28Th Electric Power Industry Reform Act (EPIRA) Implementation Status Report (For the Report Period April 2016)
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28th Electric Power Industry Reform Act (EPIRA) Implementation Status Report (For the Report Period April 2016) Prepared by the Department of Energy With Contributions from Energy Regulatory Commission Philippine Electricity Market Corporation National Power Corporation National Electrification Administration Power Sector Assets and Liabilities Management Corporation National Transmission Corporation TABLE OF CONTENTS I. INTRODUCTION ............................................................................................................... 1 II. PRIVATIZATION…………………………………………………………………………………..2 A. Privatization of Generating Assets .............................................................................. 2 B. Transfer of NPC Contracted Energy Outputs to Independent Administrators .............. 3 C. Other Disposable Assets............................................................................................. 4 D. Privatization Proceeds ................................................................................................ 5 E. Concession of the National Transmission Network ..................................................... 5 F. Sale of Sub-Transmission Assets (STAs) ................................................................... 6 III. ELECTRICITY RATES……………………………………………………………………….. …8 IV. COMPETITION .............................................................................................................. 17 A. Wholesale Electricity Spot Market (WESM) Operational Highlights…………………...17 B. Updates on WESM Governance Activities ................................................................ 20 C. Reserve Market Implementation ............................................................................... 26 D. Retail Competition and Open Access (RCOA) .......................................................... 27 E. Market Share Monitoring ........................................................................................... 29 V. POWER SUPPLY SECURITY AND RELIABILITY ......................................................... 30 A. Installed And Dependable Capacity .......................................................................... 30 B. Power Generation ..................................................................................................... 32 C. System Peak Demand .............................................................................................. 35 D. Electricity Sales ........................................................................................................ 35 E. Significant Outages ................................................................................................... 40 F. 2015 Significant Incidents in the Power System ........................................................ 44 H. Status of Government Generating Assets ................................................................. 46 I. Status of Transmission Projects ................................................................................ 48 J. Distribution Infrastructure Projects ............................................................................ 55 VI. TOTAL ELECTRIFICATION .......................................................................................... 57 VII. BENEFITS TO HOST COMMUNITIES ......................................................................... 64 ANNEXES Annex 1. TransCo Inspection Report Based on Concession Agreement as of 30 April 2016 ........................................................................................................................................... 68 Annex 2. TransCo Summary of Inspection Report for Projects Under Construction (PUC) as of 30 April 2016 ................................................................................................................... 69 Annex 3. NGCP Related Petitions to ERC as of 30 April 2016………………………………..75 Annex 4. Private Sector Initiated Power Projects in Luzon (COMMITTED) as of 31 March 2016 .................................................................................................................................... 77 Annex 5. Private Sector Initiated Power Projects in Luzon (INDICATIVE) as of 31 March 2016 .................................................................................................................................... 87 Annex 6. Private Sector Initiated Power Projects in Visayas (COMMITTED) as of 31 March 2016 .................................................................................................................................. 106 Annex 7. Private Sector Initiated Power Projects in Visayas (INDICATIVE) as of 31 March 2016 .................................................................................................................................. 111 Annex 8. Private Sector Initiated Power Projects in Mindanao (COMMITTED) as of 31 March 2016 .................................................................................................................................. 116 Annex 9. Private Sector Initiated Power Projects in Mindanao (INDICATIVE) as of 31 March 2016 .................................................................................................................................. 125 Annex 10. ERC Approved Capital Expenditure Projects as of 30 April 2016……………….134 Annex 11. NPC-incurred Amount on Grant of Mandatory Rate Reduction ......................... 175 28th Status Report on EPIRA Implementation As of April 2016 i I. INTRODUCTION The 28th Status Report on EPIRA implementation covers the period November 2015 to April 2016 with development highlights as follows: Continuing privatization of the government’s remaining assets and adoption of new timelines in light of directives to defer privatization of some assets specifically in Mindanao to address the supply shortage until the commercial operation of new power plants are realized; Declaration of full contestability timelines and other relevant policies for the retail market and increasing participation of Contestable Customers (CC); Continuing improvement in the WESM processes and operations arising from recommendations on audits, evaluation and incorporation of relevant policies to include among others, renewable energy and ancillary services; Supply and demand monitoring to ensure supply security and reliability including continuing assistance for the development of generation, transmission and distribution projects; and Continuing efforts to intensify rural electrification with the renewed targets for household electrification. 28th Status Report on EPIRA Implementation As of April 2016 1 II. PRIVATIZATION For the report period, PSALM continued activities for the privatization of Power Barge (PB) 104 and the Sucat Thermal Power Plant (STPP). New schedules for the privatization of other remaining plants were considered including Mindanao Coal-Fired Thermal Power Plant (MCFTPP) and Agus-Pulangui Hydro Electric Power Plants in line with the directives set of Congress and the DOE. Following are the recent developments on the privatization of the remaining plants and NPC-IPP contracts of the Power Sector Assets and Liabilities Management (PSALM) Corporation: A. Privatization of Generating Assets Power Barge (PB) 104 The bid for the PB 104 was successfully held last 15 April 2016 thru negotiated sale wherein SPC Island Power Corporation (SIPC) submitted the highest offer among the negotiating parties in the amount of PhP218,899,999.00. Other negotiating parties who participated were D.M. Wenceslao & Associates, Inc. (DMWAI) and Trans-Asia Oil and Energy Development Corp. The negotiated sale for PB 104 is consistent with EPIRA, COA Circulars and the Government Auditing and Accounting Manual and was adopted due to the failure of three (3) rounds of public biddings. Further, SIPC was found to be compliant to post-qualification requirements pursuant to the Negotiation Procedures to include the issuance of the Notice of Award (NOA) upon completion of the negotiation process. The Asset Purchase Agreement (APA) for the sale of PB 104 include the following provisions: Buyer can transfer PB 104 anywhere in the Philippines; and Buyer is not required to operate PB 104 in Mindanao. Prior to turn-over of PB 104 to SIPC, PSALM shall seek a written confirmation from the DOE granting clearance for the transfer of said plant considering the supply-demand situation. After the completion of the negotiation process to include the DOE clearance, the PSALM Bids and Awards Committee (PBAC) will issue the NOA. Sucat Thermal Power Plant (STPP) The second round of bidding for STPP on 08 April 2016 was declared as failure since the qualified bidders were not able to meet the reserve price set by PSALM. The qualified bidders include G.G. Uy Bonapor Metal Contractor Company, Santa Clara International Corporation, VPD Trading and Riverbend Consolidated Mining Corp. (RCMC). With the failed biddings for STPP, PSALM proposed for the conduct of negotiated sale for the same and will convene to discuss the next steps for the asset sale which shall cover the adoption of the APA, negotiation procedures, and timeline of activites to be presented to the PSALM Board for further instructions and approval. The new schedule for the STPP sale is tentatively set on the 2nd Semester of 2016. 28th Status Report on EPIRA Implementation As of April 2016 2 Indicative Privatization Schedule With concurrence from the DOE considering the supply-demand situation, PSALM updated its latest privatization