "Motion for the Issuance of Provisional
Authority" is made pursuant to Rule 14 of the said Rules;
Compliance with Pre-Filing Requirements
4.
In compliance with Rule 6 of the Commission's Rules of
Practice and Procedure, they have furnished the
respective legislative bodies of the Local Government
Units of the municipality where CEBECO I principally
operates as well as the Province of Cebu. Copies of the
Certificates from the legislative bodies are attached to
the instant application;
5.
They have caused the publication of the present
application in its entirety in a newspaper of general
circulation within the franchise area of CEBECO I.
Copies of the corresponding Affidavit of Publication and
issue of the said newspaper are, likewise, attached to
the application;
ERC Case No. 2014-116 RC
NOTICE/October 22, 2014
Page 3 of 22
Background and Statement of Facts
6.
KSPC entered into a Power Sales Contracts (PSC) with
CEBECO I on July 5, 2007. The parties subsequently
amended their PSC (first amendment) through an APSC
dated March 29, 2008 and further amended the same by
the Implementing Agreement to the Power Sales
Contract dated September 21, 2009 and finally
supplemented by the Supplemental Agreement (SA)
dated January 27, 2014, a copy of the SA is attached to
the instant application;
7.
The parties applied for the approval of their PSC with the
Commission (ERC Case No. 2007-141 RC) which it
approved the same in a Decision dated December 8,
2008 with a KSPC rate of PhP4.2511/kWh. They adopt
all documentary evidence submitted to the Commission
in support of the previous application and the approved
PSC to form part of the instant application in so far as
the documents relates to them. They, likewise, submit
that the Commission may take judicial notice of all
documents submitted in the previous application to
prevent unnecessary
duplications
of documentary
evidence;
Amendments to the PSC on the Fuel Factor of the
KSPC Price Adjustment Formula
8.
In September 2010, the Minister of Energy & Mineral
Resources (MEMR) of Indonesia passed MEMR No. 17,
Series of 2010, regulating coal exportations from
Indonesia. The law requires that the coal price in a
contract must be equal to or higher than the Coal
Reference Price (CRP) to be issued by the MEMR.
The basic tenets of the CRP affecting KSPC's coal
contracts are as follows:
8.1 The CRP applies to all long-term contracts (contracts
lasting for more than 3 years) for the exportation of
coal;
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 4 of 22
8.2 The CRP of a particular contract is the average CRP
for the three (3) months immediately preceding the
execution of the relevant contract;
8.3 The coal price must be equal to or higher than the
CRP (the CRP itself being based on FOB);
8.4 KSPC's contract price of coal is Cost and Freight
(CFR), so the delivered price of coal is coal price
(FOB) plus transportation price;
8.5 The CRP must be applied for one (1) year (i.e., the
CRP at the time of execution of the contract, e.g.
IPC contract (July 2011) is USD 56.15/ton while
JSKM contract (October 2011) is USD 54.49/ton,
Quarterly adjustments under the CSC must be equal
to or higher than blended CRP of both contracts at
USD 55.47;
8.6 If quarterly adjustments is lower than the CRP, then
the price to be used for that quarter will be the CRP;
8.7 A new CRP will be computed at each anniversary
date of each contract and used until the end of that
anniversary year; and
8.8 To export coal properly from Indonesia, a supplier
must have an IUP license and must comply with the
CRP.
A copy of the said MEMR No. 17, Series of 2010 is
attached to the application;
9.
To secure the coal requirements for the next ten (10)
years and assure the customers of supply of electricity,
KSPC entered into coal supply contracts with PT Inkor
Prima Coal (PT IPC) on July 18, 2011 and PT Jaya
Samudra Karunia Mining (PT JSKM) on October 13,
2011.
Copies of KSPC's coal supply contracts are,
likewise, attached to the application;
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 5 of 22
10.
KSPC procures its coal requirements from Indonesia
since: (1) it is the cheapest and their specifications are
the most compatible with its requirement for a CFBC
coal plant; (2) China does not export coal anymore and
prefers to use their own coal for their own consumption;
(3) Australian coal is expensive and its calorific value is
too high for a CFBC type plant; and (4) Philippine coal
calorific value is still higher than that is required by it and
the cost is higher than Indonesia;
11.
To reflect the changes in the coal (fuel) base price,
KSPC has to add the fuel factor affected by the
Indonesian CRP so that the actual cost of fuel will be
passed through to the distribution utilities, pursuant to
the Decisions of the Commission on the "pass through"
nature of fuel in the previous applications of KSPC: "the
actual fuel cost utilized in generating electricity
should be passed on to the customers [of the DUZ.
There should be no cap on the fuel cost to be
passed on to the customers as long as within the
efficiency set by the Commission. 11
(Emphasis
supplied.) Accordingly, KSPC incorporated in the price
adjustment formula in the PSC in the instant application
the Fuel Base Price Factor (f.t), thus:
Old KSPC Price Adjustment
K Ad) =
{ [
FCP n + 0.305 x _n
CF ] _n
FX}
0.540 + 0.065 x __
FCPo
CFo FX
New KSPC Price Adjustment
K Ad" =
Y
{ [
0.540 + 0.065 x --FCPn
FCPo
KAdj
Formula:
=
+ 0.305
x -CFn] x
CFo
+ [ 0.090
LCP n]
x __
LCPo
0
Formula:
Ff
-FX
FX
n}
0
+ [ 0.090
LCPn
x -LCPo
Adjustment factor of KSPC during the Billing Month
]
"
ERC Case No. 2014-116 RC
NOTICE/October 22, 2014
Page 6 of 22
FCPn = The Arithmetic average of the values of the United
States Producers' Price Index for all items and the
United States Consumer Price Index (CPI) for all items,
both as last published on or before the Adjustment Date
(the last day of the billing month) by International
Monetary Fund; provided that if the International
Monetary Fund ceases to publish such' indices, the
relevant indices published by the U.S. Department of
Labor Bureau of Labor Statistics shall apply
FCPa
=
The Arithmetic average of the values as of January
2008 of the United States Producers' Price Index for
all items and the United States CPI for all items, both
as published on by International Monetary Fund;
provided that if the International Monetary Fund ceases
to publish such indices, the relevant indices published by
the U.S. Department of Labor Bureau of Labor Statistics
shall apply
CFn
=
BPn + TBPn
CFa
=
BPa + TBPa
Where:
BPa
=
shall be the blended rate (FOB + insurance) of the
new Coal Supply Contracts 1
TBP a = shall
be
the
blended
transportation
rate
(transportation + wharfage) of the new Coal Supply
Contracts2
Ff
= Fuel Base Price Factor = (FBPrlFBPaJ
Where:
FBPn
1
2
3
=
New Fuel Base Price3
Current BPo rate as of 4th Q 2011: USD42.38
Current TBPo rate as of 4th Q 2011: USD21.14
Current New Fuel Base Price of 4th Q 2011: USD63.52
"
ERC Case No. 2014-116 RC
NOTICE/October 22, 2014
Page 7 of 22
FBPo
=
FXn
= Philippines Peso vs. US Dollar exchange
FXo
=
An exchange rate of 40.65 Philippine Peso vs. 1.00
US Dollar
LCPn
=
The Arithmetic average of the values of the CPI in
Philippines for all items and General Wholesale Price
Index in Metro Manila for Mineral fuels, lubricant and
related materials, both as last published on or before
the Adjustment Date (the last day of the billing month)
by the National Statistics Office (NSO)
LCPo
=
The Arithmetic average of the values as of January
2008 of the CPI in Philippines for all items and
General Wholesale Price Index in Metro Manila for
Mineral fuels, lubricant and related materials, both as
published by the NSO
Old Fuel Base Price4
rate as
published by the Bangko Sentral ng Pilipinas at the
last working day of the Billing Month
Where:
Adjustments to Base Price (BPn)
=
BPn
BPn
=
shall be adjusted quarterly to reflect the increase or
decrease of the price of Global Coal FOB Newcastle
as of the first day of loading as per the formula stated
below:
BP
n-l
x
(BIPn_1
BIJD
J or BP
n
~
CRP
n-2
Where:
BPn
4
=
Base Price as of current quarter; computed as per
formula above, or the current CRP, whichever is
higher
Old Fuel Base Price as of 4th Q 2007: USD52.57
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 8 of 22
BPn-1 = Base Price as of preceding quarters. In case of a new
Coal Supply Contract, the initial BPn-1 shall be the
blended rate (FOB + insurance) of the new CSC
BIPn-1= Base Index Price as of preceding quarter
BIPn-2=
CRP
=
Base Index Price as of preceding quarter to BIPn-1
the CRP provided by the MEMR as determined
annually per CSC anniversary date, which is FOB
only
• The quarter shall refer to a calendar quarter
•
Base Index Price shall be the quarterly average of the
Global coal physical index, FOB Newcastle.
For the
reference, the initial BIPn-2 shall be USD83.23 per ton
•
The initial price adjustment shall be made on the First
Delivery Date and which shall be effective until the end of
the quarter of the First Delivery Date
• The next price adjustment after the First Delivery Date will
be on the next calendar quarter and the price shall be
adjusted on the first day of every quarter thereafter
• Any applicable and export-related taxes, duties, and other
charges imposed by the respective governments of the
exporters shall be added to the coal Base Price of each
supplier/exporter under the CSC's while any applicable and
related taxes, duties, and other charges imposed by any
Government Authority having jurisdiction over either of the
parties shall be added to the blended Base Price as of
current quarter (BPn)
• The coal Base Price for each shipment of coal supplied
by the supplier CFR hereunder to the Seller's delivery
point at the Cebu Power Plant shall be the Base Price,
as applicable to that shipment and adjusted in
5
Initial BPn-1 for the current
esc
as of 4th Q 2011: USD42.38
"
ERC Case No. 2014-116 RC
NOTICE/October 22, 2014
Page 9 of 22
accordance with the immediately preceding formula
under this Annex F of the PSC (Base Price); provided,
however, that if such coal Base Price is less than the
applicable Coal Reference Price, the coal Base Price
shall be equivalent to the applicable Coal Reference
Price
Adjustment of Transportation Base Price (TBPn)
= shall be adjusted quarterly to reflect the increase
TBPn
or decrease of the price of Marine Diesel Oil as of the
first day of loading as per the formula stated below:
Where:
6
TBPn
=
TBP as of current quarter
TBPn-1
=
TBP as of preceding quarter6. In case
of a new Coal Supply Contract, the
initial TBPn-1 shall be the blended
transportation rate (transportation +
wharfage) of the new Coal Supply
Contracts
BBPn-1
=
Bunker Basis Price in US cents as of
preceding quarter
BBPn-2
=
Bunker Basis Price in US cents as of
preceding quarter to BBPn-1
750/0
=
Fixed Cost
250/0
=
Variable Cost
Initial TBPn_tfor the current
esc as of 4th
Q 2011: USD21.14
c'
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 10 of 22
• The quarter shall refer to a calendar quarter
•
Bunker Basis Price shall be the quarterly average of the
Pertamina Publicly Listed Price Index for Marine Diesel Oil
posted in PI. Pertamina. website (www. pertaminabunker.com). For the reference, the initial BBPn-2 shall be
US 0.8018 per liter
• The initial price adjustment shall be made on the First
Delivery Date and which shall be effective until the end of
the quarter on the First Delivery Date
• The next price adjustment after the First Delivery Date will
be on the next calendar quarter and the price shall be
adjusted on the first day of every quarter thereafter
•
The Transportation Base Price for coal shall include the
cost of wharfage
12. Below is a comparison of the change in the Fuel and
Transport Prices brought about by the change in the
Indonesian CRP:
Fuel Base and Transport
Previous Contract
Price, $/IVIT
New Contract
Q4,2007
Q4,2011
Coal
Transportation
Total
27.72
24.85
52.57
Coal + Transport +
Insurance Wharfage
42.38
21.14
Wtd.
Avg.
Cost
63.52
13. Further, below is a summary of the details of the
Indonesian coal contracts, with a comparison between
the old and new suppliers:
.'
ERC Case No. 2014-116 RC
NOTICE/October 22, 2014
Page 11 of 22
Suppliers
Contracted
Quantities
Delivery
Vessels
Price
Kcal
Unloading
rare
Old CSC
NewCSC
IPC,
PT
PT
Kasih PT
(Indonesian),
PT JSKM
(both
IPC
(Indonesian) Indonesians)
and
MGMec
(Filipino)
PT Kasih 320,000;
PT IPC 180,000;
MGMec 300,000
Barges
only
at
5,500
to
8,000
DWT capacity
PT Kasih USD25
for
base
price,
USD25
for
transportation base
price;
PT
IPC
USD32.26 for base
price, USD20.50 for
transportation base
price;
MGMEC
USD30.50 for base
price, USD22.07 for
transportation base
price
PT Kasih 4100, PT
IPC 4375, MGMec
4300
PT Kasih
6,000
metric tons/day, PT
IPC 7,000 metric
tons/day,
MGMec
7,000
metric
tons/day
PT IPC 500,000;
PT
JSKM
350,000
Mother
vessel
with 45,000 DWT
capacity;
lighter
barges will be
used to transfer
from
mother
vessel to jetty
PT
IPC
USD40.72
for
base
price,
USD20.72
for
transportation
base price; PT
JSKM USD42.00
for base price,
USD 19.93 for
transportation
base price
PT IPC 4100, PT
JSKM 4050
PT IPC 6,000
metric tons/day,
PT JSKM 6,000
metric tons/day
Remarks
Termination of CSC
with PT Kasih due to
passage of MEMR
regulations and noncompliance;
termination
of
MGMEC CSC due
to
inability
of
MGMEC to deliver
because
of
problems with their
mine operations
Base Price for now
is now required to
be equal to or higher
than
the
coal
reference
price
issued by the MEMR
of Indonesia as of
the execution date
of the coal supply
contract and every
anniversary thereof
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 12 of 22
Delivery
Terms
Laycan days now
allowed (number
of days when the
vessel is allowed
to arrive before
Buyer has the
option
of
cancelling
a
particular
delivery)
14. The new base coal price under the new coal supply
contracts are as follows:
Coal
Supplier
PT. IPC
PT. JSKM
Total
New Coal Contract
Fuel Price
FOB
Transpo. Total
40.72
20.72 61.44
42
19.93 61.93
Weighted Average
New Contract
FOB Trans o. Total
41.25
20.39 61.64
15.
Contract
Quantity
500,000.00
350,000.00
850,000.00
Heat Rate
4,079
As referred PSC Heat Rate of 4,165kcal/k
Wei hted Avera e New Contract
FOB
42.12
FOB + Insurance; Trans
FOB
Trans o.
42.38
21.14
Heat
Rate
4,100.00
4,050.00
0
Heat Rate
Total
62.51
4,165
+ wharfa e
Fuel Total
63.52
Details of the procurement process of fuel. KSPC
procured its supply contracts through international public
bidding.
Its procurement process is attached to the
application;
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 13 of 22
Abstract of the APSC and Related Information
16.
Executive Summary. The Executive Summary of the
APSC is, likewise, attached to the application.
Additional terms in the APSC:
"CFR" means, with respect to a destination port, "Cost
and Freight" as defined under INCOTERMS 2010.
"Coal Reference Price" or "CRP" means a coal price.
including any and/or all price changes. imposable taxes,
fees, imposts, charges. others associated costs, as
required by the MEMR of Indonesia or any other
Government Authority of any country affecting the
Seller's coal supply contracts.
"First Delivery Date" has the meaning given to that term
in the coal supply contracts entered into by the Seller
with its coal suppliers; provided, that where there are
different First Delivery Dates under such coal supply
contracts, the latest of such dates shall be the First
Delivery Date for purposes of the PSC.
"Governmental Authority" means the Republic of the
Philippines, any province, city, municipality or other
political subdivision, agency, authority, board, bureau,
commission, court, department, instrumentality of any
country or any other foreign Governmental Authority
having jurisdiction or relation over either of the Parties,
their respective property and assets, the performance of
obligations under the PSC or having the power or
authority to affect any aspect of the PSC.
"Ministry of Energy and Mineral Resources" or
"MEMR" means the political subdivision, agency, board,
bureau, commission, department, instrumentality or
Governmental Authority in Indonesia, having jurisdiction
over the coal supply arrangements between the Seller
and its coal suppliers and the performance of their
respective
obligations
under
said
coal
supply
arrangements, or any other successor Governmental
"
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 14 of 22
Authority having the same jurisdiction or exercising the
same powers.
New Paragraph in the "Monthly Payment" Provision:
A new paragraph in the Amendment to the PSC is
added to Article 7.2, as Article 7.2((i)] as follows:
"The Monthly Payment shall be subject to any and/or
all adjustment on the Base Price for coal. In case any
price changes, taxes, fees, imposts, charges or other
associated costs is implemented under any new
contract, or under any other law, ordinance or regulation
by any Government Authority or any agency or
instrumentality of any country affecting the Seller's coal
supply contracts or the application of and computation
applicable to the coal price, such price changes, taxes,
fees, imposts, charges, and other associated costs shall,
upon the giving of notice by the Seller to the Buyer, be
deemed incorporated to this Power Sales Contract and
shall entitle the Seller, without need of any further notice
or action to, or any approval or consent by, the Buyer to
adjust the Monthly Payment in accordance with this
paragraph and under Annex F (r) based on such
changes; provided further, that the Base Price for coal
shall include the shipment's insurance cost while the
Transportation Base Price for coal shall include the cost
of wharfage."
New Annex F (Annex F[r]) on the KSPC Price
Adjustment Formula. Annex F of the PSC and the
PSC IA in each case hereby replaced in whole by Annex
F (r) as attached to the APSC.
Effect of Amendment
"Except as specifically modified by this Amendment, all
terms and provisions of the Power Sales Contract, as
previously amended and supplemented, shall remain in
full force and effect. From and after the date hereof, all
references in the Power Sales Contract to "this
Contract," "hereof," "herein," and other words of similar
import shall be deemed to refer to the Power Sales
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 15 of 22
Contract, as previously amended and supplemented,
and as modified by this Amendment, and the Power
Sales Contract with all its subsequent amendments and
supplements shall be read and construed with this
Amendment as one integrated document incorporating
the amendments effected hereby."
Change in Circumstance. The Parties hereto agree
that "Except as specifically provided in Section 2(b)
hereof (APSC), if, as a result of any Applicable Law
coming into effect after the signing of this Amendment,
or as a result of any such Applicable Law (including any
official interpretation thereof which the Seller has relied
upon in entering into this amendment) in force at the
date hereof being amended, modified or repealed, the
interest of the Seller in the Site, the Project or the Cebu
Power Plant or the Seller's economic return on its
investment is materially reduced, prejudiced or otherwise
materially affected,
or when the amended contract
materially affects the interest of the Buyer due to great
effect of the fuel base factor, the Parties hereto shall
meet and endeavor to agree on the necessary
amendments to the PSC, and if after 60 days no such
agreement has been reached then either Party may,
upon giving to the other not less than 30 days' notice,
terminate the PSC".
17.
Adoption of the
Commission.
PSC and the
Decision
of the
All terms and conditions in the PSC between the parties
and as approved by the Commission, shall be in full
force and effect except as specifically modified by the
APSC;
Rate Implications of the PSC
18.
The following table shows the impact of the new Fuel
Base Price on the generation rates paid by the
distribution utilities in the Visayas:
.'
"
ERC Case No. 2014-116 RC
NOTICE/October 22, 2014
Page 16 of 22
Generating
Billing
Company
Current NPC
Rate
(as of June
2012)
PhP/kWh
Charges
Particulars
Proposed
KSPC Rate
PhP/kWh
I. Generation CharQe
1, Generation
CharQe/Base Price
2. Franchise & Benefits to Host
Communities Taxes (FBHC)
3. Market Fee
(WESM)
Total Amount Before VAT
3.7255
4.2511
0.0177
-
0,011
0.0110
3.7542
4.2621
Rate
Adjustment
II. Rate Adjustments
1. Deferred
Accounting
Adjustments (OM)
Total Amount
1a. GRAM OM
1b. ICERA OM
0.4847
0.1213
0.6060
-
2a. FPPCA
2b. FxA
0.2162
0.0069
0.2231
-
-
0.1102
12%
VAT
(applied only
to Generation
Charge
and
Rate
Adjustment)
Before VAT
-
2. Automatic Cost
Adjustments (ACA)
Total Amount
III. 12% VAT on Non-Renewable
Before VAT
Energy Generation Charge
-
Renewable Energy Mix - 76.81 %
Non-Renewable EnerQY Mix - 23.19%
IV. DOE ER1-94
Total Monthly
19.
-
I
Power Rate (P/kWh)
4.6935
0.0100
4.2511
+
Rate
Adjustment
+ Market Fee
+ VAT + 0.01
CEBECO 1'5 Rate Impact. Below is the Rate Impact of
CEBECO I on the APSC:
.1
-.
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 17 of 22
Month
1an.13
feb.13
Mar.13
Apr.13
May.13
1un.13
Jul.13
Aug.13
5ep.13
Oct-!3
Nov.13
Dec.13
Jan.14
feb-14
Mar.14
Apr.14
Overall
SayResl Say Resl
OtherCostsI
Gen Mix Trans, Rate /
Effective
KWHIUC;
Customer: Customer:
(with OLD kwh
Rate
VAT,Slj etc,)
50 KWH 70 KWH
KSPCRate)
5,0732
2,8445
1.1130
9,0307 451.53 632.15
4.8554
1.1870
3.0357
9.0781 453.91 635,47
5,0587
1.1599
9,2803 464.01 649.62
3.0617
5.4138
1.0006
3.0474
9.4617 473.09 662.32
5,1328
3,0863
1.0062
9,2253 461.26 645.77
4.8871
1.0441
8,9974 449,87 629,82
3.0662
5,6819
1.1125
3.1298
9.9243 496,21 694,70
5,6006
1.0705
9,8129 490.65 686.91
3.1418
5.3788
1.0407
3.1183
9,5378 476.89 661.65
4.9115
1.0653
9,0853 454,26 635.91
3.1025
5,0638
3,1561
1.0102
9.2908 464,54 650.35
5.5035
1.0338
3.1361
9.6740 483.10 611.18
5,6594
1.0140
3.2516
9.9250 496.25 694.15
6,1170
3,2447 10,3888 519.44 727.22
1.0270
6,0187
3,3254 10.5470 527.35 138,29
1.1429
0,9598
3,2680 10,3968 519,84 727,78
6.1689
SayResl
Customer:
100 KWH
903.07
907,81
928.03
946,17
922.53
899.74
992.43
981.29
953.18
9OS.53
929.08
961,40
992,50
l038.88
1/054.10
1/039.68
Overall
GenMix
Differenceof SayResl SayResl SayResl
OtherCostsI
(with Trans.
Effective
KWH(UC;
Price Customer: Customer: Customer:
NEW Rate/kwh
Rate
VAT, Sl; etc,1
(P/KWH) 50 KWH 70 KWH 100 KWH
KSPC
Ratel
2,8445
9,1740
5,2165 1.1130
0.1433 458,70 642,18 917.40
0,1495 461.38 645,94 922.76
5,0050 1.1870
3,0351
9,2276
0,1505 471.54 660.16 943.OS
5,2092 1.1599
9,4308
3.0611
5,5599 1.0006
3,0474
9,6078
0.1461 480.39 672.55 960.78
5,2832 1.0062
3.OS63 9.3757
0.1504 468.78 656,30 937,57
5,0596 1.0441
3,0662
9,1100
0.1726 458,50 641.90 917.00
0,1077 501.60 702,24 11003,20
5,1896 1.1125
3.1298 10,0320
9,9187
0,1058
495,94 694,31 991.87
3.1418
5.1064 1.0705
5,4800 1.0407
3,1183
9,6391
0,1012 481.95 674,73 963.91
4,9768 1.0653
9,1446
0,0593 45W 640,12 914,46
3.1025
0,1167 470,38 658,53 940.15
3,1567
9,4075
5.1806 1.0702
0,1247 489,94 685,91 979.87
5,6282 1.0338
3,1367
9.7987
5,7939 1.0140
3,2516 10,0594
0,1344 502.97 704,16 11005,94
3,2441 10.6697
0,2809 533.49 746,88 1,066,91
6,3919 1.0270
0,1444 534,51 748.39 1/069.13
6,2230 1.1429
3.3254 10,6913
0,2126 530,41 142,66 11060.94
6,3815 0,9598 . 3,2680 10,6094
7,0000 ,..----------6,0000
+--------~••
5.0000 ,......
,j
4,0000
3,0000
1.0000
• OverallGenMixlwith OLDKSPCRate)
-Overall GenMix(withNEWKSPCRatej
Differencein Amount for a Residential
Difference in%for a Residential
SayResl SayResl SayResl
Customer: Customer: Customer:
50 KWH 70 KWH 100 KWH
SayRe~ SayResl SayResl
Customer: Customer: Customer:
50 KWH 10 KWH 100 KWH
1.1664
1,4773
7.5265
7,3061
1,5197
8,6289
5,3863
5,2887
5,0613
2,9672
5,8368
6,2351
6,7218
14,0455
7,2184
10,6285
10,0329
10.4682
10,5371
10.2286
10,5276
12,OS05
7,5409
7,4042
7.0858
4,1541
8,1715
8.7291
9,4106
19,6637
10.1058
14,8799
14.3321
14,9546
15.0530
14,6123
15,0394
17,2579
10,7727
10,5774
10,1226
5,9345
11.6136
12,4701
13.4437
28,0909
14,4369
21.2510
1.6%
1.6%
1.6%
1.5%
1.6%
1.9%
1.1%
1.1%
1.1%
0.7%
1.3%
1.3%
1.4%
2.7%
1.4%
2,0%
1.6%
1.6%
16%
1.5%
1.6%
1.9%
1.1%
1.1%
1.1%
0.7%
1.3%
1.3%
1,4%
2,7%
1.4%
2,0%
1.6%
1.6%
1.6%
1.5%
1.6%
1.9%
1.1%
1.1%
1.1%
0,7%
1.3%
1.3%
1.4%
2,7%
1.4%
2,0%
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 18 of 22
20.
CEBECO I's Load Forecast.
Forecast is indicated below:
CEBECO
l's
Load
CEBECO1.10 Year Forecast MWH SALES & PURCHASES
300;000
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
MWH
PURCHASES
180,249
187)229
194,626
202,443
210,681
219,339
22M18
237,918
247,840
258,185
MWHSALES
164,027
170,378
177Jl0
184,224
191/719
199/598
207/860
216/505
225)535
234)948
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
.MWH
21.
SALES -MWH
PURCHASES
Board Approval. APSC and the joint filing of the instant
application have been approved by the board of
directors of applicant CEBECO I. A copy of CEBECO I's
Resolution on the approval of the APSC and the joint
filing of this application is attached to the instant
application;
Motion for the Issuance of Provisional Authority to
Adopt the New Fuel Base Price and the Fuel Factor
in the KSPC Price Adjustment Formula
22.
The APSC will not terminate, suspend or in any way
affect their PSC as approved by the Commission and as
implemented and continue to be implemented by them,
save for the new fuel base price and the fuel base price
factor brought about by the Indonesian MEMR, which is
the subject matter of the instant application. It is in this
regard that, pending the final approval of the instant
application, they request that they be allowed to adopt
the new fuel base price and the fuel base price factor in
the KSPC price adjustment formula;
ERC Case No. 2014-116 RC
NOTICE/October 22, 2014
Page 19 of 22
23.
Since the implementation of the Indonesian MEMR,
KSPC has been incurring losses since September 2011.
As of October 25, 2013, it already incurred a total loss of
PhPB42,362,546.51
and it will continue to incur more
losses
without
the
proper
intervention
of the
Commission.
Below is the table showing the effect of
the Indonesian MEMR on it without adopting the new
fuel base price and the fuel base price factor for all being
customers;
KSPC Loss on the Fuel Cost
as of March 2014
Customer: CEBECO I
1) Fuel Costs/Expenses
BillingPeriod
Sep 26"Oct 25, 2011
Oct 26"Nov 25, 2011
Nov 26"Dec 25, 2011
Dec 26, 2011"Jan 25, 2012
Jan 26NFeb25, 2012
Feb 26"Mar 25, 2012
Mar 26"Apr 25, 2012
Apr 26"May 25, 2012
May 26"Jun 25, 2012
Jun 26"JuI25, 2012
Jul26"Aug 25,2012
Aug 26NSep25, 2012
Sep 26NOct25, 2012
Oct 26NNov25, 2012
Nov 26NDec25, 2012
Dec 26, 2012NJan 25, 2013
Jan 26NFeb25, 2013
Feb 26NMar25, 2013
Mar 26"Apr 25, 2013
Apr 26"May 25, 2013
May 26NJun 25, 2013
Jun 26NJu125,2013
Jul26NAug 25, 2013
Aug 26NSep25, 2013
Sep 26"Oct 25, 2013
Oct 26NNov25, 2013
Nov 26NDec25, 2013
Dec 26, 2013NJan 25, 2014
Jan 26NFeb25, 2014
Feb 26"Mar 25, 2014
TOTAL
kWh Sold
5,514,000.00
4,896,000.00
5,040,000.00
5,208,000.00
5,269,000.00
4,740,000.00
5,186,000.00
5,040,000.00
5,061,000.00
2,694,000.00
4,908,700.00
5,173,000.00
5,028,000.00
4,056,000.00
3,672,000.00
5,187,000.00
5,131,000.00
4,704,000.00
4,128,000.00
4,378,400.00
5,208,000.00
4,970,000.00
4,896,500.00
4,637,500.00
2,688,000.00
5,122,000.00
6,828,000.00
6,661,000.00
6,480,000.00
6,560,000.00
149,065,100.00
CoalConsumption
(MT)
3,344.39
2,969.55
3,056.89
3,158.79
3,195.79
2,874.93
3,145.45
3,056.89
3,069.63
1,633.98
2,977.26
3,137.56
3,049.61
2,460.07
2,227.16
3,146.05
3,112.09
2,853.10
2,503.74
2,655.61
3,158.79
3,014.44
2,969.86
2,812.77
1,630.34
3,106.63
4,141.36
4,040.Q7
3,930.29
3,978.81
90,411.90
Fuel Cost
(USD/MT)
83.91
80.66
80.19
73.07
67.60
66.67
69.46
65.41
61.76
64.93
71.37
FOREX(PHP=USD) Fuel Expenses (PHPI(a)
43.285
43.629
43.684
43.186
42.768
43.049
42.718
43.576
42.492
42.037
42.164
41.741
41.376
41.085
41.058
40.637
40.718
40.821
41.307
41.508
43.810
43.250
44.117
43.357
43.110
43.855
44.493
45.271
44.637
45.212
42.798
12,146,957.95
10,871,263.25
11,205,114.00
11,003,270.69
11,024,400.47
9,982,728.28
10,774,900.31
10,681,881.00
10,459,558.35
5,019,009.72
9,172,696.54
9,569,606.02
8,529,824.42
6,832,467.22
6,181,541.40
8,523,500.00
8,448,284.51
7,764,813.54
7,183,692.69
7,656,523.95
9,612,329.09
8,527,785.60
8,570,092.38
7,976,950.91
4,340,744.24
8,414,253.66
11,379,996.09
11,875,572.29
11,391,083.37
11,680,262.00
276,801,103.93
.
'
••
ERC Case No. 2014-116 RC
NOTICE/October 22, 2014
Page 20 of 22
~ Existing Fuel Pass-Through
BillingPeriod
Sep 26NOct 25, 2011
Oct 26NNov 25, 2011
Nov 26NDec 25, 2011
Dec 26, 2011 NJan 25, 2012
Jan 26NFeb 25, 2012
Feb 26NMar 25, 2012
Mar 26NApr 25, 2012
Apr 26NMay 25, 2012
May 26NJun 25, 2012
Jun 26NJu125, 2012
Jul26NAug 25, 2012
Aug 26NSep 25, 2012
5ep 26NOct 25, 2012
Oct 26NNov 25, 2012
Nov 26NDec 25, 2012
Dec 26, 2012NJan 25, 2013
Jan 26NFeb 25, 2013
Feb 26NMar 25, 2013
Mar 26NApr 25, 2013
Apr 26NMay 25, 2013
May 26NJun 25, 2013
Jun 26NJu125, 2013
Jul26NAug 25,2013
Aug 26N5ep 25, 2013
5ep 26NOct 25, 2013
Oct 26NNov 25, 2013
Nov 26NDec 25, 2013
Dec 26, 2013NJan 25, 2014
Jan 26NFeb 25, 2014
Fen 26NMar 25, 2014
TOTAL
kWh Sold
Existing Fuel Pass. Revenue (P/kWhl
Fuel Expenses (PHPllb)
Through (P/kWh)
(a)
% Pass-through
(a/b)
Remarks
5,514,000.00
4,896,000.00
5,040,000,00
5,208,000.00
5,269,000.00
4,740,000,00
5,186,000.00
5,040,000,00
5,061,000,00
2,694,000,00
4,908,700,00
5,173,000,00
5,028,000.00
4,056,000.00
3,672,000.00
5,187,000.00
5,131,000.00
4,704,000,00
4,128,000,00
4,378,400.00
5,208,000.00
4,970,000,00
4,896,500,00
4,637,500,00
2,688,000,00
5,122,000,00
6,828,000,00
6,661,000,00
6,480,000,00
6,560,000,00
1.7469
1.7607
1.7630
1.6863
1.6700
1.6810
1.6630
1.6964
1.6542
1.4881
1.4926
1.4776
1.4006
1.3907
1.3898
1.3573
1.3600
1.3635
1.4311
1.4381
1.5178
1,4239
1.4524
1.4274
1.3621
1.3857
1.4058
1.4894
1.4686
1.4875
9,632,406,60
8,620,387,20
8,885,520,00
8,782,250,40
8,799,230,00
7,967,940,00
8,624,318,00
8,549,856.00
8,371,906,20
4,008,941.40
7,326,725.62
7,643,624.80
7,042,216,80
5,640,679,20
5,103,345,60
7,040,315,10
6,978,160,00
6,413,904,00
5,907,580,80
6,296,577.04
7,904,702,40
7,076,783.00
7,111,676,60
6,619,567,50
3,661,324,80
7,097,555,40
9,598,802,40
9,920,893.40
9,516,528,00
9,758,000,00
12,146,957.95
10,871,263.25
11,205,114.00
11,003,270.69
11,024,400.47
9,982,728,28
10,774,900.31
10,681,881.00
10,459,558.35
5,019,009,72
9,172,69654
9,569,606,02
8,529,824,42
6,832,467,22
6,181,541.40
8,523,500.00
8,448,284.51
7,764,813.54
7,183,692,69
7,656,523.95
9,612,329,09
8,527,785.60
8,570,092.38
7,976,950,91
4,340,744.24
8,414,253.66
11,379,996.09
11,875,572.29
11,391,083.37
11,680,262,00
79%
79%
79%
80%
80%
80%
80%
80%
80%
80%
80%
80%
83%
83%
83%
83%
83%
83%
82%
82%
82%
83%
83%
83%
84%
84%
84%
84%
84%
84%
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
Loss
149,065,100,00
1.5111
225,901,718.26
276,801,103.93
82%
Total Loss
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 21 of 22
24.
Without provisional authority prayed for, KSPC will
continue to incur losses. Thus, they are constrained to
request for a provisional authority to adopt and
implement the new fuel base price and the fuel base
price factor in the KSPC price adjustment formula to
avoid further losses detrimental to the continued
operation of KSPC. Moreover, being a base-load energy
supplier of CEBECO I, it would be in the best interest of
both parties to acquire the requested provisional
authority at the earliest possible time; and
25.
Thus, they pray that:
a)
Their motion for the issuance of provisional
authority allowing KSPC to adopt and used the
new fuel base price and the fuel base price factor
in its Price Adjustment Formula be approved prior
hearing and issuance of final authority; and
b)
Their APSC be approved by the Commission.
The Commission has set the application for jurisdictional
hearing,
expository
presentation,
pre-trial
conference
and
evidentiary hearing on November 21, 2014 (Friday) at nine-thirty
in the morning (9:30 A.M.) at the CEBECO I Multi-Purpose Hall,
Main Office, Bito-on, Dumanjug, Cebu.
All persons who have an interest in the subject matter of the
proceeding may become a party by filing, at least five (5) days prior
to the initial hearing and subject to the requirements in the ERC's
Rules of Practice and Procedure, a verified petition with the
Commission giving the docket number and the title of the
proceeding and stating: (1) the petitioner's name and address; (2)
the nature of petitioner's interest in the subject matter of the
proceeding, and the way and manner in which such interest is
affected by the issues involved in the proceeding; and (3) a
statement of the relief desired.
•
ERC Case No. 2014-116 RC
NOTICE/October 22,2014
Page 22 of 22
All other persons who may want their views known to the
Commission with respect to the subject matter of the proceeding
may file their opposition to the application or comment thereon at
any stage of the proceeding before the applicants conclude the
presentation of their evidence. No particular form of opposition or
comment is required, but the document, letter or writing should
contain the name and address of such person and a concise
statement of the opposition or comment and the grounds relied
upon.
All such persons who may wish to have a copy of the
application may request the applicants, prior to the date of the initial
hearing, that they be furnished with a copy of the application. The
applicants are hereby directed to furnish all those making such
request with copies of the application and its attachments, subject to
reimbursement of reasonable photocopying costs. Likewise, any
such person may examine the application and other pertinent
records filed with the Commission during the usual office hours.
WITNESS, the Honorable Chairperson, ZENAIDA G. CRUZDUCUT, and the Honorable Commissioners, ALFREDO J. NON,
GLORIA VICTORIA C. YAP-TARUC, and JOSEFINA PATRICIA A.
MAGPALE-ASIRIT, Energy Regulatory
ommission, this 22nd day
of October, 2014 at Pasig City.
ATTY.~:
.SALVANERA
Director III, L gal Services
/"'iO/NJSlCEBECO
2-PCPC -NOPH IDESKTOPIPSA