24th Electric Power Industry Reform Act Implementation Status Report (Period Covering November 2013 to April 2014) 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 24th Status Report on EPIRA Implementation CONTENTS I. INTRODUCTION ............................................................................................................... 1 II. PRIVATIZATION ............................................................................................................... 2 A. Privatization of Generating Assets .............................................................................. 2 B. Transfer of NPC Contracted Energy Outputs from its IPPs to Independent Administrators ................................................................................................................... 4 C. Privatization Proceeds ................................................................................................ 6 D. Concession of the National Transmission Network ..................................................... 6 E. Sale of Sub-Transmission Assets (STAs) ................................................................... 7 III. ELECTRICITY RATES ..................................................................................................... 8 A. Distribution Utilities’ Electricity Rates Data and Regulatory Actions ............................ 8 B. Transmission Rates Regulatory Updates .................................................................. 11 C. Generation Costs ...................................................................................................... 13 D. Administration of Universal Charge (UC) .................................................................. 14 E. Assumption of Loans of Electric Cooperatives .......................................................... 15 F. Lifeline Rate Subsidy Program .................................................................................. 15 G. Mandatory Rate Reduction (MRR) ............................................................................ 16 IV. COMPETITION .............................................................................................................. 17 A. Wholesale Electricity Spot Market (WESM) Operational Highlights ........................... 17 B. Updates on WESM Governance Activities ................................................................ 18 C. Reserve Market Implementation ............................................................................... 20 D. MERALCO Price Hike Case and other cases............................................................ 22 E. Line Rental Segregation ........................................................................................... 23 F. Other Issuances ........................................................................................................ 23 G. Retail Competition and Open Access (RCOA) .......................................................... 24 H. Market Share Monitoring ........................................................................................... 26 I. Interim Mindanao Electricity Market (IMEM) .............................................................. 28 V. POWER SUPPLY SECURITY AND RELIABILITY ......................................................... 33 VI. TOTAL ELECTRIFICATION .......................................................................................... 41 A. Qualified Third Party (QTP) Approach ................................................................. 42 B. Household Electrification Development Plan ........................................................ 43 C. Philippine Rural Electrification Service (PRES) Project ........................................ 43 VII. BENEFITS TO HOST COMMUNITIES ...................................................................... 44 VII. EPIRA REVIEW ......................................................................................................... 48 November 2013 – April 2014 ii 24th Status Report on EPIRA Implementation ANNEXES Annex 1.Transco Inspection Report Based on Concession Agreement as of 30 April 2014 53 Annex 2. Summary Inspection Report (PUC) as of 31 March 2014 ..................................... 54 Annex 3. NGCP Related Petitions to ERC as of 30 April 2014 ............................................ 55 Annex 4. Metered Quantity, Spot Quantity, Bilateral Quantity (MWh) .................................. 64 Annex 5. Demand and Energy Offers (MW) (Luzon) ........................................................... 67 Annex 6. Demand and Energy Offers (MW) (Visayas) ........................................................ 70 Annex 7. Generation Mix (%) .............................................................................................. 71 Annex 8. WESM Effective Settlement Prices ...................................................................... 74 Annex 9. Private Sector Initiated Power Projects in Luzon (COMMITTED) as of 28 February 2014 ............................................................................................................................ 77 Annex 10. Private Sector Initiated Power Projects in Luzon (INDICATIVE) as of 28 February 2014 ............................................................................................................................ 83 Annex 11. Private Sector Initiated Power Projects in Visayas (COMMITTED) as of 28 February 2014 ............................................................................................................. 93 Annex 12.Private Sector Initiated Power Projects in Visayas (INDICATIVE) as of 28 February 2014 ............................................................................................................. 97 Annex 13.Private Sector Initiated Power Projects in Mindanao (COMMITTED) as of 28 February 2014 ........................................................................................................... 102 Annex 14. Private Sector Initiated Power Projects in Mindanao (INDICATIVE) as of 28 February 2014 ........................................................................................................... 107 Annex 15. ERC Approved Capital Expenditure Projects as of 31 March 2014 .................. 110 November 2013 – April 2014 ii 24th Status Report on EPIRA Implementation LIST OF TABLES Table 1. Schedule of Privatization for Generating Assets as of 30 April 2014 ...................... 4 Table 2. Indicative Schedule for Appointment of IPP Administrators as of 30 April 2014 ....... 5 Table 3. Generated and Collected Proceeds of Privatization as of 30 April 2014, (In US$Billion) .................................................................................................................... 6 Table 4. Utilization of Privatization Proceeds as of 30 April 2014 .......................................... 6 Table 5. Summary Table of STAs Sale Per Region as of 30 April 2014 ............................... 7 Table 6. EC's Unbundled Average Effective Residential Electricity Rates, March 2014 (PhP/kWh) ..................................................................................................................... 9 Table 7. Summary of MERALCO Residential Unbundled Power Rates, April 2014 (PhP/kWh) ................................................................................................................... 10 Table 8. List of ERC Decisions on DU's Rate Applications for the period November 2013- April 2014…………………………………………………………………………………………….12 Table 9. Indicative Rates of the Proposed Maximum Allowable Revenue (MAR) for CY 2014…………………………………………………………………………………………………..13 Table 10. 2014 Proposed Rates on Regulated Transmission Services (System Operator [SO] ............................................................................................................................. 13 Table 11. Universal Charge Remittances, Interests, and Disbursements as of 30 April 2014 (In Billion PhP)………………...…………………………………………………………………….15 Table 12. UC Collections and Disbursements for November 2013 – April 2014 (In Billion PhP) ............................................................................................................................ 14 Table 13. Status of Loan as of 31 March 2014 (In PhP Billion) ............................................ 15 Table 14. PSALM Payments per Type of Loan as of 30 April 2014 (In PhP Billion) ............. 15 Table 15. Summary of Lifeline Subsidy Implementation, January to December 2013………17 Table 16. Registration Update as of 30 April 2014 (Luzon and Visayas)……………………18 Table 17. Approved WESM Rules and Market Change Proposals (4Q2013- 1Q2014)…….20 Table 18. Summary of RCOA Registration as of 30 April 2014 ........................................... 24 Table 19. Summary of Market Transactions (integrated Wholesale and Retail Markets) ..... 24 Table 20. Retail Electricity Suppliers' Market Share as of 30 April 2014…………..…………26 Table 21. Power Plants with Changes in Nameplate Rating………………………………..…28 Table 22. 2013 Installed and Dependable Capacity of Luzon Grid ...................................... 33 Table 23. 2013 Installed and Dependable Capacity of Visayas Grid ................................... 34 Table 24. Installed and Dependable Capacity of Mindanao