Republic of the ENERGY REGULATORY COMMISSION Pasig City

IN THE MATTER OF THE APPLICATION FOR THE APPROVAL OF THE OVER/UNDER RECOVERIES BASED ON THE FORMULA ON THE VARIOUS AUTOMATIC COST ADJUSTMENTS AND TRUE-UP MECHANISMS AND CORRESPONDING CONFIRMATION PROCESS PURSUANT TO ERC RESOLUTION No. 16, SERIES OF 2009 AS AMENDED BY RESOLUTION NO. 21, SERIES OF 2010

ERC CASE NO. 2020-001 CF

KALINGA - ELECTRIC COOPERATIVE, INC., (KAELCO), Applicant. x------x

NOTICE OF VIRTUAL HEARING

TO ALL INTERESTED PARTIES:

Notice is hereby given that on 06 March 2020, Applicant -Apayao Electric Cooperative, Inc. (KAELCO) filed an Application dated 26 February 2020, seeking the Commission’s approval of over/under recovery based on the formula on the various automatic cost adjustment and true-up mechanism and corresponding confirmation process pursuant to ERC Resolution No. 16, Series of 2009 as amended by Resolution No. 21, Series of 2010.

The pertinent allegations of the said Application are hereunder quoted as follows:

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1. Applicant is an electric cooperative duly organized and existing under and by virtue of the laws of the Philippines, with principal office at Callagdao, Bulanao, Tabuk, Kalinga represented in this instance by its OIC-General Manager, Engr. Dominic H. Ayaen, per Board Resolution attached hereto as Annex A;

2. It is the exclusive franchise holder issued by the National Electrification Commission (NEC), to operate an electric light and power distribution system in the City of Tabuk and municipalities of Rizal, , , , , and Lubuagan, all in the province of Kalinga, and the municipalities of Conner, Calanasan and , all in the province of Apayao, per attached Certificate of Registration and Certificate of Franchise and Certificate of Amendment of Franchise hereto as Annexes “B” to “B-2”;

3. Under ERC Resolution No. 16, Series of 2009 as amended by ERC Resolution No. 21, Series of 2010, Luzon Distribution Utilities (DUs) and Electric Cooperatives (ECs) are required to file their respective consolidated applications for the approval of their over or under recoveries on the implementation of various automatic cost adjustments and true-up mechanisms, such as : Automatic Generation Rate (GR) and System Loss Adjustment Mechanism, Transmission Rate (TR) Adjustment Mechanism, Lifeline Rate Recovery Mechanism, Calculation of the Over/Under Recovery in the Implementation of Lifeline Rates by DUs, Calculation of Over/ Under Recovery in the Implementation of System Loss Rate (SLR) by DUs, and Calculation of the Over/Under Recovery in the Implementation of Transmission Rates;

4. Applicant adopted and applied the various formulas provided under Resolution 16, Series of 2009 as amended by Resolution 21, Series of 2010, in determining the under/over recoveries on the implementation of the foregoing automatic cost adjustments and true-up mechanisms;

5. A summary of the allowable cost vis-a-vis the actual collection on the above-mentioned implementation of various automatic cost adjustments and true-up mechanisms are presented hereunder, as follows:

(Over)/Under Allowable Cost Actual Revenue Recovery Generation 291,283,528 293,067,136 (1,783,608) Transmission 93,303,750 91,934,586 1,369,163 System Loss 57,684,973 57,433,215 251,757 Lifeline 4,583,122 7,337,463 (2,754,342) Senior Citizen 144,317 159,689 (15,372) Total 466,999,690 449,932,092 (2,932,402)

6. A proposed refund/collect scheme of the above over/under recoveries for implementation of within 36 months, as follows:

ERC CASE NO. 2020-001 CF NOTICE OF VIRTUAL HEARING/ 16 November 2020 PAGE 3 OF 7

(Over)/Under Recoveries No. of Forecasted Months In PhP PhP/kWh Particulars Sales Generation (1,783,608.04) 166,320,548.85 Main (1,696,377.56) 163,137,393.38 (0.0104) Lubuagan 36 Kabugao (87,230.48) 3,183,155.47 (0.0274) Transmission 1,369,163.08 163,155,153.80 Residential 893,513.97 113,083,380.69 0.0079 Low Voltage 36 292,700.74 21,261,392.80 0.0138 High Voltage 182,948.37 28,810,380.31 0.0064 System Loss 251,757.05 166,320,548.85 Main 646,370.16 163,137,393.38 0.0040 Lubuagan 36 Kabugao (394,613.11) 3,183,155.47 (0.1240) Life Line (2,754,342.40) 166,320,548.85 Main Lubuagan 36 (2,754,342.40) 166,320,548.85 (0.0166) Kabugao Senior Citizen (15,371.97) 166,320,548.85 Main Lubuagan 36 (15,371.97) 166,320,548.85 (0.0001) Kabugao

Generation (1,783,608.04) Transmission 1,369,163.08 System Loss 251,757.05 Life Line (2,754,342.40) Senior Citizen (15,371.97) TOTAL (Over)/Under (2,932,402.27)

7. In support of the foregoing, applicant is submitting herewith the following data and documents contained in five folders, attached hereto as Annexes “C” to “G”:

a. Summary of Over/Under computation per charges for the entire period in yearly presentation b. Proposed Scheme of Refund/Collect using latest kWh Sales c. Supplier and Transmission Data Sheet d. Power Bills from Suppliers e. Statistical Data Sheet f. Sections B & E of the Monthly Financial Status Reports g. Actual Implemented Rates Sheets h. Lifeline Discount Sheets i. Senior Citizen Discount Sheets j. Consumer Bills per Customer Class k. Computation of Generation Rate l. Computation of System Loss Rate m. Computation of Transmission Rate n. Computation of Lifeline Rate o. Computation of Senior Citizen Rate

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8. Finally, in compliance with the ERC Rules of Practice and Procedure, Applicant is likewise submitting herewith following documents, to wit:

Annexes “H” to “H-1” Certifications of the Sangguniang Panlungsod of Tabuk and Sangguniang Panlalawigan of Kalinga

Annex “I” Certification of the Sangguniang Panlalawigan of Apayao

Annex “J” Affidavit of Publication from the Newspaper where the Application with some errata was published

Annex “K” to “K-1” Copy of the newspapers where the Application with some errata was published

Annex “L” Affidavit of Publication from the Newspaper where the correction to the errata was published

Annex “M” to “M-1” Copy of the newspapers where the corrections to the errata were published

PRAYER

WHEREFORE, premises considered, it is respectfully prayed that the computations of over/under recoveries presented in the instant application be approved, and KAELCO be allowed to refund/collect said over/under recoveries.

Other relief, just and equitable in the premises are likewise prayed for.

In the Order dated 25 August 2020, the Commission has set the instant Application for the determination of compliance with the jurisdictional requirements, expository presentation, Pre-trial Conference, and presentation of evidence on 12 November 2020, through a virtual hearing using the Zoom Application as the online platform for the conduct thereof, pursuant to Resolution No. 07, Series 0f 20201 dated 23 July 2020.

However, upon the recommendation of the National Disaster Risk Reduction and Management Council (NDRRMC), and in view of the continuing inclement weather brought by Typhoon “Ulysses”, work

1 A Resolution for the Transitory Implementation of Legal e-Processes Pending the Adoption of the Interim Guidelines Governing Electronic Application, Filings, and Virtual Hearings Before the Energy Regulatory Commission; and ERC CASE NO. 2020-001 CF NOTICE OF VIRTUAL HEARING/ 16 November 2020 PAGE 5 OF 7 in the government offices in the National Capital Region (NCR), among others, was suspended from three o’clock in the afternoon (03:00 P.M.), 11 November 2020 until 12 November 20202.

IN VIEW OF THE FOREGOING, the virtual hearing scheduled on 12 November 2020 was cancelled.

ACCORDINGLY, the Commission has set anew the instant Application for the determination of compliance with the jurisdictional requirements, expository presentation, Pre-Trial Conference, and presentation of evidence on the following dates:

Date Online Platform Activity Determination of 02 December 2020 compliance with Microsoft Teams (Wednesday) Jurisdictional (MS Teams) at nine o’clock in the requirements and Application morning (09:00 A.M.) Expository Presentation 09 December 2020 Pre-Trial Microsoft Teams (Wednesday) at nine Conference and (MS Teams) o’clock in the morning Presentation of Application (09:00 A.M.) Evidence

Any interested stakeholder may submit its comments and/or clarifications at least one (1) calendar day prior to the scheduled virtual hearing, via electronic mail (e-mail) at [email protected], [email protected] and [email protected], copy furnish the Legal Service through [email protected] and [email protected]. The Commission shall give priority to the stakeholders who have duly submitted their respective comments and/or clarifications, to discuss the same and propound questions during the course of the expository presentation.

Moreover, all persons who have an interest in the subject matter of the instant case may become a party by filing with the Commission via e-mail at [email protected], [email protected] and [email protected], copy furnish the Legal Service through [email protected] and [email protected], a verified Petition to Intervene at least five (5) calendar days prior to the date of the initial virtual hearing and subject to the requirements under Rule 9 of the 2006 ERC Rules of Practice and Procedure, indicating therein the docket number and title of the case and stating the following:

2 Office of the President of the Philippines Memorandum Circular No. 82 dated 11 November 2020. ERC CASE NO. 2020-001 CF NOTICE OF VIRTUAL HEARING/ 16 November 2020 PAGE 6 OF 7

1) The petitioner’s name, mailing address, and e-mail 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.

Likewise, all other persons who may want their views known to the Commission with respect to the subject matter of the case may file through e-mail at [email protected], [email protected] and [email protected], copy furnish the Legal Service through [email protected] and [email protected], their Opposition or Comment thereon at least five (5) calendar days prior to the initial virtual hearing and subject to the requirements under Rule 9 of the 2006 ERC Rules of Practice and Procedure. No particular form of Opposition or Comment is required, but the document, letter, or writing should contain the following:

1) The name, mailing address, and e-mail address of such person;

2) A concise statement of the Opposition or Comment; and

3) The grounds relied upon.

All such persons who wish to have a copy of the Application may request from Applicant that they be furnished with the same prior to the date of the initial hearing. Applicant is hereby directed to furnish all those making such request with copies of the Application and its attachments, through any of the available modes of service, upon their agreement, subject to the reimbursement of reasonable photocopying costs. Any such person may likewise examine the Application and other pertinent records filed with the Commission during the standard office hours. In the alternative, those persons who wish to have an electronic copy of the Application may request the Commission for the e-mail addresses of the Applicant by sending an e-mail to [email protected], [email protected] and [email protected], copy furnish the Legal Service through [email protected] and [email protected]. Nonetheless, any person may also access the Application as posted by the Commission in its official website at www.erc.gov.ph.

Finally, all interested persons may be allowed to join the scheduled initial virtual hearing by providing the Commission, thru ERC CASE NO. 2020-001 CF NOTICE OF VIRTUAL HEARING/ 16 November 2020 PAGE 7 OF 7 [email protected] and [email protected] with their respective e-mail addresses and indicating therein the case number of the instant Application. The Commission will send the access link/s to the aforementioned hearing platform within five (5) working days prior to the scheduled hearing.

WITNESS, the Honorable Commissioners ALEXIS M. LUMBATAN, CATHERINE P. MACEDA, FLORESINDA G. BALDO-DIGAL and MARKO ROMEO L. FUENTES, Energy Regulatory Commission, this 16th day of November 2020 in Pasig City.

AGNES VST DEVANADERA Chairperson and CEO

LS: KMS/ARG/MCCG