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~TORyc. d' O,,~ i '& Republic of the Philippines i:':',<-A'pproved for~. ENERGY REGULATORY COMMISSION' Posting Pacific Center Building www..gov.ph San Miguel Avenue? Pasig City IN THE MATTER OF THE APPLICATION FOR APPROVAL OF BUSINESS SEPARATION AND UNBUNDLING PLAN (BSUP) PURSUANT TO SECTION 36 OF REPUBLIC ACT NO.9136 AND RULE 10 OF ITS IMPLEMENTING I~ULES AND REGULATIONS ERC CASE NO. 2016-023 MC PAMPANGA III ELECTRIC COOPERATIVE, INC.(PELCO III), Applicant. x--------------------x ORDER • On 2 August 2016, Pampanga III Electric Cooperative, Inc. (PELCO III) filed with the Commission an Application for Approval of Business Separation and Unbundling, Plan (BSUP) pursuant to Section 36 of Republic Act No. 9136 and Rule 10 of its Implementing Rules and Regulations, dated 18 July 2016. ,In the said Application, PELCO III alleged, amon& others, that: 1. PELCO III .is a non-stock, non-profit electric cooperative, duly organized and existing under Philippine laws, with principal office at Sampaloc, Apalit, Pampanga; 2. It holds an exclusive franchise fTom the National Electrification Comm,ission to operate an electric light ~~~4 power distribution service in certain municipaliY ERC Case No. 2016-023 MC Order /01 September 2016 Page 3 Of29 in the province of Pampanga: Apalit, Macabebe, Masantol, Minalin San Simon and Sto. Tomas. PELCO Ill's main office is located in Sampaloc, Apalit, Pampanga. It maintains Sub-Offices in all the other five (5) municipalities in its franchise area. The status of its electrification for the last five (5) years is provided in the table below, as follows: Type of Customers 1 2011 1'2012': '2013 :'2014' 2015 I Ave. i L-~ .~ " i - I-:-Q!owth ! i ResidentiaL' Residential '52,26zl53,684~53,53~53,013 53~5.9..9'1.10% 'I Low I Commercial i 2,°94 I 2,144 i 2,105: 2,091 I 2,134 I 0,49% : ~~~age I I: I : ,- I Industrial i 3,3- 21 'I_ 21 ! 24 __ 2:1~5,52% _I_ 1 Irr[gation I 1~ 11 ~3 8 I -2,76% I i j :::::l:"" I '" '" I ,m i 3m "6 I 0,3% I I S~reet , ... '120 "li3-1 - 108;'--154 1-981, ~1:66%'Ii ~ ~ghts _ _--+ : .~I ~, i High I Commercial I 0 2 : 3 i 2 I 3 i 22.22% , I Voltage I I I I I ' I i !J!!YL I Industrial lot- 11r-'l~ 14 !~14_i 8.62% J '-- : Irrigation 'i it __Ol __ ~_~q=__oL9,OO% I ~T~ i _ i 55'03-L[55.498 - 55,314L~~:3961=_l.08% j Based on its Financial and Statistical Report as of December 31, 2015, the following is PELCO Ill's sales data: TOTAL RESIDENTIAL COMMERCIAL LV PUHUC BUILDING AIDiA/ KWH AMOUNT KWH AMOUNT KWH AMOUNT KWH AMOUNT TOWN APALIT (10.44~) (21.~l;;2.~~) 11886~) (16002.74) (,,60) (",102.81) (20) (IS6.78) MASANTOL (23.345) (198,037.20) (23,245) (196,714.48) (100) (1,322.72) MACABEBE (10,086) (177.330••••) fto.Q86) (177,no. '5) (001 (700.77) STOTOMAS 000 6802.64 000 6802.6 MINALIN (0.820) (8".887.33) 6 8,,8) (60102.08) 2 (2 8 .2 ) SAN SIMON (".280) (46200.66) (5280) (462QO.66) GRAND (76,893) (522,104.23) (73,242) (489,646.67) (3,721) (33,040.55) (20) (156.78) TOTAL AIDiA/ TOTAL VAT. VAT GENCO VATTRANSCO VAT SL GENCON VAT SL TRANSCO TOWN DISTRIBUTION APAUf (".6~0.27) (~.~6".,,' (8120.6 ) (21"-"-.2') MASANTOL ("'"0"'.0") (~.186.!i:2 (, -.781.77) (2066.76) MACABEBE (14,,,82$) (',086.40 (0,"06.46) (1,080.20) STOTOMAS (1,'88.4") (101;;.0'-':' It 282.'71;;) (0.67) MINALIN (6.~47.,8) (1126.00) (" "'2.80) (1068.601 SAN SIMON (~.26~.,,0) (6"'.06) (2186.46) ("-62.071 GRAND (54,256.09) (11,484.47) (35,039.9') (7,731.71) - TOTAL b)CORPORATE STRUCTURE PELCO Ill's present organizational structure is typica~llY1 hierarchical. At the top of its hierarchy are the member- ... -- - -- - .- ERC Case No. 2016-023 MC Order /01 September 2016 Page40f29 consumers who elect the Board of Directors (BOD), the policy-making body of the Cooperative. The Board is headed by the President and is composed of six (6) members, including the General Manager (GM) in an ex- officio capacity and who sits on top of operations. The 6 members of the Board represent the different districts/municipalities covered by PELCO III and are elected by their respective constituents for a term of three (3) years. The top management, headed by the General Manager under the office of the General Manager (OGM), is composed of six (6) departments and six (6) area offices, respectively described as follows: OFFICE OF THE GENERAL MANAGER (OGM) 1. Institutional Services Department (ISD) The lSD is headed by Melinda T. Javier. Under lSD is the Coop Mfairs & Consumer Development Division. 2. HR AND ADMINISTRATIVE DEPARTMENT (HR AD) The HR AD is headed by Engr. C. Rommel P. Calilung. There are two Divisions under this department: (a) Human Resource Development Division and (b) Administrative Division. 3. TECHNICAL SERVICES DEPARTMENT (TSD) The TSD is headed by Engr. Michael P. Yutuc. There are two Divisions under this department: (a) Asset Management Division and (b) Network Management Division. 4. FINANCIAL SERVICES DEPARTMENT (FSD) The FSD is headed by Ma. Elizabeth D. Urbano. There are two Divisions under the FSD: (a) Accounting Division, and the (b) Consumer Accounts Division. 5. INTERNAL AUDIT DEPARTMENT (lAD) The lAD is headed by Engr. Cornelio C. Limpin. There are two Divisions under this department: (a) Operation Audit Division and (b) Technical Audit Division'i ERC Case No. 2016-023 MC Order /01 September 2016 Pagesof29 6. CORPORATE PLANNING, TRADING & INFORMATION TECHNOLOGY DEPARTMENT (CPD) The CPD is headed by Eduardo A. Aduna. This department has two divisions: (a) Information Technology Division and (b) Trading Division. Under the Trading Division is the Load and Forecasting Analyst. 7. AREA OFFICES (AO) The six (6) Area Offices are: Apalit Area Office located in Sampaloc, Apalit which covers the town of Apalit; Macabebe Area Office which covers the town of Macabebe; Masantol Area Office which covers the town of Masantol; Minalin Area Office which covers the town of Minalin; San Simon Area Office which covers the town of San Simon and Sto. Tomas Area Office which covers the town of Sto. Tomas. Each Area Office is headed by an Area Manager, and composed of two (2) divisions: (a) Office Services Division and (b) Operation and Maintenance Division. Several collection centers or paying stations are located strategically in the area coverage, add to these are the banks located in the respective towns. Over- the-counter and on line payments of electric bills are also catered by other commercial banks. c.) DESCRIPTION OF FUNCTIONS 1. GENERAL MEMBERSHIP Their general functions are to vote, to participate in General and Special Meetings, to purchase from the cooperative electric energy; to comply with and be bound by the Articles of Incorporation and By-Laws of the cooperative, rules and regulations adopted by the Board, and requirements of the National Electrification Administration ("NEA"), and to pay the membership fee. 2. BOARD OF DIRECTORS The Board is fully responsible to the member- consumers for the management of internal affairs of the Cooperative, for public relations and for relations ~th Government and Public Agen~i:s. It delegates /f ... ERC Case No. 2016-023 MC Order /01 September 2016 Page 6 Of29 the General Manager detailed management, program planning and supervision over execution of policies and programs. 3. OFFICE OF THE GENERAL MANAGER (OGM) The Office of the General Manager is responsible for the over-all planning, organizing, directing, controlling and coordinating of all activities, programs and projects of the cooperative. 4. FINANCE SERVICES DEPARTMENT (FSD) The FSD is primarily responsible for the preparation of the annual budget and financial plan of the FSD and the entire cooperative. It functions as the implementing arm of the GM in the financial operation of the cooperative. Accounting Division This division reviews the propriety of transactions, verifies payment documents and certifies as to validity of transactions, propriety and completeness of supporting papers and accounting entries. It also supervises the work of accounting personnel and the implementation of accounting policies and procedures, in conformity with guidelines/standards and with the established accounting and auditing practices, rules and regulations. Consumer Accounts Division This division is responsible in the computation of monthly electric rates based on ERC-approved guidelines, ensures proper and accurate billing of customers; prepares monthly summary of sales as to energy (kWh), amount, and type of consumers. It is likewise responsible for the submission of monthly reportorial requirements to the ERC regarding rates. 5. INSTITUTIONAL SERVICES DEPARTMENT (ISD) Handles the institutional development of member- .consumers and employees of the .cooperative. It ensures the effectiveness and success of information campaign, Annual General Membership Assemblies, di,t,idcl",Hon/mectinr>,.ndt'IDning,.nd "min¥. ERC Case No. 2016-023 MC Order /01 September 2016 Page 70f29 Coop Affairs and Consumer Development Division This Division assists the ISD Manager in formulating the implementation of training programs, information dissemination activities for the members-consumers; ensures that all consumers' complaints are properly acted upon and recorded; reviews all requirements for service connections to ensure that they are properly accomplished and documented; supervises the processing of membership applications for submission to the Board for Approval and the maintenance of updated membership register and other membership records; devises plans and procedures for peaceful, honest and orderly conduct of district elections and holding of meaningful and informative annual general membership assembly (AGMA).