1. Philippine Energy Sector
EPDP RESEARCH WORKSHOP|FEBRUARY 2015

2. GENERATION

3. Introduction
Generation facilities or powerplants in the country includes: Oil based (such as gas turbines, diesel,combined cycle and oil); natural gas, coal, geothermal, hydro,wind, solar, and biomass.
As of 2014, there are a total of 120 generator plants.
Luzon grid-55
Visayas grid- 36
Mindanao- 29
Gas turbine engines derive their power from burning fuel in a combustion chamber and using the fast flowing combustion gases to drive a turbine in much the same way as the high pressure steam drives a steam turbine. (
Combined Cycle- burning gas in a gas turbine (GT) produces not only power – which can be converted to electric power by a coupled generator – but also fairly hot exhaust gases. (
The gas turbine is one of the most efficient one for the conversion of gas fuels to mechanical power or electricity

4. Power Generation Mix Total Generation: 75, 266 GWh
Source: DOE Power Statistics, 2013

5. Total Generation and Installed Capcity
Technology
Power Generated Quantity (Gwh)
2013
Installed Capacity (MW)
Oil Based
4,491
3,353
Combined Cycle
247
Diesel
3,805
Gas Turbine
Oil
438
Hydro
10,019
3,521
Geothermal
9,605
1,868
Coal
32,081
5,568
Natural Gas
18,791
2,862
Wind
279 33
Biomas
119
Solar 1
Total
75,266
17,325
*Installed capacity excludes off-grid generators
Source: 2013 Power Statistics, DOE

6. Installed and Dependable Capacity
Category
Installed Capacity
(in MW)
Dependable Capacity
Percentage of Installed Capacity
Area
Luzon
12,789.8
11,518.7
90.0%
Visayas
2,447
2,103.3
85.95%
Mindanao
2,087.2
1,749.4
83.82%
Total
17, 325
15,371
88.72%
Ownership type
NPC
1,356
984
72.57%
NPC-IPP
2,885
2,501
86.68%
Non NPC/IPP
13,084
11,087
84.73%
For more details please see pdf on 2013 power plants capacity mix
*excludes off-grid generators
Source: DOE, power Plants Capacity as of March 2014

7. Installed and Dependable Capacity
Technology
Installed
(MW)
Dependable
Percentage of Installed Capacity
Coal
5,566
5,206
93.53%
Oil based
3,363
2,646
78.70
Natural Gas
2,862
2,760
96.44
Geothermal
1,568
1,482
94.52
Hydro
3,521
2,983
84.72
Wind 33 17
51.52
Solar 1
Biomass
119 76
63.87
Total
17,325
15,371
88.72%
*excludes off-grid generators
Source: DOE, power Plants Capacity as of March 2014

8. Generation and Demand Area Installed Capacity (in MW)
Dependable Capacity
2013 Peak Demand
Luzon
12,789.8
11,518.7
8,305
Visayas
2,447
2,103.3
1,572
Mindanao
2,087.2
1,749.4
1,428
Total
17, 325
15,371
11, 305
Source: DOE 2013 Power Statistics

9. Major Owners Area Percentage Luzon San Miguel 30.4 Aboitiz 17.2 Lopez
15.3
NPC/PSALM
13.7
Visayas
32.3
Global Business Power Corporation
28.9
Salcon
15.5
Green Core Energy Dev. Corporation
14.1
Mindanao
77.4
18.4
Source: kpmg.com/energyaspac

11. Generators in PSE Company Listing Date Aboitiz Power Corp Jul 2007
Alsons Consolidated Resources Inc
April 1993
Energy Development Corporation
Dec 2006
First Gen Corp
Feb 2006
First Philippine Holdings Corp
May 1963
Petron Corporation
Sep 1994
Phoenix Petroleum Philippines Inc
SPC Power Corporation
Apr 2002
Trans-Asia Oil and Energy Development Corp
Jan 1970
Vivant Corporation
Jun 1994
Source: PSE website

12. Small Power Utilities Group
The Small Power Utilities Group or SPUG, the missionary electrification arm of NPC, currently manages 298 plants in 231 service areas nationwide.
SPUG’s dependable capacity of 244 MW in 2013 serviced 39 electric cooperatives and 10 LGUs
NPC provided power to 3,128 barangays which translates to 755,862 households benefiting from the services of SPUG.

13. In 2013, NPC installed a total of 16,295 kW in different power plants and areas;
• 12 gensets with a total capacity of 7,200 kW were added to 7 existing power plants and barges.
• 3 new mini-grids in 3 different formerly un- electrified areas with a total capacity of 95 kW were installed.
• 2 new rental gensets with a total capacity of 9,000 kW were put on line in 2 existing plants experiencing deficient capability
A genset, or distributed generator system, is an electrical generator, such as a solar panel, gasoline powered generator, or windmill, located in proximity to the end-user rather than in a central location. This system can be used as an augmentation to an existing electrical grid system or as an "off-grid" power source, depending upon the needs of the user. (

14. SPUG Areas Areas Power Plants
Marinduque/North Luzon Areas (Batanes, Isabela and Aurora)/Quezon 21
Sta Cruz Mini Grid 3
Camiguin Mini-Grid 2
others 16
Mindoro/Romblon 18
Catanduanes/Masbate/Albay/Camarines Sur
178
Masbate Mini-Grid 5
Camarines Sur Mini-Grid
Burias Mini-Grid 6
Masbate PRES
153 10
As of May 2013

15. Areas
Power Plants
Palawan 14
Western Visayas 23
Panay Mini-Grid 3
Bohol Mini-Grid 11
Others 8
Eastern Visayas Area 24
Almagro Mini-Grid 4
Sto Nino
Catbalogan
Western Mindanao 16
Eastern Mindanao 10

16. Basco Wind Turbine Farm
Polilio DPP, Quezon

17. Policies Rule 5: Generation Sector RA 9136- EPIRA RA 9367- Biofuels
Section 6. Generation charges and VAT
imposition of zero percent (0%) VAT shall apply to the sale of generated power by a Generation Company through all stages of sale until it reaches the End-user. 
RA EPIRA
RA Biofuels
RA Renewable Energy Act

18. TRANSMISSION

19. Transmission
The power transmission system links power plants to the electric distribution utilities nationwide.
Source:

20. Transmission Sector in the Philippines
Transmission Sector. The transmission of electric power shall be a regulated common electricity carrier business subject to the ratemaking powers of the ERC.
(Sec. 7, RA 9136 Electric Power Industry Reform Act (EPIRA) of 2001)
Creation of the National Transmission Company. The TRANSCO shall assume the authority of NPC for the planning, construction and centralized operation and maintenance of its high voltage transmission facilities, including grid interconnections and ancillary services.
(Sec. 8, RA 9136 (EPIRA))
Source:

21. Who owns these transmission facilities?
The National Transmission Corporation is the owner of the nation’s transmission assets. TRANSCO was formed pursuant to RA 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001 to operate and maintain the country’s transmission assets.
EPIRA mandated the privatization of TRANSCO. Following a public bidding in 2007, the TransCo concession was awarded to NGCP. In 2009 TransCo turned over the management and operation of its nationwide transmission system to NGCP. Ownership of all transmission assets however, remains with TransCo.
Source: transco.ph

22. TransCo
National Transmission Company Board Members Cesar V. Purisima, DOF Secretary Carlos Jericho L. Petilla, DOE Secretary Ramon J.P. Paje, DENR Secretary Rolando T. Bacani, TransCo President Emmanuel R. Ledesma, PSALM President (Luzon Representative) Atty. Gladys N. Nalda (Visayas Representative) Atty. Josephine Cassandra J. Cui (Mindanao Representative
Source:

23. “Stronger transmission for a stronger nation.”
NGCP
The National Grid Corporation of the Philippines is a private company that won the franchise to operate, maintain, and further expand the national power grid of the Philippines in
NGCP Shareholders:
One Taipan Holdings Corporation* (30%)
Calaca High Power Corporation (30%)
State Grid Corporation of China (40%)
*Henry Sy’s One Taipan Corporation acquired Monte Oro Grid Resources Corporation, which previously owned 30% stake in the NGCP.
“NGCP tries to empower the country by building transmission lines that will traverse and interconnect our major islands so that every household will enjoy the benefits of electricity.”
“Stronger transmission for a stronger nation.”
Source: and

24. Franchise Law ~ RA 9511
Grants the NGCP the franchise to operate, manage, and expand the electric transmission business of the country.
A product of the EPIRA law, the Franchise Law authorizes NGCP to handle the transmission grid for 25 years, renewable for another 25 years, - for a total of 50-year franchise.
The franchise only covers the operations and management of the transmission facilities but the assets, including lines, substations, land, and structures, will remain with the Philippine government through the National Transmission Corporation or TransCo.
Source: and

25. Franchise Law ~ RA 9511
For the duration of the franchise, NGCP shall safely and reliably transmit electricity through the high-voltage transmission backbones, and shall improve and enhance the present transmission system nationwide.
The law also subjects NGCP to the regulation and policies of the Energy Regulatory Commission (ERC) in the conduct of its operations.
Further, NGCP is expected to report regularly to the Congress of the Philippines to ensure the compliance with regulators and related laws.
Source: and

26. What are the areas covered by the transmission facilities in the Philippines?
On-grid System: "On-Grid System" refers to electrical systems composed of interconnected transmission lines, distribution lines, substations, and related facilities for the purpose of conveyance of bulk power on the grid of the Philippines. (RA 9513 Renewable Energy Act of 2008)
These systems are owned by TransCo and operated and managed by the NGCP.
Off-grid Systems: "Off-Grid Systems" refer to electrical systems not connected to the wires and facilities of the On-Grid Systems of the Philippines. (RA 9513 Renewable Energy Act of 2008)
Off-grid areas include missionary areas.
Source: Renewable Energy Act of 2008 and

27. What are the areas covered by the transmission facilities in the Philippines?
On-grid system of the Philippines NGCP’s main responsibility is the operation, maintenance, improvement, and expansion of over 19,490 circuit kilometers (ckm) of transmission lines and 27,726 mega-volt amperes (MVA) of substation capacity from Luzon to Mindanao.
Source:

28. What are the areas covered by the transmission facilities in the Philippines?
Luzon: Metro Manila, North Luzon, and South Luzon, the largest grid in the country accounts for 74% of the country’s total power demand.
Source:

29. What are the areas covered by the transmission facilities in the Philippines?
Visayas: The interconnected island grids of Cebu, Negros, Panay, Leyte, Samar, and Bohol compose the Visayas grid. The region accounts for 14% of the country’s power demand.
Source:

30. What are the areas covered by the transmission facilities in the Philippines?
Mindanao: Mindanao accounts for 12% of the total power demand.
Source:

31. From which power generation plant do these transmission lines source electricity?

32. Luzon power plants that feed into the Luzon grid (2013)
From which power generation plant do these transmission lines source electricity?
Luzon power plants that feed into the Luzon grid (2013)
Source:

33. Luzon power plants that feed into the Luzon grid (2013)
From which power generation plant do these transmission lines source electricity?
Luzon power plants that feed into the Luzon grid (2013)
Source:

34. Luzon power plants that feed into the Luzon grid (2013)
From which power generation plant do these transmission lines source electricity?
Luzon power plants that feed into the Luzon grid (2013)
Source:

35. Visayas power plants that feed into the Visayas grid (2013)
From which power generation plant do these transmission lines source electricity?
Visayas power plants that feed into the Visayas grid (2013)
Source:

36. Visayas power plants that feed into the Visayas grid (2013)
From which power generation plant do these transmission lines source electricity?
Visayas power plants that feed into the Visayas grid (2013)
Source:

37. Mindanao power plants that feed into the Mindanao grid (2013)
From which power generation plant do these transmission lines source electricity?
Mindanao power plants that feed into the Mindanao grid (2013)
Source: Situationer/2013-Power-Plants-Mindanao.pdf

38. Electric power transmission and distribution losses (% of output)
Electric power transmission and distribution losses include losses in transmission between sources of supply and points of distribution and in the distribution to consumers, including pilferage.
Country
2011 % loss
Philippines 11
Brunei Darussalam 7
Cambodia 28
Indonesia 9
Malaysia 6
Myanmar 21
Singapore 5
Thailand
Vietnam 10
Country
2011 % loss
Australia 5
Brazil 16
Canada
China 6
Germany 4
Japan
New Zealand 7
South Korea 3
United States
Source:

39. Transmission losses
From the Philippine Power Development Plan,
The 2008 actual Station Use/Transmission Loss are 2.6 percent (Luzon), percent (Visayas) and 4.4 percent (Mindanao).
2. Convert energy sales forecasts to peak demand forecasts
“From the forecasted energy sales that have been established above, the station use (SU) and transmission losses (TL) are then added to come up with the gross generation. These are the figures converted to peak demand in MW using the assumed load factor for each grid based on historical performance. The 2008 actual SU/TL of 2.6 percent (Luzon), 4.3 percent (Visayas) and 4.4 percent (Mindanao) were used.”
Source:

40. Notes on Transmission Systems for Off-grid / Missionary Areas Areas
These are under the National Power Corporation (NAPOCOR or NPC) and the Small Power Utilities Group (SPUG).
“Pursuant to Section 70 of Republic Act No (Electric Power Industry Reform Act or “EPIRA”), NPC shall remain as a National-Government owned and controlled corporation to perform the missionary electrification function through its Small Power Utlities Group (NPC-SPUG) and shall be responsible for providing power generation and its associated power delivery systems in areas that are not connected to the transmission system.”
Source:

41. Notes on Overhead and Underground Transmission Lines
Overhead Transmission Lines
High-voltage overhead transmission lines are a reliable, low cost, easily maintained, and established method to transport bulk electricity across long distances.
Underground Transmission Lines
In the United States, only around 0.5% of high-voltage transmission lines are underground.
Construction of high-voltage transmission lines underground is appropriate in densely urban and suburban settings or, in some instances, where sufficient right-of-way is not available for an overhead line.
While underground transmission lines are somewhat immune to weather-related failures, any damage is difficult to pinpoint and repair, and required repairs may take a couple of weeks to several months to complete. Damage to overhead lines is easy to locate and typically takes several hours or days to repair.
Underground transmission lines in a radial system require more cables to meet the same reliability as an overhead line. The additional components translate to a higher cost and can reduce overall system reliability.
Source:

42. DISTRIBUTION

43. Overview
The distribution of electricity to end-users is a regulated common carrier business requiring a national franchise.
Distribution of electric power to all end-users may be undertaken by private distribution utilities, cooperatives, local government units presently undertaking this function and other duly authorized entities, subject to regulation by the ERC.

44. Overview
According to NEA, there are 119 Distribution Utilities (Dus) in the PH
These DUs may purchase electricity from generation companies or the WESM, when qualifies, for distribution to residential, commercial, industrial and other users.

45. How it works? (VECO)
Source:
Electric power delivered to your home or business is typically generated in large centralized power plants of National Power Corporation-Power Sector Assets and Liabilities Management (NPC-PSALM) and independent power producers (IPPs).

46. How it works? (VECO)
Power then travels over long distances via high-voltage transmission lines (138kV or 230kV) of National Grid Corporation  of the Philippines (NGCP), which are interconnected in a grid or network configuration.
From the transmission system, power travels by means of 69kV sub-transmission lines to 13 VECO distribution substations with a total capacity of 410MVA that are strategically located within its franchise area.
Source:

47. How it works? (VECO)
Source:
From these substations, distribution lines operating at medium-voltage levels of 23kV, 13.8kV and 4.16kV, disperse the power throughout Cebu City and nearby municipalities.
The power then travels from the distribution line through a service transformer located in close proximity to your home or business establishment.  

48. Overview
9 among the listed 119 electric cooperatives source their energy from Small Power Utility Groups (SPUGs):
Albay Electric Cooperative, Incorporated
Davao del Norte Electric Cooperative, Inc.
Davao del Sur Electric Cooperative, Inc.
Lubang Electric Cooperative, Inc.
Marinduque Electric Cooperative, Inc.
Quezon II Electric Cooperative, Inc.
Samar I Electric Cooperative, Inc.
Southern Leyte Electric Cooperative, Inc.
Sultan Kudarat Electric Cooperative, Inc.
Source: kuryente.org

49. Overview
11 Electric Cooperatives in need of financial support (as of 2013)
Pampanga Electric Cooperative III
Camarines Sur Electric Cooperative III
Albay Electric Cooperative
Masbate Electric Cooperative
Ticao Island Electric Cooperative
Northern Samar Electric Cooperative
Basilan Electric Cooperative,
Tawi-Tawi Electric Cooperative,
Sulu Electric Cooperative
Lanao del Sur Electric Cooperative
Maguindanao Electric Cooperative Inc.
Source: NEA
Piamonte (NEA Deputy Administrator for Electric Distribution Utilities Services) said these electric cooperatives had high system losses, huge liabilities, low collection efficiency, negative networth and institutional problems such as governance. They are also incurring losses.
Piamonte said NEA can provide options for ailing electric cooperatives to ensure their delivery of electric service in their area of coverage

50. Overview
While Manila Electric Company (MERALCO) is the only DU listed publicly in the Philippine Stock Exchange (PSE).
MERALCO is the PH’s largest DU with a franchise area of 9,337 square km, about a quarter of the entire Philippine population, covering NCR, provinces of Bulacan, Rizal, Cavite, parts of Laguna, Quezon and Batangas and 17 barangays in pampanga.

51. Sources of MERALCO
SOURCE: MERALCO
SOURCE: MERALCO

52. Sources of MERALCO
Source: MERALCO
SOURCE: MERALCO

53. Unbundling of Rates (based on Sec 36 of EPIRA)
Sources:

54. Unbundling of Rates Generation Charge Transmission Charge
cost of power generated and sold to MERALCO by the suppliers, presently the NPC and IPPs
Transmission Charge
for the delivery of electricity from generators, usually in remote areas or provinces, to the distribution system of MERALCO. This goes to TransCo, a company spun off from NPC
System Loss Charge
represents recovery of the cost of power lost due to technical and non-technical losses. This is set a maximum of 9.5% as provided for by R.A which was reduced to 8.5% starting 2010 under ERC Resolution No. 17, Series of 2008.
Technical Loss- aggregate of conductor loss, the core loss in transformers, and any loss due to technical metering error
Non-technical loss- aggregate of the energy lost due to pilferage, meter-reading errors, and meter tampering
Administrative loss- include the energy that is required for the proper operation of the distribution system and any unbilled energy for community-related activities
Sources:

55. System Loss

56. System Loss Data (MERALCO)

57. System Loss
The 5 Electric Cooperative that had the lowest system loss are:
1. Misamis Oriental I Electric Service, Inc (MORESCO) %
2. Dinagat Island Electric Cooperative, Inc. (DIELCO) %
3. Bohol I Electric Cooperative, Inc. (BOHECO I)- 6.05%
4. Cebu II Electric Cooperative, Inc. (CEBECO II)- 6.75%
5. Batanes Electric Cooperative, Inc. (BATANELCO)- 7.53%
Source:

58. System Loss The 3 regions that had the lowest system loss are:
The Region VII (Central Visayas) ECs recorded the lowest average system loss at 8.03%.
It is followed by Region X (Northern Mindanao) ECs at 8.79%
Region III (Central Luzon) ECs at 10.02%.
Source:

59. System Loss
In an effort to address the system loss concerns of the ECs nationwide, NEA has also tapped the Japan International Cooperation Agency (JICA). JICA employed the expertise of the Tokyo Electric Power Company (TEPCO)
“System Loss Reduction for Philippine Electric Cooperatives”
“System Loss Reduction Manual” which aims to develop the technical capacity and planning abilities of NEA and the ECs to reduce distribution system losses.
Source:

60. Historical Transmission and Distribution Losses by region
Source:

61. Transmission and Distribution Losses
The disturbing evidence is that losses (and theft) appear to be increasing in an era of readily available technological means (metering, for instance) to lower non-technical losses.
Also, many of the power systems were privatized between 1980 and , yet the data shows that overall, this has not impacted positively on power sector efficiency.

62. Unbundling of Rates Universal Charge (UC)
Environmental charge- UC that accrues to an environmental fund to be used solely for watershed rehabilitation and management, managed by NPC under Sec 34(d) of EPIRA, pegged at PhP0.0025/kWh
Missionary electrification- to fund the electrification of remote and unviable areas, as well as areas not connected to the transmission system, as mandated under Sec 70 of EPIRA
Sources:

63. Unbundling of Rates
Other possible components of the Universal Charge which are yet to be resolved by the ERC are:
Stranded debts and stranded contract costs of the NPC,
Stranded contract costs of distribution utilities, and
Equalization of the taxes and royalties applied to indigenous or renewable sources of energy vis-à-vis imported fuels
Stranded costs can be defined as those costs that cannot be recovered by regulated firms during the transition from traditional regulation to an open, competitive environment.
Source: ftp://

64. Unbundling of Rates Supply System Charge Government tax
cost for rendering services to customers, such as billing, collection, customer assistance and associated services
Government tax
Local Franchise tax- levied by province and cities for businesses enjoying a franchise
VAT- is the percentage tax imposed on the value of the sale of electricity and related services through all stages of generation, transmission, distribution and sale of electricity to the final consumer. It is a form of indirect sales tax because the total of the VAT collected on each sale transaction in all the stages mentioned is charged to the final consumer as part of the purchased price with sellers and utilities merely as tax collectors
Sources:

65. Unbundling of Rates Retail Customer Charge Subsidies
retail customer charge is fixed as PhP 5 per customer. The customer pays this amount even if he did not use a single watt during the billing period
Subsidies
Lifeline Discount/Subsidy
socialized pricing mechanism under Sec 73 of EPIRA to benefit marginalized/low- income captive market customers. Residential customers using up to 100kWh/ month enjoy a lifeline discount to be applied to the total of the generation, transmission, system loss, distribution, supply and metering charges.
Senior Citizen Discount/Subsidy
socialized pricing mechanism for senior citizens provided under R.A (Expanded Senior Citizens Act of Applied on qualified customers’ total generation, transmission, system loss, distribution, supply and metering charges, net of lifeline discount funded by customers not availing the senior citizen discount Two types:
Maximum of 5% discount on the electricity bills of residential accounts registered under the name of a senior citizen which consumer not more than 100 kWh/month
50% discount on the electricity bills of senior citizen institutions accredited by DSWD
Sources:

66. Lifeline Discount/Subsidy

67. Unbundling of Rates Feed In Tariff Allowance
uniform charge collected from all electricity consumers connected to the grid
will be used to compensate renewable energy developers, as provided by Republic Act No. 9513, or the Renewable Energy Act of 2008.
“This charge will form part of the fund which the National Transmission Corp. (TransCo) will use to pay the FIT-eligible Renewable Energy developers for the energy they will produce.”
Sources:

68. Unbundling of Rates Metering customer charge
this includes the cost of metering, its reading, operation and maintenance of power metering facilities
ERC-Rules for the power supply option program:
Article 1 Sec The eligible DU shall be the sole metering service and data provider for the eligible customers
Magna Carta for Residential Electricity Consumers
Article 12. Right to a Meter Testing by Electric Utility and/or ERC:
A customer has the right to require the distribution utility to test, once every two (2) years, free of charge, the accuracy of the meter installed in his premises making use of a meter standard duly tested and sealed by the ERC. If more than once every two years, the DU may assess the customer a testing fee based on the testing fee charged by ERC.
The customer may also request the ERC to conduct a meter test subject to the payment of a fee prescribed under the approved ERC schedule of fees and charges.
FOR SPUGS
Automatic Meter Reading System- where they need to input serial number and date and time
Sources:

69. Unbundling of Rates
MERALCO’s Peak/ Off-Peak (POP) rates program (formerly known as Time of Use or “TOU”)
it is an alternative energy pricing scheme that is based on the time of day electricity is generated and on the cost of supplying electricity during that time.
With this pricing scheme, Meralco customers can avail of lower generation costs in their total electricity rate during pre-defined off-peak hours:
Source:

70. Unbundling of Rates POP (TOU) time PEAK OFF-PEAK Monday to Saturday
PEAK
OFF-PEAK
Monday to Saturday
8 am to 9 pm (13 hours)
9 pm to 8 am (11 hours)
Sunday
6 pm to 8 pm (2 hours)
8 pm to 6 pm (22 hours)
Compared to standard rates, the POP program more accurately reflects the cost of electricity generation during specific time periods.

71. Unbundling of Rates POP (TOU) rates PEAK (Php/kWh) OFF-PEAK (Php/kWh)
PEAK (Php/kWh)
OFF-PEAK (Php/kWh)
DRY
POP rate
7.48
3.55
Non-POP rate
5.69
Difference
1.79
-2.14
WET
7.28
5.57
1.71
-2.02
Source:

72. Policy Instruments 1. R.A. 9136 2. Philippine Distribution Code
Electric Power Industry Reform Act of 2001 (EPIRA)
2. Philippine Distribution Code
3. P.D. 269, s. 1973
National Electrification Administration Decree
4. R.A
National Electrification Administration Reform Act of 2013
2. establishes the basic rules, procedures, requirements, and standards that govern the operation, maintenance, and development of the electric distribution system
will be used with the Philippine Grid Code and the Market Rules of the Wholesale Electricity Spot Market (WESM) to ensure efficient operation of the total electric energy supply system in the PH
System Loss Classifications:
Technical Loss- aggregate of conductor loss, the core loss in transformers, and any loss due to technical metering error
Non-technical loss- aggregate of the energy lost due to pilferage, meter-reading errors, and meter tampering
Administrative loss- include the energy that is required for the proper operation of the distribution system and any unbilled energy for community-related activities

73. Policy Instruments 5. R.A. 7832 6. R.A. 9513
Anti-electricity and Electric Transmission Lines/Materials Pilferage Act of 1994
6. R.A. 9513
Renewable Energy Act of 2008
7. Executive Order No. 215
Amending Presidential Decree No. 40 and allowing the private sector to generate electricity
5. lines/materials, rationalizing system losses by phasing out pilferage losses as a component
illegal use of electricity:
connection tapping with overhead lines, service drops, other service wires, existing electric service facilities of any consumer, tamper, install or use of tampered electrical meter, jumper, current reversing transformer, shorting or shunting wire, loop connection etc.
damage or destroy an electric meter, equipment, wire or conduit or allow them to be damaged as to interfere with accurate metering
mandated electric utilities to cut down on system loss to ensure that power rates reflect only actual consumption
6. Section 9. Green Energy Option. - The DOE shall establish a Green Energy Option program which provides end-users the option to choose RE resources as their sources of energy.
Upon the determination of the DOE of its technical viability and consistent with the requirements of the green energy option program, end users may directly contract from RE facilities their energy requirements distributed through their respective distribution utilities.
Consistent herewith, TRANSCO or its successors-in-interest, DUs, PEMC and all relevant parties are hereby mandated to provide the mechanisms for the physical connection and commercial arrangements necessary to ensure the success of the Green Energy Option. The end-user who will enroll under the energy option program should be informed by way of its monthly electric bill, how much of its monthly energy consumption and generation charge is provided by RE facilities.
7. Amending Presidential Decree No. 40 and allowing the private sector to generate electricity
Places the responsibility of setting up transmission line grids and the construction of associated generation facilities in Luzon, Visayas, Mindanao, and the major islands of the country to the National Power Corporation (NPC)
Approved: July 10, 1987
Source:

74. Policy Instruments 8. R.A. 9209 9. R.A. 9381 10. R.A. 10373
An act granting MERALCO a franchise
9. R.A. 9381
An act further amending the franchise of Angeles Electric Corporation granted under R.A 2341
10. R.A
An act granting the Olongapo Electricity Distribution Company, Inc. a franchise
8. An act granting MERALCO a franchise to construct, operate and maintain a distribution system for the conveyance of electric power to the end-users in the cities/municipalities of Metro Manila, Bulacan, Cavite and Rizal, and certain cities/municipalities/barangays in Batangas, Laguna, Quezon, and Pampanga
Approved: June 9, 2003
Source:
9. An act further amending the franchise of Angeles Electric Corporation granted under R.A. 2341, as amended to construct, operate and maintain a distribution system for the conveyance of electric power to the end-users in the cities of Angeles, province of Pampanga and renewing/extending the term of the franchise to another 25 years from the date of approval
Lapsed into law on March 09, 2007 without the signature of the President
Source:
10. An act granting the Olongapo Electricity Distribution Company, Inc. a franchise to construct, install, establish, operate and maintain a distribution system for the conveyance of electric power to the end-users in the city of Olongapo and its suburbs
Approved: Mar 01, 2013
Source:

75. Problems in the Sector Electricity theft/”jumper” Regulatory burden
System losses
Independent Power Producers (IPPs) –related problems
No source of fund- In the Philippines the electricity utility, Napocor, has amassed extensive debts due to the terms of its IPPs. Around $9bn, of the $15bn total liabilities consists of obligations under power purchase agreements with IPPs. With Napocor scheduled for privatisation in the next couple of years, advisors recommend that the debts be assigned to the government so as not to deter investors. Thus, the central government would be saddled with debts of $9bn on account of IPPs. This also shows that IPPs can inhibit privatisation as private investors are unlikely to be racing to get into onerous PPAs or take on debts to IPPs.

76. Problems in the Sector Uncompetitive and inflexible
Independent Power Producers (IPPs) –related problems
Uncompetitive and inflexible
In the Philippines, a total of 42 IPP contracts were signed under the Aquino and Ramos administrations, in response to the power crisis that had hit the country between 1990 and 1994.
The IPP contracts contain a take-or-pay provision.
A subsequent downturn in the demand for power due to the Asian economic crisis has resulted in excess capacity in the system.
Napocor is currently faced with a problem on where to distribute its generated capacity. Prices have increased as a result.
High prices and generous concessions
The rigidities of IPPs can increase prices as in Philippines where Napocor is already collecting a ‘PPA adjustment charge’ from customers to reflect the cost of IPP obligations.
As of May 2000, this component represented 20% of the total tariff. While only 40% of generated power is actually used by the public, consumers are allegedly charged between P0.20 and P0.40 per kilowatt-hour for the unused power produced under the contracts.
Source: Bayliss and Hall (2000) Please see file under filename: problems with IPPs

77. CONSUMPTION

78. Demand Forecast PROCESS 1. Forecast Sales 2. Estimate Gross Generation
3. Estimate Peak Demand
4. Adjust Base Year
5. Demand Forecast
Energy Sales Forecast
1 Residential Sales (GWh) = a + b*Regional Population + c*Regional GDP/Capita
Non-Residential (GWh) = a +b*Regional GDP
2 Sales data of each DUs from the Distribution Development Plans
Estimate Gross Generation
1 Gross Generation (GWh) by Grid = Energy Sales in Distribution*(1+AF) 2 Gross Generated Energy (GWh) = Energy Sales of DUs*(1+AF)
AF - Adjustment Factor
Sales on Transmission
Distribution and Transmission Losses
Generation for own use
Grid Station Use and Transmission Losses
Luzon 2.60%
Visayas 4.30%
Mindanao 4.40%
Energy Sales (GWh) Peak Demand (MW)
Source: Power Development Plan,

79. Energy Consumption BY SECTOR
Others includes public buildings, street lights, irrigation, energy recovered and others not elsewhere classified.
Own Use includes Distribution Utilities company used and Power Plants Station Used.
System Losses includes Distribution Utilities losses and Transmission losses (substation used, transformation and other unaccounted losses).

80. Energy Consumption By Island Group
Demand for Luzon Grid is 74% of nationwide demand

81. Demand-Supply Outlook
Luzon
Visayas
Mindanao
Total
Available Capacity (in MW)*
8473
1608
1351
11432
Peak Demand (in MW)**
8305
1572
1348
11225
Surplus/(Deficit)
168 36 3
207
Required Reserve Margin*
973
140
1116
Reserve Margin + Peak Demand
9278
1712
12341
Demand + Reserve
-805
-104
-909
Reserves are capacities "on stand-by" to support the secure and reliable operation of the grid. These are highly important to ensure the continuous and reliaable provision of electricity to consumers.
Regulating Reserve - Reserves that adjust generation continuously in response to small frequency changes
Contingency Reserve - Reserves that respond so as to arrest a significant drop in system frequency such as would arise as a result of credible contingency affecting one (or more) genrating units within a region, or transmission flows into a region
Dispatchable Reserve - Reserve available to respond to a re-dispatch performed during a trading interval, on either a regular or an ad hoc basis
*System Capacity as of Februaary 2015, NGCP
** 2013 System Peak Demand

82. Luzon. Electricity Price. Generation(Php/kWh). Transmission(Php/kWh)
Luzon Electricity Price Generation(Php/kWh) Transmission(Php/kWh) Distribution (Php/kWh) Systems Loss (Php/kWh)
Average
Minimum
Maximum
Source: kuryente.org

83. Visayas. Electricity Price. Generation(Php/kWh). Transmission(Php/kWh)
Visayas Electricity Price Generation(Php/kWh) Transmission(Php/kWh) Distribution (Php/kWh) Systems Loss (Php/kWh)
Average
Minimum
Maximum
Source: kuryente.org

84. Mindanao Electricity Price Generation(Php/kWh) Transmission(Php/kWh) Distribution (Php/kWh) Systems Loss (Php/kWh)
Average
Minimum
Maximum

85. Retail Competition and Open Access Update
Prospective Based on ERC Data
Registered as of June 2014
Retail Electricity Supplier (RES) 18 16
Local Retail Electricity Supplier 23 9
Retail Metering Servicce Provider 39
Contestable Customer
970
333
Supplier of Last Resort 27 4
Total
1077
385
Source: Power Industry Reforms in RCOA and EPIRA Nov DOE
Source: Power Industry Reforms in RCOA and EPIRA Nov DOE

86. RCOA Contestable Customers
Indicative
Registered with CRB
No. of Contestable Customers
Power Demand (in MW)
Actual Consumption, (in MWh)
Luzon
847
331
1145.5
Visayas
123
403.79 2
3.7
4.052
Total
970
2964.5
333
1149.2
Source: Power Industry Reforms in RCOA and EPIRA Nov DOE

87. RCOA Suppliers
Source: Power Industry Reforms in RCOA and EPIRA Nov DOE

88. Barangay Electrification Program
No. of Barangays
Electrified Barangay
Unelectrified Barangays
Luzon
20486
Visayas
11442
Mindanao
10046
10040 6
Total
41975
41969
Source: Department of Energy

89. Sitio Electrification Program Update
Potential
Energized
Remaining Unenergized
Luzon
34628
32404
2224
Visayas
32514
30601
1913
Mindanao
36347
28555
7791
Total
103489
91561
11928
NEA through the Sitio Electrification Program (SEP) will provide
electricity to their committed number of sitios (32,441)
In order to avoid overlapping of targeted households
between DOE and NEA, electric cooperatives (ECs) provide
DOE with a certification that specifies households
which are not to be covered by NEA?s SEP.
ECs thru their DDP were also requested by the DOE to
identify their planned projects from in order also
to avoid overlapping fund sources
Source: Department of Energy

90. Household Electrification Program
Total HH 2013
Served HH 2013
Unserved HH 2013
Luzon
Visayas
Mindanao
Total
DOE?s approaches to household electrification are the following:
Utilization of ER 1-94 funds to cover the HHs not included in
NEA?s SEP
Electrification with the use of RE systems which is
implemented by REMB (a criteria is used by REMB for
identifying HH beneficiaries)
Qualified Third Party (QTP) Program
Solar PV Mainstreaming
Source: Department of Energy

91. Household Energy Consumption Survey 2011
Majority of households use electricity as its primary source of energy.
Electricity is mostly used for lighting purposes
It is also popularly used for recreation and space cooling.

92. PRICING

93. Policy Instruments for Pricing
Generation Cost: Article 2 Section 1 and 2 of ERC Resolution No. 16, Series of 2009
Transmission Cost: Article 3 Section 2 of ERC Resolution No.16, Series of 2009
Distribution Charge: with ERC Order on ERC Case NO RC , Rules for Setting Distribution Wheeling Rates (RDWR) for PIOUs and Rules for Setting Cooperatives WHeeling Rates for ECs
Metering Charge: ERC Order on ERC Case NO RC

94. Policy Instruments for Pricing
Systems Loss Charge: RA 7823, and Article 2 Section 4 of ERC Resolution No.16, Series of 2009
UC-ME: ERC Order on ERC Case No RC
UC- Stranded Cost: ERC order on ERC Case No RC
Lifeline Rate Subsidy: Article 2 Section 5 of ERC Resolution No.16, Series of 2009
SeniorCitizen Rate Subsidy: ERC Resolution No.23, Series of 2010

95. Luzon & Visayas: Captive Market
Generation charge is set by the generation companies in accordance with aforementioned policy
Includes: Generation charge, Previous power cost adjustment, Franchise and benefits to host communities, Adjustment on generation cost, Fuel recovery charge, Automatic fuel recovery charge, GRAM, Foreign exchange adjustment

96. Generation Charge GR = AGR + OGA GR = generation rate (Php/kWh)
AGR = adjusted GR = TGC/TPGGR

97. Transmission Charge
Includes: Transmission demand charge, transmission system charge

98. Transmission Charge

99. Transmission Charge

100. Distribution Charge
Includes:Distribution system charge, Distribution demand charge, Distribution system charge excess, Other fixed costs, Loan condonation (per kWh and per customer per month), Reinvestment fund/Members’ capital contribution
MAP2015 = [MAP2014 x {1 + CWb015 - X}] K ITA2015
The maximum average price will be calculated by the DU then translated into Distribution Charges for each customer class

101. Luzon & Visayas: Contestable Market
The price of electricity in the contestable market is largely determined by the price aggreed upon in bilateral contracts between firms

102. Components of a bill Generation, transmission, and distribution costs
Supply Charges: Supply system charge, Supply retail customer charge, Supply charge per kW
Metering charges: Metering system charge, Metering retail customer charge, Metering retail customer charge – CT rated, Metering retail customer charge – Secondary, Metering retail customer charge – Primary
System Loss: System loss charge, System loss charge per kW

103. Components of a bill
Universal Charge: UC-Missionary electrification charge, UC- Environmental charge
Subsidies: Lifeline rate subsidy, Lifeline discount, Senior citizen subsidy, Senior citizen discount charge
Vat19: Generation VAT, Transmission VAT, System loss VAT, Distribution VAT, Power Act Reduction VAT, Others VAT, Others VAT 2, EVAT, WESM VAT, local franchise tax VAT
Other taxes: Local franchise tax, Business tax, Local and national franchise tax – non-VAT, Energy
Feed In Tariff Allowance

104. Comparison with ASEAN
Most ASEAN countries except Singapore have a vertically integrated electricity industry that is dominated by a state-owned firm

105. Indonesia

106. Malaysia

107. Thailand

108. Singapore

109. Comparison of Subsidies
Subsidies in Indonesia are present in the form of government transfers to PLN, while in Malaysia there are fuel discounts on top of government transfers to TNB. There are no explicit subsidies for electricity in Thailand, but an IEA study uses the price-gap approach to estimate the subsidy from the use of underpriced indigenous energy resources in the country and they found the subsidy to be as large as those in Indonesia. According to the IEA study there are no subsidies for electricity in the Philippines.