Power Market Development

9 \-\-k - d PREPARED FOR INTERNATIONAL COOPERATION ADMINISTRATION REPORT on Power Market Development PHILIPPINES TUDOR ENGINEERING COMPANY, Washington, D. C, AUGUST 1958 RETURN TO - MIDIPW PREPARED FOR INTERNATIONAL COOPERATION ADMINISTRATION REPORT on Power Market Development PHILIPPINES TUDOR ENGINEERING COMPANY, Washington, D. C. AUGUST 1958 TABLE OF CONTENTS Page Letter of Transmittal.......... .. ............. 2 Frontispiece.. ......................... ,,,.,,...,,,.,,,,, 0 0 110 0 6 Introduction.................. 7 Philippine Power Market Development..... ................. 8. Objectives of Project.... *....... ............,..9 8 Area of Operations. .. .. .... ........ *..... 8 Status of Power Market and Condition of Electric Utilities... 0.... o................ *,a* ,a 8 Low Cost Primary Powei Supply ....... *a,,,,*, * 9 Plan to Organize and to Expand Local Utilities........ 9 Load Building...................................... 10 Operating Suggestions for Utility Managers..... ... ,. 11 Financing ............. .. ....... ........ 11 Company Employee Instruction..................... 11 Results Accomplished.............................. 11 Rates..... .. ........... 12 Acknowledgements............................. ..... 13 EXHIBITS 1. Photographs...... ......... ................... 0a4-04000 15i 2. Extension Rule.. .. ................. 20 3. Plan to Organize and Expand Local Utilities........... 22 a. Organization of New Utilities................ 24 b. Rehabilitation of Existing Utilities. .......... 25 4. Operating Suggestions for Utility Managers........... 29 5. Progress Report Forms ..................... 50 a. Progress Report - Existing Systems.. ....0 51 b. Progress Report - New Systems........... 52 6. A Load Building Plan for National Power Corporation .................. o....foooo 53 7. A Guide for the Organization and Operating of a Small Electric Utility........ .0. .... ... 57 8. Progress in Financing. 0 . 0 . .0. ..a.... .... 59 9. A. A: List of Electric Utilities in Towns .......... 65 B. A List of Towns Without Electric Utilities.....o. 67 10. Task Order No. 12... ..... ....... 0.0 0 0. ..0.0 .. 69 -1' MAsso A. swoo. TUDOR ENGINEERING COMPANY . A ZW6Zagog OAma'A.UUAr. $90 MISSION STREST, SAN FRANObeCo YUKON 8*9010 Address reply to 1413 K St., N.W., Washington 5, D.C. STerling 3-5313 International Cooperation Administration August 1, 1958 815 Connecticut Avenue, N. W. Reference: TAC-122 Washington 25, D. C. PPA 92-22-082 SUBJECT: POWER MARKET DEVELOPMENT g - PHILIPPINES Attention: Mr. Norman E. Thompson Gentlemen: On March 20, 1958, ICA/W directed the Tudor Engineering Company (TEC) by Task Order No. 122, to send a power market consultant to the Philippines fo.. the purpose of exploring the power market potential within the grid service area of the National Power Corporation (NPC) and to develop detataed plans, "by which small privately owned or municipally owned local utility companies are to be formed in areas through which high tension transmission lines and subtransmission lines from existing and proposed permanent type power generating plants located in North and Central Luzon will pass". On April 16, 1958, an orientation meeting was held with ICA/W and the consultant, Mr. Stahl. Mr. E. G. Stahl was in the Philippines from April 30 to July 17, 1958. After a rather extensive survey of conditions, he prepared the attached plan of operation, which includes detailed methods for organizing new -2 TUDOR ENGINEERING COMPANY electric utilities, expanding the service facilities of existing utilities, and developing new load and revenue for both the local utilities and the National Power Corporation. 1. Economic Importance of the Project The project covers the principal rice, sugar cane and tobacco growing areas of the Islands. Except for Manila and environs, the project area has better transportation, better communications, and to more r*-dernized than other sections of the Islands, and expanded use of electric power would be a major contribution to the economic welfare of the area and to the country as a whole. For example, the Philippines imports rice, which to the basic food supply, and cotton for its textile mills. With elec tric power made available for irrigation pumping, this area could produce adequate supplies of these two important products now imported. If markets are available, it could also greatly increase production of cane sugar, which is one of the country's major dollar exports. The expansion of electric power facilities within this area would also be of great assistance to the many small home type industries, such as woodworking, furniture making, sewing, potteries, etc. Probably no other effort involving equal expenditure of funds could contribute as much toward improving the economy of the area as would electric service if it were made available at reasonable rates. This program also has a special significance that if it proves to be successful similar programs will be instituted throughout the Islands of the Republic. -3 'UDOR ENGINEERING COMPANY 2. Conclusions and Recommendations With the completion of the power Miarket development report (TEC-31) under date of February 20, 1957, and Mr. Stahl's report which is attached hereto, we feel that the project has been thoroughly investigated and effectively planned to enable accomplishment of the objectives outlined in PPA 92-22-082. The problem remaining is to implement the plans. The job is basically promotion. It will require thorough training of contact personnel and extensive supervision by someone who has had broad experi ence in this kind of work. The recommendation for NPC to employ a technical engineer and a young graduate attorney as a team to promote Plans 1 and 2 (organization of new utilities and rehabilitation of existing utilities, see Exhibit 3) appears to be sound. This work will involve both technical and legal questions and such a team, well trained and properly supervised, could be an effective promotional unit. The new business promotion plan recommended by Mr. Stahl appears to be well-planned arid adaptable to local conditions. It is an essential part of the program, as it is principally through increased use of electric services that a reduction in rates is realized. It is recommended that ICA provide a power market consultant to direct this activity. It is also recommended that NPC delegate to the consultant full authority for the selection and supervision of the required promotional personnel, and that NPC provide transportation for the consultant at his request and for the full duration of his stay in the Philippines. -4 TUDOG ENGINEERING COMPANY In addition to the above, the following very essential require ments should be protrided before implementation of this project: a. Appropriation by NPC of 60, 000 pesos per year (2pesos for US $1) to provide personnel, trans portation and equipment. b. Provision for a dollar exchange fund of one million dollars (2 pesos for US $1) to be made available to local utilities on approval by NPC for the purchase of essential electric line equipment. It is recommended that the initial phase of this promotional activity will require about four months time in the Philippines by the power consultant. After this initial organization, training, and supervisional period, one or more subsequent inspection periods of 30 to 45 days dura tion should be adequate. On June 19, 1958, ICA/ W authorized TEC to provide Mr. F. M. Zablan, General Manager, National Power Corporation, with a copy of material contained in this report. This material was supplied to Mr. Zablan under date of July 9, 1958. Very truly yours, TUDOR ENGINEERING COMPANY John Qp: Project Manager Encls. EGS:ebf -5 sI U 0 A 0/ t A *AMUfAY?,PUG /N~ I 0I it mgL *1 LEPANTO C 0 *~r / j MININGCO, 0t L A /l N wft uf INNtV .a \ Uc VS 0 0 A I V A T A'AC4Co \ wFrua tJere 1' AUSIPL RA 1DA I A Ie 6, **0,a 300,00KW300il\ __PA MNPtA s A** o 1..\ ' s:MA'1 L7 N.- r t9I J A NOATI PLA USA -- o wit I MPAT1 GINISAIINOE PLNT , -&SSE SICA A HYDROtLICTRIC* STRAM ILECTAIC 830~~3 LttINme 000 SUBSTATIONS TowNSWITWoutILIC~itIC unungsII A TOtW N4tuNGSftCittC UTILIthf5 m 4~W ga. ****MM --- CENR AL UO tSAWV LINIS (andW£WWW'Ist.en .W ........ ISA WVLINMS Ipon, I - - SUtSTATIONS(po.Wnest M L (RID SYSTEM gilIITIAG TRAMMISION UINIS ANDSUSITATINS SUAUGUSTN 1988 TEC1 v LINtv C ATION P CO OTI I INTRODUCTILN This report is submitted in the form of a series of recommendations, supplemented by 10 exhibits. All of this material, including the suggested Plans 1 and 2, were worked out in cooperation with the National Power Corporation. Prior to departure from the Philippines, all of these materials, including Plans 1 and 2 for the implementation of the project, were reviewed and approved by the NPC. The only exception is the matter of NPC providing annually 60, 000 Pesos for the promotional activities. Mr. Zablan was out of the country and did not have an opportunity to consider this particular matter when it was under discussion. The exhibits, are submitted in this form so that they can be useable for office and field use, and the instructions have been designed so that a practicable and workable solution for the operation of small utility companies can be accomplished with a minimum of effort. The plans for the organization of new utilities and the rehabilitation of existing utilities are recommended as the best manner of approach in making electric energy available to more people in the barrios. The listing of towns having utilities and those without electric

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