Professional Documents
Culture Documents
IN THE MATTER
OF THE
APPLICATION FOR APPROVAL
OF THE RENEWABLE ENERGY
SUPPLY
AGREEMENT
BETWEEN SOUTH COT ABATO
II ELECTRIC COOPERATIVE,
INC.
AND
ASTRONERGY
DEVELOPMENT GENSAN INC,
ERC CASE NO. 2015-148 RC
SOUTH
COTABATO
II
ELECTRIC
COOPERATIVE,
INC. AND
ASTRONERGY
DEVELOPMENT GENSAN, INC.,
Applicants.
DOCKliiITMll
DEC 2,...........
2, 2015
DIIte:'.;.";7
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~~,
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x- - - - - - - - - - - - - - - - - - - - - - -x
ORDER
On August 4, 2015, South Cotabato II Electric Cooperative, Inc.
(SOCOTECO II) and ASTRONERGY Development Gensan, Inc.
(ASTRONERGY) filed an application for the approval of R~newable
Energy Supply Agreement (RESA), with motion for confidential
treatment of information and prayer for issuance of provisional
authority.
In support of their prayer for the issuance of a provisional
authority, SOCOTECO II and ASTRONERGY alleged, among others,
that:
1.
2.
ASTRONERGY;0
3.
4.
5.
the
II.
Mindanao
Scenario
Grid
and
SOCOTECO
II's
Supply-Demand
MINDANAO SUPPLY-DEMAND
2014
3000 Apr: 13.6 MW TUdaya
15 MW Mapalad 0'''"
2800 J sep: 26.1 tv'MI Peak Pmver
Nov: 150 MW Therma South 1
OUTLOOK (2014-2020)
--.~-~-~-
2015
Mar: 150 IIlN Therma South 2
. Jun: 112 Sa!1anQan HE?
: Jul:30 MW Puyo HE?
outlook
2016
2017
\ Jan: 9 MW Umbata~n
HEP
2600 '
,,.--.,. ..,"._'
"'"
,~
...
2000 .,
1800 -
1400 ~
1200 .
Peak Demand, MW
Suppliers:
1. PSALM/NPC'
2. SEC
3. FDC-GEO
Forecasted
2015 2016 2017 2018
171
179
142
150
30
10
15
70
10
supply-
2019
188
2020
197
15
70
15
70
15
70
15
70
5
30
30
19.6
15
30
15
10
5
10
5
10
5
10
5
30
30
30
30
III.
ProcurementProcess
IV.
Type of Plant
Solar Power Plant
Delivery Term
The RESA shall remain in force and effect for a period of twentyfive (25) years counted from the Commercial Operation Date as
defined in Article 3.1 of the RESA.
Contract Capacity
Delivery Point
The Delivery Point as agreed upon by the parties shall be the
Energy Payment
The Energy Price shall be as follows:
V.
a)
During the first full contract year, the price for each MW/h
of energy delivered shall be PhPB,350.00 and increased,
each contract year thereafter, by four and eight-tenths
percent (4.8%). For each month, SOCOTECO II shall pay
ASTRONERGY an amount equal to the sum of each and
every megawatt-hour
(MW/h) of energy delivered
multiplied by the applicable energy price per MWh.
b)
ASTRONERGY's
DISCUSSION
For purposes of evaluating the prayer for the issuance of
provisional authority, the Commission bench marked the FIT model
used by ASTRONERGY and found the same consistent with that of
the Commission's recently approved New Solar FIT rate under ERC
Case No. 2014-004 RM dated Macch 27,2015, to ~
PARTICULARS
Total Project Cost, US$/MW
Engineering, Procurement and
Construction (EPC), US$/MW
Project Capacity Factor, % of DC
nameplate rating
Project Capacity Factor, % of AC
nameplate ratinQ
After-tax Equity IRR, %
Local Inflation Rate
Peso to US$ FX Rate
Base Local CPI
Loan Amortization, years
ASTRONERGY
1,958
FIT
1,958
1,586
1,586
16
18.50
20
12.76
3.28
44.40:1
138.91
10
13.87
3.28
44.40:1
138.91
20
FIT
3.28% - 32%
0% - 68%
1.059%
Escalation/CPI
USD:PhP
Net Escalation
Note: 1.
ASTRONERGY
2.
ASTRONERGY
4.8%
4.8%
Year
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
19th
20th
21st
22nd
23rd
24th
25th
Proposed
Rate
6.35
6.65
6.97
7.31
7.66
8.03
8.41
8.82
9.24
9.68
10.15
10.64
11.15
11.68
12.24
12.83
13.44
14.09
14.77
15.48
16.22
17.00
17.81
18.67
19.56
Fit Rate
8.63
8.72
8.82
8.92
9.02
9.12
9.23
9.34
9.46
9.58
9.70
9.83
9.96
10.10
10.24
10.38
10.53
10.68
10.84
11.01
9.01
9.15
9.30
9.45
9.60
To
illustrate
further,
the
graph
below
shows
that
ASTRONERGY's
proposed rate shall have a constant upward
movement while the FIT Rate shall vary, depending on the movement
of economic indices.
25.00
20.00
15.00
-Proposed
10.00
-FIT
Rate
Rate
5.00
Note: Under the FIT model, at 21" year, the base rate will be set back to PhP7.00/kWh.
Total Cost
US$/MW
US$/kW
US$/W
Debt/Cap
US$48,867,000
US$1,958,000
US$1,958
US$1.96
70%
of WACC
12.76%
Ratio
Annual Cost
Average
Debt
0.7
7.25%
5.08%
Equity
0.3
12.76%
3.83%
WACC
8.90%
Values
8.60%
1.0
Equals
8.60%
5.27%
Cost of Equity
13.87%
Land lease
Power Plant Maintenance and
Reconditioning
Module technicians; replacement and
washing
Monthly audit and technical inspection
24-hour security and remote monitoring
High voltage inspection and
maintenance
Inverter reconditioning/replacement fund
(10-year life)
Maintenance vehicle lease, fuel and
maintance
Water supply
Maintenance and Reconditioning
Subtotal
Insurance (0.6% of insured value)
Insurance Subtotal
General and Administrative
Total Cost
Cost, US$
94,829
US$/Wp cost
0.00380
124,775
0.00500
37,433
124,775
0.00150
0.00500
49,910
0.00200
249,550
0.01000
49,910
0.00200
6,239
0.00025
642,591
0.02575
281,492
129,766
1,148,679
0.01128
0.00520
0.04603
were
used
in ASTRONERGY's
In the Matter of the Petition to Initiate Rule-Making for the Adoption of the Feed-In Tariff
for Electricity Generated from Biomass, Ocean, Run-of-River Hydropower, Solar and
\Mod
E",~yR.,,",~ (P"moo"N,'o",' R,"~,b1. E",~yBO"d-NRE~
and Calculating
Rate*
Solar Power
1,958
1,586
16
20
79.5
2,000
12.76
3.28
44.40: 1
138.91
20
Stated in US$OOO's; and solar-electric generation equipment in "DC" unless otherwise noted
price each year. Even with the indexed price structure considered,
ASTRONERGY would just earn an IRR of 12% only which is about
85% only of the Commission-approved return on equity.
In determining the reasonableness of the proposed rate, the
Commission benchmarked the rates with the Commission's approved
rates and parameters under ERC Case No. 2014-020 RC2 and ERC
Case No. 2014-004 RM3.
Shown below is the comparison of the major parameters
approved by the Commission under the New Solar FIT vis-a-vis
ASTRONERGY's proposed parameters, as follows:
Parameters
Total Project Cost
Capacity Factor (DC)
Capacity Factor (AC)
Equity IRRNominal
Pre-tax WACC
Annual Escalator
Rate
ASTRONERGY's
proposal
Commission's
Approved New
Solar FIT
Commission's
Provisionally
Approved Rate
US$1,958/kW
US$1,958/kW
US$1,958/kW
16%
20%
18.50%
16%
20%
12.76%
13.87%
12.76%
8.90%
9.20%
(Based on FIT
Rule)
4.8%
PhP6.35/kWh
PhP8.69/kWh
8.9%
PhP8.54/kWh
4.
In the Matter of the Application for Approval of the Power Supply Agreement (PSA) Between
Cagayan Electric Power and Light Company Inc.(CEPALCO) and Kirahon Solar Energy
Corporation (KSEC), with Prayer for Provisional Authority
In the Matter of the Adoption of the Amendments to Resolution NO.10, Series of 2012, A
Resolution Approving the Feed-in-Tariff (FIT) Rates, as necessitated by the New Installation
Target for Solar Energy Generation Set by the Department of Energy (DOE)
VI.
Rate Impact
Particulars
Total Energy
Cost, PhP
Total Energy
Consumed,
kWh
Blended Rate
(PhP/kWh)
Without
ASTRONERGY
With ASTRONERGY
(Commission's
provisionally rates)
Difference
630,899,205.66
633,920,802.43
3,021,596.76
90,926,400
91,443,200
516,800
6.9386
6.9324
0.0062
/?
1.
2.
3.
SO ORDERED.
Pasig City, October 13, 2015.
....~ ..-r--
ALFR~'N
GLO~C~
Commissioner
~ 'AP-TARUC
commissi~er
;-ERC-~--.
Office of the Chairman
111I,illlllllllll!IIIIIIIII:1111I'1111111111
~III~~ III! ~ 1111~~
L-201S-016-02S72
Copy furnished:
1.
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3.
4.
5.
Commission on Audit
Commonwealth Avenue
Quezon City, Metro Manila
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