&.G\.\I.ATORy~ c,'" ~ 0>:-'.'~'.::\ ~ ~/ / 'Y ".P"~"""''',0.'''-'''''J /"! ,.• <{i Republic of the Philippines iJJ i;;: ',' t:. : ., I.;( 's. ENERGY REGULATORY COMMISSION [ :'".' :l n . ..~, r. •••• ,'0, 'I ,.-: ,. , San MIguel Avenue, Pasig CIty \: "~ .•,~l)

""" ~ ~ /, '-~~.~ IN THE MATTER OF THE APPLICATION FOR APPROVAL OF THE POWER SUPPLY AGREEMENT (PSA) BETWEEN ELECTRIC COOPERATIVE, INC. AND TOTAL POWER INC., WITH PRAYER FOR PROVISIONAL AUTHORITY

ERC CASE NO. 2016-062 RC

LANAO DEL NORTE ELECTRIC COOPERATIVE, INC. (LANECO) AND TOTAL POWER INC. (TPI), Applicants. )(------){

NOTICE OF PUBLIC HEARING

TO ALL INTERESTED PARTIES:

On 28 April 2016, Lanao del Norte Electric Cooperative, Inc. (LANECO) and Total Power Inc. (TPI) filed a joint application for approval of the Power Supply Agreement (PSA) between Lanao del Norte Electric Cooperative, Inc. and Total Power Inc., with prayer for the issuance of provisional authority.

In their application, LANECO and TPI alleged the following:

1. Applicant LANECO is a non-stock, non-profit electric cooperative, duly organized and existing under and by virtue of the laws of the Republic of the , with principal office at Sagadan, , Tubod, Lanao del Norte, Philippines. It is authorized to distribute and provide electricity services to its member- consumers in the Municipalities of Bacolod, , ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Page 2 Of16

;Balo-i, $ultan Naga Dimaporq, , Kapatagan, , Lala, , Magsaysay, Maigq, , , Poona Piagapo, Salvador, , Tangkal, and Tubod, all in the Province of Lanao Del Norte (hereinafter, "Franchise Area"). Copies of LANECO's Certificates of Franchise are attached to the application as Annexes "A", "A-l" and "A-2" to form integral parts hereof;

2. Applicant TPI is a domestic corporation, duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with principal office at 201 Alabang Business Tower, 1216 Acacia Ave., Alabang, Muntinlupa City;

3. TPI is engaged in the business of installing, ownmg, operating, maintaining, and managing power generation facilities. Copies of relevant documents showing TPI's due incorporation, registration, and permit to operate as a generation company are hereto appended to form integral parts hereof, as follows:

.- .--_ .. . --- ._- - ..- . ANNEX DOCUMENT - . - "B" Certificate of Incorporation with the Securities and Exchange Commission (SEC) "C" Articles of Incorporation and By- Laws "D" General Information Sheet for the Year 2015 "E" Certificate of Non-Coverage (CNC) from the Department of Environment and Natural Resources (DENR)

4. LANECO and TPI may be served with orders, notices, and other legal processes of this Honorable Commission through the address of the undersigned Firm;

5. On 12 April 2013, Applicants LANECO and TPI executed a Power Supply Agreement (PSA) for the delivery to and purchase by LANECO of electricity for its peaking load requirements from TPI's 4-4 MW diesel-fired power plant. A copy of the PSA is hereto attached as Annex "F" to form an integral part hereof;

6. By and pursuant to Sections 25, 43 (u) and 45 (b) of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA), its ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Page 3 of 16

Implementing Rules and Regulations, and other pertinent rules and regulations, the instant Application is submitted to the Commission for its due consideration and approval of the PSA, executed by and between LANECOand TPI;

STATEMENT OF FACTS

7. Distribution utilities in Mindanao, including LANECO, have been experiencing chronic energy crisis due to insufficient supply, particularly with the reduction of supply coming from the National Power Corporation - Power Sector Assets and Liabilities Management (NPC- PSALM);

8. On 26 December 2012, NPC-PSALM renewed its Contract for the Supply of Electric Energy (CSEE) with LANECO, but allotted to the latter only 5 MW against LANECO's basic power demand of 14 MW'. NPC- PSALM informed LANECO in 2013 that due to generation constraint, it can no longer commit to supply the full energy requirements of LANECO.A copy of the Certification from NPC-PSALM is herewith attached to form an integral part hereof as Annex "G";

9. At that time, the insufficiency of supply threatened the viability of LANECO and posed risk of substantial stoppage of economic activities within its Franchise Area;

10. As an immediate solution to its power woes, LANECO made an invitation to bid on 11March 2013, calling all Independent Power Providers (IPP) who could provide a peaking plant to be embedded directly to LANECO's distribution line. Copies of LANECO's Invitation to Bid and the Affidavit of Publication from the newspaper where said Invitation was published, are hereto attached as Annexes "H" and "H-l", respectively, to form integral parts hereof;

11. Only TPI submitted its bid proposal for the 3MW + IMW Brand New High Speed Containerized Power Plant using diesel as fuel. A copy of TPI's letter-proposal dated 11 March 2013 with attached diesel power plant layout and single line diagram layout is hereto attached to form an integral part hereof as Annex "H-2";

1 As of the issuance of LANECO Board Resolution No. 59, Series of 2013 dated April 10, 2013 (Annex "Y' hereof) ERC Case No. 2Q16-062 CF Notice of Public Hearing /30 May 2016 Page 4 of 16 '

12. Owing to the urgent need to address the power crisis in LANECO's franchise area, as well as the persistent demand from the big load consumers group, LANECO negotiated with TPI to lower its peaking rate proposal to be at par with ERC's authorized ceiling load range. A copy of LANECO's Board Resolution No. 57, Series of 2013 authorizing the cooperative to negotiate the peaking load rate of TPI, is herewith attached and made an integral part hereof as Annex "H-3";

13. As a result of the negotiation, on 12 April 2013, LANECO and TPI executed a ten (lO)-year Power Supply Agreement (PSA), providing the terms and conditions of supply to LANECO of electric energy for its peaking requirements from a 4.4 MW diesel-fired power plant (hereinafter, the "TPI Power Facility") to be financed, developed, constructed, commissioned, operated, and maintained by TPI within the Franchise Area of LANECO;

ABSTRACT OF THE PSAAND OTHER RELATED INFORMATION

14. The following are the salient features of the PSA:

A. Term. The PSA shall become effective upon its execution on 12 April 2013 (the "Effective Date") and shall have a term commencing on said Effective Date until the last day of the tenth (10th) year of the Commercial Operations Period, which refers to the twenty-sixth (26th) day immediately following the day on which all the conditions under Section 4.1 of the PSA have been complied with, unless renewed or earlier terminated in accordance with the PSA.

One of the conditions precedent to Commercial Operations Date under Section 4.1 of the PSA is the Commission's approval of the PSA, provided that the issuance of a provisional approval shall be considered approval for purposes of determining Commercial Operations Date;

B. Supply of Electricity. During the term of the PSA, TPI shall allocate and deliver to LANECO, the Contract Energy for the latter's peaking requirement equivalent to 720,000 kWh per month, with an Allowable Maximum Demand of 3,000 kW per month pursuant to "Schedule of Contract Energy" (Schedule 1 of the PSA), except for interruption or reduction due to Force ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Pagesoft6

Majeure, System Emergency, and/or Allowable Outage;

Subject to availability of supply and consent of TPI, LANECO may be allowed to increase its Contract Energy subject to 24-hour prior notice to TPI, provided that LANECO shall pay Additional Energy Fee per month. LANECO may also be allowed to increase the Allowable Maximum Demand, subject to mutual agreement of the Parties on the terms of expansion;

C. Delivery Point. The Delivery Point shall be within the TPI Power Facility at Poblacion, Tubod, Lanao Del Norte. Electricity shall be deemed delivered to and accepted by LANECOat the Delivery Point. For all intents and purposes, title to and all risks associated with electricity from TPI Power Facility shall pass to LANECOat the Delivery Point. All risks and costs including any transmission losses attributed to the delivery of electricity' beyond the Delivery Point shall be for the account of LANECO;

D. Allowable Outage. For each contract year, TPI is entitled to an Allowable Outage of forty-five (45) days consisting of: (i) Scheduled Outage equivalent to forty (40) days, and (ii) Unscheduled outage equivalent to five (5) days. TPI is excused from its obligation to deliver energy during the occurrence of Scheduled Outage or Unscheduled Outage, in which case, the Contract Energy for the affected Billing Period may be adjusted pro rata or as agreed by the Parties;

In any contract year, the difference between Allowable Outage and the actual days used by TPI for Scheduled and Unscheduled Outage in such contract year will not be credited to the succeeding contract years;

E. Contract Energy Charge. For energy delivered, TPI shall charge LANECO, in peso per kilowatt hour (PhP/kWh), as indicated under Schedule 3 of the PSA. LANECOand TPI agreed to Fixed and Variable rates composed of the following components:

a. Capacity Fee (CF) = based on the contracted capacity of LANECO or 3,000 ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Page60f16

kW in the amount of PhP715.00/kW /month;

b. Fixed O&M Fee (FOM) = PhP350/kW/month escalated annually by Inflation Factor, as specified below;

c. Energy Fee = PhPO.4956/kWh; and

d. Fuel Oil and Lube Rates (FLR) in PhP/k Wh = full pass through costs based on fixed values of Fuel Oil Consumption Rate (FCR) for diesel equivalent to 0.28 liters/kWh, plus or minus 5%; and Lube Oil Consumption Rate (LOCR) equivalent to 0.001 liters/kWh, plus or minus 3%.

For Capacity and Fixed O&M Fees, kW is equivalent to the contracted capacity of LANECO or 3,000 kW. Meanwhile, the input values for Contract Energy Charge are without Value Added Tax (VAT). VAT will be applied and reflected in the Invoice to be issued to LANECO.

Monthly Power Bill:

The Monthly Power Bill is computed as follows:

MPB = FC + VC + VAT +/- allowable adjustments FC = { CF + (FOM) (IFf) } BC VC = [(EF) (IFv) + FLR] EDm

For Billing Period m = 1,2, ..., 12

Where:

MPB = Monthly Power Bill in PhP EF = Energy Fee (before adding the applicable VAT) for the Billing Period in PHP/kWh FC = Fixed Charge per month in Pesos VC = Variable Charge per month in Pesos VAT = Applicable Value Added Tax CF = Capacity Fee in PhP /kW /month FOM = Fixed 0 & M fee in PhP /kW /month IFf = Inflation Factor for Fixed 0 & M Fee BC = Billing Capacity in kW or 4,400 Kw IC = Installed Capacity in kW or 4,400 Kw IFv = Inflation Factor for Energy Fee ERG Case No. 2Q16-062 CF Notice QfPublic Hearing /3Q May 2016 Page 70f16 .

FLR = Fuel Qil,Lube oil, and rel\lted fuel rate in PhPjkWh

• Not to exceed 0.294 liter per kWh for HFO • Not to exceed 0.00103 liter per kWh for Lube Oil

EDm = The Contract Energy in kWh as indicated in Schedule 1, provided that it shall be proportionately adjusted based on the number of days of Allowable Outage during relevant Billing Period.

Inflation Factor:

For Fixed O&M Fee: IFf = 0.30 + 0.70 x (PCPImjPCPIb) For Energy Fee: IFv = 0.05 +0.05 x (PCPImjPCPIb) + 0.05 x (PUXmjPUXb) x UCPImjUCPIb) + 0.15 x (PEXmjPEXb) x (ECPImjECPIb) + 0.70 x (PJXmjPJXb) x (CCPImjCCPIb)

Where:

PCPIm = Philippine CPI of the current billing month PCPh = Philippine CPI of the effectivity month of the PSA USCPIm = US CPI of the current billing month USCPh = US CPI of the effectivity month of the PSA ECPIm = Euro CPI of the current billing month ECPh = Euro CPI of the effectivity month of the PSA

JCPIm = Japan CPI of the current billing month JCPh = Japan CPI of the effectivity month of the PSA PUXm = Peso to US Dollar exchange rate at the end of the current billing month = Peso to US Dollar exchange rate of 42.713 as of 3 March 2012 PEXm = Peso to Euro exchange rate at the end ofthe current billing month = Peso to Euro exchange rate of 56.1676 as of 3 February 2012

PJXm = Peso to Yen exchange rate at end of the current billing month ERC Case N(). 2()16-062 CF Notice of Public Hearing /30 May 2016 PageS of 16

PJKb = Peso to Yen exchange rate of 0.5605 as of 3 March 2012

Notes:

1. If CPI of current billing month is not published and available within two days from the end of the Billing Period, the most recent available published index shall be used.

2. If the source of any foreign indices is no longer available or has not been published or available for a prolonged period, the replacement index shall be selected by the TPI.

3. If any of the foregoing indices are re-based during the duration of the PSA, TPI has the option to apply a corresponding adjustment to the inflation formula to conform to the rebasing of the subject indices.

F. Additional Energy Fee per Month.

For energy secured by LANECO in excess of the Contract Energy, TPI shall charge an Additional Energy Fee per month for such excess energy, computed according to the following formula provided under Schedule 3 of the PSA:

AEF = AEFC+ AEVC

AEFC = {AECFR + (AEFOMR) (lFf) + AEINSR} EDAEM AEVC = [(EF) (IFv) + FLR] EDAEM

Where:

AEF = Additional Energy Fees in PhP for energy delivered over and above the Peaking Contracted Energy AEFC = Additional Energy Fixed Costs AEVC = Additional Energy Variable Costs AECFR = Additional Energy Capacity Fee Rate equivalent to 1.85000, in PhP /kWh AEFOMR= Additional Energy FOM Rate equivalent to 0.6672, in PhP /kWh AEINSR = Additional Energy Insurance Premium Rate equivalent to 0.0308, inPhP/kWh EDAEM = The sum of the hourly volumes in excess of the Contract Energy for the ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Page 9 of 16 .

Billing Period primarily associated with calendar month m (for example December 26-January 25, is associated with January) measured up to Delivery Point, in kWh EF = Energy Fee (before adding the applicable VAT)for the Billing Period inPhP/kWh IFf = Inflation Factor for Fixed O&MFee IFv = Inflation Factor for Energy Fee FLR = Fuel Oil, Lube Oil and related fuel rate in PhP/kWh • Not to exceed 0.294 liter per kWh for HFO • Not to exceed 0.00103 liter per kWh for Lube Oil

COMMERCIAL ADVANTAGES OF THE GENERATION RATE AND IMPACT ON LANECO'S OVERALL RATES

15. With the total1l.71 MW being supplied to LANECO by its current suppliers NPC-PSALM, King Energy Generation, Inc. (KEG!), and FDC Misamis Power Corporation (FDC), out of its peaking requirement of 18.803 MW for 2015, the 4-4 MW Diesel Fired Peaking Power Plant of TPI will help alleviate and sustain the energy supply needs of LANECO,especially during high demand or peaking period, when deficiency in power supply is mostly felt;

16. Moreover, the variance between supply and demand for electricity during peak period is projected to increase for the next succeeding years, that the need to address the issue is more urgent now than ever. Copies of LANECO's Demand-Supply Scenario from 2013 to 2020 with Average Daily Load Curve and Historical and Forecasted Data for years 2008 to 2024 are herewith attached to form integral parts hereof as Annex "I";

17. The embedded peaking 4-4 MW TPI Power Facility, being a diesel power plant which is faster to construct than any other type of power plants, will address the immediate need for a new power source at the most convenient time. Effectively, with more stable power within LANECO's Franchise Area, the economic losses of industries and business are minimized and the quality of the day-to-day lives of its member-consumers are improved;

18. Further, the development of the peaking plant to be embedded to LANECO's system will also benefit '. ERC Case No. 2016-()62 CF Notice 9fPublic Hearing /39 May 2016 Page 10 of 16 .

LANECO III terms of avoiding added cost of transmISSIOn charge. Likewise, LANECO will be insulated from transmission issues afflicting the Mindanao Grid, and shall have less systems loss;

19. Meanwhile, the following table shows the simulated impact to LANECO's overall retail rate of implementing the proposed generation rate for peaking power delivered from the TPI Power Facility:

r-- Without TPI: Averag~_m~nthly. kWh purchased from y'SAlM, FDCand KEGI ~~ ....__~~2~l-1----- Average rate PhP 5.6088 Total Amount PhP . __ 3~,~~I,?43.J7 - -_._- _._. ------_ .. _._------With TPI(3MW): , ! ... . kWh 720,000 I I~OJ1tracte

,Total Generation Cost . 42,932,754.56 ,-- . --_.,,- I- -- ..- •• - - _. • j .. -.- ..... h~lai'E~ergy t~ be purchased 6,662,991 -1----_. : New Blended Power Cost/kWh 644~~ -- ._.i- ___. 1--- ...------'" ------. ,kWh cost before TPI 5.6088 kWh cost with TPI 6.4435 I -_.- ._. ._- -- Average Increase per kWh PHP 0.9656 /kWh . I(VATEXCLUSIVE) I .-----.l.- Notes: I TPI Bill based on a 33.33% Load Factor as contracted and using Fuel Cost of P30.00/li. 2 The total Contracted Energy of TPI is to address this unserved energy amounting 720 MWh.

20. The foregoing Rate Impact Simulation is also attached to the application as Annex "J";

21. The above simulation depicts an increase in generation costs only. However, considering that the TPI Power Facility will be embedded to LANECO, any rate increase will be tempered due to savings in transmission charges and less systems loss contribution, which are expected from the supply of additional peaking power by TPI;

22. In support of the instant Application for the approval of the PSA, the Applicants further attach the following documents to form integral parts hereof, to wit:

.\ :~ ! • .' ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Page 11Of16

"K" Sample Monthly Power Bill "L" Executive Summary of the PSA TPI's Five Year Financial Plan from year "M" 2016 to 2020 "M-1" Total Capital Cost Computation "M-2" Project Cost Breakdown "M-3" Loan Amortization Schedule "M-4" Working Capital at 60 days Weighted Average Cost of Capital (WACC) Computation CRF Calculation

. reign O&M Calculation "M-9" ~/LubeCost Cer . tion from the Development Bank "N" of th 'lippines (DBP) dated 19 March 2015, c 'ng as to TPI's approved loan Letter frol'i1 t e DBP dated 06 January "0" 2015, settin~ terms and conditions of the loan with Original Con Agreement "P" between TPI and B rr Corporation Fuel Supply Agreemeti~tween TPI and "Q" F.D.J Rosmar Corporati TPI's Audited Financial ments for "R" the year 2014 Technical Characteristics of the "8" Generation Capacity Notice of Award issued by LANECO in favor of TPI to install the embedded "T" diesel-fired power plant generator for the supply of energy during peak hours LANECO's Current Hourly Supply- "U" Demand Scenario LANECO's Distribution Development "V" Plan (DDP) ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Page 12 Of16

Copy of Resolution No. 17, S. 2013 issued by the Sangguniang Barangay of Poblacion, Municipality of Tubod, "W" interposing no objection to the establishment by TPI of a power generation plant located herein Copy of LANECO's Board Resolution No. 45, Series of 2014 granting TPI the right "X" of usufruct over a portion of land owned by LANECO for the construction of TPI's Power Facility Certified copy of LANECO's Board Resolution No. 59, S. 2013, authorizing its President, Reinario B. Bihag, to sign, execute and enter into a PSA with TPI Original copy of LANECO's Board esolution No. 68, S. 2015, authorizing ~ filing by Board President Reinario B. . . of an Application with the ERC for "z" the proval of the PSA between TPI and ~ E~, and engaging the services of Diccio ,w Firm to assist and represent LANEC 0 such purpose Original c@~~ of LANECO's Board Resolution N4 S. 2015, authorizing its President, Reint~~B. Bihag, to sign the Verification and Oif..Ji{icateof Non-Forum "Z-I" Shopping and any aircfAI documents, and to do all acts in relation~te.the filing of the Application for the app~l of the PSA with TPI until final ~ution and termination of the same; Original copy of TPI's ecretary's Certificate attesting to the resolution of its Board of Directors to enter into a PSA with LANECO and authorizing its "AA" Chairman/President Juanito C. Tan, Jr. to sign the PSA for and in behalf of TPI, which resolutions were adopted during a special meeting held on 10 April 2013 '. ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Page 13 of 16

Original GOPY of TPI's Board Resolution NO.002, Series of 2015, authorizing the filing of an Application with the ERC for the approval of the PSA between TPI and LANECO, designating its President, Juanito C. Tan, Jr., to file such Application, sign the Verification and "BB" Certificate of Non-Forum Shopping and any and all documents in relation to the same, and to do all acts in relation to the foregoing from filing until final resolution and termination of the same, and engaging the services of Diccion Law Firm ~ (~~ to represent and assist TPI 'e3. 23. Appli~t~ LANECO and TPI reserve their right to submit "'i1'ther documents, either in the course of the hearing "&1,as may be required by this Honorable .. ;;p\ CommlSSlOI1.~

COM~I4\NCE WITH PRE-FILING "'REQUIREMENTS '"() 24. Applicants hereby man1rest their compliance with the pre-filing requirements"filandated under Rule 3, Section 4(e) ofthe Implementing"1f:alfs and Regulations of the EPlRA and Rule 6 of the M)t16 ERC Rules of Practice and Procedure, as establish'e'~~X. attachments to be appended as follows, to wit: ~ j.." a. Notarized Affidavit of Publ~tion stating that the instant Application was~Jlblished in a newspaper of general circulati:bh. within the Franchise Area and/or the areI?where the Applicants principally operate, to b~ppended as Annex "CC";

b. A copy of the newspaper issue where the Application was published, to be appended as Annex "CC-l" and the relevant page hereof where the Application appears, as Annex "CC-2";

c. Original Certifications acknowledging receipt of the instant Application with annexes, issued by the Legislative Bodies of the Province of Lanao Del Norte, Municipality of Tubod, and the City of Muntinlupa, to be appended hereto as Annexes "DD", "EE", and "FF", respectively, where the Applicants principally operate. ERC Case No. 2016-062 CF Notice ofPuI,lic Hearing /30 May 2016 Page 14 of 1f;)

ISSUANCE OF PROVISIONAL AUTHORITY

All the foregoing are herein repleaded by reference in support of the instant Prayer for the issuance of provisional authority;

26. The basis by which Applicants LANECO and TPI pray for the issuance of Provisional Authority or interim relief prior to final approval of the instant Application is Rule 14 of the ERC Rules of Practice and Procedure, which provides:

L~ <'C2 "Section 3. Action on the Motion. - '"~(~~otionsforprovisional authority or q:thterim relief may be acted upon ti(tth or without hearing. The Cdilimission shall act on the motion t":.'1 on thii;f?asis of the allegations of the appU~an~n or petition and supporting\~ documents and other evidences th-dt>applicant or petitioner has submitted an;a~thecomments or opposition filed by any ih@n~sted person, if there be any." [EmphasilQ~rs} <'/'\ 27. Various constraints in opti~~ing available capacities in Mindanao cause energy gentfahon deficiencies leading to rotational brownouts to rMi8n the limited supply within the region; '?~t, ~-- '" " ,-"', 28. At present, LANECO's suppliers pro{4~",only 11.71 MW out of its 18.803 MW peak load req,uiJ~ments. The deficiency in peak load supply is expect~:Cto persist on to the next succeeding years. This not only'hiXs inimical consequences to LANECO's viability, but ne~essarily, to the businesses, industries and the day-to-day activities of its individual member-consumers;

29. While the subject PSA entered by LANECO with TPI will enable LANECO to address its power needs, particularly its peaking requirements, Commercial Operations under the PSA is dependent among others, on at least a provisional approval by the Commission of the subject PSA. Section 4.1.1 ofthe PSA provides:

4.1 xxx xxx xxx. Commercial Operations Date shall be the 26th day immediately following the day on which all of the following conditions have been satisfied: • ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Page 15 of 1~ .

4.1.1 ERC approval of this Agreement has been secured, provided that the issuance of a provisional approval by the ERC shall be considered as approval for purposes of determining Commercial Operations Date.

30. TPI's peaking 4-4 MW Diesel Fired Plant is already constructed and ready to deliver the needed peaking energy to LANECO. However, it cannot declare .C9mmercial Operations without the acquiescence of the C6rn~ission, through at least, a provisional authority; "'---""-:'--A \ ,- of all the foregoing, it is most respectfully prayed of this Hdii6rable Commission: That- V"',l . df '\d'"".>"h' h . ()a Pnor to an or pen lng" eanng on t e ments, a PROVISIONAL AUTH0RlTY be issued to Applicants LANECO ana;::t~I for the immediate implementation of their PSA,. including the rate structure herein as applied; ari(l. '~<,(). (b) After due notice and hear'ln~, a FINAL AUTHORITYbe issued approving tlfe:J~SAby and between Applicants LANECOand TRf;'including its rate structure, as applied. Further, in the event that a Final Authority shall be issued after TPI starts actual delivery of power to LANECO, said Final Authority be retroactively applied to the date of such actual delivery.

The Commission has set the application for determination of compliance with the jurisdictional requirements, expository presentation, pre-trial conference, and presentation of evidence on 04 August 2016 (Thursday) at ten o'clock in the morning (10:00 A.M.) at the LANECOMain Office, Tubod, Lanao del Norte, Mindanao. ~, ERC Case No. 2016-062 CF Notice of Public Hearing /30 May 2016 Page 16 of 16

All persons who have an interest in the subject matter of the proceeding may become a party by filing, at least five (5) days prior to the initial hearing and subject to the requirements in the ERC's Rules of Practice and Procedure, a verified petition with the Commission giving the docket number and title of the proceeding and stating: (1) the petitioner's name and 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.

All other persons who may want their views known to the Commission with respect to the subject matter of the proceeding may file their opposition to the application or comment thereon at any stage of the proceeding before the applicant concludes the presentation of its evidence. No particular form of opposition or comment is required, but the document, letter or writing should contain the name and address of such person and a concise statement of the opposition or comment and the grounds relied upon.

All such persons who wish to have a copy of the application may request from the applicant that they be furnished with the same, prior to the date of the initial hearing. The applicant is hereby directed to furnish all those making such request with copies of the application and its attachments, 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.

WITNESS, the Honorable Chairman JOSE VICENTE B. SAlAZAR, and the Honorable Commissioners ALFREDO J. NON, GLORIA VICTORIA C. YAP-TARDC, JOSEFINA PATRICIA A. MAGPALE-ASIRIT, and GERONIMO D. STA. ANA, Energy Regulatory Commission, this 30th day of May 2016 at Pasig City.

AnY. NAT~. MARASIGAN Chzef of Staff Office of the Chairman and CEO