IN THE MATTER OF THE APPLICATION FOR THE APPROVAL OF UNPLANNED TIE LINE CAPITAL PROJECT OF MISAMIS ORIENTAL I RURAL ELECTRIC SERVICE COOPERATIVE, INC. (MORESCO I) ARISING FROM THE SALE OF . VARIOUS SUBTRANSMISSION ASSETS BY THE NATIONAL TRANSMISSION CORPORATION (TRANSCO) TO MORESCO I, WITH PRAYER FOR THE ISSUANCE OF A PROVISIONAL AUTHORITY ERC CASE NO. 2015-012 RC MISAMIS ORIENTAL I RURAL ELECTRIC SERVICE COOPERATIVE, · INC. (MORESCO I), · Applicant. UOCKJiX.Bil )(- ------------- ~ ------------ ~)( Date: ivJJ:l~:·_R..~ .I.20J5 "ll>w'·. ............... .. ................................ , ORDER On January 30, 2015, the Misamis Oriental I Rural Electric Service Cooperative, Inc. (MORESCO I) filed an application for the approval of its unplanned tie line capital expenditure project arising from the sale of various subtransmission assets by the National Transmission Corporation (TRANSCO) to MORESCO I, with prayer for the issuance of a provisional authority. In the said application, MORESCO I alleged, among others, that: 1. It is an electric cooperative (EC) existing pursuant to Presidential Decree No. 269 (P.O. 269), as amended. It has its postal address at Poblacion, Laguindingan, Misamis Oriental. It may be served with the processes of ERC CASE NO. 2015-012 RC ORDER/March 2, 2015 Page 2~--...:o::....:..f-=8-------------·-···---·---··-_______ the Commission through its Board President, Engr. Melvyn D. Eballe and General Manager, Engr. Julie B. Real whose joint authority is attached to the application as Annex "A" and made an integral part thereof; 2. Its franchise area includes the Municipalities of Alubijid, lnitao, Opol, Lugait, Laguindingan, Manticao, Gitagum, Libertad, Naawan, El Salvador City in the Province of Misamis Oriental, a portion of Cagayan de Oro City and the Municipalities of Talakag and Baungon in the Province of Bukidnon; 3. In December, 2010, it and Cagayan Electric Power and Light Company, Inc. (CEPALCO) entered into a Compromise Agreement (CA) on the mode of acquisition of the Lugait-Carmen 69 kV subtransmission line from the TRANSCO, as follows: MORESCO 1 shall acquire the Lugait-Opol portion of the 69 kV line while (CEPALCO) shall acquire the lponan (Opol) - Carmen portion, with due consideration of the connected customers of each of the two (2) distribution utilities (DUs); 4. Subsequently, a provisional authority (PA) was issued in 1 ERC Case No. 2012-066 RC . The National Grid Corporation of the Philippines' (NGCP's) 138 kV substation will be installed in Kamagon, Patag, Opol, Misamis Oriental and is estimated to be completed in June 2015. With the forthcoming completion and operation of the NGCP substation, it and CEPALCO have agreed to connect separately to the said substation in order to promote efficiency and reliability of power to their respective consumers; 5. The CA entered into by and between and CEPALCO requires an amendment of the Contract to Sell/Lease Purchase Agreement as to the assets and their corresponding prices and below is the list of equipmenUfacilities that the parties have agreed to buy from the TRANSCO, as follows: for CEPALCO: (a) Structure 223 to Structure 300 of the 69 kV Lugait­ Carmen; and (b) Carmen Substation transformer and accessories; and for MORESCO 1: (a) Lugait Substation outgoing feeder to Structure 221 of 69 kV Lugait-Carmen Line; and (b) Lugait Switchbay; 1 "In the Matter of the Application of the Opol Substation Project, with Prayer for the Issuance of a Provisional Authority" ---- --------------------------------------------, ERC CASE NO. 2015-012 RC ORDER/March 2, 2015 .E?.9~-----~---··9..f..... ?. .... -.... .... --······--····· --········ ······································--·········-- 6. As a result of such CA, it was agreed by the parties to apply separately to construct a 69 kV tie line from the new NGCP 138 kV substation to each distribution utilities' respective distribution system. This tie line will replace its three (3) connections, namely: (a) Patag Opol Substation; (b) Canitoan Substation; and (c) Carmen­ Talakag 34.5 kV line; 1. Estimated Project Cost: A. Construction ofTie line, 69kV with 15kV underbuilt Length Cost perkm Amount Circuit description km Php/km Php 69 kV single circuit 3.0 5,621,213 16,863,637.91 15 kV underbuilt 3.0 1,058,606 3,175,818.30 ROW 3.0 75,000 225,000.00 SUB-TOTAL Php 20,264,456.21 B. Air Break Switch, 69KV LABOR& QUANTITY UNIT PRICE MATERIAL STRUCTURE ASSEMBLY OVERHEAD AMOUNT Air break switch 1 398,408 398,408 99,602 498,010.00 SUB-TOTAL Php 498,010.00 C. Mertering Equipment Metering Connection Point Requirements Amount 69kV 1 set Php 1,933,594.46 D. ERC Fees and Charges ERC Fees and Charges Amount Application Fee 700.00 ProiAsional Authority 700.00 Research Fund (10%) 140.00 Permit Fee 170,220.45 SUB-TOTAL Php 171,760.45 jGRAND TOTAL (Ph~) Ph~ 22,867,821.121 ERC CASE NO. 2015-012 RC ORDER/March 2, 2015 .. E.9.9~ .... 4... 9..f... §............ --·················- ······--····--······-········ ...... ············---·-----····-·····--··---······· -·········---·· .... ······--······--···· 2. Line Diagram of the 69 kV tie line: M12-3.2MVA So bros MS-1.5 MVA TalakagSs M3-o.sn MVA I==} UPGRADET020MVA MambuayaSs G9/34.5-13.2kV CANITUAN ~ PROPOSED NGCPOMI. M7-1 MVA toMvA tc~ swm:HYARD ,---------, CabulaSs 6 _... , .... ::~.·---~69KV ..J Constructionof69kV : ; : ; TielinewithlSkV _,.,.,., /' -··---------·-------------r,.! a 'r"~'T' _...-// _, underbuild,3kms -~, L · _..,}·' :• ~--··::=..------ Lugait-Carmen,69kV 1 3 2 -C r7r'\ NGCPLUGAIT r:::J :-• ._!.;;/' /::'"L: ("".--I ..... ......,.,......,......--\---.===;---;::;;;;;;,;~i;:~\ Lueo[t.:[cmxhem,69kil [J_._. ~ 2-75MVA ' CARMEN : /"'~; l Llugalt-lnchrome169kV. n \...JI-f lOMVA ///1 N.C. i:'_! 1 l A J LugoiHII•m:.··~;ii··· F N.C_L}._ __ NGCPCAR~;;/j "t/~~----fj 0 4 ~--- 1 """";'"""' ~ oro< ••. ~:::::::,:::C .. ~, . L----··=:·: e.~w" .i 6 ! MeteringEquipment M6-lOMVA 6 M9-tOMVA j····{"J---' M2-10MVA 0 6 I for69kVTieline ~ @-£11+·-l.!....... --'-· r:l.~I=~OR t~:t--i".!·--1 N.O. :·--0-! !----------~-------.:~ J ·-----------------------~ .---·····----------· N.O.lr k~. rr N.C. ··-'-····t--····'· r;;l (.! ,b_ I_ I LAGUINDINGAN Legend: ------- Proposed N-169kV 9 ,-- ··f:lr<ID AIRPORT lOMVA -···· .. - ....... -Existing 69 kv line LUMBO --Existing 34.5 kv line Ml-lOMVA ··- --· ·· -- Proposed 34.5 kv line L.! Proposed Switchbay and Metering, 69kV NOTE: Mode of implementation (N-1 Project) 1. Year1(40kms) 69kV line N-1 project will be connected to NGCP Lugait Substation. 2. Year 2(44kms) & Year 3(44kms) 69kV line N-1 project will be connected to proposed of NGCP Opol Switchyard. 3. The 34.5kV load of Carmen-Talakag line connection point will be transferred to proposed 20MVA Mambuaya Substation for load center purposes. 3. Rate Impact: 7. There will be no rate impact because the project cost will be sufficiently covered by its existing Reinvestment Fund for Sustainable Capital Expenditure (RFSC); and PRAYER 8. It prays that the Commission, after due notice and hearing, approve its unplanned tie line capital project and, while the application may not yet be heard, or is pending, evaluate the application and grant it provisional approval and confirm the tie line capital project in order that it can conduct the necessary preparations for the acquisition of the materials necessary considering that the NGCP's 138 kV substation is forecasted to be completed in June 2015. Finding the said application to be sufficient in form and in substance with the required fees having been paid, the same is hereby set for jurisdictional hearing, expository presentation, pre-trial ERC CASE NO. 2015-012 RC ORDER/March 2, 2015 ..E9.9~ .. ?. ..9f_?. ···········-·-···· ... .................... ···········--····--····-·········· ···························--····················-······ ... ........... .... -- ...... .. ······-···- conference and evidentiary hearing on April 7, 2015 (Tuesday) at nine o'clock in the morning (9:00 A.M.), at the MORESCO l's Main Office, Poblacion, Laguindingan, Misamis Oriental. MORESCO I is hereby directed to cause the publication of the attached Notice of Public Hearing, at its own expense, twice (2x) for two (2) successive weeks in two (2) newspapers of general circulation in the Philippines, with the date of the last publication to be made not later than ten (1 0) days before the date of the scheduled initial hearing. It is also directed to inform the consumers within its franchise area, by any other means available and appropriate, of the filing of the instant application, its reasons therefor and of the scheduled hearings thereon. Let copies of the application, this Order, and the attached Notice of Public Hearing be furnished the Office of the Solicitor General (OSG), the Commission on Audit (COA) and the Committees on Energy of both Houses of Congress. They are hereby requested, if they so desire, to send their duly authorized representatives at the scheduled hearings. Likewise, let copies of this Order and the attached Notice of Public Hearing be furnished the Offices of the Governors of Misamis Oriental and Bukidnon and the Mayors of the Cities/Municipalities within the franchise area of MORESCO I for the appropriate posting thereof on their respective bulletin boards. MORESCO I is hereby directed to furnish all those making requests therefor with copies of the application and its attachments, subject to reimbursement of reasonable photocopying costs. On the date of the initial hearing, MORESCO I must submit to the Commission its written Compliance with the jurisdictional