HAPUA WG No.5 (ESI Services) UpdatesHAPUA WG No.5 (ESI Services) Updates The WG2, 5, 6 and The WG2, 5, 6 and Chairman of Chairman of APGCCAPGCC Meeting Meeting

Jakarta, Indonesia ● 26 February 2009Jakarta, Indonesia ● 26 February 2009

By WG 5 Project Coordinator:MR. MELBURGO S. CHIU

VP – Sales and Services, Luzon Generation, WM & DRFFNational Power Corporation

PHILIPPINES

Recommendations of the WC & APGCCRecommendations of the WC & APGCC

Conduct the study and identify features of existing Conduct the study and identify features of existing bilateral arrangements to be used later to bilateral arrangements to be used later to Multilateral Arrangement.Multilateral Arrangement.

Carry out study on bilateral basis first between Carry out study on bilateral basis first between Members countries of Subsystem A. Commercial Members countries of Subsystem A. Commercial Issues, Tax, Regulation, Tariff System and Issues, Tax, Regulation, Tariff System and Social Social ImpactImpact are to be included in the study. are to be included in the study.

Provide various contractual models between two Provide various contractual models between two countries and recommend for further improvement countries and recommend for further improvement if needed. if needed.

Prioritize the major issue on the Prioritize the major issue on the commercial/regulation tax and tariff aspect of the commercial/regulation tax and tariff aspect of the interconnection which may impasse the study.interconnection which may impasse the study.

WG5 UpdatesWG5 Updates

WG5 conducted on 25 Feb 2009 kick-off WG5 conducted on 25 Feb 2009 kick-off meetings of its 2 new projects that will meetings of its 2 new projects that will undertake aforementioned APGCC-related undertake aforementioned APGCC-related tasks:tasks: Project No. 5 – Regulatory Issues & Challenges Project No. 5 – Regulatory Issues & Challenges

of Regulated Entity/ Owner/ Investor and of Regulated Entity/ Owner/ Investor and ConsumersConsumers

Project No. 6 – Bilateral Interconnection Project No. 6 – Bilateral Interconnection ArrangementArrangement

Project 5 UpdateProject 5 Update

Inclusion of the following in its TOR Inclusion of the following in its TOR Objectives and Scope of Study :Objectives and Scope of Study :

To identify the regulatory and legal To identify the regulatory and legal challenges/ issues related to cross border challenges/ issues related to cross border electricity trading/ transaction.electricity trading/ transaction.

Addition of the following Deliverable:Addition of the following Deliverable:

Information and recommendations on the Information and recommendations on the regulatory and legal challenges/ issues regulatory and legal challenges/ issues related to cross border electricity trading/ related to cross border electricity trading/ transaction.transaction.

Project 5 UpdateProject 5 Update

Timeline of Work Plan was adjusted:Timeline of Work Plan was adjusted: Conduct survey among members – March to Conduct survey among members – March to

Sept 2009Sept 2009 Initial draft of the report – Oct 2009Initial draft of the report – Oct 2009 Preliminary results of the study – Dec 2009Preliminary results of the study – Dec 2009 Finalization of the study – March 2010Finalization of the study – March 2010 Submission of Project Completion Report – May Submission of Project Completion Report – May

20102010

Project 6 UpdateProject 6 Update

The Kick-off meeting of Project 6 was held The Kick-off meeting of Project 6 was held with 18 participants from 9 member with 18 participants from 9 member countries; 5 from Subsystem A and 2 each countries; 5 from Subsystem A and 2 each from Subsystems B and C.from Subsystems B and C.

A brief presentation on the Project TOR A brief presentation on the Project TOR already approved by HAPUA WC and already approved by HAPUA WC and APGCC meetings in December 2008 was APGCC meetings in December 2008 was given with additional recommendations as given with additional recommendations as follows.follows.

Project 6 UpdateProject 6 Update

Terms of Reference (TOR)Terms of Reference (TOR)

The Meeting agreed to change the Project title The Meeting agreed to change the Project title from “Bilateral Contract Benchmarking” to from “Bilateral Contract Benchmarking” to “Bilateral Interconnection Arrangement” and “Bilateral Interconnection Arrangement” and the project deliverable will be the Model of the project deliverable will be the Model of Bilateral Interconnection Agreement.Bilateral Interconnection Agreement.

The Meeting had detailed discussion on the The Meeting had detailed discussion on the instruction made by the APGCC that the instruction made by the APGCC that the relevant study should also include the relevant study should also include the social social impactimpact. Considering that it is a very broad . Considering that it is a very broad issue, the Meeting agreed that it should be issue, the Meeting agreed that it should be excluded from the Project scope of work.excluded from the Project scope of work.

Project 6 UpdateProject 6 Update

Framework of Study [1/3]Framework of Study [1/3] An overview of the ASEAN An overview of the ASEAN

interconnection: the existing, the interconnection: the existing, the ongoing and the potential projects in ongoing and the potential projects in each Subsystem, highlighting on each Subsystem, highlighting on Subsystem A which is the Project first Subsystem A which is the Project first step, had been made with step, had been made with recommendation to update with current recommendation to update with current scheme of the ASEAN Power Grid.scheme of the ASEAN Power Grid.

Project 6 UpdateProject 6 Update

Framework of Study [2/3]Framework of Study [2/3] According to the Project TOR, a common According to the Project TOR, a common

understanding had been emphasized understanding had been emphasized that at the first step “Bilateral Contract” that at the first step “Bilateral Contract” is defined here as contract for cross is defined here as contract for cross border power purchase and sale border power purchase and sale between utility and utility of HAPUA between utility and utility of HAPUA member countries. Also, to meet the 12 member countries. Also, to meet the 12 month timeline as committed in the month timeline as committed in the TOR, the first stage of the Project will be TOR, the first stage of the Project will be focused mainly on Subsystem A.focused mainly on Subsystem A.

Project 6 UpdateProject 6 Update

Framework of Study [3/3]Framework of Study [3/3] The Meeting agreed with the project The Meeting agreed with the project

framework of study as proposed by the Project framework of study as proposed by the Project Leader with brainstorm covering technical, Leader with brainstorm covering technical, commercial, and legislations and regulatory commercial, and legislations and regulatory issues. Pro and Con factors for cross border issues. Pro and Con factors for cross border interconnection were also mentioned.interconnection were also mentioned.

According to the meeting concept, According to the meeting concept, benchmarking study of the Bilateral benchmarking study of the Bilateral Interconnection Agreement will be based on Interconnection Agreement will be based on exchanges of information, knowledge sharing exchanges of information, knowledge sharing to be developed as guidelines for the contract to be developed as guidelines for the contract model. model.

Project 6 UpdateProject 6 Update

Model of Bilateral Interconnection Model of Bilateral Interconnection Agreement, preliminary prepared by Agreement, preliminary prepared by the EGAT Power Purchase Agreement the EGAT Power Purchase Agreement Division, was presented to the Division, was presented to the Meeting.Meeting.

Bilateral Interconnection Agreement ModelBilateral Interconnection Agreement Model

Definitions and Interpretation

Term

Coordinating Committee

Interconnections

Interconnected Utility Responsibility

Miscellaneous Provisions

Sale and Purchase of Electrical Energy Billing and Payments

Tax and Tariff

Metering

Default and Termination

BIAConditions Precedent

Model of Bilateral Interconnection Model of Bilateral Interconnection Agreement (BIA)Agreement (BIA) Detailed discussion, comments and Detailed discussion, comments and

recommendations on each item had been recommendations on each item had been deliberated and expressed.deliberated and expressed.

Focus was made on commercial issue Focus was made on commercial issue regarding the reliability and viability of the regarding the reliability and viability of the interconnection with conclusion that interconnection with conclusion that alternative provisions be incorporated in the alternative provisions be incorporated in the model e.g. long/short term agreement, model e.g. long/short term agreement, capacity and energy transactions, price capacity and energy transactions, price quotation/fixed tariff with variable factors. quotation/fixed tariff with variable factors.

Project 6 UpdateProject 6 Update

Project 6 UpdateProject 6 Update

Next stepNext step EGAT as Project Leader will develop the EGAT as Project Leader will develop the

first draft of the Model Agreement as first draft of the Model Agreement as discussed and will distribute to all discussed and will distribute to all Project Members for consideration by e-Project Members for consideration by e-mail expecting to have feedback mail expecting to have feedback incorporated in the second draft ready incorporated in the second draft ready for the next meeting.for the next meeting.

Project 6 Action Plan Project 6 Action Plan

Date and Venue of Next WG5 Date and Venue of Next WG5 MeetingMeeting

The WG 5 and its projects will have The WG 5 and its projects will have back to back meetings, in Vietnam back to back meetings, in Vietnam around October 2009. Exact date will around October 2009. Exact date will be confirmed at a later date.be confirmed at a later date.

Thank you!Thank you!Terima kasih!Terima kasih!

WG5 Project Coordinator:MR. MELBURGO S. CHIUVice President, Sales & Services, Luzon Gen, WM & DRFFNational Power Corporation (NPC)Quezon Avenue corner BIR Road, Diliman1100 Quezon City, PHILIPPINESTel. no.: +63-2-922-8430, +63-2-924-5241Fax no.: +63-2-924-5241E-mail: MSChiu@napocor.gov.ph