1pro~rr.>r! for energyregulatorycommission r....certificate of registration issued by the...

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Republic of the Philippines ,/:...A \1pro~rr.>r! for J.J;.,ENERGY REGULATORYCOMMISSION"" r. :~... ~

San Miguel Avenue, Pasig CityP'OSW1g'{i'NfI re.goy.ph

IN THE MATTER OF THEAPPLICATION FORAPPROVAL OF THE POWERSUPPLY AGREEMENT (PSA)BETWEEN BOHOL IELECTRIC COOPERATIVEINC.. (BOHECO I) ANDUNIFIED LEYTEGEOTHERMAL ENERGY,INC.(ULGEI) WITH PRAYERFOR CONFIDENTIALTREATMENT OFINFORMATION AND THEISSUANCE OF PROVISIONALAUTHORITY,

ERCCASE NO. 2016-151 RC

BOHOL I ELECTRICCOOPERATIVE, INC.(BOHECO I) AND UNIFIEDLEYTE GEOTHERMALENERGY, INC. (ULGEI),

Applicants.J(- - - - - - - - - - - - - - - -- - - - - - - -J(

DOCKETED. • OCT 0 7 'JR1ADate. "-~-;T'-...f&III'

BJ':- ~.-l'¥....._...-

NOTICE OF PUBLIC HEARING

TOALL INTERESTED PARTIES:

On 04 July 2016, Bohol I Electric Cooperative, Inc. (BOHECO I)and Unified Leyte Geothermal Energy, Inc. (ULGEI) filed their jointApplication for the approval of 'the Power Supply Agreement (PSA)with prayer for confidential treatment of information and theissuance of provisional authority.

\

ERC CASE NO. 2016-151 RCNOTICE OF PUBLIC HEARING/ 20 SEPTEMBER 2016PAGE20F16

In support of said Application, BOHECO I and ULGEI allegedthe following:

1. Applicant BOHECO I is a non-stock, non-profit electriccooperative, duly organized and existing under and by virtueof the laws of the Philippines, with principal office address atCabulijan, Tubigon, Bohol. It is authorized to distribute andprovide electricity services to its member-consumers in theMunicipalities of Alburquerque, Antequera, Baclayon,Balilihan, Batuan, Bilar, Calape, Carmen, Catigbian, Clarin,Corella, Cortes, Dauis, Dimiao, Inabanga, Lila, Loay, Loboc,Loon, Maribojoc, Panglao, Sagbayan, San Isidro, Sevilla,Sikatuna, and Tubigon, all in the Province of Bohol(collectively, the "Franchise Area").

2. Copies of BOHECO I's Articles of Incorporation, By-Laws,Certificate of Registration and Certificate of Franchise areattached to the Application as follows:

.:rr.~ti:'lADnexf:i~~!"'''''','e;''.,.,,~~,,e, ,i;'''''''~' 'D'" ."_.,,",~t~~~"liI;iftr""""'" '''',':;";;')A'<!•.•• If . ';~_. of. 7'..~'/'''~:il~~'2;f~~~'~:,:~:I<~'!.;",~.'~if"~':'~';;"~:~:~J-..••..~' acumen .,~.;~,'.', ':f~_ ~';:-,}"*"?\:.,:.~

"A" BOHECO I's Articles of Incorporation"B" BOHECO I's By-laws

"e" Certificate of Registration with the NationalElectrification Administration (NEA)

"D" Certificate of Franchise

3. Meanwhile, Applicant ULGEI is a corporation duly organizedand existing under the laws of the Republic of the Philippineswith principal address at 38th Floor, One Corporate Center,Julia Vargas cor. Meralco Avenue, Ortigas Center, Pasig City,and it manifests the following:

3.1 ULGEI, as an Independent Power ProducerAdministrator, falls within the ambit of Sections 47and 29 of Republic Act No. 9136 or the Electric PowerIndustry Reform Act of 2001 (EPlRA).

3.2 While ULGEI is a co-applicant, it manifests that thisjoint application shall neither modify, diminish, norconstitute as a waiver of ULGEI's rights or expand itsobligations and responsibilities as a generationcompany under the EPlRA.

3.3 ULGEI has joined in this Application as a co-Applicant, as required by the Commission.

4. Copies of ULGEI's Securities and Exchange CommissionCertificate of Incorporation, Articles of Incorporation, By-Laws and General Information Sheet are attached and aremade integral parts to the Application as follows:

Certificate of Registration issued by the Securitiesand Exchan e Commission (SEC)ULGEI's Articles of Inca orationGeneral Information Sheet

"F""G"

• if,YAlidnex.lll~"E"

ERC CASE NO. 2016-151 RCNOTICE OF PUBLIC HEARING/ 20 SEPTEMBER 2016PAGE 3 OF 16 .

5. BOHECO I and ULGEI may each. be served with orders,notices and other legal processes of this Commission throughthe address of their respective counsels at the addressesindicated below.

NATURE OF THE APPLICATION

6. Pursuant to Sections 23, 25, 43 (u), and 45 (b) of the EPlRA,its Implementing Rules and Regulations (IRR), and otherpertinent rules and regulations, this Application is submittedto the Commission for its consideration and approval of thePSN executed between BOHECO I and ULGEI on 4 April2016.

I.

STATEMENT OF FACTS

BOHECO I's Power Supply and Demand Situation

7. BOHECO I needs to address the insufficiency of its powersupply due to the increasing demand within its franchisearea.

8. BOHECO I currently receives a total of 22 MW from itsexisting suppliers out of its peak requirement of 29 MW.With an annual average growth rate of 6.32%, BOHECO Iforecasts that its peak demand for the year 2018 will be 37MW.

The Competitive Selection Process

9. BOHECO I and Bohol II Electric Cooperative, Inc. (BOHECOII), collectively, the "lBP ECs", received an unsolicitedproposal from GNPower Ltd. Co.("GNPower") for the supplyof their aggregated short-term baseload demand for theperiod 26 December 2018 to 25 December 2019 andmedium-term baseload demand for the period 26 December2018 to 25 December 2023.

1Attached to the Application as Annex "H".

ERC CASE NO. 2016-151 RCNOTICE OF PUBLIC HEARINGf 20 SEPTEMBER 2016PAGE 4 OF 16

10. Guided by declared and agreed policy and guidelines asdescribed in the 1BP ECs Rules and Procedures forUnsolicited Proposal, which is Annex A of the Instructions toProponents2, the 1BPECs created the Joint CompetitivePower Supply Procurement ("JCPSP") Board, the 1BPJCPSPBids and Awards Committee ("JBAC") and the 1BP JointTechnical Working Group ("JTWG") to conduct the initialevaluation of GNPower's unsolicited proposal in order todetermine its compliance with 1BP EC's policy andguidelines.

11. The JTWG found the proposal of GNPower consistent withthe criteria set forth in the aforementioned policy andguidelines. A copy of the results of the evaluation is attachedto the Application as "Annex "J".

12. As required by the JBAC, GNPower submitted a Firm andFinal Proposal, containing the Legal, Technical and FinancialDocuments, the Technical Proposal, and the FinancialProposal.

13. After a more detailed evaluation, the JBAC endorsed theGNPower proposal to the 1BP JCPSP Board, which grantedGNPower the Original Proponent status in the CompetitiveSelection Process through Comparative Proposals. A copy ofthe results of the detailed evaluation is attached as Annex "K"of the Application.

14. Other generating companies ("GENCOs") were invited tosubmit Comparative Proposals to challenge GNPower's offerthrough publications in newspapers of general and nationalcirculation for two (2) consecutive weeks and through writteninvitations to the GENCOs published in the Department ofEnergy website. Copies of the invitation as published twice inthe Philippine Daily Inquirer and the Affidavit of Publicationare attached to the Application as Annexes "L" to "L-2".

15. Participating GENCOs submitted letters of intent (LOI), andthey were provided with a copy of the Instructions toProponents (ITP) and due diligence data. Thereafter,transaction conferences were held to clarify and discuss thetransaction process, requirements, rules, and evaluationmethodology. Copies of the LOI from the GENCOs areattached as Annex "M" and series of the Application.

16. During the submission and opening of bids, First Gen andTrans-Asia Oil and Energy Development Corporationsubmitted comparative proposals. First Gen, through thesubmitted documents, manifested that its affiliate, ULGEI,

2 Attached to the Application as Annex "I".

ERC CASE NO. 2016-151 RCNOTICE OF PUBLIC HEARING/ 20 SEPTEMBER 2016PAGE 5 OF 16

will be the proponent in the transaction. Upon evaluation bythe JBAC, it was found that the evaluated effective levelizedprice of ULGEI for the short-term (CY-2016-2018) and ofGNPower for the medium-term (CY 2019-2023) were thelowest. The results of the evaluation are shown in theattached Annex "N" of the Application.

17. On 22 January 2016, the JBAC issued a Notice of Award toULGEI and the same was accepted by ULGEI on 26 January2016, copies of which are attached to the Application asAnnexes "0-1" and "0-2", respectively.

18. The 1BP ECs and ULGEI negotiated the final terms andconditions of the PSA based on the Key Contract Termsprovided in the ITP. This led to the execution ofseparate/individual but identical PSAs by and between eachof BOHECO I and BOHECOII and ULGEI.

II.

ABSTRACT OF THE PSAAND OTHER RELATEDINFORMATION

19. The following are the salient terms and conditions of thePSA:

A. Effectivity and Term of Agreement._The Agreementshall take effect immediately from Effective Date and shallremain in force and effect until 25 December 2018. Theobligation of the ADMINISTRATOR to sell and deliver thecontracted capacity and its associated energy and theobligation of the CUSTOMERto accept and pay for the sameshall commence upon receipt by the Parties of the ERCApproval, whether provisional or final, of this Agreement.

B. Supply of Contracted Capacity and AssociatedEnergy. The ADMINISTRATOR shall, during the entireterm of this Agreement, make available, sell and deliver, orcause to be delivered to the CUSTOMER the ContractedCapacity and Associated Energy ("Contracted Capacity andAssociated Energy") in accordance with Annex "A" at thePoint of Delivery, whether sourced from the Plant or fromother electricity generators including the WESM.

CONTRACTED CAPACITY AND ASSOCIATED ENERGY

Term Contracted Capacity (kW)Effective Date until 25 December 2016 5,00026 December 2016 to 25 December 2017 6,00026 December 2017 to 25 December 2018 8,000

ERC CASE NO. 2016-151 RC .NOTICE OF PUBLIC HEARING/ 20 SEPTEMBER 2016PAGE60F16 .

CUSTOMER shall, over the term of this Agreement, pay theguaranteed associated energy. The guaranteed associated energyshall be equal to the product of 70% of Contracted Demand, and No.of Hours of the applicable Billing Period, subject to adjustment inkWh due to Force Majeure, Customer's Service InterruptionAdjustment, or other causes, such as safety, as may be provided bylaw, rule, regulation or order of a competent authority inaccordance to Annex "B"of the PSA.

CUSTOMERmay be allowed to increase the Contracted Capacity atthe same rate subject to: (a) the Technical Limits of the Plant, theconstraints relating to the transmission lines, substations and otherfacilities, (b) the availability of capacity of the ADMINISTRATORthat may be utilized to serve the increase in Contracted Capacity,and (c) such other terms and conditions as the Parties may agreeupon.

C. Basic Energy Charge, Applicable Load Factor, andGuaranteed Monthly Payment

BASICENERGYCHARGE

The Basic Energy Charge or BECshall be equal to:

BEC = CRFALF + VOMF + Generation Payment Rate + Administration Fee

Where:

a) CRFALF is the Capital Recovery Fee with values for differentCapacity Utilization Factors (CUF) or Applicable LoadFactors (ALF), effective until 25 December 2018. The CapitalRecovery Fees, as tabulated in Annex "V", shall be fixedthroughout the term of the Agreement.

b) VOMF is the Variable O&MFee equivalent to the value statedin Annex "V"is effective until 25 December 2015.

The VOMF shall be adjusted annually at a rate equivalent to theactual increase (or decrease) in the Philippine Consumer PriceIndex - base period calendar year 2006=100 ("CPI") published bythe Philippines Statistics Authority, or its succeeding entity, for theyear. For purposes of adjusting the VOMF, the base CPI shall beAverage 2014. The first adjustment to the VOMF shall be made on26 December 2015 and such adjustment shall take effect from 26December 2015 up to 25 December 2016.


The VOMF shall be adjusted annually using the following formula:

Where:

Adjusted VOMFnCPln-1= VOMFn_1 * ---CPln-2

VOMFnVOMFn-1

CPIn-1

CPIn-2

=

=

=

=

VOMF for year nVOMF for year n-lAverage Philippine Consumer Price Index (CPI)of year n-l, as published by PhilippineStatistics Authority or its successorAverage Philippine Consumer Price Index (CPI)of year n-2, as published by PhilippinesStatistics Authority or its successor

A sample computation on the adjustment ofVOMF is provided in

Annex "V'.

c) Generation Payment Rate = Rate x In, such that if In< 1, In= 1

Where:

Rate = is subject to inflation factor, In, with value stated in Annex "V".

In = Inflation Factor for the Billing Period under consideration,where Inflation Factor shall be:

Where:

FX1 = Philippine Peso vs US Dollar Reference Rate as published bythe Bangko Sentral ng Pilipinas at the last working day of the BillingPeriod under consideration;

FXo = Philippine Peso vs US Dollar Reference Rate as published bythe Bangko Sentral ng Pilipinas as of 24 May 2013 equivalent to41.5°8;


CEl = US Price Index for Capital Equipment, line 63 bb,International Financial Statistics (2010=100) for the period of pricedetermination;

CEo = US Price Index for Capital Equipment, line 63 bb,International Financial Statistics (2010=100) for the month of May2013 equivalent to 104.185;

FCPl = US Consumer Price Index, All Items, line 64, InternationalFinancial Statistics (2010=100) for the period of pricedetermination;

FCPo = US Consumer Price index, All Items, line 64, InternationalFinancial Statistics (2010=100) for the month of May 2013equivalent to 106.828;

LCPl = Consumer Price Index for National Capital Region, All Items(2006=100) as published by the National Statistics Office for theperiod of price determination.

LCPo= Consumer Price Index for National Capital Region, All Items(2006=100) as published by the National Statistics Office for themonth of May 2013 equivalent to 125.7.

WPGl = Manufactured Goods Classified Chiefly by MaterialsComponent of the General Wholesale Price Index for NationalCapital Region (1998=100) as published by the National StatisticsOffice for the period of price determination.

WPGo = Manufactured Goods Classified Chiefly by MaterialsComponent of the General Wholesale Price Index for NationalCapital Region (1998=100) as published by the National StatisticsOffice for the month of May 2013 equivalent to 170.

WPMl = Machinery and Transport Equipment component of theGeneral Price Index for National Capital Region (1998=100) aspublished by the National Statistics Office for the period of pricedetermination.

WPMo = Machinery and Transport Equipment component of theGeneral Wholesale Price Index for National Capital Region(1998=100) as published by the National Statistics Office for themonth of May 2013 equivalent to 152.2.

d) Administration Fee shall be equivalent to the value specifiedin Annex "V", effective until 25 December 2018. For theavoidance of doubt, the Administration Fee shall be fixed


throughout the term of the Agreement. Only theAdministration Fee shall be subject to 12% VAT.

APPLICABLE LOAD FACTOR

Formula:ED

ALF (%) = --------(CCx N) - L~=l Xi:t EQ

Where:

ED =

CC =N =k =Xi =

(CUF) or ApplicableBilling Period, in %,

places (E.g.

ALF

EQ

=

=

Capacity Utilization FactorLoad Factor (ALF) for therounded off to 2 decimal85.62%).

Total energy delivered for the Billing Periodinclusive of Exchange in Quantity, if any, kWhContracted Capacity, kWTotal number of hours in a Billing PeriodTotal number of affected hours in a Billing PeriodAdjustment in kWh due to Force Majeure,Customer's Service Interruption Adjustment, orother causes, such as safety, as may be provided bylaw, rule, regulation or order of a competentauthorityExchanged Quantity, defined as the total energydelivered to or received from the other 1BP EC,kWh

Sample Computation:

Energy Delivered (kWh) 2,600,000

Contracted Capacity (kW) 5,000

N, no. of hours in a Billing Period 744(kW)

k, no. of affected hours (hours) ~

Xl (kW) 1,000

X2 (kW) 2,000

X3 (kW) 3,000

2,600,000 kWhApplicable Load Factor = (5,000 x 744) - (1,000 + 2,000 + 3,000)

ERC CASE NO. 2016-151 RCNOTICE OF PUBLIC HEARING/ 20 SEPTEMBER 2016PAGE 10 OF 16

2,600,000 kWh=-----

3,714,000 kWh

= 70.00%

GUARANTEED MONTHLY PAYMENT

1. If the Applicable Load Factor is less than 70%, the followingMinimum Charge formula shall apply:

Guaranteed Monthly Payment= (Applicable CRF at 70% Load Factor + VOMF+ Generation Payment Rate + AF)x Adjusted Associated Energy

2. The Adjusted Associated Energy shall be determined asfollows:

k

Adjusted Associated Energy = 70% * CC * N - IXi :t EQi=l

Sample Computation:

Load Factor is less than 0%:

Ener Delivered (kWh), ED

Contracted Ca acit (kW)

N, no. of hours in a Billin Period (kW)

k, no. of affected hours (hours)

Xl (kW)

X2 (kW)X (kW)

E (kWh) (delivered to other 1BPEC)

A licable Load Factor, %

A licable CRF at 0% Load Factor (PhP kWh)

VOMF (Ph kWh)

Rate (Ph kWh)

InAdministration Fee (PhP kWh), AF

2, 66,800

5,000

4

36,000

,0002,000

5,000

69%

2.3

2.2442

1.05

0.1900

~I,'

ERC CASE NO. 2016-151 RCNOTICE OF PUBLIC HEARINGf 20 SEPTEMBER 2016PAGEuOF16

The following Guaranteed Monthly Payment shall apply:

Adjusted Associated Energy (kWh) = 2,604,000 - (6,000 + 4,000 + 2,000) -5,000

= 2,587,000

Guaranteed Monthly Payment (PhP) = (2.3477 + 0.0529 + (2.2442 * 1.05) +0.1900) * 2,587,000= 12,797,914.87

III.

GENERATION RATE AND IMPACT ON BOHECO I'sRETAIL RATES

20. As earlier stated, BOHECO I currently receives a total of22MW from its existing suppliers out of its peak requirementof 29MW. BOHECO I forecasts that its peak demand from26 December 2016 to 25 December 2018 will be 37MW.Thus, BOHECO I needs to address the insufficiency of itspower supply due to the increasing demand within itsfranchise area.

21. The additional supply from ULGEIwill significantly augmentthe supply deficiency of BOHECO I and will decrease theadverse effects thereof by providing a stable and adequatesource of electricity.

22. Among the suppliers capable of providing additional energyto BOHECO I and the rest of the 1BP ECs, ULGEI's ratesproved to be more reasonable and competitive.

23. BOHECO I simulated a rate impact analysis3 whichultimately resulted in a PhPo.2864/kWh decrease with theexecution of the PSAwith ULGEI:

3 Assumptions:

a. WESMhourly Prices are inflated from actual prices of 2014 at the rate of 3.43%b. CEDC/SPC/SPUG/ULGEI inflatable prices are inflated at the rate of PH CPI of 3-43%c. Weighted average Price are Present Worth in a 3 year levelizing period (2016 - 2018)d. Actual Prices of Existing Power Suppliers and Evaluated price of ULGEI on September

2015 are used as base in the simulation.The complete Rate Impact Analysis is attached as ANNEX"P".

ERC CASE NO. 2016-151 RCNOTICE OF PUBLIC HEARING/ 20 SEPTEMBER 2016PAGE 12OF 16

-+ Simulation of Generation Mix Ratewithout ULGEI

Forecasted Percent Resulting Average WeightedPower AverageSupplier Quantity Amount (PhP) Share Capacity Rate Rate(kWh) (%) Factor (%) (P/kWh) (P/kWh)

CEDC 90,155,000 581,888,219 55.74% 74% 5.9624

SPC 2,973,301 14,481,937 1.39% 34% 4.5304

BSMHP 8,468,000 35,949,200 3044% 39% 3.9684

JMHP 19,053,000 70,981,951 6.80% 44% 304825SPUG 572,946 4,135,563 0040% 22% 6.7472 5.3851

ULGEI . , 0 0 0.00% . 0%

GNP . 0 0 0.00% 0%

WESM 61,437,727 336,440,585 32.23% 4.9593

TOTAL 182,659,974 1,043,877,457 100.00%

Simulation of Generation Mix Rate withULGEI

Forecasted Percent Resulting Average WeightedPower Quantity Amount (PhP) Share Capacity Rate AverageSupplier Rate(kWh) (%) Factor (%) (P/kWh) (P/kWh)

CEDC 90,155,000 581,888,219 55.74% 74% 5.9624

SPC 2,973,301 14,481,937 1.39% 34% 4.5304

BSMHP 8,468,000 35,949,200 3044% 39% 3.9684

JMHP 19,053,000 70,981,951 6.80% 44% 304825

SPUG 572,946 4,135,563 0040% 22% 6.7472 5.0987

ULGEI 46,602,691 216,442,788 20.73% 87% 4.3027

GNP 0 0 0.00% 0%

WESM 14,835,036 85,922,222 8.23% 5.1005

TOTAL 182,659,974 1,009,801,882 96.74%

IGeneration Rate Impact - -0.2864 I

24. In compliance with Rule 20 of ERC Rules of Practice andProcedure relative to the submission of supportingdocuments and information for the approval of the PSA andthe rate structure embodied therein, Applicants BOHECO Iand ULGEI also attach to the Application the followingdocuments to form integral parts hereof:

DQCUM~NT'ULGEI's Financial Pro osalULGEI's Audited Financial Statement for 201BOHECO I's Distribution Develo ment Plan (DDP)BOHECO I's Actual and Forecasted Ener and DemandBOHECO I's Avera e Dail Load Curve

ERC CASE NO. 2016-151RCNOTICE OF PUBLIC HEARING/ 20 SEPTEMBER 2016PAGE 13OF 16

25. Applicants BOHECO I and ULGEI are reserving their right tosubmit other documents, either in the course of the hearingor as may be required by the Commission.

IV.

COMPLIANCE WITH PRE-FILING REQUIREMENTS

26. In compliance with Rule 6 of the ERC Rules of Practice andProcedure, Applicants have furnished the legislative bodies ofPasig City, Municipality of Tubigon, and the Province ofBohol with copies of their Application with all its annexes.The certifications attesting receipts and postings thereof areto be attached to the Application as Annexes "2", "AA" and"BB", respectively. Applicants have caused the publication oftheir Application in a local newspaper circulating within thefranchise area of BOHECO I. Copies of the Affidavit ofPublication and the local newspaper including the relevantpage thereof are to be attached to the Application as Annexes"CC","DD", and "EE", respectively.

Y.

MOTION FOR CONFIDENTIAL TREATMENT OFANNEXES "I" to "N" and "Q" to "Y"

27. Under Rule 4 of the ERC Rules of Practice and Procedure, aparty to any proceeding before the Commission may requestthat certain information not be disclosed and be treated asconfidential, by describing with particularity the informationto be treated as confidential, specifying the ground for theclaim of confidential treatment of the information and, ifapplicable, specifying the period during which theinformation must not be disclosed.

28. BOHECO I requests for the confidential treatment ofAnnexes "I" to "N" of the Application, consisting of the tenderdocuments. These annexes show the individual offers of thebidders which participated in the IBP JCPSP, as well as theresults of the evaluation. The IBP ECs, BOHECO I included,are bound by their undertaking to secure and keep inconfidence the offers and the proposed terms of supply, soas not to prejudice or pre-empt any future CSPs in whichthese bidders will participate. Otherwise, BOHECO I andBOHECO II may be held liable for damages for breach ofconfidentiality, and eventually, risk their good relations withthe suppliers concerned.

29. Similarly, Applicant ULGEI respectfully moves for theconfidential treatment of Annexes "Q" to "V" of theApplication. These annexes, exclusively owned by Applicant


ULGEI, contain information which are considered part of itsbusiness and trade secrets. As such, ULGEI has the soleproprietary interest and will be unduly prejudiced shouldthey be disclosed to the public.

30. In accordance with Section 1(b), Rule 4 of the ERC Rules ofPractice and Procedure, Applicants BOHECO I and ULGEIsubmit one (1) copy each of Annexes "I" to "N" and "Q" to "V"in a sealed envelope, with the envelope and each page of thedocuments stamped with the word "Confidential".

VI.

DEMAND SIDE MANAGEMENT

31. BOHECO I undertakes to submit a copy of the Demand SideManagement program as part of its submission to the EnergyRegulatory Commission.

VII.

PRAYER FOR PROVISIONAL AUTHORITY

32. All the foregoing allegations are re-pleaded by reference insupport of herein Prayer for the issuance of ProvisionalAuthority to implement the subject PSA;

33. BOHECO I and ULGEI pray for the issuance of a ProvisionalAuthority or interim relief prior to final decision pursuant toRule 14 of the ERC Rules of Practice and Procedure, to wit:

"Section 3.Action on the Motion. - Motions forprovisional authority or interim relief may be actedupon with or without hearing. The Commission shallact on the motion on the basis of the allegations of theapplication or petition and supporting documents andother evidences that applicant or petitioner hassubmitted and the comments or opposition filed by anyinterested person, if there be any."

34. The continuous additional supply shall help keep stablepower supply for the increasing demand and low and stablecost of power available at the WESM and for the end-users;and

35. To emphasize the necessity of a provisional approval ofherein Application, a Judicial Affidavit to support the prayer

ERCCASENO. 2016-151RCNOTICEOF PUBLIC HEARING/ 20 SEPTEMBER 2016PAGE 15 OF 16

for provisional authority will be attached to the Applicationas Annex "GG".

PRAYER

WHEREFORE, premises considered, it is most respectfullyprayed that this Honorable Commission (i) treat asconfidential all information in Annexes "I" to "N" and"Q" to "V" ; (ii) pending hearing on the merits, issue aProvisional Authority authorizing the immediateimplementation of the Power Supply Agreement betweenApplicants BOHECO land ULGEI, including the ratestructure therein, as applied; (iii) after due notice andhearing, approve the Application, the Power SupplyAgreement, and the rate structure contained therein; and (iv)in case the final approval is issued after ULGEI starts actualdelivery of power to BOHECO Ian order retroactivelyapplying the final approval to the date of actual delivery.

Other reliefs as may be just and equitable under the premisesare, likewise, most respectfully prayed for.

The Commission has set the Application for initial hearing,Expository Presentation, Pre-trial Conference, and presentation ofevidence on 04 November 2016 (Friday) at two o'clock in theafternoon (2:00 P.M.) at BOHECO I Main Office inCabulijan, Tubigon, Bohol.

All persons who have an interest in the subject matter of theproceeding may become a party by filing, at least five (5) days prior tothe initial hearing and subject to the requirements in the ERC's Rulesof Practice and Procedure, a verified petition with the Commissiongiving the docket number and title of the proceeding and stating: (1)the petitioner's name and address; (2) the nature of petitioner'sinterest in the subject matter of the proceeding, and the way andmanner in which such interest is affected by the issues involved in theproceeding; and (3) a statement of the relief desired.

All other persons who may want their views known to theCommission with respect to the subject matter of the proceeding mayfile their opposition to the Application or comment thereon at anystage of the proceeding before Applicants conclude the presentationof its evidence. No particular form of opposition or comment isrequired, but the document, letter or writing should contain the nameand address of such person and a concise statement of the oppositionor comment and the grounds relied upon.

I..

ERe CASENO. 2016-151 RCNOTICE OF PUBLIC HEARING/20 SEPTEMBER 2016PAGE 16 OF 16

All such persons who wish to have a copy of the Application mayrequest from the Applicants that they be furnished with the same,prior to the date of the initial hearing. Applicants are hereby directedto furnish all those making such request with .copies of the.Application and its attachments, subject to the reimbursement ofreasonable photocopying costs. Any such person may likewiseexamine the Application and other pertinent records filed with theCommission during the standard office hours.

WITNESS, the Honorable Chairman, JOSE VICENTE B.sALAZAR, and the Honorable Commissioners, ALFREDO J.NON, GLORIA VICTORIA C. YAP-TARUe, JOSEFINAPATRICIA A. MAGPALE-ASIRIT, and GERONIMO D. STA.ANA, Energy Regulatory Commission, this 20th day of September2016 in Pasig City.

J. MARASIGANC of Staff

Officeof the Chairman and CEO

Ill, ~/~ ,~,m6-'5'RC BOHECO I ond ULGEI.d"