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(NAR) VOL.8 NO. 1 / JANUARY-MARCH 1997
[ DOE ENERGY REGULATIONS NO. 1-97, February 05, 1997 ]
RULES AND REGULATIONS GOVERNING BULK POWER SUPPLY OF INDUSTRIES FROM THE NATIONAL POWER CORPORATION
Pursuant to the authority vested upon the Department of Energy by Republic Act No. 7638 (Department of Energy Act of 1992), which mandates the Energy Industry Administration Bureau to encourage and guide the operations of both government and private entities involved in electricity distribution, and consistent with Republic Act No. 6395, as amended, which authorizes the National Power Corporation to sell electric power in bulk to industrial enterprises, the Department hereby adopts and promulgates the following rules and regulations to govern bulk power supply to industrial enterprises/estates from the National Power Corporation (NPC), hereinafter referred to as "NPC bulk supply".
SECTION 1. Statement of Policy - The Department of Energy (DOE) shall promote the economic and efficient generation and transmission of electricity, with due regard to the capability of the franchised electric, distributor to serve the power requirements of such industrial enterprises/ estates.
Furthermore, the DOE shall ensure the provision of adequate and reliable power supplies as well as competitive power rates for industrial enterprises/estates with the end view of promoting investments and industrial development and generating exports and employment.
The DOE'S Energy Industry Administration Bureau (EIAB) shall have overall jurisdiction in the implementation of the policy on NPC bulk supply.
SECTION 2. Scope of Application -These rules and regulations shall apply to any of the following entitites:
a. Any existing or prospective industrial enterprise not located within an industrial estate.
b. Any existing or prospective industrial estate as the sole customer and not the industrial enterprises located thereat. For purposes of these rules and regulations, industrial estate, as defined under Republic Act No. 7916 (An Act Providing for the Legal Framework and Mechanisms for the Creation, Operation, Administration, and Coordination of Special Economic Zones in the Philippines, Creating for this Purpose, the Philippine Economic Zone Authority (PEZA), and for Other Purposes), shall mean a tract of land subdivided and developed according to a comprehensive plan under a unified continuous management and with provisions for basic infrastructure and utilities, with or without prebuilt standard factory buildings and community facilities for the use of the community of industries.
c. Any industrial enterprise seeking to renew an NPC bulk supply contract in force at the time of the effectivity of these rules and regulations.
SECTION 3. General Provisions
The following shall be the general provisions to be followed in the implementation of the policy on NPC bulk supply;
a. The franchised electric distributor shall be given the opportunity to supply the power requirements of existing or prospective industrial enterprise/estates that are located or plan to locate within its franchise area.
b. The franchised electric distributor must posses the technical and financial capability to assume the distribution function for the industrial enterprise/estate, as shall be determined by the EIAB based on the performance standards prescribed under Section 10(b) of these rules and regulations.
c. in all cases, the affected franchised electric distributor shall match NPC power rates to satisfactorily guarantee non-prejudice to the operation and viability of the concerned industrial enterprise/estate.
d. The DOE shall recognize NPC bulk supply contracts in force at the time of the effectivity of these rules and regulations.
e. The DOE shall recognize any stipulation pertaining to restrictions or prohibitions on bulk supply under any existing and/or future Power Purchase Agreement between NPC and the affected franchised electric distributor.
f. The NPC may continue to provide bulk supply to government institutions, unless otherwise stipulated under any existing or future Power Purchase Agreement between the NPC and the affected franchised electric distributor.
g. The term for any new or renewed NPC bulk supply contract shall be subject to the terms and conditions mutually agreed upon by the NPC and the concerned industrial estate/enterprise.
SECTION 4. Limitations on NPC Bulk Supply - NPC bulk supply shall not be granted in any of the following cases:
a. Industrial enterprises/estates already in operation and already being served by electric distributors at the time of the effectivity of these rules and regulations, except in cases, where the industrial enterprise/estate presents for determination by the EIAB sufficient proof that the concerned franchised electric distributor fails to satisfy the provisions of Section 10 hereof as well as to provide competitive power rates to the concerned industrial enterprise/estate.
b. Residential customers, including those within the industrial estates and real estate subdivisions.
SECTION 5. Specific Provisions for Granting NPC Bulk Supply - The following shall guide applicants requesting for authority to avail of NPC bulk supply:
a. The industrial load shall not be less than 2,000 kilowatts (kW) and the delivery voltage shall be in accordance with the following transmission voltage in the concerned NPC grid:
c. The industrial enterprise/estate shall shoulder all costs of putting up operating and maintaining ail the dedicated acilities associated with the power service delivery. For purposes of these rules and regulations, dedicated facilities shall include all radial transmission lines, substations, substransmission and distribution lines, transformers and associated equipment solely utilized by the industrial enterprise/estate to enable power service delivery.
d. In the case of industrial estates not under the supervision of the Philippine Economic Zone Authority (PEZA), the affected franchised electric distributor shall have the right of first refusal to supply the power requirements of the concerned industrial estate and the individual enterprises that are located or plan to locate thereat, provided, however, that the affected franchised electric distributor shall meet the technical and financial standards of performance prescribed under Section 10(b) of these rules and regulations.
e. For individual estates under the supervision of PEZA, which have the franchise to operate heat, light and power utilities by virtue of Republic Act 7916, the affected franchised electric distributor shall be given the opportunity to operate and maintain the facilities associated with the power service delivery to the individual enterprises located thereat.
SECTION 6. Filing of Applications for NPC Bulk Supply- The industrial enterprise/estate seeking authority to avail of or to renew its NPC supply contract shall be guided by the following:
a. Applicants shall file with the EIAB a written application containing and/or enclosing thereto the following information/documents:
1. Name and business address including a brief, corporate/ business profile of applicant;
Location of applicant's installation, plant or factory for which NPC bulk supply is sought, including the nearest NPC substation, as well as the power demand, delivery voltage, requested schedule for connection, load curve, and other relevant technical information;
Statement of the reasons for applying for NPC bulk supply; and
4. Such other documents which the EIAB may deem necessary in support of the application.
b. All applications for new NPC bulk supply contracts and renewal of contracts in force at the time of the effecitivty of these rules and regulations shall be subject to hearing procedures conducted in accordance with the Rules of Practice and Procedure governing hearings before the EIAB as adopted by the DOE on February 1993.
c. The EIAB shall approve or deny any application for NPC bulk supply based on the affected franchised electric distributor's meeting the technical and financial standards of performance prescribed under Section 10 (b) of these rules and regulations and its ability to match NPC power rates.
The industrial enterprise/estate which has been granted authority to have NPC bulk supply shall submit to EIAB a copy of its bulk supply contract with the NPC for monitoring purposes.
d. In the case where the affected franchised electric distributor is deemed technically and financially capable but cannot match power rates, the NPC and the concerned franchised electric distributor shall adopt an interim billing arrangement prescribed under Section 9 of these rules and regulations.
e. For renewal of any NPC bulk supply contract, the concerned industrial enterprise/estate shall advise the EIAB and the NPC in writing of such intention to renew at least three (3) months before the expiration of the contract. The industrial enterprise/estate shall henceforth be further guided by the specific provisions under Sections 6(a) and 6 (c) and Section 8 of these rules and regulations.
f. Provided that all information requirements shall have been complied with, the EIAB shall approve or deny any application for new NPC bulk supply within sixty (60) days from the date of application.
SECTION 7. Renewal of NPC Bulk Supply Contracts
-The renewal of any NPC bulk supply contract shall be further governed by the following;
a. The industrial enterprise/estate shall advise the EIAB in writing of such intention to renew the contract at least three (3) months before contract expiration.
b. Provided that ail information requirements shall have been complied with, the EIAB shall complete the evaluation and inform the industrial enterprise/estate and concerned electric distributor of its decision to approve or deny any renewal of contract within sixty {60) days from the date of submission.
c. Any industrial enterprise/estate connected below the transmission voltages prescribed in Section 5 (a) of the rules and regulations and which has been granted authority to renew its bulk supply contract with the NPC, shall shoulder all costs of putting up, operating and maintaining the new/ upgraded 'dedicated facilities' pursuant to the required transmission voltages in the concerned grid.
SECTION 8. Transfer of Substransmission Facilities
For any industrial enterprise/estate where the concerned electric distributor is deemed technically and financially capable and will match NPC power rates, the following provisions shall be applied:
a. The EIAB shall forthwith issue an order allowing the franchised electric distributor to serve the industrial enterpise/estate within a reasonable period of time but not exceeding one year from the date of issuance of said order.
b. The franchised electric distributor shall negotiate with the NPC for the transfer of the dedicated faciltities put up by the latter. Repayment for the investment on such facilities shall be done in accordance with arrangements mutually agreed upon by the NPC and the affected franchised electric distributor.
c. During the pendency of the actual transfer of the concerned industrial enterprise/estate to the affected franchised electric distributor, the latter, if it so wishes, shall adopt with NPC an interim billing arrangements prescribed under Section 9 of these rules and regulations. The affected franchised electric distributor may use the proceeds derived from such billing arrangement for upgrading the facilities to facilitate take-over of service to the concerned industrial enterprise/estate.
d. The franchised electric distributor may enter into a tripartite agreement with the NPC and the industrial enterprise/estate to facilitate and effect the transfer arrangements.
e. For monitoring purposes, the franchised electric distributor shall submit to the EIAB copies of any such transfer agreement and related documents.
SECTION 9. Interim Billing Arrangement - For franchised electric distributor deemed technically and financially capable but cannot match NPC power rates to the concerned industrial enterprise/estate, the affected franchised electric distributor, if it so wishes, shall adopt with NPC an interim arrangement, as follows:
a. The monthy billing for the affected franchised electric distributor by NPC shall be based on the prevailing utility rate and effective load factor resulting from aggregating the consumption of the industrial enterprise/estate within its franchise area and the consumption of the franchised electric distributor.
b. To ensure the implementation of this interim billing arrangement, the NPC shall submit to the EIAB copies of any agreements thereon.
c. The interim billing arrangement shall only be effective until such time that the affected franchised electric distributor is able to match the NPC power rates while maintaining its technical and financial capability.
SECTION 10. Performance Evaluation of Franchisee! Electric Distributor - The following guidelines and procedures shall appiy to any applications for NPC bulk supply contract:
a. For purposes of evaluating the technical and financial capability of the affected franchised electric distributor to serve the concerned industrial enterprise within its franchise area, the EIAB shall require the affected franchised electric distributor to submit the following operational data requirements pertaining to the past three (3) years immediately preceding the year of the application.
1. System operating map (single line diagram) indicating the voltage level and load carried at each end points;
2. Customer profile:
3. Evaluation reports on the electric distribution utility's systems operations and other related records;
4. Certified true copies of audited financial statements;
5. Monthly Financial and Statistical Reports (MFSRs), period ending December for rural electric cooperatives (For RECs only);
6 Power factor and monthly kW, kWh and kVARh readings;
7. Power outages report specifying the duration, frequency, nature/causes of each outage, affected area of line section, and the equivalent lost sales (revenue) in kWh or total interrupted kWh;
8. Other documents and records relevant to support its technical and financial capability; and
9. Power expansion plant {medium-and/or long term).
b- The franchised electric distributor shall meet the following technical and financial standards on the basis of its records of operations for the past three (3) years immediately preceding the date of application for NPC bulk supply:
1. Technical Standards
1. System loss. "System loss" means losses in the electric system of a franchised electric distributor, consisting of line and transformation losses as well as unregistered electric energy consumption, measured as a proportion of the system input, and derived as:
The system loss shall meet the caps on recoverable rate of system loss set forth under Section 10 (a) and 10 (b) of Republic Act No. 7832 (An Act Penalizing the Pilferage of Electricity and Theft of Electric Power Transmission Lines/Materials, Rationalizing System Losses by Phasing Out Pilferage Losses as a Component Thereof, and for other Purposes) as follows:
The allowable caps on recoverable rate of system loss for 1994 and 1995 shall be at 22%.
ii. Power Factor. "Power Factor" refers to the ratio of the real or useful power in kilowatts (kW) to the apparent power in kVA occurring within the distribution system of the franchised electric distributor at any given load and time, and derived as:
where kWh is the registered energy for the billing period while kVARh is the registered reactive energy. Both are measured and indicated by the billing meter for the billing period.
The standard is at least 90%.
iii. Voltage Variation. "Voltage Variation" (Z^. V ) refers to the average voltage drop or rise (Vdi) of the whole distribution system of the franchised electric distributor, measured as:
where (Vd.) is the voltage drop or rise at load end (i) or equals to (Vk- V,); i is the number of load end points; V k is the nominal voltages; M is the number of nominal voltages.
For franchised electric distributor with only one standard nominal voltage for its entire distribution system, voltage variation shall be measured as:
iv. System Reliability. "System reliability" refers to the ability of the franchised electric distributor to supply electricity to its customers at specified power level and any given time and place, while maintaining an acceptable level of quality of service, measured as:
(a) System Interruption Frequency Rate (IFR) -represents the average number of times the customers experience power interruption within a given year.
I.F.R. = Total Load Interrupted (in kW) Average System Demand (in kW)
Average System Demand (in kW)
where total load interrupted is the sum of the load experiencing power interruption regardless of the length of time of interruption; average system demand s actual energy drawn by its customers divided by the total number of hours. Power interruption excludes those outages due to force majeure.
b) System Cumulative Interruption Time (CIT) – represents the approximate total length of time the customers experienced power interruption within a given year.
where total unserved energy is the lost sales or the undelivered energy due to power interruption.
c) System Restoration Time (RT) - refers to the average amount of time it takes power to be restored to an interrupted circuit.
The standard is set at 5 times for Interruption Frequency Rate (IFR), 45 hours for Cumulative Interruption Time (CIT), and 60 minutes for Restoration Time (RT).
The relative weights assigned to the technical standards shall be 30% for system loss, 10% for power factor, 30% for voltage variation, and 30% for system reliability (10% each for the three system reliability indicators).
2. Financial Standards
i) Outstanding Debt to NPC (ODNPC). "Outstanding debt to NPC" (ODNPC) refers to the overdue accounts to NPC excluding restructured debts and receivables from government accounts.
The standard is set at no outstanding debt to NPC.
ii. Amortization Payment (AP). "Amortization Payment" (AP) refers to the ability of the franchised electric distributor to pay its loan obligation with the National Electrification Administration (NEA).
The standard is one (1) month of delayed payments with NEA. AP shall apply for rural electric cooperatives (RECs) only.
iii. Debt Service Capability Ratio (DSCR) . "Debt Service Capability Ratio" (DSCR) refers to the ability of the franchised electric distributor to service debt in the short and long run, measured as:
Net income (before interest) plus Non-cash Charges
Interest plus Principal Payments on All Loans
The standard is at least 1.25 for private electric utilities (PUs). The DSCR shall apply for Private Utilities (PUs) only.
iv. Operating Expense Ration (OER). "Operating Expense Ration " (OER) is defined as the ration of the franchised electric distributor's operating expenses to its revenues from the sale of electricity, measured as:
Operating Expenses plus
Cost of Available Power less Taxes and Non-Cash Charges
OER= -------------------------------------------------------
Revenue from Sale of Electricity
The standard is 95 percent or less.
v. Average Collection Period (ACP). "Average Collection Period" (ACP) is defined as the number of days the franchised electric distributor collects its accounts receivables, measured as:
The relative weights assigned to the financial standards shall be as follows:
be 30% for the first year, 30% for the second year and 40% for the year that immediately preceded the application.
d. The relative weights assigned to the standards of performance shall be 60 percent for the technical standards, and 40 percent for the financial standards.
e. A franchised electric distributor which obtains at least an
eighty percent (80%) passing mark shall be deemed capable to assume the distribution functions for the applicant industrial enterprise/estate within its franchise area.
SECTION 11, Other Provisions
a. These rules and regulations shall be amended, replaced or repealed in due time as may be deemed necessary by the DOE to rationalize availment by industrial estates/ enterprises of NPC bulk supply and as restructuring and privatization efforts for the Philippine power industry moves toward an increasingly competitive industry structure.
b. These rules and regulations shall take effect fifteen (15) days after the date of publication in one (1) newspaper of general circulations, and all previous pertinent orders, resolutions or memorandum circulars inconsistent herewith are hereby amended or repealed accordingly.
c. These rules and regulations shall be applied to govern hearings on applications already filed or pending before the EIAB on the date of effectivity hereof.
Adopted: 5 Feb. 1997
SECTION 1. Statement of Policy - The Department of Energy (DOE) shall promote the economic and efficient generation and transmission of electricity, with due regard to the capability of the franchised electric, distributor to serve the power requirements of such industrial enterprises/ estates.
Furthermore, the DOE shall ensure the provision of adequate and reliable power supplies as well as competitive power rates for industrial enterprises/estates with the end view of promoting investments and industrial development and generating exports and employment.
The DOE'S Energy Industry Administration Bureau (EIAB) shall have overall jurisdiction in the implementation of the policy on NPC bulk supply.
SECTION 2. Scope of Application -These rules and regulations shall apply to any of the following entitites:
a. Any existing or prospective industrial enterprise not located within an industrial estate.
b. Any existing or prospective industrial estate as the sole customer and not the industrial enterprises located thereat. For purposes of these rules and regulations, industrial estate, as defined under Republic Act No. 7916 (An Act Providing for the Legal Framework and Mechanisms for the Creation, Operation, Administration, and Coordination of Special Economic Zones in the Philippines, Creating for this Purpose, the Philippine Economic Zone Authority (PEZA), and for Other Purposes), shall mean a tract of land subdivided and developed according to a comprehensive plan under a unified continuous management and with provisions for basic infrastructure and utilities, with or without prebuilt standard factory buildings and community facilities for the use of the community of industries.
c. Any industrial enterprise seeking to renew an NPC bulk supply contract in force at the time of the effectivity of these rules and regulations.
SECTION 3. General Provisions
The following shall be the general provisions to be followed in the implementation of the policy on NPC bulk supply;
a. The franchised electric distributor shall be given the opportunity to supply the power requirements of existing or prospective industrial enterprise/estates that are located or plan to locate within its franchise area.
b. The franchised electric distributor must posses the technical and financial capability to assume the distribution function for the industrial enterprise/estate, as shall be determined by the EIAB based on the performance standards prescribed under Section 10(b) of these rules and regulations.
c. in all cases, the affected franchised electric distributor shall match NPC power rates to satisfactorily guarantee non-prejudice to the operation and viability of the concerned industrial enterprise/estate.
d. The DOE shall recognize NPC bulk supply contracts in force at the time of the effectivity of these rules and regulations.
e. The DOE shall recognize any stipulation pertaining to restrictions or prohibitions on bulk supply under any existing and/or future Power Purchase Agreement between NPC and the affected franchised electric distributor.
f. The NPC may continue to provide bulk supply to government institutions, unless otherwise stipulated under any existing or future Power Purchase Agreement between the NPC and the affected franchised electric distributor.
g. The term for any new or renewed NPC bulk supply contract shall be subject to the terms and conditions mutually agreed upon by the NPC and the concerned industrial estate/enterprise.
SECTION 4. Limitations on NPC Bulk Supply - NPC bulk supply shall not be granted in any of the following cases:
a. Industrial enterprises/estates already in operation and already being served by electric distributors at the time of the effectivity of these rules and regulations, except in cases, where the industrial enterprise/estate presents for determination by the EIAB sufficient proof that the concerned franchised electric distributor fails to satisfy the provisions of Section 10 hereof as well as to provide competitive power rates to the concerned industrial enterprise/estate.
b. Residential customers, including those within the industrial estates and real estate subdivisions.
SECTION 5. Specific Provisions for Granting NPC Bulk Supply - The following shall guide applicants requesting for authority to avail of NPC bulk supply:
a. The industrial load shall not be less than 2,000 kilowatts (kW) and the delivery voltage shall be in accordance with the following transmission voltage in the concerned NPC grid:
1. Luzon Grid - 230,000 voltsb.-The NPC bulk supply shall not result in duplication of service facilities.
2. Visayas Grid - 69,000 volts
3. Mindanao Grid - 138,000 volts
c. The industrial enterprise/estate shall shoulder all costs of putting up operating and maintaining ail the dedicated acilities associated with the power service delivery. For purposes of these rules and regulations, dedicated facilities shall include all radial transmission lines, substations, substransmission and distribution lines, transformers and associated equipment solely utilized by the industrial enterprise/estate to enable power service delivery.
d. In the case of industrial estates not under the supervision of the Philippine Economic Zone Authority (PEZA), the affected franchised electric distributor shall have the right of first refusal to supply the power requirements of the concerned industrial estate and the individual enterprises that are located or plan to locate thereat, provided, however, that the affected franchised electric distributor shall meet the technical and financial standards of performance prescribed under Section 10(b) of these rules and regulations.
e. For individual estates under the supervision of PEZA, which have the franchise to operate heat, light and power utilities by virtue of Republic Act 7916, the affected franchised electric distributor shall be given the opportunity to operate and maintain the facilities associated with the power service delivery to the individual enterprises located thereat.
SECTION 6. Filing of Applications for NPC Bulk Supply- The industrial enterprise/estate seeking authority to avail of or to renew its NPC supply contract shall be guided by the following:
a. Applicants shall file with the EIAB a written application containing and/or enclosing thereto the following information/documents:
1. Name and business address including a brief, corporate/ business profile of applicant;
Location of applicant's installation, plant or factory for which NPC bulk supply is sought, including the nearest NPC substation, as well as the power demand, delivery voltage, requested schedule for connection, load curve, and other relevant technical information;
Statement of the reasons for applying for NPC bulk supply; and
4. Such other documents which the EIAB may deem necessary in support of the application.
b. All applications for new NPC bulk supply contracts and renewal of contracts in force at the time of the effecitivty of these rules and regulations shall be subject to hearing procedures conducted in accordance with the Rules of Practice and Procedure governing hearings before the EIAB as adopted by the DOE on February 1993.
c. The EIAB shall approve or deny any application for NPC bulk supply based on the affected franchised electric distributor's meeting the technical and financial standards of performance prescribed under Section 10 (b) of these rules and regulations and its ability to match NPC power rates.
The industrial enterprise/estate which has been granted authority to have NPC bulk supply shall submit to EIAB a copy of its bulk supply contract with the NPC for monitoring purposes.
d. In the case where the affected franchised electric distributor is deemed technically and financially capable but cannot match power rates, the NPC and the concerned franchised electric distributor shall adopt an interim billing arrangement prescribed under Section 9 of these rules and regulations.
e. For renewal of any NPC bulk supply contract, the concerned industrial enterprise/estate shall advise the EIAB and the NPC in writing of such intention to renew at least three (3) months before the expiration of the contract. The industrial enterprise/estate shall henceforth be further guided by the specific provisions under Sections 6(a) and 6 (c) and Section 8 of these rules and regulations.
f. Provided that all information requirements shall have been complied with, the EIAB shall approve or deny any application for new NPC bulk supply within sixty (60) days from the date of application.
SECTION 7. Renewal of NPC Bulk Supply Contracts
-The renewal of any NPC bulk supply contract shall be further governed by the following;
a. The industrial enterprise/estate shall advise the EIAB in writing of such intention to renew the contract at least three (3) months before contract expiration.
b. Provided that ail information requirements shall have been complied with, the EIAB shall complete the evaluation and inform the industrial enterprise/estate and concerned electric distributor of its decision to approve or deny any renewal of contract within sixty {60) days from the date of submission.
c. Any industrial enterprise/estate connected below the transmission voltages prescribed in Section 5 (a) of the rules and regulations and which has been granted authority to renew its bulk supply contract with the NPC, shall shoulder all costs of putting up, operating and maintaining the new/ upgraded 'dedicated facilities' pursuant to the required transmission voltages in the concerned grid.
SECTION 8. Transfer of Substransmission Facilities
For any industrial enterprise/estate where the concerned electric distributor is deemed technically and financially capable and will match NPC power rates, the following provisions shall be applied:
a. The EIAB shall forthwith issue an order allowing the franchised electric distributor to serve the industrial enterpise/estate within a reasonable period of time but not exceeding one year from the date of issuance of said order.
b. The franchised electric distributor shall negotiate with the NPC for the transfer of the dedicated faciltities put up by the latter. Repayment for the investment on such facilities shall be done in accordance with arrangements mutually agreed upon by the NPC and the affected franchised electric distributor.
c. During the pendency of the actual transfer of the concerned industrial enterprise/estate to the affected franchised electric distributor, the latter, if it so wishes, shall adopt with NPC an interim billing arrangements prescribed under Section 9 of these rules and regulations. The affected franchised electric distributor may use the proceeds derived from such billing arrangement for upgrading the facilities to facilitate take-over of service to the concerned industrial enterprise/estate.
d. The franchised electric distributor may enter into a tripartite agreement with the NPC and the industrial enterprise/estate to facilitate and effect the transfer arrangements.
e. For monitoring purposes, the franchised electric distributor shall submit to the EIAB copies of any such transfer agreement and related documents.
SECTION 9. Interim Billing Arrangement - For franchised electric distributor deemed technically and financially capable but cannot match NPC power rates to the concerned industrial enterprise/estate, the affected franchised electric distributor, if it so wishes, shall adopt with NPC an interim arrangement, as follows:
a. The monthy billing for the affected franchised electric distributor by NPC shall be based on the prevailing utility rate and effective load factor resulting from aggregating the consumption of the industrial enterprise/estate within its franchise area and the consumption of the franchised electric distributor.
b. To ensure the implementation of this interim billing arrangement, the NPC shall submit to the EIAB copies of any agreements thereon.
c. The interim billing arrangement shall only be effective until such time that the affected franchised electric distributor is able to match the NPC power rates while maintaining its technical and financial capability.
SECTION 10. Performance Evaluation of Franchisee! Electric Distributor - The following guidelines and procedures shall appiy to any applications for NPC bulk supply contract:
a. For purposes of evaluating the technical and financial capability of the affected franchised electric distributor to serve the concerned industrial enterprise within its franchise area, the EIAB shall require the affected franchised electric distributor to submit the following operational data requirements pertaining to the past three (3) years immediately preceding the year of the application.
1. System operating map (single line diagram) indicating the voltage level and load carried at each end points;
2. Customer profile:
3. Evaluation reports on the electric distribution utility's systems operations and other related records;
4. Certified true copies of audited financial statements;
5. Monthly Financial and Statistical Reports (MFSRs), period ending December for rural electric cooperatives (For RECs only);
6 Power factor and monthly kW, kWh and kVARh readings;
7. Power outages report specifying the duration, frequency, nature/causes of each outage, affected area of line section, and the equivalent lost sales (revenue) in kWh or total interrupted kWh;
8. Other documents and records relevant to support its technical and financial capability; and
9. Power expansion plant {medium-and/or long term).
b- The franchised electric distributor shall meet the following technical and financial standards on the basis of its records of operations for the past three (3) years immediately preceding the date of application for NPC bulk supply:
1. Technical Standards
1. System loss. "System loss" means losses in the electric system of a franchised electric distributor, consisting of line and transformation losses as well as unregistered electric energy consumption, measured as a proportion of the system input, and derived as:
Total kWh Saleswhere net system input is the sum of the utility's generated and purchased electric energy, net of the utility's own use of electric energy.
% System Loss == 1--------------------- x 100%
Net Systems Input (kWh)
The system loss shall meet the caps on recoverable rate of system loss set forth under Section 10 (a) and 10 (b) of Republic Act No. 7832 (An Act Penalizing the Pilferage of Electricity and Theft of Electric Power Transmission Lines/Materials, Rationalizing System Losses by Phasing Out Pilferage Losses as a Component Thereof, and for other Purposes) as follows:
| Year | PUs | RECs |
|---|---|---|
| 1996 | 14 1/2% | 22% |
| 1997 | 13 1/4 % | 20% |
| 1998 | 11 3/4% | 18% |
| 1999 | 9 1/2% | 16% |
| 2000 | Based on ERB ruling | 14% |
The allowable caps on recoverable rate of system loss for 1994 and 1995 shall be at 22%.
ii. Power Factor. "Power Factor" refers to the ratio of the real or useful power in kilowatts (kW) to the apparent power in kVA occurring within the distribution system of the franchised electric distributor at any given load and time, and derived as:
kWh
% P. F. = _______________________x 100%
(kWh)2+(kVARh):
% P. F. = _______________________x 100%
(kWh)2+(kVARh):
where kWh is the registered energy for the billing period while kVARh is the registered reactive energy. Both are measured and indicated by the billing meter for the billing period.
The standard is at least 90%.
iii. Voltage Variation. "Voltage Variation" (Z^. V ) refers to the average voltage drop or rise (Vdi) of the whole distribution system of the franchised electric distributor, measured as:
Vdi
?N ( x 100)
Vk?v = ?MK x 1 N
M
For franchised electric distributor with only one standard nominal voltage for its entire distribution system, voltage variation shall be measured as:
The standard is set at less than or equal to 10 percent of nominal voltage.Vdi
?N ( x 100)I = 1 VkV =
N
iv. System Reliability. "System reliability" refers to the ability of the franchised electric distributor to supply electricity to its customers at specified power level and any given time and place, while maintaining an acceptable level of quality of service, measured as:
(a) System Interruption Frequency Rate (IFR) -represents the average number of times the customers experience power interruption within a given year.
I.F.R. = Total Load Interrupted (in kW) Average System Demand (in kW)
Average System Demand (in kW)
where total load interrupted is the sum of the load experiencing power interruption regardless of the length of time of interruption; average system demand s actual energy drawn by its customers divided by the total number of hours. Power interruption excludes those outages due to force majeure.
b) System Cumulative Interruption Time (CIT) – represents the approximate total length of time the customers experienced power interruption within a given year.
C. I T = System I.F.R. x no. of hours interruption orAverage System demand (in kW)
Total Unserved Energy (in kWh)
where total unserved energy is the lost sales or the undelivered energy due to power interruption.
c) System Restoration Time (RT) - refers to the average amount of time it takes power to be restored to an interrupted circuit.
R.T. = System C. I. T. x 60 minutesThe system's restoration time for outages caused by typhoon and other uncontrollable forces shall be given consideration to determine the ability of the franchised electric distributor to restore power during the times of emergencies.
System I.F.R.
The standard is set at 5 times for Interruption Frequency Rate (IFR), 45 hours for Cumulative Interruption Time (CIT), and 60 minutes for Restoration Time (RT).
The relative weights assigned to the technical standards shall be 30% for system loss, 10% for power factor, 30% for voltage variation, and 30% for system reliability (10% each for the three system reliability indicators).
2. Financial Standards
i) Outstanding Debt to NPC (ODNPC). "Outstanding debt to NPC" (ODNPC) refers to the overdue accounts to NPC excluding restructured debts and receivables from government accounts.
The standard is set at no outstanding debt to NPC.
ii. Amortization Payment (AP). "Amortization Payment" (AP) refers to the ability of the franchised electric distributor to pay its loan obligation with the National Electrification Administration (NEA).
The standard is one (1) month of delayed payments with NEA. AP shall apply for rural electric cooperatives (RECs) only.
iii. Debt Service Capability Ratio (DSCR) . "Debt Service Capability Ratio" (DSCR) refers to the ability of the franchised electric distributor to service debt in the short and long run, measured as:
Net income (before interest) plus Non-cash Charges
Interest plus Principal Payments on All Loans
The standard is at least 1.25 for private electric utilities (PUs). The DSCR shall apply for Private Utilities (PUs) only.
iv. Operating Expense Ration (OER). "Operating Expense Ration " (OER) is defined as the ration of the franchised electric distributor's operating expenses to its revenues from the sale of electricity, measured as:
Operating Expenses plus
Cost of Available Power less Taxes and Non-Cash Charges
OER= -------------------------------------------------------
Revenue from Sale of Electricity
The standard is 95 percent or less.
v. Average Collection Period (ACP). "Average Collection Period" (ACP) is defined as the number of days the franchised electric distributor collects its accounts receivables, measured as:
ACP = Customers Accounts Receivables less Government Accounts x365 days
Revenue from Sale of Electricity The Standard is 45 days or less.
Revenue from Sale of Electricity The Standard is 45 days or less.
The relative weights assigned to the financial standards shall be as follows:
c. The equivalent raw score for each operational year shall
be 30% for the first year, 30% for the second year and 40% for the year that immediately preceded the application.
d. The relative weights assigned to the standards of performance shall be 60 percent for the technical standards, and 40 percent for the financial standards.
e. A franchised electric distributor which obtains at least an
eighty percent (80%) passing mark shall be deemed capable to assume the distribution functions for the applicant industrial enterprise/estate within its franchise area.
SECTION 11, Other Provisions
a. These rules and regulations shall be amended, replaced or repealed in due time as may be deemed necessary by the DOE to rationalize availment by industrial estates/ enterprises of NPC bulk supply and as restructuring and privatization efforts for the Philippine power industry moves toward an increasingly competitive industry structure.
b. These rules and regulations shall take effect fifteen (15) days after the date of publication in one (1) newspaper of general circulations, and all previous pertinent orders, resolutions or memorandum circulars inconsistent herewith are hereby amended or repealed accordingly.
c. These rules and regulations shall be applied to govern hearings on applications already filed or pending before the EIAB on the date of effectivity hereof.
Adopted: 5 Feb. 1997
(SGD.) FRANCISCO L VIRAY
Secretary
Secretary