Applicant. - Energy Regulatory Commission

Transcription

Republic of the Philippines
ENERGY REGULATORY COMMISSION
San Miguel Avenue, Pasig City
IN THE MATTER
OF THE
APPLICATION FOR APPROVAL
OF THE PROPOSED CAPITAL
EXPENDITURE
PROJECTS
FOR THE YEARS 2011 TO 2014
ERC CASE NO. 2012-043 RC
NUEVA
VISCAYA
COOPERATIVE,
(NUVELCO),
ELECTRIC
INC.
Applicant.
)(-
------- --------------
-)(
DECISION
Before the Commission for resolution is the application filed on
March 21, 2012 by Nueva Viscaya Electric Cooperative, Inc.
(NUVELCO) for approval of its capital expenditure (CAPEX) projects
for the years 2011 to 2014.
Having found said application sufficient in form and in
substance with the required fees having been paid, an Order and a
Notice of Public Hearing, both dated April 10, 2012, were issued
setting the case for initial hearing on May 16, 2012.
In the same Order, NUVELCO was directed to cause the
publication of the 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 (10) days before the date of the scheduled
initial hearing. It was 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 hearing thereon.
The Office of the Solicitor General (OSG), the Commission on
Audit (COA) and the Committees on Energy of both Houses of
Congress were furnished with copies of the Order and the Notice of
Public Hearing and were requested to have their respective duly
authorized representatives present at the initial hearing.
ERC Case No. 2012-043 RC
DECISION/December 18, 2014
Page 2 of 24
Likewise, the Offices of the Provincial Governor of Nueva
Viscaya and the Mayors of the City and Municipalities within
NUVELCO's franchise area were furnished with copies of the Order
and Notice of Public Hearing for the appropriate posting thereof on
their respective bulletin boards.
On May 7,2012, NUVELCO filed its "Pre-Trial Brief'.
During the May 16, 2012 initial hearing, only NUVELCO
appeared.
No intervenor/oppositor appeared nor was there any
intervention/opposition reg istered.
At the said hearing, NUVELCO presented proofs of its
compliance with the Commission's posting and publication of notice
requirements which were duly marked as Exhibits "A" to "0",
inclusive. Thereafter, it conducted an expository presentation of its
application.
At the termination
of the expository presentation,
the
Commission conducted the pre-trial conference where NUVELCO
presented its proposed facts and issues relative to the instant
application.
NUVELCO presented the following witnesses in support of its
application: 1) Engr. Epifanio P. Mendoza, its Engineering Manager,
who testified, among others, on the following: a) his participation in
the preparation of the instant application; b) his participation in the
preparation and development of the feasibility study for the proposed
CAPEX; and c) the total estimated cost of the projects; and 2)
Mr.Wilfredo N. Acasio, its Financial Consultant, who testified, among
others, on the following: a) his participation in the financing plan for
the proposed CAPEX; b) the funding requirement of the proposed
projects; c) the financial resources of NUVELCO; and d) the projects'
rate impact.
In the course of their direct examinations, additional documents
were presented and duly marked as exhibits.
The direct
examinations having been terminated, the Commission propounded
c1arificatory questions on the said witnesses. NUVELCO was, then,
directed to file its formal offer of evidence.
On May 29, 2012, NUVELCO filed its "Formal Offer of
Evidence" which is hereby admitted for being relevant and material in
the final resolution of this case.
On March 20 to 22, 2013, the Commission conducted an ocular
inspection on NUVELCO's assets subject of the instant application.
Page 3 of 24
On January 22, 2014 a~d February 17, 2014, the Commission
issued the Orders directing NUVELCO to submit various documents.
On March 28, 2014, NUVELCO filed its "Additional CAPEX
Requirements" in compliance with the aforesaid directives.
DISCUSSION
NUVELCO sought the Commission's approval of the following
capital projects for the years 2011 to 2014:
Proposed
Project
Primary
1
Distribution
Name
2011
-
Installation of Three-phase
3
Installation of Fuse Cut-out and Auto-link Resettable
Electronic Sectionalizer along lateral distribution lines
4
Installation of Substation
and Solano Substations
5
Installation of Revenue Meter to Alfonso Castaneda
Acquisition
Auto-recloser
Feeder Metering at Bambang
of Distribution Upgrading
Replacement
Secondary
Distribution
Replacement
of Overloaded
9
Replacement
Clustering
of Kilowatt-hour
Distribution
Transformers
meter and Meter
due to Add-on Projects
Acquisition
of Lineman's Tools Set
Acquisition
of Vehicles
Acquisition
of Meter Reading/Billing
Acquisition
of Office Furnitures and Equipment
16
Acquisition
Hardware
of Engineering Analysis Software and
17
Acquisition of Accounting, Payroll, Warehousing and
Member-Consumer
Information System Software
Acquisition
Construction
Acquisition
2,770,307.98
1,872,640.00
4,771,402.08
8,308,389.06
1,762,676.00
-
-
268,800.00
-
268,800.00
-
499,520.00
4,905,309.89
4,717,929.15
5,264,232.36
5,190,715.29
12,287,546.52
12,766,226.60
18,298,683.53
15,075,322.64
499,520.00
20,078,186.69
58,427,779.28
8,956,631.42
10,706,928.02
12,015,039.22
14,307,633.16
45,986,231.82
9,424,052.18
9,958,079.80
10,450,169.45
11,066,385.93
40,898,687.35
4,610,320.11
4,985,262.74
5,385,941.99
5,814,908.94
20,796,433.78
-
of Test Instruments
18
19
20
2,558,439.68
-
Projects
Acquisition
11
12
13
14
15
949,760.00
2,419,945.56
Projects
Connection of New Customers
(KWh meters & accessories)
Non-network
1,216,965.40
922,880.00
2,351,456.52
Total (PhP)
2014
2013
Projects
8
10
Materials
of Rotten Poles
Other Network
Cost (PhP)
Projects
Installation of Air Break Switches
2
6
7
Project
2012
4,488,000.16
-
Gadgets
of Street Lighting Equipment
of NUVELCO Office Buildings & Facilities
268,800.00
50,215,945.68
Total (PhP)
Performance
System
Assessment
-
3,296,160.00
8,369,760.00
-
213,640.00
890,400.00
571,032.00
807,520.00
22,094,960.16
2,907,072.00
2,180,360.00
-
6,968,925.98
-
-
6,968,925.98
-
7,500,000.00
-
-
7,500,000.00
593,600.00
7,447,721.36
-
576,800.00
12,643,226.20
1,120,000.00
-
2,340,800.00
24,622,104.44
1,120,000.00
88,810,338.69
74,855,561.45
560,000.00
2,730,000.00
of Office Stand-by Power Generator
571,032.00
807,520.00
5,941,040.00
2,907,072.00
807,520.00
of NUVELCQ's
610,400.00
1,801,156.88
59,138,998.84
Existing Distribution
NUVELCO serves the Province of Nueva Viscaya which
comprises of fifteen (15) Municipalities, namely: Ambaguio, Aritao,
Bagabag, Bayombong, Bambang, Diadi, Dupax del Sur, Dupax del
273,020,844.65
Page 4 of 24
Norte, Kasibu, Kayapa, Quezon, Santa Fe, Solano, Villaverde and
Alfonso Castaneda.
At present, there are three (3) substations that cater the energy
requirements of NUVELCO with a combined rated capacity of 35
MVA. Two (2) of the three (3) substations, the Solano and Bambang
Substations, are owned by NUVELCO while the other substation, the
Bayombong Substation, is owned by the National Grid Corporation of
the Philippines (NGCP).
NUVELCO
owns
about
14.36 kilometers
of 69 kV
subtransmission lines. As of year-ending 2010, there are eleven (11)
feeders being supplied by the substations consisting of a total of
1,450.40 circuit kilometers of primary distribution lines and 1,290.76
circuit kilometers of secondary distribution lines. As illustrated below,
the single phase lines dominate the medium voltage segment with a
total length of 913.16 km. or more than one half of the entire
segment. These are elongated and over extended lines intended to
supply the power requirements of the consumers all throughout the
far flung barangays:
SYSTEM LINE CONFIGURATION
(km)
The figures below show the type of consumers being served by
NUVELCO as of year 2010. Its residential consumers reflect the large
area being served as a rural countryside. 62,794 out of 67,939 total
consumers of the cooperative or 92% of the market are residential
consumers followed by commercial customers with a market share of
3%. The remaining 5% of the market is composed of public industrial,
buildings, street lights, sale for resale, and temporary customers.
Page 5 of 24
CUSTOMER CLASS
Public8uildin~lree~
l~~hIS
1,~5;.'00
1~
Commercial
2,314.00
3%
In terms of energy sales, the residential consumers contribute
to about 48,840 MWh or 630/0 of the entire sales of the NUVELCO,
while industrial customers' share is 22%, as shown in the figure
below. The remaining 150/0 share in the energy sales comprise of
commercial, street lights, public buildings, sale for resale, and
temporary customers.
ENERGY SALES
• Residential
48,840.00
63%
• Temporary
Customer
1,232.00
2%
a Public Building
3,209.00
4%
Bulk of the power requirements of NUVELCO are being
sourced from the National Power Corporation (NPC) and San Miguel
Energy Corporation (SMEC) through the 69 KV sub-transmission
lines of the National Grid Corporation (NGCP).
This constitutes
97.84% of its total energy requirements. The remaining portions are
being supplied by FRENDCO mini-hydro at 1.44% and Aurora
Electric Cooperative, Inc. (AURELCO) and Nueva Ecija II Electric
Cooperative, Inc. - Area 2 (NEECO II Area 2) at 0.72%. AURELCO is
supplying three (3) barangays in the Municipality of Alfonso
Castaneda while NEECO II Area 2 is supplying two (2) barangays in
the Municipality of Dupax del Sur and three (3) barangays of Alfonso
Castaneda.
Page 6 of 24
NUVELCO's energy purchases and sales for the past seven (7)
years are directly proportional as illustrated in the figure below. An
increase on both the energy purchases and sales were significant
annually for the last seven (7) years with an average annual growth
rate of 6.1 % and 6.80/0, respectively. The increase in energy sales
was brought about by the annual rural electrification program
implemented by NUVELCO.
Notably, NUVELCO did not meet the percent loss cap from the
period presented below. There is an increase in system loss starting
2005 to 2007 with an average of 170/0 within the said period. A
decrease in system loss, however, was experienced during the years
2008 to 2010 but still beyond the cap.
Energy Profile (MWh)
100,000.00
--; ..
l--~....._....
! ~,~~
~!.••
~
!
50,00000
40,000.00
30.000,00
20,000.00
t
J..
'
:
. . '-"i
•-
=~~'
!
SALES
(MWh)
I
l
,-.
1...
1
j
III
10,000.00
.~ ....
~~
_-_.'--_.~:-.
---_ ..._,_ .. _- ~---_ .._"._._
_ ~~_,f._
..
~8'
:f
.__
J
Forecasting
It is imperative to have an accurate
energy, demand and customers of an electric
determine the optimal project for a particular
the appropriate solution which will redound
consumers.
forecast of the future
cooperative in order to
scenario and prescribe
to the benefit of the
There are two (2) methods of forecasting that may be utilized to
calculate or estimate the future requirement of an electric utility.
These are the Econometric Analysis which uses economic and
demographic information to forecast the load as an input and Trend
Analysis which requires only historical data as an input.
The Econometric Analysis presents the most accurate for
medium and long-term forecasting while the Trend Analysis is the
widely used method of forecasting among the electric cooperatives
which requires only the historical data as an input. This method of
forecasting is best suited for short-term (5 years) planning, which
DECISION/December 18,2014
Page 70f24
coherently meets the criteria for the planning period under ERC
Resolution 26, Series of 2009.
Under the Electric Cooperative's Distribution Utility Planning
Manual (ECDUPM), all forecasting models formulated must be tested
for validity and accuracy. Valid models should meet the following
criteria for each statistical value:
1)
Adjusted R2 should be at least 800/0for econometric
analysis or 990/0for trend analysis;
2)
3)
4)
P-value should be lower than 0.1;
T-statistic should be greater than 2 or less than -2; and
Mean Absolute Percentage Error (MAPE) should be
less than 5%.
NUVELCO simulated several forecasting models using trend
analysis in order to produce accurate forecast of its future energy
purchases, sales and customers. The table below shows the
summary of the forecast that passed all the criteria mentioned above
and was used by NUVELCO in its distribution development planning:
Forecasting
Energy Purchase
(Distribution System)
Energy Sales
(Distribution System)
c:
0
Distribution
System
:;::;
tl
a + bt + ce + dr'
(double horizon)
ce
a + bt +
(with
horizon)
0.9960
0.9954
0.9939
a + be (double
horizon)
0.9952
Bambang
a + Ine+ Ine (with
horizon)
0.9923
~
c
a + loge + loge
(double horizon)
Validity
Adj. R2 (>0.99 or >0.8)
Solano
.c
::l
'tl
Model
Cll
E
Ql
C
Bayombong
ce
a + bt +
(with
horizon)
0.9937
l!!
~~
~oi
~~
Distribution
System
a + logt + logt2 +
loge
0.9985
0
Residential
Commercial
a + Int + Ine + Ine
a + bt + logt (double
horizon)
0.9986
0.9940
Tests
t-stat (It I > 2)
Accuracy
p-value
«0.1)
a
41.4774
1.3136E-08
b
-3.8346
0.00861289
c
a
10.9931
3.36753E-05
6.6583
0.001153087
b
3.6243
0.015151358
c
2.0326
0.097787765
d
2.7446
0.040569866
a
37.0585
2.69454E-07
b
4.3427
0.007410199
c
a
7.8745
0.000530813
37.9924
2.27698E-09
b
40.8751
1.36746E-09
a
43.0258
1.27982E-07
b
-4.7086
0.005296242
c
a
10.4168
0.0001405
33.7520
b
4.0724
0.009611044
c
a
7.9105
0.000519575
146.5364
7.00747E-07
b
14.7063
0.000681991
c
-9.5395
0.002443318
d
a
10.4460
0.001872754
141.6215
7.76256E-07
b
14.0685
0.000777832
c
-8.7556
0.003137498
d
9.6495
0.002362718
a
42.1917
1.18605E-08
b
21.1087
7.36684E-07
c
-7.3455
0.000325701
Test
MAPE «5%)
1.78%
2.95%
1.88%
3.07%
2.19%
4.29271 E-07
2.06%
0.24%
0.27%
1.93%
Page 8 of 24
Public Building
Street Lights
a + be + logt (double
horizon)
a + Int + Ine + Ine
(double horizon)
a
0.9929
0.9949
b
8.4982
18.6008
c
a
3.9468
26.1358
b
3.5753
-5.6177
c
d
a
Temporary
Customer
a+bt+ce+de
(with horizon)
0.9942
b
c
d
Industrial
a + be (with horizon)
0.9923
Sale for Resale
a + be + logt
0.9928
a
b
a
b
c
8.9110
5.5927
4.3054
-4.5637
5.6091
42.5328
29.9906
4.9937
9.9184
3.6853
0.000145299
1.55779E-06
0.007565771
1.53227E-06
0.015954324
0.002473521
0.000296336
0.005015828
0.012591464
0.010309681
0.004962878
1.13027E-08
9.11615E-08
0.007523808
0.000580104
0.02110598
4.79%
1.92%
3.48%
3.73%
2.51%
The energy purchase and sale of its entire distribution system,
as well as the peak demand requirement of each substation and the
entire distribution
system was forecasted directly using the
abovementioned trend methods. On the other hand, the number of
customers in each class as well as the number of customer for the
entire system was directly forecasted using the polynomial trend
method. Subsequently, the forecasted data of each class were
allocated to the forecasted number of customers of the entire system
to produce a conservative and accurate forecast of the said
parameter.
I. PERFORMANCE ASSESSMENT
NUVELCO
identified and quantified the problems and
categorized these requirements to address the safety, capacity
(including customer requirements), reliability improvements and
system loss reduction. It is worthy to note that the last CAPEX
application of NUVELCO was filed in year 2007 under ERC Case No.
2007-123 MC.
A. Safety
The existing substations of NUVELCO are equipped with
complete voltage and current protection systems. The 13.2/7.62 kV
main feeder's protective devices are Automatic Circuit Breakers
which main function is to interrupt power supply during abnormal
circuit condition or faults.
Page 9 of 24
B. Capacity
NUVELCO's maximum rated capacity of its entire distribution
system is 35 MVA. This comprises the merged capacities of the
existing three (3) substations of NUVELCO.
Based on the forecasted demand, as shown in the table below,
the loading percentage of the entire distribution system within the
CAPEX period is within the 700/0 criteria for capacity augmentation
planning margin. All substations are also within the said margin
except for the Solano Substation which will exceed the said margin
starting the year 2011.
No.
1
2
3
Substation
Solano
Bambang
Bayombong
Entire
System
c.
Rated MVA
Capacity
Max. MVA
Capacity
Power
Factor'
Max. MW
Capacity
10.00
12.50
89%
11.18
10.00
12.50
98%
12.28
15.00
35.00
18.75
43.75
97%
18.10
95%
41.45
Capacity
Parameters
MWDemand
% Loading
MW Demand
% Loading
MWDemand
% Loading
MWDemand
% Loading
Historical
Forecasted
2010
2011
2012
2013
8.15
8.59
9.05
9.57
67.61%
72.89%
76.79%
80.94%
85.57%
5.79
7.20
7.59
8.00
8.46
47.10%
58.65%
61.78%
65.12%
68.85%
5.19
6.51
6.86
7.23
7.64
28.68%
35.97%
37.89%
39.93%
42.22%
17.16
17.57
18.47
19.49
20.65
41.40%
42.39%
44.55%
47.02%
49.83%
Power Quality
The Philippine Distribution Code (PDC) provides that the
voltage levels at the customer's connection point must be within
:f:100/0 of the nominal voltage level of 230 volts. In the instant
application, the existing power quality of NUVELCO's distribution
system complies with the said provision of the PDC, as shown in the
table below. There were no low-voltage or over-voltage and
unbalance voltage problem encountered within the system during
peak and off-peak hours.
No.
Substation
1
80lano
2
Bambang
3
Bayombong
Feeder
Name
21804
22804
23804
24804
21BM4
22BM4
23BM4
24BM4
22B04
23B04
24B04
2014
7.56
Voltage
Profile (p.u.)
Year 2010
0.9790
0.9370
0.9170
0.9420
0.9290
0.9080
0.9370
0.9250
0.9120
0.9620
0.9420
Page 10 of 24
D. System Efficiency
For the past seven (7) years, the average system loss of
NUVELCO is 15.64%, to wit:
20,00%
18.86%
18.00%
16.00%
14.00%
12,00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2004
2005
-
2006
2007
2008
System Loss
- - - --
System Loss cap
2009
2010
In the table above, the most efficient is during the year 2004
and the worst was in year 2007 wherein NUVELCO reached a
system loss of 18.860/0which is beyond the system loss cap of 130/0.
These enormous losses were due to the inappropriate distribution
transformer capacities installed at that time. NUVELCO gradually
replaced these units with appropriate sizes which improved the entire
distribution system's efficiency as reflected in the years 2008 up to
2010.
However, the existing system loss of NUVELCO is still beyond
the allowable limit and thus, there is a need to reduce these losses
through an exerted effort to determine the probable cause of the
distribution system's inefficiency.
E. Reliability
The reliability performance of NUVELCO was measured using
the following indices: a) the System Average Interruption Frequency
Index (SAIFI); and b) the System Average Interruption Duration Index
(SAIDI). These indices are the prescribed reliability indicators in the
ECDUPM, the value of which shall not exceed the interim criteria for
SAIFI at 20 customer-interruptions per customer-year and for SAIDI
at 45 hours per customer-year. For the last seven (7) years,
NUVELCO' average reliability performance indices for SAIFI and
SAIDE are 2.54 and 3.67, respectively,
both within the
abovementioned criteria, to wit:
Page 11 of 24
12.00
10.00
tJ>
q)
0
8.00
'5
of:
~
~
6.00
i~
:a
~::.;.;
.!!!
~
.
-I
~~~t
)i~
4.00
II
2.00
~It::~
.SAIFI
!'!ISAlOl
&MAIFI
2004
3.59
6.93
3.32
F. Rural Electrification
There are still several barangays within the franchise area of
NUVELCO that needs to be energized. Since its mandate is to
provide rural electrification, NUVELCO included in its program the
detailed plan for the electrification of the remaining barangays and
sitios.
II. PROJECT OVERVIEW
A. Capital Projects
Resolution No. 26, Series of 2009 (Guidelines for the Approval
of Regulated Entities' Capital Expenditure Projects) requires that the
capital projects should be necessary to serve, among others, the
forecasted future loads of the distribution utility and to maintain
efficient electric service to its existing and future consumers.
It
should comply with the utility's technical criteria for capacity,
reliability', quality and safety of its entire distribution system.
Regulated Entities' capital assets are divided into two (2)
categories, namely: (1) regulated distribution assets; and (2)
distribution connection assets. The regulated distribution assets are
further divided into two (2) sub-categories, namely: (a) distribution
plant assets or network assets; and (b) general plant assets or nonnetwork assets.
B. Project Formulation
The preparation of capital expenditure projects requires diligent
formulation of project ideas in coming up with a particular solution to
assess deficiencies/problems
of a distribution network. Several
alternatives were considered by NUVELCO in addressing the
deficiencies of its distribution system in order to provide a technically
Page 12 of 24
feasible and economically viable project for the benefits of its member
consumers.
c.
Proposed Projects and Objectives
NUVELCO identified and proposed twenty (20) capital projects
intended to address the distribution system's technical deficiencies,
as discussed in the performance assessment. These projects are
essential to provide continuous supply, efficient, reliable and best
possible quality of service to its customers.
Shown below is the summary of the proposed projects which is
presented according to the distribution system's categories,
corresponding project type, system deficiencies to be resolved and
project cost:
Project
Primary Distribution
Name
Proposed Cost
(PhP)
Rationale
Projects
1
Improve
system
reliability
performance
while
maintaining a safe distribution system. The proposed
equipment shall be used as load shifter during
interruptions.
2
Installation of Three-phase Auto-Recloser
The installation of Automatic Circuit Recloser will
provide back-up protection within the main feeders in
the event fault occurs in the system.
Safety
4,771,402.08
3
Installation of Fuse Cut-out and Auto-link
Resettable Electronic Sectionalizer along
lateral distribution lines
Improve
system
reliability
performance
while
maintaining a safe distribution system since the
proposed
equipment
shall protect the installed
distribution transformers.
Safety
8,308,389.06
4
Installation of Substation Feeder Metering at
Bambang and Solano Substations
Improve distribution system's efficiency by installing
revenue meters to the feeders of Bambang and
Solano substations.
Efficiency
268,800.00
5
Installation of Revenue Meter to Alfonso
Castaneda
The procurement of metering equipment is necessary
to determine the consumption of the sale for resale
customer class (served by AURELCO) in Alfonso
Castaneda
Efficiency
499,520.00
6
Acquisition of Distribution Upgrading
Materials
Replacement of the existing distribution facilities such
as conductors and other distribution facilities that are
beyond its asset life is necessary for public safety
and to improve system's reliability and efficiency.
7
Replacement of Rotten Poles
Some rotten poles must be replaced
for
distribution system to operate safely and reliably.
Secondary
Distribution
Replacement of Overloaded
Transformers
9
Replacement of Kilowatt-hour
Meter Clustering
10
1,872,640.00
Safety
the
Safety
20,078,186.69
58,427,779.28
Projects
8
Other Network
Reliability
Distribution
meter and
Upgrading and augmenting the existing distribution
transformers
are necessary to accommodate
the
predicted additional demand and customers.
Capacity
45,986,231.82
Improve the EC's existing system's efficiency by
replacing defective and old KWh meters with new
meters and the same shall be clustered in several
strategic locations.
Efficiency
40,898,687.35
Address the impending load and customer growth by
providing them necessary service drop wires, and
metering facilities and equipment.
Capacity
20,796,433.78
Projects
Connection of New Customers due to Addon Projects (KWh meters & accessories)
DECISION/December
18, 2014
Page 13 of 24
Non-network
Projects
Acquisition of Test Instruments
The acquisition
of several
test equipment
is
necessary to continuously monitor the condition of
DUs network assets such as meters, conductors,
protection
equipment
and transformers,
thereby,
improving the EC's reliability performance.
Customer
Efficiency
571,032.00
Acquisition of Lineman's Tools Set
Replacement of the existing worn out tools and safety
apparels of the cooperative personnel in order for the
EC to continuously
maintain a safe distribution
system.
Customer
Efficiency
807,520.00
13
Acquisition of Vehicles
Enhance the services rendered in the operation and
maintenance
of
the
cooperative.
Reliable
maintenance vehicles provide efficient way to ensure
the consumers' needs.
Customer
Efficiency
22,094,960.16
14
Acquisition of Meter Reading/Billing
Gadgets
Enhance the existing reliability performance of the
DU by introducing this new technology of "Read &
Bill" System.
Customer
Efficiency
2,907,072.00
15
Acquisition of Office Furnitures and
Equipment
The acquisition of office equipment such as furnitures
and office supplies which is necessary
for a
conducive-work station and providing better service
to its customers.
Customer
Efficiency
2,180,360.00
16
Acquisition of Engineering Analysis
Software and Hardware
Enhance the existing database of the DU in order to
maximize the use of SynerGee Program. The said
database is not compatible to the SynerGee program
which aids engineers
in effective
performance
analysis and planning.
Customer
Efficiency
6,968,925.98
17
Acquisition of Accounting, Payroll,
Warehousing and Member-Consumer
Adopt an automated financing and accounting system
or program in order to enhance financial processes of
the cooperative,
thereby,
improving
the
ECs
customer service performance.
Customer
Efficiency
7,500,000.00
18
Acquisition of Street Lighting Equipment
The cooperative
is responsible
lighting equipment.
Customer
Efficiency
2,340,800.00
19
Construction of NUVELCO
& Facilities
The project shall provide conduciveness
to the
cooperatives personnel and to paying customers as
well as eliminating rentals for its sub-offices.
Customer
Efficiency
24,622,104.44
20
Acquisition of Office Stand-by Power
Generator
The project aims to provide the main office a
continuous power in case of power failure within the
distribution system.
Customer
Efficiency
1,120,000.00
TOTAL
I 273,020,844.65
11
12
Office Buildings
to
provide
street
I
III. PROJECT EVALUATION
As prescribed in the ECDUPM, the power system model or
electric circuits used to assess distribution system's performance
should be modified to reflect the proposed projects or solutions.
Likewise, the conduct of appropriate technical analysis is necessary
in order to predict the performance of the distribution system.
NUVELCO
provided several alternative projects for each
quantified problems and ranked the technically feasible projects in
terms of technical effectiveness. The projects that were considered
technically feasible were subject to economic evaluation such as the
least cost or economic viability.
I
Page 14 of 24
Upon evaluation of the twenty (20) proposed capital projects,
the Commission hereby approves seventeen (17) projects proposed
by NUVELCO with an approved amount of One Hundred NinetyEight Million One Hundred Sixty-One Thousand Five Hundred
Thirty and 21/100 Pesos (PhP198,161,530.21). The remaining
three (3) projects shall be deferred for failure of NUVELCO to provide
technical justifications.
Shown below is the summary of the projects with modification
and the corresponding costs:
Project
Primary
Distribution
Project
Name
Proposed
1,872,640.00
3
8,308,389.06
5
6
Acquisition of Distribution Upgrading
7
Replacement
Materials
of Rotten Poles
Distribution
Replacement
of Overloaded
9
Replacement
Clustering
10
12
Acquisition
13
14
Acquisition
of Meter Reading/Billing
15
Acquisition
16
Acquisition
Hardware
Software
and
17
Acquisition of Accounting, Payroll, Warehousing
Member-Consumer
and
18
Acquisition
19
Construction
20
Acquisition of Office Stand-by Power Generator
Other Network
Non-network
Taken
Assessment/Reason
-
Deferment
Lack of technical justification
5,920,773.06
Cost Reduction
Technical amendments
499,520.00
382,320.00
Cost Reduction
Cost amendments
20,078,186.69
15,795,055.66
Cost Reduction
Cost amendments and
OPEX re-alignment of some
materials
58,427,779.28
43,679,477.89
Cost Reduction
Cost amendments
45,986,231.82
40,290,401.35
Cost Reduction
Cost amendments
40,898,687.35
26,299,449.79
Cost Reduction
Technical
20,796,433.78
20,618,797.19
Cost Reduction
Cost amendments
Projects
8
of
Action
Approved
Projects
1
Secondary
Cost (PhP)
Distribution
Kilowatt-hour
meter
Transformers
and
Meter
amendments
Projects
Projects
of Lineman's Tools Set
of
Engineering
-
Deferment
Re-aligned to OPEX
22,094,960.16
17,672,080.16.
Cost Reduction
Technical
2,907,072.00
790,171.20
Cost Reduction
Cost amendments
2,180,360.00
1,626,632.00
Cost Reduction
OPEX re-alignment
materials
of some
6,968,925.98
2,458,600.00
Cost Reduction
OPEX re-alignment
materials
of some
Deferment
Unavailable
807,520.00
Gadgets
Analysis
7,500,000.00
-
amendments
cost breakdown
2,340,800.00
130,872.00
Cost Reduction
Technical Amendments
24,622,104.44
16,432,029.93
Cost Reduction
Cost amendments & OPEX
re-alignment of some
materials
1,120,000.00
453,635.90
Cost Reduction
Cost amendments
IV. COSTANALYSIS
NUVELCO's estimated the cost of its projects based on the
prevailing market price through public, transparent and competitive
bidding process.
Page 15 of 24
The Commission made an assessment of the proposed project
cost in accordance with the Valuation Handbook prescribed in
Resolution No. 17, series of 2010 (A Resolution Adopting the
Valuation Handbook for the
Cost Valuation of System
Distribution Utilities Operating
[PBR))" and the latest NEA
Optimized Depreciated Replacement
Fixed Assets of Privately Owned
Under Performance-Based Regulation
Price Index for the year 2012. The
Commission reduced the project costs that exceeded the benchmark
provided in the said Valuation Handbook or the NEA price index and
retained the estimated project costs that are closed to the said
benchmarks.
Shown below is the comparison of the proposed estimated
cost, the Commission's Price Benchmark and the 2012 NEA Price
Index:
Equipment
Specification
Unit Cost (PhP/Unit)
Unit
Proposed'
ERC'"
NEA'"
-
Air-break Switch
Outdoor Type, 69kV
No.
230,720.00
No.
587,864.13
805,400.00
No.
5,369.81
4,800.00
4,674.00
21,320.00
440,904.39
-
Recloser
Automatic,
Cut-out and Arrester
15kV, Distribution
Overhead Conductor
Bare, ACSR #2
km
32,116.01
33,700.00
Overhead Conductor
Bare, ACSR #1/0
km
47,985.50
52,200.00
30,140.00
Overhead Conductor
Duplex, ACSR #6
km
21,193.60
27,400.00
20,770.00
Overhead Conductor
Duplex, ACSR #2
km
56,200.17
58,500.00
41,580.00
Distribution Transformer
15 KVA
No.
68,137.13
75,000.00
59,638.33
25 KVA
No.
88,407.58
95,000.00
77,380.00
37.5 KVA
No.
107,929.68
107,000.00
94,467.00
50 KVA
No.
126,173.31
124,000.00
110,435.00
Pole
30 ft., steel
No.
12,710.16
16,100.00
10,204.05
Pole
35 ft., steel
No.
18,499.55
19,300.00
12,716.92
Pole
40 ft., steel
No.
22,156.74
27,800.00
17,395.25
Pole
45 ft., steel
No.
26,085.11
34,200.00
20,420.75
35,500.00
3-phase, 15kV, 630A
Class
KWh Meter
Programmable
No.
33,600.00
KWh Meter
30A, bottom connected
No.
796.95
KWh Meter
Class 200, 15A, 2W
No.
1,747.70
Electronic, Polyphase
2,200.00
818.57
1,768.69
The proposed costs and the NEA price benchmark were based
only on the material costs while the Commission's valuation includes
all the necessary cost in establishing and installing such equipment or
materials.
It can be observed from the aforesaid table that most of the unit
costs are comparable and lesser than the abovementioned price
benchmarks. Meanwhile, the Commission allowed an inflation rate
factor of 3% to cover the future increase in cost of the proposed
materials/equipment.
1 The proposed
unit cost does not include contingency
2 The ERC and NEA price benchmarks
rate factors and VAT
already includes contingency
rate factors and VAT
Page 16 of 24
V. PROJECT DESIGN
The. acquisition of several major equipment such as the
distribution transformers and conductors, and protection equipment
(circuit breakers, disconnect switches, fuse cut-outs and surge
arresters) are necessary to ensure the safety of the entire distribution
system.
Moreover, the acquisition of revenue and monitoring
meters, engineering hardware and software programs are vital tools
necessary for monitoring the power quality and reliability of the
system, and other parameters needed to provide an efficient and
reliable power service to the consumers. These parameters are also
in compliance with the provisions of the Philippine Distribution Code
(PDC).
The design of the proposed electrical projects complies with the
standards of NEA Engineering Bulletin and the Philippine Electrical
Code (PEC).
VI. PROJECT STATUS
During the ocular inspection, it was disclosed that some
projects were already implemented by NUVELCO, as follows:
Project
No.
Project
Title
Project
Type
Actual Cost
(PhP)
Remarks
3
Installation of Fuse Cut-out and Auto-link
Resettable Electronic Sectionalizer along
lateral distribution lines
Safety
999,830.00
Partially implemented
6
Acquisition
Materials
Safety
8,973,222.47
Safety
7,076,355.84
Capacity
9,443,115.82
System Efficiency
3,836,789.64
1,025,375.00
625,772.81
of Distribution
Upgrading
7
Replacement
of Rotten Poles
8
Replacement
Transformers
of Overloaded
9
Replacement of Kilowatt-hour
Meter Clustering
10
Connection of New Customers due to Add-on
Projects (KWh meters & accessories)
Capacity
18
Acquisition
Customer Efficiency
Distribution
meter and
Total
31,980,461.58
I
NUVELCO decided to implement the abovementioned projects
in order to maintain a safe and secure operation of its power system.
It is incumbent upon any distribution utility to ensure the safety of its
consuming public and to address the increasing power requirement of
its customers.
Page 17 of 24
VII. FINANCING PLAN/RATE IMPACT ANALYSIS
NUVELCO intends to finance the proposed projects through
loan from any available private banking institution.
Although
NUVELCO has not yet identified the bank, it used the NEA loan
package to simulate the rate impact of its expenses on Reinvestment
Fund for Sustainable CAPEX (RFSC) rate. The loan shall have an
annual interest rate of g% and quarterly repayment within ten (10)
years. NUVELCO shall use its previous collection and the projected
revenues from the RFSC to settle the annual amortization.
NUVELCO proposed a staggered scheme on the private banks
loan releases. The release of the loan proceeds shall be on an
annual basis as projected in the annual implementation of the
projects. Considering the modification as to the cost requirements of
some of the projects, the projected annual loan amount shall be as
follows:
Projected
Financier
I
2011
Private banks
I
26,624,719.41
Loan Amount
I
2012
4,860,841.36
I
(PhP)
I
2014
85,495,714.81
Total (PhP)
2015
I
81,180,254.63
198,161,530.21
The Commission simulated the impact on NUVELCO's existing
RFSC rate if it opted not to avail of any loan and will just utilize its
expected revenues from the RFSC to finance the entire CAPEX
projects. Shown below is the Commission's simulation:
2011
Energy Sales Forecast, KWh
Approved RFSC Rate, PhP/KWh
Cash balance beginning, PhP, excess/(shortfall)
2012
2013
83,150,000
88,305,000
93,825,000
0.3722
0.3722
0.3722
2014
2015
99,763,000
Entire 5 years
106,115,000
0.3722
471,158,000
0.3722
0.3722
267,172.00
(3,448,999.23)
16,680,627.59
43,762,095.77
(13,083,245.26)
267,172.00
30,948,430.00
32,867,121.00
34,921,665.00
37,131,788.60
39,496,003.00
175,365,007.60
313,173.13
313,173.13
313,173.13
313,173.13
313,173.13
1,565,865.63
31,261,603.13
33,180,294.13
35,234,838.13
37,444,961.73
39,809,176.13
176,930,873.23
31,528,775.13
29,731,294.89
51,915,465.71
81,207,057.49
26,725,930.86
177,198,045.23
26,624,719.41
4,860,841.36
85,495,714.81
81,180,254.63
198,161,530.21
8,153,369.95
8,153,369.95
8,153,369.95
8,153,369.95
40,766,849.73
199,685.00
36,456.00
641,218.00
608,852.00
1,486,211.00
34,977,774.36
13,050,667.31
8,153,369.95
94,290,302.76
89,942,476.57
240,414,590.93
(3,448,999.23)
16,680,627.59
43,762,095.77
(13,083,245.26)
(63,216,545.71)
(63,216,545.71)
CASH INFLOWS
Current year RFSC Collection, PhP
50% income on leased properties,
PhP
Total Cash Inflows, PhP
Available
cash for disbursement,
PhP
..-
CASH OUTFLOWS
CAPEX Requirement,
-
-
PhP
Previous Loan Amortization,
PhP
ERC Permit Fees, PhP
Total Cash Outflows, PhP
Cash balance ending,
I Rate Impact
PhP, excess/(shortfall)
on RFSC, PhP/KWh, excess/(shortfall)
I
(0.0415)
I
0.1889
8,153,369.95
I
0.4664
I
(0.1311)
I
(0.5957)
Based on the above simulation, the revenues derived from
NUVELCO's existing RFSC rate is not sufficient to finance the entire
I
(0.1342)
I
Page 18 of 24
CAPEX projects. There is a need to increase its RFSC rate by
PhPO.1342/kWh and thus, the need to avail a loan is necessary.
The Commission also made several simulations on the
indicative effect of NUVELCO's existing RFSC rate using the
following conditions prescribed under the proposed financing scheme
of the capital expense:
1.
The proposed loan terms and conditions:
2011
_Energy Sales Forecast, KWh
2012
83,150,000
0.3722
2013
2014
88,305,000
93,825,000
99,763,000
0.3722
0.3722
0.3722
2015
Entire 5 years
106,115,000
471,158,000
0.3722
0.3722
267,172.00
23,175,720.18
44,100,340.44
66,373,664.00
90,215,893.15
267,172.00
30,948,430.00
32,867,121.00
34,921,665.00
37,131,788.60
39,496,003.00
175,365,007.60
313,173.13
313,173.13
313,173.13
313,173.13
313,173.13
26,624,719.41
4,860,841.36
85,495,714.81
81,180,254.63
198,161,530.21
CASH INFLOWS
PhP
Loan proceeds from financial institutions,
PhP
Available
PhP
-
1,565,865.63 ..
57,886,322.54
38,041,135.49
35,234,838.13
122,940,676.54
120,989,430.75
375,092,403.43
58,153,494.54
61,216,855.66
79,335,178.57
189,314,340.53
211,205,323.90
375,359,575.43
198,161,530.21
CASH OUTFLOWS
--
CAPEX Requirement,
PhP
CAPEX Amortization,
PhP
26,624,719.41
PhP
8,153,369.95
Cash balance
I
ending,
Rate Impact on RFSC, PhP/KWh, excess/(shortfall)
2.
I
-
4,860,841.36
-
85,495,714.81
81,180,254.63
4,065,847.91
4,808,144.63
4,808,144.63
17,864,153.54
31,546,290.71
8,153,369.95
8,153,369.95
8,153,369.95
8,153,369.95
40,766,849.73
-
199,685.00
36,456.00
641,218.00
608,852.00
1,486,211.00
34,977,774.36
17,116,515.22
12,961,514.57
99,098,447.38
107,806,630.11
271,960,881.64
23,175,720.18
44,100,340.44
66,373,664.00
90,215,893.15
103,398,693.79
103,398,693.79
I
0.2787
0.4994
I
I
0.7074
0.9043
I
0.9744
I
0.2195
I
NEA loan portfolio with 8% annual interest rate at 15
years repayment:
2011
2012
2013
83,150,000
88,305,000
93,825,000
0.3722
0.3722
0.3722
267,172.00
23,175,720.18
45,102,432.29
30,948,430.00
32,867,121.00
34,921,665.00
313,173.13
313,173.13
26,624,719.41
4,860,841.36
2014
2015
99,763,000
Entire 5 years
106,115,000
0.3722
471,158,000
0.3722
0.3722
68,247,625.20
93,274,896.83
267,172.00
37,131,788.60
39,496,003.00
175,365,007.60
313,173.13
313,173.13
1,252,692.50
85,495,714.81
81,180,254.63
198,161,530.21
CASH INFLOWS
PhP
PhP
Available
PhP
-
57,886,322.54
38,041,135.49
34,921,665.00
122,940,676.54
120,989,430.75
374,779,230.31
58,153,494.54
61,216,855.66
80,024,097.29
191,188,301.73
214,264,327.58
375,046,402.31
-,-._-----
CASH OUTFLOWS
-..
CAPEX Requirement,
PhP
CAPEX Amortization,
PhP
26,624,719.41
PhP
I
4,860,841.36
-
3,063,756.07
85,495,714.81
81,180,254.63
198,161,530.21
3,623,102.14
3,623,102.14
13,461,253.35
23,771,213.71
--"---_._.
-
8,153,369.95
8,153,369.95
8,153,369.95
40,766,849.73
641,218.00
608,852.00
1,486,211.00
8,153,369.95
8,153,369.95
199,685.00
36,456.00
34,977,774.36
16,114,423.38
11,776,472.09
97,913,404.90
103,403,729.93
264,185,804.65
23,175,720.18
45,102,432.29
68,247,625.20
93,274,896.83
110,860,597.66
110,860,597.66
0.2787
I
0.5108
I
0.72741
0.9350
I
1.0447
I
0.2353
I
Page 19 of 24
3.
RFSC utilization shall be maximized and the deficit to
fully implement the projects shall be sourced through a
loan from NEA with 8% annual interest rate at 15 years
repayment period:
2011
2012
83,150,000
0.3722
2013
2014
2015
88,305,000
93,825,000
99,763,000
106,115,000
0.3722
0.3722
0.3722
0.3722
-
267,172.00
19,732,744.05
Entire 5 years
471,158,000
0.3722
-
46,104,156.34
267,172.00
CASH INFLOWS
Current year RFSC Collection,
PhP
PhP
PhP
32,867,121.00
313,173.13
313,173.13
PhP
34,921,665.00
-
-
3,448,999.23
Available
30,948,430.00
-
37,131,788.60
39,496,003.00
313,173.13
313,173.13
175,365,007.60
1,252,692.50
11,138,067.46
51,811,861.39
66,398,928.08
34,710,602.36
33,180,294.13
34,921,665.00
48,583,029.19
91,621,037.52
243,016,628.18
34,977,774.36
33,180,294.13
54,654,409.05
94,687,185.52
91,621,037.52
243,283,800.18
85,495,714.81
81,180,254.63
198,161,530.21
396,882.77
1,678,560.94
2,869,209.25
8,153,369.95
8,153,369.95
40,766,849.73
641,218.00
608,852.00
1,486,211.00
-
CASH OUTFLOWS
CAPEX Requirement,
PhP
CAPEX Amortization,
PhP
26,624,719.41
PhP
I
396,882.77
396,882.77
8,153,369.95
8,153,369.95
8,153,369.95
199,685.00
36,456.00
34,977,774.36
-
I
-
4,860,841.36
-
-I
-
13,447,550.07
8,550,252.71
19,732,744.05
46,104,156.34
0.22351
0.4914
94,687,185.52
I
91,621,037.52
-
243,283,800.18
-
-
-
-I
-I
-I
Based on the above simulations, NUVELCO's existing RFSC
rate will not be sufficient to fund its capital expense. It is therefore
strategically optimal if NUVELCO will avail of the loans to finance
CAPEX projects. To mitigate the rate impact on its rate, NUVELCO
should negotiate for longer terms, lower interest rate and reasonable
loan amount.
However, the above simulations do not reflect the fact that
there will still be a reduction in NUVELCO's overall rate due to the
efficiency, reliability (less ENS) and system loss reduction in the
implementation of the proposed projects.
The detailed discussion of the Commission's resolution of the
proposed capital expenditures is embodied in a separate document
hereto attached as Annex "A" and made integral part of this Decision.
A perusal of the evidence presented herein showed that the
approval of NUVELCO's capital projects for the years 2011 to 2014 is
in accordance with the provisions of R.A. 9136 and the Commission's
"Resolution Amending the Rules for Approval of Regulated Entities'
Capital Expenditure Projects" and will redound to the benefit of the
electricity consumers in terms of continuous, reliable and efficient
power supply as mandated by R.A. 9136, or the Electric Power
ERC Case No. 2012'-043 RC
Page 20 of 24
Industry Reform Act of 2001 (Section 2. Declaration of Policy - (b)
"to ensure the quality, reliability, security and affordability
supply of electric power'?
the foregoing premises
application filed by the Nueva Viscaya Electric
(NUVELCO) for approval of its capital projects for
2014 is hereby APPROVED with MODIFICATION
following conditions:
considered, the
Cooperative, Inc.
the years 2011 to
and subject to the
WHEREFORE,
a.
The following are the confirmed projects with the
corresponding costs:
Confirmed
Project
Primary
Distribution
Name
2011
of Distribution
Upgrading
Distribution
of Overloaded
Replacement
of Kilowatt-hour
Materials
Distribution
Transformers
meter and Meter Clustering
2,351,456.52
712,816.67
287,013.33
2,063,512.71
3,063,342.71
8,267,978.38
5,494,917.46
705,244.09
1,581,438.38
2,731,553.92
17,456,116.89
11,704,776.39
24,532,472.73
8,046,925.98
3,375,628.92
1,396,189.84
461,160.72
18,292,983.75
9,585,343.94
27,736,099.57
13,422,133.58
595,580.00
429,795.00
9,313,255.66
10,338,630.66
10,429,040.16
807,520.00
12,464,931.27
10,429,040.16
807,520.00
130,872.00
12,464,931.27
85,495,714.81
116,981,275.59
Projects
Acquisition
of Vehicles
Acquisition
Acquisition
Construction
2,351,456.52
Projects
(kWh Meters and Accessories)
Non-Network
-
Projects
Replacement
Other Network
Total (PhP)
2014
-
of Rotten Poles
Secondary
Cost (PhP)
2012
Auto-Recloser
Replacement
Project
Projects
Installation of Three-phase
Acquisition
of the
-
130,872.00
-
Total (PhP)
26,624,719.41
b. The following are the
corresponding costs:
4,860,841.36
approved
Approved
Project
Primary
Distribution
Installation
Name
Auto-recloser
Installation of Substation
Solano Substations
Feeder Metering at Bambang and
Installation
of Revenue Meter to Alfonso Castafleda
Acquisition
of Distribution
Secondary
Replacement
Upgrading Materials
of Rotten Poles
Distribution
projects
Project
with
Cost (PhP)
2015
Projects
of Three-phase
Replacement
-
2,419,945.56
2,857,430.35
268,800.00
382,320.00
4,090,279.27
19,147,005.17
Projects
of Overloaded
Distribution Transformers
12,554,301.79
the
Page 21 of 24
I Replacement
of Kilowatt-hour meter and Meter Clustering
12,877,316.21
I
10,280,166.53
I
Other Network Projects
Connection of New Customers due to Add-on Projects
Non-Network Projects
Acquisition of Test Instruments
Acquisition of Meter Reading/Billing Gadgets
Acquisition of Office Furnitures and Equipment
Acquisition of Engineering Analysis Software and Hardware
Acquisition of Street Lighting Equipment
Construction of NUVELCO Office Buildings & Facilities
Acquisition of Office Stand-by Power Generator
Total (PhP)
a.
571,032.00
7,243,040.00
790,171.20
819,112.00
2,458,600.00
3,967,098.66
453,635.90
81,180,254.63
I
The following projects are deferred and may be included
in the next CAPEX application of NUVELCO with
sufficient justifications:
1. Installation of Air Break Switches;
2. Acquisition of Lineman's Tools Set; and
3. Acquisition of Accounting, Payroll, Warehousing and
Member-Consumer Information System Software;
b.
NUVELCO should secure the appropriate Certificate of
Compliance (COC) prior to the operation of its proposed
generation facility pursuant to Resolution No. 09, Series
of 2010;
c.
It should conduct competitive biddings for the acquisition
of the materials and equipment in accordance with the
existing rules and regulations;
d.
It should file an application for authority to secure loan to
finance its capital expenditures; and
e.
NUVELCO is directed to remit to the Commission a total
permit fee in the amount of One Million Four Hundred
Eighty-Six Thousand Two Hundred Eleven Pesos
(PhP1,486,211.00) within fifteen (15) days from receipt
hereof, computed as follows:
Page 22 of 24
PhP198, 161,530.21
----------------------------
x
Ph PO.75 = PhP1,486,211.00
PhP100.00
SO ORDERED.
Pasig City, December 18,2014.
AIDA G. c~z~~
Chairperson
ALFREDOJ~
r
G..
/~~~t
GL~~leTORIA
. YAP-TARue
Commissioner
JOSEFINA PATR
C
Commissio er
. MAGPALE-ASIRIT
issioner
Page 23 of 24
Copy Furnished:
1.
ATTY.RANULFOM. OCAMPO
Counsel for Applicant
8/F STRATA 100, F. Ortigas Jr. Road
Ortigas Center, 1605 Pasig City
2.
The General Manager
NuevaViscaya Electric Cooperative,Inc. (NUVELCO)
3.
The Office of the Solicitor General
134 Amorsolo Street, Legaspi Village
Makati City, Metro Manila
4.
The Commission on Audit
Commonwealth Avenue
Quezon City, Metro Manila
5.
The SenateCommitteeon Energy
GSIS Bldg., Roxas Blvd., Pasay City
Metro Manila
6.
The House Committeeon Energy
Batasan Hills, ,Quezon City, Metro Manila
7.
Office of the Provincial Governor
Province of NuevaVizcaya
8.
Office of the Municipal Mayor
Municipality of Villaverde
Province of Nueva Vizcaya
9.
Municipality of Bagabag
10.
Municipality of Diadi
11.
Municipality of Ambaguio
12.
Municipality of Solano
13.
Municipality of Bayombong
14.
Municipality of Quezon
Page 24 of 24
15.
Municipality of Kayapa
16.
Municipality of Bambang
17.
Municipality of Kasibu
18.
Municipality of Aritao
19.
Municipality of Dupax del Norte
20.
Municipality Dupax del Sur
21.
Municipality of Santa Fe
22.
Municipality of Alfonso Castaneda
ANNEXA
DETAILED PROJECT DISCUSSION
I.
NETWORK PROJECTS
1
Project Description
I
Duration
• Acquisition and installation of eight (8) disconnect
switches within the primary lines and laterals of the 2012 to 2013
distribution s stem.
Proposed CAPEX Cost (PhP)
2012
2011
922,880.00
-
2013
949,760.00
2014
-
Total
I
1,872,640.00 I
Project Justification
• The proposed project shall provide system's reliability improvement
within the distribution system since load transfer can be implemented
in case fault occurs within the ortion of the line.
Technical Analysis
• NUVELCO did not submit any technical documents to substantiate its
claim of achieving such goal. During the inspection, it was disclosed
that there is no available data to determine the possible improvement
that should be reflected in the reliability indices such as System
Average Interruption Duration Index (SAlOl) or Expected Energy Not
Served (EENS).
• The Commission deferred the proposed project considering the
insufficient technical analysis to support the claim of the project's
benefit.
Approval
Project to continue as proposed
Project to continue with REVISED Capital Expenditure
Project to continue with Technical Amendments
Project to be deferred which may be included in its next
application with additional justification
I
Remarks
./
2
Installation of Three-phase Auto-recloser
Distribution Line Pro'ect
Project Description
I
Duration
• Acquisition of eight (8) units of 3-phase Auto-recloser
which will be installed in the main feeders of 2012 to 2013
NUVELCO's
substations
replacing the existing
protection devices therein.
2013
2012
2011
- 2,351,456.52 2,419,945.56
2014
Total
I
- 4,771,402.08 I
• The project intends to improve the existing distribution
operation and maintenance and to rovide safet .
system's
Technical Analysis
• An auto-recloser is a circuit breaker equipped with a mechanism that
can automatically close the breaker after it has been opened due to a
fault. In order to prevent damage to the distribution network, reclosers
are used on the overhead distribution systems which will detect and
interrupt momentary the faults. Since several faults on overhead lines
clear themselves,
a recloser improves service continuity by
automatically restoring power to the line after a momentary fault
without the need of any human intervention. These advantages are
highly desired by the business enterprises which are intolerant to
outage and interruptions being inimical to its operations.
• The table below shows the feeders to be installed with Auto-reclosers:
No.
1
2
3
4
5
6
7
8
•
Substation
Bambang
Bayombong
Solano
Feeder Name
F21BM4
F22BM4
F23BM4
F24BM4
F22B04
F24B04
F23S04
F24S04
Based on the technical analysis conducted by NUVELCO, there is no
other alternative solution to protect the distribution system but to install
protective devices. The EC selected auto-recloser as against fuse as
its protective device considering that it has the capability to sense
minimum fault in its rotected feeders and isolate the same leavin the
2
un-faulted portion to remain unaffected thus, limiting the magnitude of
curtailed power. The said device has the capability to clear the fault
and reclose the circuit and resume the power without the need of any
human intervention. These advantages are highly desired by the
business enterprises which are intolerant to outage and interruptions
which are inimical to its operations.
•
Fuses, on the other hand, should not be used in a three phase system
since this can only isolate faulted phase and will bring problem to
three-phase customers. Moreover, the incapability of fuse to sense
zero-sequence component is one of the reasons why auto-recloser is
the optimal device to correct the problem.
• The proposed project shall also comply with the prOVIsions of the
Philippine Distribution Code (PDC) for safety and protection of the
Economic and Cost Analysis
• Shown below is the approved project cost breakdown, to wit:
Materials
Auto-Recloser
Specifications
3-phase, 15kV, 560A
No. of
Units
Unit Cost
(PhP/unit)
Year
4
4
587,864.13
604,986.39
2012
2013
Grand Total
Project Cost
(PhP)
2,351,456.52
2,419,945.56
I
4,171,402.08
I
• The proposed unit cost has an annual increase of 3% due to annual
inflation rate.
• The cost of the device is not available with Commission and NEA price
benchmarks. However, the proposed cost is comparable with the
existing market price and available price reference found on the
internet.
Approval
Pro'ect to continue as ro osed
Pro'ect to continue with REVISED Ca ital Ex enditure
Pro'ect to continue with Technical Amendments
a Iication with additional 'ustification
Approved CAPEX Cost (PhP)
2013
2012
2011
- 2,351,456.52 2,419,945.56
I
2014
-
Remarks
./
Total
I
4,771,402.08 I
3
3
Electronic Sectionalizer alon lateral distribution lines
Project Description
I
Duration
• Acquisition of fuse cut-outs and surge arrester
combination
device,
and
auto-link
resettable
2011 to 2014
sectionalizer which shall be installed within the entire
distribution network.
2013
2012
2011
1,216,965.40 2,558,439.68 2,770,307.98
2014
1,762,676.00
I
I
Total
8,308,389.06\
• The proposed project is intended to protect the cooperative's
distribution network assets to ensure safe distribution s stem.
entire
Technical Analysis
• The operation of the system should satisfy all the prevailing safety
standards considering that safety is a criterion that does not settle for
compromise. The distribution utility should always ensure the satter of
the consumers from the hazards intrinsic in the business of electricity.
• The proposed number of protection equipment to be acquired is based
on the actual number of protection equipment that is lacking within the
• The sectionalizer, which is one of the components of the proposed
project, is already above the minimum standard for protection
equipment considering that the combination of the fuse cut-outs and
surge arresters are the minimum standard protection equipment being
used by several distribution utilities.
• The acquisition of fuse cut-outs and surge arrester combination device
is necessary to address the identified problem.
• The project should be supported by technical and economic analysis
which will justify its advantage compared with the minimum standard
requirement.
• The Commission deferred consideration for the proposed acquisition
of sectionalizer considerin
that NUVELCO did not submit an
4
I
technical or economic analysis to justify its benefits.
• The table below shows the proposed project cost breakdown, to WIt:
1
2
No. of
Units
Materials
No.
Cutout & Arrester
Cutout & arrester w/load break
3
Cutout & Arrester
4
Unit Cost
(PhP/unit)
5,369.81
25
5,720.16
143,004.12
220
5,530.90
1,216,798.13
28
5,891.77
12
242
5,691.99
30
6,063.37
8
Autolink-resettable
12
100,912.00
9
Cutout & Arrester
Autolink-resettable
6
Cutout & Arrester
7
10
Electronic
Electronic
Auto Sectionalizer
Auto Sectionalizer
1,073,961.28
200
98,056.00
5
Project Cost
(PhP)
Year
266
5,853.09
33
6,234.98
2011
164,969.55
2012
1,176,672.00
1,377,462.74
181,901.24
2013
1,210,944.00
1,556,921.67
2014
205,754.33
I
Grand Total
8,308,389.06
I
• The proposed unit cost has an annual increase of 3% due to annual
inflation rate consideration.
• With the deferment of acquiring sectionalizer, the approved project
costs are as follows:
No.
Materials
1
Cutout & Arrester
2
3
Cutout & Arrester
4
5
Cutout & Arrester
6
7
Cutout & Arrester
8
No. of
Units
Unit Cost
(PhP/unit)
Project Cost
(PhP)
Year
1,073,961.28
200
5,369.81
25
5,720.16
143,004.12
220
5,530.90
1,216,798.13
28
5,891.77
164,969.55
242
5,691.99
1,377,462.74
30
6,063.37
266
5,853.09
33
6,234.98
2011
2012
2013
181,901.24
1,556,921.67
2014
Grand Total
205,754.33
I
5,920,773.06
• The required equipment unit costs of the proposed
roximate with the NEA rice benchmark.
project
I
Remarks
2014
1,762,676.00
Total
Approval
a lication with additional 'ustification
2013
2012
2011
1,216,965.40 1,381,767.68 1,559,363.98
I
are
I
5,920,773.06
5
I
4
Installation of Substation Feeder Metering at
Bamban and Solano Substations
Project Description
• Acquisition of eight (8) units of kilowatt-hour (KWh)
meters which shall be installed at Bambang and
Solano Substations.
2012
2011
268,800.00
I
Duration
2011
2014
2013
-
-
Total
268,800.00
• The proposed project is necessary in order for the cooperative to
monitor the system efficiency performance of the entire distribution
network.
•
It will also aid the EC's technical staff in monitoring and planning for
the development of the distribution s stem.
Technical Analysis
• Bambang and Solano Substations are presently being metered and
billed by power suppliers at the primary side of the line (69kV).
However, the feeders of each existing substations do not have meters
installed in it.
• Kilowatt-hour (KWh) meters installed in the secondary side or in each
feeder are crucial in order to determine the actual demand (active and
reactive power), actual energy consumption, and other important data
relative to electrical parameters, which is a crucial factor in power
distribution system analysis. The data retrieved from these meters will
then be used to determine the specific improvements needed in the
distribution s stem such as efficienc and ower ualit.
• Shown below is the proposed project cost breakdown, to wit:
Materials
KWhMeter
Specifications
GE, KV2C,Fitzall
No. of Units
8
Unit Cost (PhP/unit)
Project Cost (PhP)
33,600.00
• The required equipment unit costs of the proposed
roximate with the NEA rice benchmark.
268,800.00
project
are
6
I
I
Approval
Pro.ect to continue as ro osed
Pro.ect to continue with REVISED Ca ital Ex enditure
Pro.ect to continue with Technical Amendments
a lication with additional .ustification
I
Remarks
./
2011
268,800.00
2014
2013
2012
-
-
-
Total
I
268,800.00 I
7
5
Project Description
I
• Acquisition of primary distribution line metering
facilities to be installed at Alfonso Castaneda, Nueva
Vizca a.
2012
2011
499,520.00
2014
2013
-
-
Duration
2011
Total
499,520.00
• The installation of meters is necessary to determine the accurate
energy consumption of the entire customers in the Municipality of
Alfonso, Castaneda, Nueva Vizca a.
Technical Analysis
• The customers in the Municipality of Alfonso Castaneda, one of the
franchise areas of NUVELCO, are being served by Aurora Electric
Cooperative, Inc. (AURELCO) through a sale for resale agreement
with NUVELCO. One of the conditions in the said agreement requires
that NUVELCO shall be responsible for installing necessary primary
metering equipment at the delivery point located at the boundary of
San Juan, Aurora and Lublub, Alfonso Castaneda, Nueva Vizcaya.
•
In order to comply with the said agreement, NUVELCO shall purchase
the necessary metering facilities which shall then be installed at the
agreed connection point.
No.
Specifications
Materials
No. of
Units
Unit Cost
(PhP/unit)
Year
Project Cost
(PhP)
1
KWh meter
Electronic, 3-phase
1
33,600.00
33,600.00
2
Current Transformer
13.8kV, 10:5
3
72,800.00
218,400.00
3
Potential Transformer
13.8kV, 70:1
3
72,800.00
4
Meter Box
-
1
7,840.00
5
PT Box
1
7,840.00
7,840.00
1
7,840.00
7,840.00
1
5,600.00
5,600.00
6
CT Box
7
Accessories
.
-
218,400.00
2011
Grand Total
7,840.00
499,520.00
I
• The Commission calculated the proposed project cost which resulted
to the reduction. The reduction of the ro'ect was based rimaril on
8
the cost alignment of the current and potential transformers with the
price benchmark provided in the ERC Valuation handbook. The said
price index already includes installation, plant and overhead costs for
the meter and transformers, and the accessories required for
installation of the same.
No.
1
2
3
4
5
6
KWh meter
Current Transformer
Potential Transformer
Unit Cost
(PhP/unit)
No. of
Units
Specifications
Materials
GE, KV2C, Fitzall
13.8kV, 10:5
13.8kV, 70:1
Meter Box
PT Box
CTBox
33,600.00
54,300.00
54,100.00
7,840.00
1
3
3
1
1
1
Project Cost
(PhP)
Year
33,600.00
162,900.00
162,300.00
7,840.00
7,840.00
7,840.00
2011
7,840.00
7,840.00
382,320.00
Grand Total
Approval
I
Remarks
2011
382,320.00
2014
2013
2012
-
-
-
Total
382,320.00
9
uisition of Distribution U
& Secondar
Project Description
I
• Replacement
of several
aged and damaged
distribution
network facilities within the entire
franchise area. Said facilities shall be replaced with
the same specifications accordingly.
Duration
• The following are the distribution assets to be
acquired, to wit:
a) Conductor with sizes ACSR #2, ACSR #1/0,
ACSR #6 duplex and ACSR #2 duplex; and
b) Electronic
3-phase
KWh
meters
and
its
correspondin accessories.
2011 to 2014
2013
2012
2011
4,905,309.89 4,717,929.15 5,264,232.36
2014
5,190,715.29
Total
20,078,186.69
• The proposed project is necessary in order to maintain a safe, efficient
and reliable distribution s stem.
Technical Analysis
• Based on the applicant's site survey, it was determined that some of
the existing distribution line assets are already old and dilapidated.
These assets are threat to public safety and a contributing factor to the
inefficiency and unreliability of the distribution system.
• The proposed project will ensure the safety and eliminate the
hazardous conditions caused by these assets, It shall also contribute
in maintainin an efficient and reliable distribution s stem.
• The determination of the assets to be replaced was based on the
actual inventory done by the cooperative. The proposed cost estimates
includes an annual inflation rate factor of 3%.
• Shown below is the project cost breakdown, to wit:
10
No.
Specifications
Materials
Conductor
1
30.00
Bare, ACSR #1/0
30.00
Duplex, ACSR #6
25.00
Duplex, ACSR #2
10.00
GE, KV2C
Meter Seal
-
Conductor
2
Bare, ACSR #2
35.00
Bare, ACSR #1/0
20.00
Duplex, ACSR #6
25.00
Duplex, ACSR #2
10.00
Meter
GE, KV2C
Meter Seal
-
-
-
-
Accessories
Conductor
Bare, ACSR #2
30.00
Bare, ACSR #1/0
30.00
Duplex, ACSR #6
25.00
Duplex, ACSR #2
3
-
-
Accessories
-
Bare, ACSR #2
Meter
Meter
GE, KV2C
Meter Seal
-
-
Conductor
4
40.00
Bare, ACSR #1/0
20.00
Duplex, ACSR #6
25.00
Duplex, ACSR #2
10.00
Meter
GE, KV2C
Meter Seal
-
Accessories
5
33,600.00
168,000.00
49,835.02
15.10
1,192,587.79
1,192,587.79
-
33,079.49
1,157,782.24
49,425.07
988,501.38
545,735.14
21,829.41
-
57,886.17
5
34,608.00
578,861.70
2012
173,040.00
58,329.62
15.55
3,750
1
1,215,679.07
1,215,679.07
-
34,042.97
1,021,289.19
50,864.63
1,525,939.03
-
22,465.21
5
35,616.00
59,572.18
595,721.75
178,080.00
65,567.18
1
1,316,004.87
1,316,004.87
-
35,006.45
1,400,258.14
-
52,304.20
1,046,083.99
5
36,624.00
577,525.53
23,101.02
61,258.18
612,581.80
2014
183,120.00
76,772.50
16.46
4,664
-
561,630.34
2013
16.01
4,096
1,294,373.33
1,294,373.33
1
I
•
529,839.94
562,001.65
2011
1
-
963,480.37
1,439,565.12
56,200.17
3,300
-
Bare, ACSR #2
32,116.01
21,193.60
-
-
Project Cost
(PhP)
Year
47,985.50
-
10.00
-
Accessories
Unit Cost
(PhP/unit)
No. of
Units
Length
I
Grand Total
20,078,186.69
I
The Commission reduced the proposed project cost based on its
assessment. The reduction was based on the elimination of meter
seals from the cost component and the cost alignment of the
conductors with the price benchmark provided in the 2012 NEA Price
Index wherein the said pnce benchmark already includes 50/0
contingency and 12% Value Added Tax (VAT). Moreover, an annual
inflation rate of 3% was retained in the said costs.
• Based on the proposed quantity of meter seals, it is possible that
NUVELCO intends to replace the existing seals of all installed KWh
meters. However, NUVELCO did not provide any justification in its
application or any reports in accordance with the rules and procedures
for the test and maintenance of electric meters of distribution utilities.
The Commission believes that the said materials should form part of
the applicant's operations and maintenance (O&M) expenditures. As
such, the proposed materials should be re-aligned to form part of the
applicant's O&M budget.
No.
Specifications
Materials
Conductor
1
Bare, ACSR #2
30.00
Bare, ACSR #1/0
30.00
Duplex, ACSR #6
25.00
Duplex, ACSR #2
10.00
GE, KV2C
Meter
Accessories
.
No. of
Units
Length
-
-
Unit Cost
(PhP/unitl
-
Year
Project Cost
(PhP)
21,320.00
639,600.00
30,140.00
904,200.00
20,770.00
41,580.00
2011
519,250.00
415,800.00
5
33,600.00
168,000.00
1
1,192,587.79
1,192,587.79
11
Conductor
2
Bare, ACSR #2
35.00
Bare, ACSR #1/0
20.00
-
Duplex, ACSR #6
25.00
-
Duplex, ACSR #2
10.00
Meter
GE,KV2C
Accessories
-
Conductor
3
Bare, ACSR #2
30.00
Bare, ACSR #1/0
30.00
Duplex, ACSR #6
25.00
Duplex, ACSR #2
10.00
Meter
GE, KV2C
Accessories
Bare, ACSR #2
Bare, ACSR #1/0
Conductor
4
-
Duplex, ACSR #6
Duplex, ACSR #2
Meter
GE, KV2C
Accessories
-
40.00
25.00
10.00
-
-
620,884.00
21,393.10
534,827.50
2012
42,827.40
5
34,608.00
173,040.00
1
1,215,679.07
1,215,679.07
22,618.39
678,551.64
31,975.53
959,265.78
-
22,034.89
428,274.00
550,872.33
2013
-
44,112.22
5
35,646.24
178,231.20
1
1,316,004.87
1,316,004.87
-
23,296.94
931,877.59
32,934.79
658,695.84
-
20.00
768,586.00
31,044.20
-
-
-
21,959.60
22,695.94
441,122.22
567,398.49
2014
-
45,435.59
5
36,715.63
183,578.14
1
1,294,373.33
1,294,373.33
454,355.89
15,795,055.66
Grand Total
Approval
a Iication with additional 'ustification
2013
2012
2011
3,839,437.79 3,741,290.57 4,124,048.04
2014
4,090,279.27
I
Remarks
Total
15,795,055.66
12
lacement of Rotten Poles
& Seconda
Project Description
• Acquisition of steel poles, with length varying from 30
up to 50 feet, which shall replace all rotten wood poles
installed within the entire distribution network.
2011
2012
I
I
112,287,546.52112,766,226.60
2013
18,298,683.53
I
Duration
2011 to 2014
2014
15,075,322,64
Total
58,427,779.28
• NUVELCO intends to replace its existing old and damaged poles in
order to maintain a safe, efficient and reliable distribution s stem.
Technical Analysis
• Based on NUVELCO's site survey, it was determined that some of the
existing poles within the distribution system are already old and
dilapidated. These distribution network assets post threat to public
safety and contributing factor to the inefficiency and unreliability of the
distribution system. It also contributes to the distribution system's
continuous and unaccounted losses or non-technical losses.
• The proposed projects will provide an assurance of eliminating hazard
and reducing nuisance interruptions caused by these assets. It will
also provide efficiency and reliability improvement in the distribution
s stem.
• The determination of the number of poles for replacement was based
on the actual inventory done by the cooperative. The proposed project
cost includes labor cost which was based on 150/0, 16%, 170/0, and
18% of the material cost for the years 2011,2012,2013,
and 2014,
respectively, and an annual inflation rate factor of 3%.
•
Shown below is the recommended project cost breakdown, to wit:
No.
1
2
Materials
Poles
Poles
Specifications
No. of
Units
Unit Cost
(PhP/unit)
Year
Material Cost
(PhP)
Labor Cost
(PhP)
30' Steel
170
12,710.16
2,160,727.26
324,109.09
35' Steel
200
18,499.55
3,699,910.86
554,986.63
40' Steel
100
22,156.74
2,215,673.52
332,351.03
45' Steel
100
26,085.11
2,608,511.42
391,276.71
30' Steel
170
13,091.47
2,225,549.08
356,087.85
35' Steel
200
19,054.54
3,810,908.19
609,745.31
2011
2012
Project Cost
(PhP)
12,287,546.52
12,766,226.60
13
3
4
Poles
Poles
40' Steel
100
22,821.44
2,282,143.73
365,143.00
45' Steel
100
26,867.67
2,686,766.76
429,882.68
30' Steel
165
13,482.77
2,224,657.05
378,191.70
35' Steel
231
19,609.53
4,529,800.87
770,066.15
40' Steel
167
23,486.14
3,922,185.27
666,771.50
45' Steel
166
27,650.22
4,589,936.69
780,289.24
2013
50' Steel
11
33,938.23
373,320.57
63,464.50
30' Steel
164
13,854.06
2,272,065.84
408,971.85
35' Steel
196
20,164.52
3,952,245.92
711,404.27
24,150.84
2,753,195.92
495,575.27
614,147.93
69,526.18
40' Steel
114
2014
45' Steel
120
28,432.77
3,411,932.94
50' Steel
11
35,114.23
386,256.53
I
Grand Total
I
50,105,788.42
I
8,321,990.86
18,298,683.53
15,075,322.64
I
58,427,779.28
I
• The Commission reduced the proposed project cost based on its
assessment. The reduction was based on the cost alignment of poles
with the price benchmark provided in the 2012 NEA Price Index
wherein the said price benchmark already includes 5°1o contingency
and 12°/0 Value Added Tax (VAT).
• The approved project cost includes labor cost but was computed
based on 15°/0 of the material cost for the entire CAPEX plan.
Moreover, an annual inflation rate of 3°1o was retained in the said cost.
•
Shown below is the recommended project cost breakdown, to wit:
No.
1
2
3
4
Materials
Poles
Poles
Poles
Poles
Material Cost
(PhP)
Labor Cost
(PhP)
10,204.05
1,734,688.50
260,203.28
12,716.92
2,543,384.00
381,507.60
1,739,525.00
260,928.75
No. of
Units
Unit Cost
(PhP/unit)
30' Steel
170
35' Steel
200
Specifications
Year
2011
40' Steel
100
17,395.25
45' Steel
100
20,420.75
2,042,075.00
306,311.25
30' Steel
170
10,510.17
1,786,729.16
268,009.37
35' Steel
200
13,098.43
2,619,685.52
392,952.83
40' Steel
100
17,917.11
1,791,710.75
268,756.61
45' Steel
100
21,033.37
2,103,337.25
315,500.59
30' Steel
165
10,825.48
1,786,203.65
267,930.55
35' Steel
231
13,491.38
3,116,508.88
467,476.33
40' Steel
167
18,454.62
3,081,921.66
462,288.25
45' Steel
166
21,664.37
3,596,286.03
539,442.90
2012
2013
50' Steel
11
28,802.59
316,828.45
47,524.27
30' Steel
164
11,150.24
1,828,639.51
274,295.93
2,723,639.88
408,545.98
35' Steel
196
13,896.12
40' Steel
114
19,008.26
45' Steel
120
50' Steel
11
2,166,941.57
325,041.23
22,314.30
2,677,716.59
401,657.49
29,666.66
326,333.30
48,950.00
37,982,154.69
5,697,323.20
2014
Grand Total
Approval
Pro'ect to continue as pro osed
I
Project Cost
(PhP)
9,268,623.38
9,546,682.08
13,682,410.97
11,181,761.48
43,679,477.89
Remarks
14
11112]!)~ 11112~0~
__
9,268,623.38
9,546,682.08
~3~
13,682,410.97
15
lacement of Overloaded Distribution Transformers
Project Description
• Acquisition of distribution transformers (DT) to replace
all overloaded and old DTs installed within the entire
distribution network.
2011
2012
2013
8,956,631.42 10,706,928.02 12,015,039.22
I
Duration
2011 to 2014
2014
14,307,633.16
Total
45,986,231.82
• The replacement of the existing overloaded and old DTs installed
within the network is necessary to address the impending capacity
problem and to maintain a safe, efficient and reliable distribution
s stem.
Technical Analysis
• Based on NUVELCO's site survey, there are several areas within the
distribution system that contain overloaded and aged/decaying
distribution transformers. The condition of such assets is a threat to
public safety as well as a contributing factor to the inefficiency and
unreliability of a distribution system.
• Since the electric cooperative is obliged to provide safe, efficient and
reliable distribution system, NUVELCO proposed to replace its
distribution transformers in order to eliminate hazard and reduce
nuisance interruptions caused by these equipment and provide reliable
ower su I to its customers.
• The determination of the assets to be replaced was based on the
actual inventory done by the cooperative. The proposed cost estimates
includes an annual inflation rate factor of 3%.
No.
1
2
Materials
Distribution
Transformer
Distribution
Transformer
Specifications
No. of
Units
Unit Cost
(PhP/unit)
Year
Project Cost
(PhP)
15kVA
20
68,137.13
1,362,742.61
25kVA
35
88,407.58
3,094,265.25
37.5kVA
30
107,929.68
50kVA
10
126,173.31
15kVA
23
70,181.24
25kVA
40
91,059.81
2011
3,237,890.43
1,261,733.13
2012
1,614,168.63
3,642,392.24
16
3
4
Distribution
Transformer
Distribution
Transformer
37.5kVA
35
111,167.57
3,890,865.00
50kVA
12
129,958.51
1,559,502.15
15kVA
25
72,225.36
1,805,633.96
25kVA
44
93,712.03
4,123,329.46
37.5kVA
38
114,405.46
50kVA
13
133,743.71
1,738,668.25
15kVA
29
74,269.47
2,153,814.70
25kVA
51
96,364.26
37.5kVA
44
117,643.35
50kVA
15
137,528.91
I
•
2013
4,347,407.55
4,914,577.29
2014
5,176,307.51
2,062,933.66
Grand Total
I
I
45,986,231.82
assessment. The reduction was based on the cost alignment of DTs
with the price benchmark provided in the 2012 NEA Price Index
wherein the said price benchmark already includes 5°1o contingency
and 12°/0 Value Added Tax (VAT). Moreover, an annual inflation rate of
3°1o was also retained in the said cost.
No.
1
2
3
4
Materials
Distribution
Transformer
Distribution
Transformer
Distribution
Transformer
Distribution
Transformer
Specifications
No. of
Units
Unit Cost
(PhP/unit)
Year
Project Cost
(PhP)
15kVA
20
59,638.33
1,192,766.60
25kVA
35
77,380.00
2,708,300.00
37.5kVA
30
94,467.00
50kVA
10
110,435.00
1,104,350.00
1,412,832.04
2011
2,834,010.00
15kVA
23
61,427.48
25kVA
40
79,701.40
37.5kVA
35
97,301.01
50kVA
12
113,748.05
15kVA
25
63,270.30
1,581,757.61
3,612,067.45
2012
3,188,056.00
3,405,535.35
1,364,976.60
25kVA
44
82,092.44
37.5kVA
38
100,220.04
50kVA
13
117,160.49
15kVA
29
65,168.41
1,889,883.99
25kVA
51
84,555.22
4,312,315.98
37.5kVA
44
103,226.64
50kVA
15
120,675.31
2013
1,523,086.39
2014
Approval
2013
10,525,272.98
' .
4,541 ,972.23
1,810,129.59
Grand Total
2012
2011
9,371,399.99
7,839,426.60
3,808,361.53
40,290,401.35
I
2014
12,554,301.79
I
Remarks
Total
40,290,401.35
17
Project No.
9
Project Title
Replacement of Kilowatt-hour meter and Meter
Clusterin
Project
Project
Priority
Project
Code
Type
Rank
Category
System Efficienc
1
Secondar Distribution Line Pro'ect
Project Description
I
• Acquisition of KWh meters to replace the existing
dilapidated and deteriorated meters within the entire
franchise with electronic meters.
Duration
2011 to 2014
• The newly acquired kWh meters shall then be
relocated and clustered to the DUs electric poles from
the consumer's remises.
2013
2012
2011
9,424,052.18 9,958,079.80 10,450,169.45
2014
11,066,385.93
Total
40,898,687.35
• The proposed project is intended to improve the efficiency of the entire
distribution s stem.
Technical Analysis
• Some of the DU's installed kWh meters have exceeded their
operational life which leads to the ineffectiveness and unreliability of
the meters. The presence of these meters contributes to the
continuous and unaccounted losses or high non-technical losses of the
distribution utility.
•
In order to reduce these losses, NUVELCO intends to replace and
relocate said kWh meters from the customer's premises and cluster
these meters to the DUs electric poles.
• Article 11 of the Magna Carta for Residential Electricity Consumers
states that; ... The customer has the right to a meter installed in a
clean place free of vibration and where it will be easily accessible and
visible for reading and testing by both the distribution utility and the
consumer ...
... Meters shall be located on the outside wall of the building or private
pole and shall not be more than 3 meters nor less than 1.52 meters
mounting height. ..
... Clustering of meters may be allowed under any of the following
circumstances:
18
1. Upon the request of a customer;
2. When there is no right of way; or
3. In areas with high incidence of electricity pilferages ...
1J
•
It is clearly stated in the guidelines that all electric kilowatt-hour meters
that are put into service should be installed within the premises of the
customer. Any deviation from the intended location of the meters
should only be based on the circumstances
provided in the
abovementioned
provision and that the DU should present
documented proof of such claims.
•
NUVELCO did not present any proof or documents to substantiate the
need of the proposed project.
•
It further admitted that it has no means of providing technical analysis
in determining the root cause of the system loss, and yet it still
proposes to cluster the meters. This approach has no technical basis
and not acceptable because NUVELCO might end up implementing a
wrong solution in addressing a specific problem. It is therefore
necessary for NUVELCO to identify precisely the real cause of the
problem for them to arrive at the right solution.
•
NUVELCO provided the benefits derived in replacing the existing KWh
meters with electronic meters, as shown in the table below. NUVELCO
preferred such type of meter since it has lower internal meter loss
compared to the electromechanical meters and that the existing
meters performance can no longer be adjusted to its required level.
Condition
Existing
Proposed
Meter Type
Mechanical
Electronic
Years
Installed
25-30
NA
Ave. Internal
Meter Loss
Ave. Error
0.001343 KW
0.000285 KW
5.1538%
0.3000%
0.001058 KW
248,267
1,679,153
4.8538%1
1,430,886
No. of proposed meters for replacement
Ave. Annual Energy/Customer (KWh)
Ave. System Loss Saved
Energy Saved (KWh)
Total Energy Saved (KWh)
I
• The replacement of KWh meters is justifiable. On the other hand, the
relocation and clustering of meters lacks technical 'ustification.
• The determination of the number of KWh meters for replacement was
based on the actual inventory done by the cooperative. The proposed
project cost includes labor cost which was based on 15%, 16%, 17%,
and 18% of the material cost for the years 2011, 2012, 2013, and
2014, respectively, and an annual inflation rate factor of 30/0.
19
No.
Materials
KWh meter
Meter seal
1
Material Cost
(PhP)
Labor Cost
(PhP)
30A, electronic
5,500
773.74
4,255,574.40
638,336.16
CI 200, 15A, 2W
1,200
1,696.80
2,036,160.00
305,424.00
-
6,700
15.10
101,180.18
15,177.03
560,000.00
84,000.00
560.00
Conductor
Duplex, #2, AWG
4,000
56.20
224,800.66
33,720.10
Conductor
Duplex, #6 ACSR
30,000
21.19
635,807.93
95,371.19
Pole
Steel, 30'
30
12,710.16
381,304.81
57,195.72
30A, electronic
5,500
796.95
4,383,241.63
701,318.66
CI 200, 15A, 2W
1,200
1,747.70
2,097,244.80
335,559.17
6,700
15.55
104,215.59
16,674.49
576,800.00
92,288.00
2011
Meter seal
.
Cluster Box
-
1,000
576.80
57.89
266,276.38
42,604.22
122,244.67
Conductor
Duplex, #2, AWG
4,600
Conductor
Duplex, #6 ACSR
35,000
Pole
Steel,30'
2012
21.83
764,029.19
30
13,091.47
392,743.96
62,839.03
5,500
820.17
4,510,908.86
766,854.51
CI 200, 15A, 2W
1,200
1,798.61
2,158,329.60
366,916.03
-
6,700
16.01
107,251.00
18,232.67
593,600.00
100,912.00
30A, electronic
Cluster Box
-
1,000
593.60
Conductor
Duplex, #2, AWG
5,100
59.57
303,818.09
51,649.08
Conductor
Duplex, #6 ACSR
38,000
22.47
853,678.11
145,125.28
Pole
Steel, 30'
30
13,472.77
404,183.10
68,711.13
30A, electronic
5,500
843.38
4,638,576.10
834,943.70
C1200, 15A, 2W
1,200
1,849.51
2,219,414.40
399,494.59
16.46
110,286.40
19,851.55
610,400.00
109,872.00
KWh meter
-
Meter seal
6,700
2013
-
1,000
610.40
Conductor
Duplex, #2, AWG
6,000
61.26
367,549.08
66,158.83
Conductor
Duplex, #6 ACSR
44,000
23.10
1,016,444.94
182,960.09
Pole
Steel,30'
13,854.07
415,622.24
74,812.00
Cluster Box
30
I
•
Year
1,000
Meter seal
4
Unit Cost
(PhP/unit)
-
KWh meter
3
No. of
Units
Cluster Box
KWh meter
2
Specifications
2014
Grand Total
Project Cost
(PhP)
9,424,052.18
9,958,079.80
10,450,169.45
11,066,385.93
I 35,089,441.45 I 5,809,245.90 I 40,898,687.35 I
The Commission verified that the proposed project IS viable
considering that the project's Net Present Value (NPV) is positive and
the Benefit-Cost Ratio is greater than one (1), as manifested in the
using the
determined
was
assessment
The
below.
table
some
incorporating
while
benefits
technical
abovementioned
significant variables such as its asset life and discount rate of 10 years
and BO/o, respectively. The discount rate shall be the NEA interest rate
considering that the projects will be funded through NEA loan.
1.53
BIC
8%
Interest Rate
PV of Benefits
PhP43,886,959.40
PVof Cost
PhP28,623,009.31
Total Benefits (NPV)
PhP15,263,950.09
•
assessment. The reduction was based on the exclusion of the material
cost involving meter clustering which includes meter seals, and the
associated manpower or labor cost. However, the annual inflation rate
of 30/0 was retained in the said cost.
•
Shown below is the approved project cost breakdown, to wit:
No.
Materials
1
KWh meter
2
KWh meter
Specifications
No. of
Units
Unit Cost
(PhP/unit)
30A, electronic
5,500
773.74
CI 200, 15A, 2W
1,200
1,696.80
30A, electronic
5,500
796.95
Year
2011
2012
Project Cost
(PhP)
4,255,574.40
2,036,160.00
4,383,241.63
20
1,200
1,747.70
2,097,244.80
5,500
820.17
4,510,908.86
1,200
1,798.61
30A, electronic
5,500
843.38
CI 200, 15A, 2W
1,200
1,849.51
CI 200, 15A, 2W
. 30A, electronic
3
4
KWh meter
KWh meter
CI200,
15A, 2W
2013
4,638,576.10
2014
Grand Total
Approval
2011
2012
2013
6,291,734.40 6,480,486.43 6,669,238.46
2,158,329.60
2,219,414.40
26,299,449.79
I
2014
6,857,990.50
Remarks
Total
26,299,449.79
21
II.
OTHER NETWORK PROJECTS
10
Connection of New Customers due to Add-on
Pro.ects - KWh meters & accessories
Distribution Line Pro.ect
Project Description
• The following are the required specifications of the
projects, to wit:
a) The service drop wire is a twisted bare and
insulated duplex AWG #6 ACSR conductor.
Consumers at low voltage have the same service
drop wire size; and
b) The single phase KWH meters are electronic
rated 60A at 240V.
2013
2012
2011
4,610,320.11 4,985,262.74 5,385,941.99
I
2014
5,814,908.94
Duration
2011 to 2014
Total
20,796,433.78
• The DU is mandated to provide sufficient distribution services and
connections to its consumers consistent with the PDC. It is necessary
to forecast the number of new connections to determine the quantity of
metering equipment and other materials necessary to address load
growth.
Technical Analysis
• The forecasting of the new customers was based on the 7-year
historical customer data of NUVELCO. The customer types are
forecasted separately to capture the best model fitted to each
customer type.' NUVELCO mainly focused on residential customers for
this particular project. The models passed and met all the criteria
necessary to validate the accuracy of the forecasted model.
• The table below shows the forecasted additional residential customer
requirement of NUVELCO.
Customer Class
Residential
2011
Forecasted No. of Customers
I 2012
2013
3,271
I
3,434
I
I
3,605
I
I
2014
3,785
22
Cost Analysis
No.
1
2
3
4
Materials
Specifications
KWh meter
Electronic single phase
Service Drop
Duplex #(j AWG
KWh meter
Service Drop
Duplex #(j AWG
KWh meter
Service Drop
Duplex #(j AWG
KWh meter
Service Drop
Duplex #(j AWG
Length
No. of
Units
Unit Cost
(PhP/unit)
773.74
21,190.40
796.95
21,826.11
820.17
22,461.82
843.38
23,097.54
-
3,271
98.13
-
-
3,434
103.02
-
-
3,605
108.15
-
-
3,785
113.55
-
Project Cost
(PhP)
Year
2011
4,610,320.11
2012
4,985,262.74
2013
5,385,941.99
2014
5,814,908.94
I
Grand Total
20,796,433.78
I
• The above proposed cost estimates includes an annual inflation rate
factor of 3%.
• The Commission reduced the proposed project cost. The reduction
was based on the cost alignment of the conductor for service drop with
the price benchmark provided in the 2012 NEA Price Index wherein
the said price benchmark already includes 5010 contingency and 120/0
Value Added Tax (VAT). Moreover, the annual inflation rate of 3% was
retained considerably in the said cost.
No.
1
2
3
4
Materials
Specifications
KWh meter
Service Drop
Duplex #(j AWG
KWh meter
Service Drop
Duplex #(j AWG
KWh meter
Service Drop
Duplex #6 AWG
KWh meter
Service Drop
Duplex #(j AWG
Length
-
No. of
Units
Unit Cost
(PhP/unit)
3,271
773.74
20,770.00
796.95
21,393.10
820.17
22,034.89
843.38
22,695.94
-
98.13
-
3,434
103.02
-
-
3,605
108.15
-
-
3,785
113.55
-
Project Cost
(PhP)
Year
2011
4,569,066.2'6
2012
4,940,653.84
2013
5,339,769.40
2014
2014
5,769,307.69
Grand Total
Approval
2011
2012
2013
I
I 4,569,066.26 4,940,653.84 5,339,769.40
2014
5,769,307.69
20,618,797.19
I
Remarks
Total
20,618,797.19
23
III.
NON-NETWORK PROJECTS
Project
Project
Project
Project
No.
Title
Code
Type
.l
•
uisition of Test Instruments
Customer Efficienc
5
~
Project Category
Non-Network Re uirements
Project Description
• Acquisition of one (1) unit of each measuring and
testing equipment such as Meter Standard, Load
Logger, Clamp Ammeter and Megger Tester.
2012
2011
- 571,032.00
I
Duration
2012
2014
2013
-
-
Total
571,032.00
• The abovementioned equipment are intended to monitor the power
quality of the distribution system, the condition of the installed kilowatthour meters, and the condition of the electrical wirings within the
customer's premises.
equipment
shall improve
the distribution
has the
Cost Analysis
• The proposed cost components are comparable with the existing
market price and available price reference found on the internet.
No.
Materials
No. of
Units
Unit Cost
(PhP/unit)
1
Meter Standard
1
288,400.00
2
Load Logger
1
213,416.00
3
Clamp Ammeter
1
23,072.00
4
Megger Tester
1
46,144.00
Year
Project Cost
(PhP)
288,400.00
213,416.00
2012
Grand Total
23,072.00
46,144.00
571,032.00
Approval
Pro"ect to continue with Technical Amendments
I
Remarks
./
24
f'"
,
...-(!)~~~(!)~-~.3__...-(!)~..-n.atal"
-
571,032.00
-
-
571,032.00
25
~&.
Project No.
uisition of Lineman's Tools Set
~
Project Type
Priority Rank
Project Category
Customer Efficienc
5
Project Description
I
• Acquisition of several safety apparels, such as safety
shoes, hardhats and working gloves, to be used by
the technical staff of the EC.
2012
2011
807,520.00
-
Duration
2012
:
total
2014
2013
-
-
807,520.00
Project Justification / Cost Analysis
• As part of the human resource management program, the safety and
welfare of its human resources are the priority program. At present,
technical personnel, particularly the linemen are equipped with tools
and safety personal protective devices which are already old and
worn-out due to its everyday use. Furthermore, some field technical
men are presently deficient in the necessary safety apparels such as
safety shoes, hardhats and working gloves
• The Commission finds that the acquisition of linemen's tools set should
form part of NUVELCO's operations and maintenance (O&M)
ex enditures.
Approval
Project to be re-aligned to applicant's Operations and
Maintenance Ex enditure Accounts
I
Remarks
26
Project
Project
Project
Project
Priority
Project
No.
Title
Code
Type
Rank
Category
.l
•
uisition of Vehicles
Customer Efficienc
5
Project Description
I
Duration
• Acquisition of utility vehicles intended for operation
and maintenance and service vehicles intended for 2011 to 2014
emplo ees and customer services.
2013
2012
2011
4,488,000.16 5,941,040.00 8,369,760.00
• NUVELCO intends to augment
the vehicles that exceeded the
be replaced considering that it
frequent breakdown and some
2014
3,296,160.00
Total
22,094,960.16
its existing fleet of vehicles and replace
standard asset life. Old vehicles should
produces high maintenance cost due to
of its spare parts are already obsolete.
• NUVELCO finds the project necessary in order to meet the growing
demand of its consumers. The continuous increase in the distribution
lines, the power demand and the number of customers should require
an expansion of utility and service vehicles in order to maintain these
assets appropriately and respond to customer demands more
efficiently.
• The following table shows the proposed and the approved number of
vehicles for the entire CAPEX years, to wit:
No. of Units
No.
Materials
1
Double Cab
Specifications
Proposed
Recommended
4x4 pick-up
2
1
3
3
2
Double Cab
4x2 pick-up
3
Double Cab
4x4 pick-up (drop-side)
1
1
4
Van
4x4 Passenger
3
2
5
6
Motorcycle
-
2
2
Motor cab
1
1
7
Truck
Tadano
4
4
8
9
10
Man-lift
Standard
4
4
Man-lift
3-fold extended boom
1
Shuttle Bus
-
1
1
22
19
Grand Total
• The Commission excluded
assessment, to wit:
some vehicles
-
based on the following
the required number of vehicles,
cab and van. The Commission
27
allocated only one (1) unit per area/office for a specific type of
vehicle; and
2. The shuttle bus should be deferred since it does not address the
project's intention of providing service to its customers. The said
vehicle would only serve the employees of NUVELCO and not its
customers.
Cost Analysis
• NUVELCO considered an annual inflation rate factor of 3% In its
proposed project cost. Shown below is the proposed project cost
breakdown, to wit:
No.
1
Materials
Unit Cost
(PhP/unit)
Double Cab
4x4 pick-up
ESD
1
1,568,000.00
4x4 Passenger
Metering
1
1,008,000.00
Motorcycle
-
Metering
2
70,000.00
Metering
1
92,000.16
Truck
Tadano
Aritao & Solano Area
2
840,000.00
Double Cab
4x2 pick-up
North & South Area
2
1,095,920.00
Double Cab
Apprehension
1
980,560.00
Tadano
Bambang & Dupax
Area
2
865,200.00
Man-lift
Standard
Solano
1
1,038,240.00
Double Cab
4x4 pick-up
ISO
1
1,662,080.00
Double Cab
4x2 pick-up
FSD
1
1,127,840.00
Van
4x4 Passenger
Audit
1
1,068,480.00
Shuttle Bus
-
Main office
1
1,662,080.00
1
1,068,480.00
1
1,780,800.00
1
1,098,720.00
2
1,098,720.00
2
Truck
4
No. of
Units
Van
Motor cab
3
Department
Designation
Specifications
Man-lift
Standard
Bagabag Area
Man-lift
Subtransmission
Van
4x4 Passenger
ISO
Standard
Bayombong
Area
Man-lift
O&M
& Dupax
I
Year
Project Cost
(PhP)
2011
4,488,000.16
2012
5,941,040.00
2013
8,369,760.00
2014
3,296,160.00
Grand Total
I 22,094,960.16 I
•
review. The reduction was based on the exclusion of some vehicles in
the project, as discussed previously. The annual inflation rate of 3%
was retained considerably in the said cost.
•
No.
1
2
3
Materials
Department
Designation
Specifications
No. of
Units
Unit Cost
(PhP/unit)
Double Cab
4x4 pick-up
ESD
1
1,568,000.00
Van
4x4 Passenger
Metering
1
1,008,000.00
Motorcycle
Metering
2
70,000.00
Motor cab
-
Metering
1
92,000.16
Truck
Tadano
Aritao & Solano Area
2
840,000.00
Double Cab
4x2 pick-up
North & South Area
2
1,095,920.00
Double Cab
Apprehension
1
980,560.00
Tadano
Bambang & Dupax
Area
2
865,200.00
Manlift
Standard
Solano
1
1,038,240.00
Double Cab
4x2 pick-up
FSD
1
1,127,840.00
Van
4x4 Passenger
ISO/Audit
1
1,068,480.00
Manlift
Standard
Bagabag Area
1
1,068,480.00
Subtransmission
O&M
1
1,780,800.00
Truck
Manlift
Year
Project Cost
(PhP)
2011
4,488,000.16
2012
5,941,040.00
2013
5,045,600.00
28
Standard
Bayombong
Area
& Dupax
2,197,440.00
17,672,080.16
Approval
Pro'ect to continue as roposed
I
2011
2012
2013
2014
4,488,000.16 5,941,040.00 5,045,600.00 2,197,440.00
Remarks
Total
17,672,080.16
29
Project
Project
Project
Project
Priority
Project
No.
Title
Code
Type
Rank
Category
A
•
uisition of Meter Readin
Customer Efficienc
5
Project Description
I
• Acquisition of several new portable devices intended
for the application of meter reading, billing and
collection s stem.
2012
2011
-
2012
Total
2014
2013
-
2,907,072.00
Duration
-
2,907,072.00
• NUVELCO presently relies on "centralized" processing with respect to
its customers' energy consumption. The said process requires manual
reading of each customer's consumption which will then recorded in
the EC's main computer.
• The proposed project of "read & bill" system or a system of collecting
energy bills from the customers using the meter-reading/billing
equipment would enhance its customer service more efficiently.
NUVELCO intends to use such system and replace the said existing
billing process.
• The proposed project requires hand-held computerized metering and
billing devices with memo card for file storage.
Cost Analysis
Materials
Portable Meter Reading Gadgets
No. of
Units
Unit Cost
(PhP/unit)
Year
Project Cost
(PhP)
18
161,504.00
2012
2,907,072.00
assessment. The proposed cost of equipment is expensive compared
to the approved cost of advance meter reading/billing equipment. The
Commission adopted the cost of the metering/billing equipment
approved to ISECO.
30
I
No.
1
2
3
4
Materials'
"';~'.
..
PSION Neo
Wall Charger Adaptor
Docking Connector
Lithium Ion Battery
No. of
Units
UnitCost
(PhP/uriit)
18
18
18
18
35,400.00
2,073.60
1,324.80
5,100.00
Year
Project Cost
(PhP)
2012
637,200.00
37,324.80
23,846.40
91,800.00
Grand Total
790,171.20
Recommendation
I
Remarks
2011
-
2012
790,171.20
2014
2013 .
-
-
Total
790,171.20
31
~&.
~
uisition of Office Furniture and E ui ment
~
~
~
Project Category
Customer Efficienc
5
1-
uisition of office furniture and e
2011
2012
268,800.00
807,520.00
2013
2014
890,400.00
Total
213,640.00
2,180,360.00
• NUVELCO intends to acquire office furniture and equipment in order to
improve its customer service program. The objectives of the program
are as follows:
1. To provide customers the quality of institutional services; and
2. To render fast and effective way of processing electric service
application, inquiries pertaining to billing, membership and
service concerns through automation.
• The Commission approves the proposed project excluding the office
furniture which are not included in the list of assets to be capitalized in
the CAPEX guidelines. These assets should form part of the
a licant's 0 erations and maintenance O&M ex enditures.
Cost Analysis
• NUVELCO considered an annual inflation rate factor of 30/0 in its
breakdown, to wit:
No.
Materials
1
Office Furnitures
2
Data server & workstations
4
Unit Cost
(PhP/unit)
1 lot
268,800.00
2011
268,800.00
807,520.00
2012
807,520.00
1 lot
284,928.00
6
41,552.00
2013
249,312.00
Computer for ID processing
1
356,160.00
Finger Scanner
5
42,728.00
2014
213,640.00
Finger Scanner
I
•
Project Cost
(PhP)
Year
1 set
Office Furnitures
3
No. of
Units
284,928.00
356,160.00
Grand Total
I
2,180,360.00
With the previously discussed technical amendments,
project cost breakdown are as follows:
No.
Materials
No. of
Units
Unit Cost
(PhP/unit)
Year
I
the approved
Project Cost
(PhP)
1
Data server & workstations
1
807,520.00
2012
807,520.00
2
Finger Scanner
6
41,552.00
2013
249,312.00
32
Computer for 10 processing
356,160.00
Finger Scanner
213,640.00
. Grand Total
1,626,632.00
I
• The devices are comparable with the existing market price and
available price reference found in the internet. Meanwhile, the annual
inflation rate factor of 30/0 was retained in the recommended project
cost.
Approval
ap lication with additional 'ustification
2012
2011
807,520.00
.
2013
605,472.00
I
2014
213,640.00
Remarks
..Total"
1,626,632.00
..
33
Project No.
16
Project Title
Acquisition of Engineering Analysis Software and
Hardware
Project
Project
Priority
Project
Code
Type
Rank
Category
Customer Efficienc
5
Project Description
I
• Acquisition of engineering analysis software and
hardware capable to interface with the existing
SYNERGEE Engineering Anal sis software.
2012
2011
- 6,968,925.98
2014
2013
-
Duration
2012
Total
- 6,968,925.98
• NUVELCO has existing SYNERGEE Engineering Analysis software
which plays a vital tool in assisting the engineers in the performance of
their duties such as analysis of the distribution system to develop plans
and procedures and to improve the same efficiently. However, its
usage is minimized due to the absence of technical database and
software that can interface with the data inputs required by the said
software.
• The proposed project shall support its preparation for distribution
network planning to improve, if not maintain, an efficient, reliable and
safe distribution s stem.
Cost Analysis
• Some of the materials and components in the proposed project cost
include 12% VAT. Moreover, some of the cost components are
material cost incurred in the surveys such as logistics and office
supplies.
• Shown below i~ the proposed project cost breakdown, to wit:
No.
No. of
Units
Activity
Unit Cost
(PhP/unit)
Year
Material
Cost (PhP)
Cost wI
VAT (PhP)
Project
Cost (PhP)
1
Manpower for Pole Numbering
16,500
50.05
825,825.00
99,099.00
924,924.00
2
Manpower for Distribution
Mapping
20,000
41.88
837,571.43
100,508.57
938,080.00
3
Manpower for Transformer
Numbering
3,030
85.80
259,974.00
31,196.88
291,170.88
1,365,525.39
163,863.05
1,529,388.43
4
Manpower for Consumer
5
Manpower for Distribution
Encoding
6
Manpower for Consumer
Encoding
Line
Data Survey
Line
Data
2012
70,362
19.41
20,000
7.15
143,000.00
17,160.00
160,160.00
70,362
2.15
150,926.49
18,111.18
169,037.67
34
.
7
Integrated Facility Data Management
System (IFDMS) installation, trainings
and consultancy
1 set
8
Engineering
Hardware and Logistic
1 set
371,000.00
371,000.00
9
Engineering
Hardware Accessories
1 set
799,600.00
799,600.00
10
Outsourcing Surveyors
Management Team
1 set
462,000.00
11
Office Supplies used in surveys
1 set
35,565.00
and Project
1,150,000.00
1,150,000.00
I
I
Grand Total
138,000.00
1,288,000.00
462,000.00
-
462,000.00
35,565.00
-
35,565.00
6,400,987.31
I
567,938.68
371,000.00
799,600.00
I
6,968,925.98
I
• The proposed cost components are comparable with the existing
market price and available price reference found in the internet.
•
assessment. It excluded the labor and material costs involving
surveying activities, particularly activity nos. 1-6 and 10-11, in the cost
component. These costs should form part of the applicant's operations
and maintenance (O&M) expenditures.
•
No. of
Units
Unit Cost
(PhP/unit)
Year
Material
Cost (PhP)
Cost wI
VAT (PhP)
Project
Cost (PhP)
1,150,000.00
138,000.00
1,288,000.00
No.
Activity
7
Integrated Facility Data Management
System (IFDMS) installation, trainings
and consultancy
1 set
8
Engineering
Hardware and Logistic
1 set
371,000.00
371,000.00
.
371,000.00
9
Engineering
Hardware Accessories
1 set
799,600.00
799,600.00
-
799,600.00
1,288,000.00
2012
Grand Total
2,320,600.00
Approval
2012
2011
2,458,600.00
-
2014
2013
-
138,000.00
I
2,458,600.00
Remarks
Total
- 2,458,600.00
35
Project No.
17
Project Title
Acquisition of Accounting, Payroll, Warehousing and
Member-Consumer Information S stem Software
Project
Project
Priority
Project
Code
Type
Rank
Category
Customer Efficienc
5
Project Description
I
• Acquisition of computer software and hardware
intended for accounting, payroll, warehousing, and
member-consumer information s stem.
2012
2011
- 7,500,000.00
2014
2013
-
Duration
2012
Total
- 7,500,000.00
• NUVELCO intends to acquire Management Information System
software in order enhance the accounting practices. The proposed
project shall adopt automated financing and accounting system which
will aid its management in the decision making with respect to
accounting matters.
• The overall design of the proposed system will also provide the
necessary document that will comply with the current demands of the
electric industry, the existing government and regulatory agencies, and
the actual work flow of the EC.
Cost Analysis
• NUVELCO failed to submit the necessary project cost breakdown or
any quotation to justify the proposed project cost amounting to PhP7.5
Million. Thus, the Commission deferred consideration of this project
which should be included in the next CAPEX application of NUVELCO.
Approval
Project to continue as proposed
Pro.ect to continue with REVISED Capital Ex enditure
I
Remarks
36
.
-
Project No.
Project Title
•
-
A
•
uisition of Street Li
ment
~
~
Customer Efficienc
~
5
Project Category
Project Description
• AcquIsItion of street lightIng equipment to be installed
within road/ri ht of wa areas with insufficient Ii htin .
2011
2012
560,000.00
576,800.00
2013
593,600.00
I
Duration
2011
2014
610,400.00
to 2014
Total
2,340,800.00
• Part of the social responsibility program of NUVELCO is to provide
street lighting equipment within its franchise area. The proposed
project intends to install several sets of street lighting equipment that
shall be im lemented within the a lied CAPEX ears.
Cost Analysis
• NUVELCO considered an annual inflation rate factor of 3% in its
breakdown, to wit:
No.
Materials
No. of
Units
Unit Cost
(PhP/unit)
Year
Project Cost
(PhP)
1
Street Light
700
800.00
2011
560,000.00
2
Street Light
700
824.00
2012
576,800.00
3
Street Lig ht
700
848.00
2013
593,600.00
4
Street Light
700
872.00
2014
610,400.00
Grand Total
•
I
2,340,800.00
I
Upon verification, the proposed quantity of street lighting equipment
does not coincide with its forecast for the entire applied CAPEX years.
Thus, the Commission reduced the project cost consistent with
forecasted number of equipment. Shown below is the approved project
cost breakdown, to wit:
No.
Materials
No. of
Units
Unit Cost
(PhP/unit)
Year
Project Cost
(PhP)
1
Street Light
130
800.00
2011
104,000.00
2
Street Light
18
824.00
2012
14,832.00
3
Street Light
7
848.00
2013
5,936.00
4
Street Lig ht
7
872.00
2014
6,104.00
Grand Total
130,872.00
I
• The required materials are comparable with the existing market price
and available price reference found in the internet. The annual inflation
rate factor of 3% was retained considerabl in the a roved ro'ect
37
cost.
Approval
Pro'ect to continue with REVISED Capital Expenditure
ap lication with additional 'ustification
Recommended CAPEX Cost (PhP)
2013
2012
2011
14,832.00
5,936.00
104,000.00
I
2014
6,104.00
Remarks
Total
130,872.00
38
"
Project No.
19
Project Title
Construction of NUVELCO Office Buildings &
Facilities
Project Code
Project Type
Customer Efficienc
5
~
Project Category
Project Description
I
Duration
• The proposed projects involve the following activities:
1. Construction
of
Engineering
Services
Department (ESD) and Warehouse Building;
2. Rehabilitation
of Solano Substation Office,
Administrative Building and Gymnasium;
3. Construction of Information Technology (IT) 2011 to 2014
office at the northern part of the franchise;
4. Construction of headquarters perimeter fencing
and lighting;
5. Installation of water system; and
6. Construction of General Mana er's uarter.
2013
2012
2011
2,730,000.00 12,643,226.20 7,447,721.36
2014
1,801,156.88
Total
24,622,104.44
• The proposed project shall ensure the convenience of the memberconsumers as well as the employees during the official transactions.
• The following are detailed discussions of each activity of the projects:
1. The ESD, Administrative and Warehouse Sections are presently
located within the main building causing area congestion. The
construction of ESD and warehouse building shall provide better
working conditions to the employees;
2. The rehabilitation of Solano Substation office, Administrative
Building and Gymnasium, which is located at NUVELCO's main
office, is intended to enhance its existing physical condition;
3. The construction of IT building at Bonfal, Bayombong, Nueva
Vizcaya is necessary considering that the said area has reliable
internet network services;
4. The construction of fencing and lightings at NUVELCO's main
office is necessary to ensure its security and protection;
5. Upgrading of existing water facilities is necessary to ensure
continuous supply of water to be used by the employees; and
6. The construction of GM's quarter is intended to accommodate
the EC's eneral mana er and his/her visitors.
39
Cost Analysis
• The proposed project cost includes other financial factors such as
labor cost (35% of material cost), administrative and supervision cost
(5% of material and labor cost), and contingencies (10% of material,
labor cost, and administrative and supervision cost).
1
2
Year
Activity
No.
Construction
of ESD & Warehouse
Rehabilitation
of Solano Substation
Building
Bldg.
3
Construction
of IT Office at North Area Office
4
Construction
of HQ Perimeter Fencing & Lighting
5
Installation
6
Construction
2012
of Water System
2013
7
Repair of Admin Bldg.
8
Construction
of GM's Quarter
9
Gymnasium
Improvement
'--
2011
2014
G_ra_n_d_To_ta_I
Material Cost
(PhP)
Other Costs
(PhP)
Project Cost
(PhP)
1,430,174.77
799,825.23
2,230,000.00
320,666.99
179,333.01
500,000.00
5,515,472.19
3,084,527.81
8,600,000.00
2,272,391.34
1,270,834.86
3,543,226.20
370,370.37
129,629.63
500,000.00
2,066,651.90
1,155,775.07
3,222,426.97
1,724,862.40
964,629.30
2,689,491.70
984,962.45
550,840.24
1,535,802.69
1,155,143.10
646,013.78
1,801,156.88
115,840,695.51
I
8,781,408.93124,622,104.441
assessment. The reduction was based on the following factors:
a) The exclusion of all rehabilitation activities and gymnasium
improvement;
b) The exclusion of administrative and supervision cost; and
c) The reduction of labor cost and contingencies to 250/0and 5% of
the required material cost, respectively.
• The rehabilitation activities and its corresponding costs should form
part of NUVELCO's operations and maintenance (O&M) expenditures
considering that said activities are expenditures on repairs or
maintenance of an asset. Pursuant to the amended CAPEX Rules,
these type of expenditures should be excluded from the capitalization
cost of the electric cooperative. As such, said activities should be
realigned and form part of NUVELCO's O&M budget.
• The required materials of the approved projects are comparable with
the existing market price and available price reference found in the
internet. Shown below is the approved project cost breakdown, to wit:
Year
Activity
No.
1
Construction
of ESD & Warehouse
2
Construction
of IT Office at North Area Office
Building
3
Construction
4
Installation
2011
2012
of Water System
5
Construction
of HQ Perimeter
6
Construction
of GM's Quarter
Fencing & Lighting
Grand Total
2013
Material Cost
(PhP)
Cost of Labor &
Contingency
(PhP)
Project Cost
(PhP)
1,430,174.77
429,052.43
1,859,227.20
5,515,472.19
1,654,641.66
7,170,113.85
2,272,391.34
681,717.40
2,954,108.74
370,370.37
111,111.11
481,481.48
2,066,651.90
619,995.57
2,686,647.47
984,962.45
295,488.74
1,280,451.19
12,640,023.02
3,792,006.91
16,432,029.93
40
Approval
Pro.ect to continue as pro osed
Recommended CAPEX Cost (PhP)
2012
2013
2011
1,859,227.20 10,605,704.07 3,967,098.66
I
Remarks
./
./
2014
-
Total
16,432,029.93
41
Project
Project
Project
Project
Priority
Project
No.
Title
Code
Type
Rank
Category
•
&
•
uisition of Office Stand-b
Power Generator
Customer Efficienc
5
Project Description
Acquisition of one (1) set of 100 kVA, Cummins,
power enerator.
Duration
ill
2011
2012
- 1,120,000.00
2013
2014
-
2012
Total
- 1,120,000.00
• The proposed generator set would provide back-up electricity to its
main office in case of power failure within the area. It shall enhance
customer service reliability considering the office work flow will not be
interru ted even durin such event.
Cost Analysis
• The total cost of the equipment is PhP1.12 Million. However,
NUVELCO failed to submit the necessary project cost breakdown or
any quotation to justify the proposed amount.
• The Commission determined that a 100 kVA Cummins brand
generator
with similar
proposed
specifications
amounted
to
US$9,145.00, equivalent to PhP453,635.90 (inclusive of 12% VAT and
3% inflation rate).
Thus, the approved proposed project cost
amounted to PhP453,635.90.
•
NUVELCO should secure the appropriate Certificate of Compliance
(COC) from the Commission prior to the operation of the generation
facilities ursuant to Resolution No. 09, series of 2010.
Approval
2011
2012
453,635.90
-
2013
I
./
2014
-
Remarks
-
Total
453,635.90
42

Applicant. - Energy Regulatory Commission

Transcription

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