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Republic of the Philippines

ENERGY REGULATORY COMMISSION San Miguel Avenue, Pasig City

IN THE MATTER OF THE APPLICA-

TION FOR APPROVAL OF ELECTRIC

AND NON-ELECTRIC PROJECTS FOR

REGULATORY YEAR 2014 WITH PRAYER FOR PROVISIONAL AUTHOR-

ITY

ILIGAN LIGHT AND POWER, INC. (ILPI), Applicant.

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ERC CASE NO. 2013-209 RC

POSITION OF LANAO POWER CONSUMERS FEDERATION

(LAPOCOF) WITH REGARDS TO THE EXPOSITORY PRESEN-

TATION OF ILPI DURING THE PUBLIC HEARING CONDUCT-

ED BY THE ERC ON MARCH 21, 2014 AT ILIGAN CITY

I. Opposition to the Inclusion of the Following Items in the CAPEX of

ILPI

1. Expenses of the construction of the Switching Station for ILPI’s

connection to the Mapalad Energy Generating Corporation

(MEGC). There is need for a decision by the ERC on a pending “JOINT

MOTION TO RESCIND THE POWER SUPPLY AGREEMENT FOR THE SUP-

PLY OF POWER TO ILIGAN LIGHT AND POWER, INC. (ILPI) BY THE

MAPALAD ENERGY GENERATING CORPORATION (MEGC)” submitted by

the Iligan City Legal Office and LAPOCOF dated August 22, 2013.

2. Expenses for “Facility Improvement Projects” such as the con-

struction of the Cafeteria, Covered Parking Lot, etc., since these are

not inherent to the service of transmitting power to us consumers.

3. Expenses for “Capacity Augmentation Projects,” such as the line

extension project at Sitio Calawag and Dalamas, Barangay Puga-an.”

ILPI should exercise due diligence in seeking funding from other

sources, such as the DOE, which has this 100% target of electrifying

the unconnected barangays of the country from the Malampaya Fund

and other sources.

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4. Expenses for “Street-lighting Metering,” which has a Flat Rate

designation in the different categories of customer classes. This

means that ILPI will charge whatever is consumed even at daytime if

the street lights are not put off due to the negligence of the City Gov-

ernment. Or worse, this excess from the 12 hour limit for street lights

will be added to our systems loss. Would it not be better for ILPI to

lobby/exert effort so that the City Government will use its Community

Host Benefit from NPC to put up day and night sensors, so that the

street lights are off during daytime. This benefit for hosting AGUS 6

and 7 by the City of Iligan is at the tune of more or less 16-million pe-

sos a year.

5. Expenses for the “NGCP Sources Metering.” ILPI should remem-

ber that the ERC in a previous application, excluded in the factoring of

the computation of the rates for Residential Consumers, ILPI’s CAPEX

with regards to their acquisition of the 69KV Sub-transmission Lines

from NGCP. LAPOCOF opposed such CAPEX to be imposed on Residen-

tial Consumers since this 69KV Sub-transmission lines will be used to

service bulk consumers, such as GRANEX, SANMICOCO, etc.

II. Clarification as to Funding Source

Will ILPI fund the expenses from its retained earnings, or borrow fund to fi-

nance the acquisition or get fund from its stockholders?

III. Clarification with Regards to the Weighted Average Cost (WAC)

ILPI mentioned that 16% was the WAC used during the previous Applica-

tions, which is being used for this present application. What is the bench-

mark from the ERC?

IV. Asset Inventory

There is a need for ILPI to provide us with an inventory of all their assets

that had been part of their CAPEX in their previous applications, which have

already been part of the past electricity bills of consumers. We have no re-

port as to what were completed, and the actual cost thereof. We consumers

have no means of reviewing all expenses unless we have this inventory. We

can segregate what will be part of their CAPEX in their future applications.

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This way, we, consumers, can monitor whether these expenditures are justi-

fiable for ILPI to give us efficient and reliable power at the least cost.

PRAYER

WHEREFORE, it is respectfully prayed of the Honorable Energy Regulatory

Commission that the above position of LAPOCOF be considered. We pray

that the ERC orders ILPI to provide us an Inventory of their assets.

Other relief just and equitable under the premises are also prayed for.

ENGR. NORBERTO J. OLLER

President

DR. MELCHIE J. AMBALONG

Chair Emerita

March 25, 2014