Republic of the ENERGY REGULATORY COMMISSION , Pasig City

IN THE MATTER OF THE APPLICATION FOR THE .APPROVAL OF THE ENERGY SUPPLY AGREEMENT (ESA) BETWEEN DAVAO LIGHT AND POWER COMPANY, INC. (DLPC) AND THERMA MARINE, INC. (TMI), WITH PRAYER FOR PROVISIONAL AUTHORITY

ERC CASE NO. 2011-041 RC

DAVAO LIGHT AND POWER COMPANY, INC. (DLPC), nOCrrRiTLlD Applicant. n.ate: P{ji{..~~..2..o.. .2a11 )(------)( 1:;1:. -• .....•.•...... _•.,.,..~

ORDER

Before the Commission for resolution is the "Joint Manifestation/Compliance (Re: Refund Scheme)" filed on February 26, 2013 by Davao Light and Power Company, Inc. (DLPC) and Therma Marine, Inc. (TMI).

In the Order dated May 30, 2011, the Commission provisionally approved the instant application, subject to certain conditions, one of which is that the final generation cost that can be recovered shall be determined by the Commission in its Decision in the instant application.

On April 30, 2012, the Commission issued an Order extending the aforesaid provisional authority until revoked or made permanent .by the Commission. ERC CASE NO. 2011-041 RC ORDER/November 25, 2013 Page 2 of 5

In the Decision dated November 19, 2012, the Commission approved the instant application, with modification, and directed DLPC and TMI to file, within fifteen (15) days from receipt thereof, a scheme for the refund of the difference between the final and the provisionally approved rates starting from the implementation of the provisional authority until the effectivity of the final rates approved therein.

In the "Joint Manifestation/Compliance (Re: Refund Scheme)" filed on February 26,2013 by DLPC and TMI, they proposed a refund scheme wherein the amount to be refunded was computed using the formula: Actual Billed Amount Based on Provisional Authority Rate Less Computed Amount Based on Final Approval Rate = Refund Amount. The Refund Amount is PhP31 ,846,169.60, inclusive of Value Added Tax (VAT). They, likewise, proposed that the Refund Amount be applied to DLPC's outstanding obligations to TMI and the remaining balance be refunded by TMI to DLPC over a period of twelve (12) months from approval of the Commission of the said refund scheme.

In calculating the refundable amount or the difference between the final and the provisionally approved rates, the Commission used the following formula:

Actual as Billed by TMI Based on Refund Amount = Provisional Rates Less Computed Amount Based on Final Rates

The Commission verified the actual cost billed by TMI to DLPC, based on the provisionally approved rates implemented by TMI, from the power bills submitted to the Commission pursuant to the Automatic Generation Rate Adjustment (AGRA) Rules. A perusal of the said power bills disclosed that DLPC's actual kWh purchase from TMI is 43,325,489 and the actual amount billed by TMI to DLPC is PhP538,284,898.00.

On the other hand, the Commission verified the allowable cost of TMI to be recovered from DLPC based on the approved final rate. The calculated amount based on the final rate is PhP509,850,818.00. ERC CASE NO. 2011-041 RC ORDER/November 25, 2013 Page 3 of 5

Thus, based on the foregoing formula, the refund amount shall be PhP28,434,080.00 which is calculated as the difference between the amount of PhP538,284,898.001 actually billed by TMI to DLPC and the amount of PhP509,850,818.002 that should have been billed by TM I to DLPC.

Accordingly, TMI is directed to refund the amount of PhP28,434,080.00 to DLPC for a period of six (6) months, equivalent to PhP4,739,013.33 per month. DLPC is, likewise, directed to refund the said amount to its consumers.

DLPC is further directed to submit to the Commission, along with the requirements under the AGRA Rules, a report on its monthly collection from TMI and refund to its consumers for monitoring and verification purposes. The approval of the aforesaid refund scheme is without prejudice to the verification and confirmation of DLPC's retail rates of the Commission.

SO ORDERED.

Pasig City, November 25, 2013.

. 'J'A At (~ ~A G.~~uz - DUCUT Chairperson ~

~/ ALFREDO J. NON ~~I~P-TARUC Commissioner Commis~~~;r

JOSEFINA PATRICI Com

=~I Computed based on provisionally approved rates

2 Computed based on approved final rates .' ERC CASE NO. 2011-041 RC ORDER/November 25,2013 Page 4 of 5

Copy Furnished:

1. The Law Firm of Manjares and Manjares Counsel for Applicant DLPC NO.5 Saint Anne St., Provident Village, Marikina City

2. Puyat Jacinto and Santos Counsel for Intervenor TMI 1ih Floor, VGP Center, 6772 , City

3. Office of the Solicitor General 34 Amorsolo Street, Legaspi Village Makati City,

4. Commission on Audit Commonwealth Avenue Quezon City, Metro Manila

5. Senate Committee on Energy GSIS Bldg., Roxas Blvd., Pasay City Metro Manila

6. House Committee on Energy Batasan Hills, Quezon City, Metro Manila

7. President Philippine Chamber of Commerce and Industry (PCCI) 3rd Floor, ECC Building, 355 Sen. Gil Puyat Ave., Makati City

8. Office of the City Mayor Davao City

9. Office of the City Mayor Panabo City, Davao Del Norte

10. Office of the Municipal Mayor Carmen, Davao Del Norte

11. Office of the Municipal Mayor Braulio Dujali, Davao Del Norte

12. Office of the Municipal Mayor Sto. Tomas, Davao Del Norte .. I ,,,",II'" ,-:I- • '" .'.. ERC CASE NO. 2011-041 RC ORDER/November 25, 2013 Page 5 of 5

13. Office of the Governor Province of Davao Del Norte

14. National Association of Electricity Consumers for Reforms, Inc. (NASECORE) .<

~., . ERC CASE NO. 2011-041 RC ORDER/November 25, 2013 Page 4 of 5

Copy Furnished:

1. The Law Firm of Manjares and Manjares Counsel for Applicant DLPC NO.5 Saint Anne St., Provident Village, Marikina City

2. Puyat Jacinto and Santos Counsel for Intervenor TMI 12th Floor, VGP Center, 6772 Ayala Avenue, Makati City

3. Office of the Solicitor General 34 Amorsolo Street, Legaspi Village Makati City, Metro Manila

4. Commission on Audit Commonwealth Avenue Quezon City, Metro Manila

5. Senate Committee on Energy GSIS Bldg., Roxas Blvd., Pasay City Metro Manila

6. House Committee on Energy Batasan Hills, Quezon City, Metro Manila

7. President Philippine Chamber of Commerce and Industry (PCCI) 3rd Floor, ECC Building, 355 Sen. Gil Puyat Ave., Makati City

8. Office of the City Mayor Davao City

9. Office of the City Mayor Panabo City, Davao Del Norte

10. Office of the Municipal Mayor Carmen, Davao Del Norte

11. Office of the Municipal. Mayor Braulio Dujali, Davao Del Norte

12. Office of the Municipal Mayor Sto. Tomas, Davao Del Norte ERC CASE NO. 2011-041 RC ORDER/November 25, 2013 Page 4 of 5

Copy Furnished:

1. The Law Firm of Manjares and Manjares Counsel for Applicant DLPC NO.5 Saint Anne St., Provident Village, Marikina City

2. Puyat Jacinto and Santos Counsel for Intervenor TMI 12th Floor, VGP Center, 6772 Ayala Avenue, Makati City

3. Office of the Solicitor General 34 Amorsolo Street, Legaspi Village Makati City, Metro Manila

4. Commission on Audit Commonwealth Avenue Quezon City, Metro Manila

5. Senate Committee on Energy GSIS Bldg., Roxas Blvd., Pasay City Metro Manila

6. House Committee on Energy Batasan Hills, Quezon City, Metro Manila

7. President Philippine Chamber of Commerce and Industry (PCCI) 3rd Floor, ECC Building, 355 Sen. Gil Puyat Ave., Makati City

8. Office of the City Mayor Davao City

9. Office of the City Mayor Panabo City, Davao Del Norte

10. Office of the Municipal Mayor Carmen, Davao Del Norte

11. Office of the Municipal Mayor Braulio Dujali, Davao Del Norte

12. Office of the Municipal Mayor Sto. Tomas, Davao Del Norte ERC CASE NO. 2011-041 RC ORDER/November 25, 2013 Page 4 of 5

Copy Furnished:

1. The Law Firm of Manjares and Manjares Counsel for Applicant DLPC NO.5 Saint Anne St., Provident Village, Marikina City

2.. Puyat Jacinto and Santos Counsel for Intervenor TMI 12th Floor, VGP Center, 6772 Ayala Avenue, Makati City

3. Office of the Solicitor General 34 Amorsolo Street, Legaspi Village Makati City, Metro Manila

4. Commission on Audit Commonwealth Avenue Quezon City, Metro Manila

5. Senate Committee on Energy GSIS Bldg., Roxas Blvd., Pasay City Metro Manila

6. House Committee on Energy Batasan Hills, Quezon City, Metro Manila

7. President Philippine Chamber of Commerce and Industry (PCCI) 3rd Floor, ECC Building, 355 Sen. Gil Puyat Ave., Makati, City

8. Office of the City Mayor Davao City

9. Office of the City Mayor Panabo City, Davao Del Norte

10. Office of the Municipal Mayor Carmen, Davao Del Norte

11. Office of the Municipal Mayor Braulio Dujali, Davao Del Norte

12. Office of the Municipal Mayor Sto. Tomas, Davao Del Norte