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ENERGY REGULATORY COMMISSION\; , ~.San Miguel Avenue, Pasig City "

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.IN THE MATTER OF THEPETITION FOR THE ADOPTIONOF THE PROPOSED RULES TOGOVERN THE SETTING OFREGULATED SOLAR HOMESYSTEM TARIFF FOR THEPROVISION OF ELECTRICITYSERVICE FOR RURALELECTRIFICATION BYELECTRIC COOPERATIVES

ERC CASE NO. 2014-003 RM

PHILIPPINE RURAL ELECTRICCOOPERATIVES ASSOCIATION,INC. (PHILRECA),

Applicant.)(- - - - - - - - - - - - - - - - - - - ..- -)(

ORDEROn April 24, 2014, the Philippine Rural Electric Cooperatives

Association, Inc. (PHILRECA) filed a petition for the adoption of the. proposed "Rules to Govern the Setting of Regulated Solar HomeSystem Tariff for the Provision of Electricity Service for RuralElectrification by Electric Cooperatives".

,.'

, In the said petition, PHILRECA alleged, among others, the,0 following:

".; 1. Petitioner is a non-stock, non-profit association organizedand existing under and by virtue of Philippine laws, withprincipal office address at 4/F Casman Bldg., 1198Quezon Avenue, Quezon City. It is the nationalassociation of the Electric Cooperatives ("ECs") organizedand operating under P.O. 269, as amended;

2.' Section 2(a) of the Republic Act No. 9136, otherwiseknown as the "Electric Power Industry Reform Act of2001" or "EPIRA" declares that it is the policy of the State

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ERC CASE NO. 2014-003 RMORDER/June 16, 2014 of 21

to ensure and accelerate the total electrification of thecountry;

3. Further, Section 23 of the EPIRA states among others,that the Distribution Utilities (DUs) shall provide universalservice within their franchise, over a reasonable time fromthe requirement thereof, including unviable areas, as partof their social obligation, in a manner that shall sustain theeconomic viability of the utility, subject to the approval ofthe Energy Regulatory Commission (ERC), in the case ofprivate or government-owned utilities;

4. Republic Act No. 10531, otherwise known as the"National Electrification Administration (NEA) Reform Actof 2013" declares that it is the policy of the State topromote the sustainable development of the rural areasthrough rural electrification and further mandates NEA topursue total electrification of the country through the ECsby way of enhancing distribution development and toensure their economic and financial viability andoperation, among others;

5. Republic Act No. 9513, otherwise known as the"Renewable Energy Act of 2008" provides that it is thepolicy of the State to increase the utilization of renewableenergy resources, such as, but not limited to, solar, wind,hydropower, geothermal, and ocean energy sources, andincluding hybrid system by institutionalizing thedevelopment of national and local capabilities in the useof renewable energy systems, and promoting its efficientand cost-effective commercial application by providingfiscal incentives;

6. The Department of Energy ("DOE") in its HouseholdElectrification Development Plan (HEDP) for 2013-2017,established among others, the Solar Home System (SHS)mainstreaming program to support the HouseholdElectrification Development Program activities beingundertaken by ECs under their universal serviceobligation. Copy of the DOE's HEDP FOR 2013-2017 isattached and made integral part to the instant petition;


7. To achieve the goals of the Household ElectrificationDevelopment Program, the DOE in partnership with NEAand other government agencies and industrystakeholders, committed to implement the rural andhousehold electrification program of the Government in aholistic and sustainable manner, which includes amongothers, intensification program in energized areasincluding sitio electrification, barangay line enhancementprogram, rationalization of tariff and subsidy policy,opening up areas that were waived by DUs to alternativeelectric service providers such as Qualified Third Parties(QTPs), among others.

8. To put in place a fair, transparent and efficient process forcharging consumers the cost of providing electricityservice using Solar Home System (SHS) in remote ruraland island communities, ensure the financial andoperating viability of ECs providing such electricity serviceand provide safeguards in the accounting andmanagement of the amounts collected to protect theconsumers, this petition to initiate rule-making is beingfiled pursuant to the ERC Rules of Practice andProcedure 1, to seek the adoption of the proposed rules togovern the setting of regulated Solar Home System Tarifffor the provision of electricity service for ruralelectrification by electric cooperatives;

9. The salient features of the Proposed Rules are as follows:

ARTICLE I

General Provisions

Section 1. Objectives. These rules shall have the following

objectives:

(i) To put in place a fair, transparent and efficientprocess for charging consumers the cost of providing electricity

1 Rule 21, Sections 1 and 2 of the ERCRules of Practice and Procedure provides:"Section 1. Initiation of Rule-making. - The process of adopting a new rule or amendingor repealing an existing rule may be initiated by the Commission or by interestedpersons upon a petition for the issuance, amendment or repeal of any rule.Section 2. Petition to Initiate Rule-making. - Interested persons may petition theCommission to adopt, amend, or repeal a rule by filing a petition to initiate rule-making. xxx"


service in remote rural and island communities through SHSsystems;

(ii) To ensure the financial and operational viability ofelectric cooperatives (EGs) in providing electricity service to remoterural and island communities;

(iii) To provide safeguards in the accounting andmanagement of the amounts collected under these rules to protectthe consumers.

Section 2. Scope. These Rules shall apply to all EGs providingelectricity service using SHS and participating in the SHSmainstreaming program for rural electrification implemented by theDepartment of Energy (DOE).

Section 3. Definition of Terms. The following terms shall have themeaning assigned to them:

a) "Benchmark SHS tariff' refers to a regulated tariffapproved by ERG for the supply of electricity by an EG throughEligible SHS and set the basis of the expected costs of an efficientutility rather than the actual costs of any individual EG.

b) "Eligible SHS" refers to a SHS defined as eligible torepresent electrification of a household in accordance with theguidelines or policy promulgated by the DOE;

c) "SHS customer' refers to a household provided withelectricity service by an EG through an eligible SHS.

ARTICLE II

Benchmark Tariff for Solar Home System

Section 1. Initial Capital Cost. The initial capital cost for the SHSmainstreaming program shall be covered by a capital subsidy inaccordance with the rules of the DOE on the SHS mainstreamingprogram and related rules and programs.

Section 2. Obligation to Procure, Install and Maintain the SHS.The EC has the obligation to procure, install and maintain the SHS.The EG will make at least quarterly visits to every SHS of member-consumer to inspect the system and make minor repairs. Visits formajor repairs will be conducted as needed. The SHS shall beowned by the EG and will fund the cost of replacing SHScomponents as required.

Section 3. Basis of Benchmark SHS Tariff. The tariff shall be thebest approximation of the operating cost an EG would incur inproviding electricity service to all SHS member-consumers,

"


including the cost of the replacement of components as necessary,and covering both direct and indirect overhead costs.

The higher costs of servicing SHS for more remote anddifficult to reach areas shall be considered in an incremental costadjustment that will apply to SHS in such areas. This adjustmentwill be common across all ECs serving customers in the samedefined zones.

Section 4. Cost Zones. The incremental cost adjustment requiresthat households are grouped into cost zones. The cost zones shallcapture the range of areas in which the ECs shall operate. Thesame zones will apply across all ECs.

There shall be three (3) cost zones defined by distance fromthe nearest office of an EC. These are:

Zone

Zone AZone BZone C

Distance fromthe EC Office< 40km

40km- 45km> 45 km

Small islands and islets shall be considered to fall into Zone{C]'

The ERC shall approve and monitor the ECs' classificationof households into zones.

Section 4. Non-eligible SHS. The Benchmark SHS Tariff allowsthe recovery of the costs of supply through Eligible SHS. An SHScustomer may request an EC to provide supply through a SHS oflarger capacity than the Eligible SHS. In such cases, the SHScustomer shall pay the Benchmark SHS Tariff plus a premium, asdetermined by negotiation between the SHS customer and the EC,representing the additional capital and replacement costs of thelarge capacity system relative to the Eligible SHS.

Section 5. SHS Customer Connection to the DistributionSystem. The SHS Customer shall be connected to the ECdistribution system once it becomes more economical to do so inthe SHS sites. In such case, the EC shall pull out the SHS andallocate the same to another qualified SHS Customer.

ARTICLE III

Methodology for Calculating the Benchmark Tariff

Section 1. Costs Recovery. The benchmark SHS tariff comprisesof an allowance for operating revenues, replacement cost andpass-through of other related costs.


Operating revenues comprise the base operating andservice costs for SHS installed by the EC, an incremental costadjustment representing the increasing cost of servicing more.remote areas and a contribution to overhead costs.

Replacement cost comprises the Replacement Cost Fund(RCF) paid by the member-consumer to cover the costs to the ECof replacing components of the SHS over time.

A collection fee, applied as a percentage mark-up, shall beincluded in the allowed costs to pay the authorized local agent/s ofan EGs who is responsible for collecting tariffs and remitting thesame to the EC, and for minor repairs of SHS.

Section 2. Base Operating Costs. The base operating costscomponent of the tariffs shall cover the costs of EG employeesmaking scheduled and unscheduled visits to each SHS member-consumer, including annual salaries and benefits, accommodationand meal allowances for each visit, and the costs of vehicle accessincluding fuel and wear and tear. The costs are calculatedassuming readily accessible locations for the installations.

The accommodation and meal allowances shall cover basicminimum standards, while also giving the employees anappropriate incentive for carrying out their tasks. Hence, a premiummay be paid above the standard allowances paid by ECs tocompensate and encourage its employees to provide an efficientservice to remote rural and island communities.

The base operating costs shall also include cost for theinsurance of the SHS package.

Section 3. Incremental Cost Adjustment. As the cost to serviceSHS customers can be expected to rise significantly in moreremote areas and areas with lower population densities given themuch greater travelling time, the base operating costs shall beadjusted to reflect this by multiplying them by an incremental costadjustment (expressed as a percentage) for more remote areas.The cost adjustment shall be based on the additional time requiredand, therefore, the additional manpower needed to achieve thetarget frequency of visits.

Specific identifiable additional costs shall be allowed to beadded to the base costs such as additional transport costs.

Section 4. Overheads. SHSmember-consumers shall also pay theadministrative costs for the SHS program (including staff andassociated office costs), plus an allocation of the overall overheadcosts for the EG.

The administrative costs for an SHS program can be directlyestimated and are assumed to be the same across all ECs. Thecontribution to overall overheads would be determined following the


ERC's Accounting and Cost Allocation Manual (ACAM) guidelineson the allocation of un-attributable costs.

Section 5. Replacement Cost Fund. The EC shall be responsiblefor replacing major components of the SHS (module, mounting,controllers, batteries) and providing distilled water. Bulbs or otherelectricity-using appliances shall be the responsibility of the SHSmember-consumer. The costs of replacements will be covered froma separate and ring-fenced Replacement Cost Fund (RCF).

The RCF charge shall be determined as the sum of thereplacement costs of the individual components of an individualSHS divided by their expected life (in months).

Section 6. Taxes. SHS customers shall not be required to payExpanded Value Added Tax (EVAT) pursuant to Section 13(g) ofthe Renewable Energy Act 2008 (R.A. 9513), which prescribes theapplication of zero percent VA T rate to power generated fromrenewable energy sources.

Further, pursuant to Section 13 of R.A. 10531 in relation toSection 193 of the Local Government Code (R.A. 7160) andSection 234 of Phil. Cooperative Code of 2008 (R.A. 9520), theSHS shall not be subject to Real Property Tax.

Section 7. Exemption from Universal Charges and Othercharges. SHS customers shall be exempt from Universal Chargesand other similar charges imposed to grid-connected customers.

Section 8. Agent Collection Fees. The EC's collection agent shallreceive a fee fixed monthly or a percentage mark-up on the tariffcalculated above to compensate them for their own costs.

Section 9. Adjustments to the Benchmark Tariff. Thebenchmark tariff, once established, will be indexed to generalinflation as measured by the Consumer Price Index. The level ofthe benchmark tariff will be reviewed at regular three (3) yearintervals.

ARTICLE IV

Accounting of Revenues and Expenses

Section 1. Accounting. The revenues and expenses of the ECsfor the SHS electricity services shall be booked in separateaccounts consistent with the rules in the Accounting and CostAllocation Manual approved by the ERC.

Section 2. Replacement Cost Fund. The RCF shall be arestricted account that can be utilized solely to finance theinstallation and replacement of SHS or its components.


ARTICLE V

Setting of the Benchmark SHS Tariff

Section 1. Eligible Petitioners. Any EC or group of ECs or theirauthorized representative may file a petition to the ERC for theinitial setting of the Benchmark SHS Tariff for its review andapproval every three (3) years.

Section 2. ERC Review. The ERC shall review the rate petition inaccordance with the Commission's standards for reviewingregulated tariffs.

Section 3. Public Hearings. The ERC shall conduct publichearings for the petition to set the Benchmark SHS Tariff inaccordance with the Commission's Rules of Practice andProcedures.

Section 4. Applicability. The Benchmark SHS Tariff, onceapproved, shall be applicable to all ECs providing electricity serviceusing SHS and participating in the SHS mainstreaming program forrural electrification being implemented by the DOE.

ARTICLE VI

Final Provisions

Section 1. Repealing/Separability Clause. If any provision ofthese rules is declared invalid or unconstitutional by a court ofcompetent jurisdiction, those provisions which are not affectedthereby shall continue to be in full force and effect.

Section 2. Effectivity. These rules shall take effect fifteen (15)days following its publication in a newspaper of general circulation.

10. The provisions of the draft Proposed Rules are valid, justand reasonable.

On May 27,2014 PHILRECA filed a "Supplemental Petition" tothe instant petition.

In said supplemental petition, PHILRECA alleged, amongothers the followings:

1. The Proposed Rules as filed presents in ARTICLE IIIthereof the methodology for calculating the Benchmark


Tariff. However, it does not provide the bases andparameters as well as the formulae for the calculation ofthe benchmark tariff;

2. In the meantime, petitioner gathered relevant data fromfive (5) Visayas Electric Cooperatives (ECs) consisting ofthe Negros Occidental Electric Cooperative (NOCECO),V-M-C Rural Electric Service Cooperative, Inc.(VRESCO), Cebu II Electric Cooperative, Inc. (CEBECOII), Bohol II Electric Cooperative, Inc. (BOHECO II) andBantayan Island Electric Cooperative, Inc. (BANELCO),which were utilized as parameters as it developed theformulae for calculating the benchmark tariff.

3. In order for the Proposed Rules to be complete in itselfand fully govern the setting of regulated Solar HomeSystem Tariff for the provision of electricity service forrural electrification of ECs, petitioner respectfully submitsthe instant Supplemental Petition for purposes ofincorporating in the draft Proposed Rules the bases andparameters as well as the formulae for calculating thebenchmark tariff.

4. The corresponding formulae and other additions areproposed to be inserted in the provisions of the existing ,ARTICLE III Methodology for Calculating the BenchmarkTariff while a new article to be entitled "INITIALBENCHMARK SHS TARIFF" shall be inserted as the newARTICLE IV. The other existing Articles in the Draft Rulesshall be adjusted accordingly.

5. ARTICLE III with the proposed additions incorporatedtherein as well as the proposed new ARTICLE IV arequoted hereinbelow. The additions are underlined forproper identification except the equations/formulae, asfollows, to wit:

ARTICLE 11/

Methodology for Calculating the Benchmark Tariff


Section 1. Costs to be Recovered. The benchmark SHS tariff comprisesof an allowance for operating revenues, replacement cost and pass-through of other related costs.

Operating revenues comprise the base operating and service costs forSHS installed by the EC, an incremental cost adjustment representing theincreasing cost of servicing more remote areas and a contribution tooverhead costs.

Replacement cost comprises the Replacement Cost Fund (RCF) paid bythe member-consumer to cover the costs to the EC of replacingcomponents of the SHS over time.

A collection fee, applied as a percentage mark-up, shall be included in theallowed costs to pay the authorized local agent/s of an EC who isresponsible for collecting tariffs and remitting the same to the EC, and forminor repairs of SHS.

The Fixed Monthly SHS Tariff shall be calculated according to thefollowing equations:

SHS Tariff = (MBOC + MOOC + MRC)jCUSTsHs (1)

MBOC -Monthly Base Operating Costs

MOOC -Monthly Office Overhead Costs

MRC - Monthly Replacement Costs

CUSTsHs-Total No. ofSHS Customers

Section 2. Base Operating Costs. The base operating costs componentof the tariffs shall cover the costs of EC employees making scheduled andunscheduled visits to each SHS member-consumer, including annual I

salaries and benefits, accommodation and meal allowances for each visit,the costs of vehicle access including fuel and wear and tear, and interestexpenses for borrowed capital in case of output-based aid where the ECwill advance the initial investment. The costs are calculated assumingreadily accessible locations for the installations.

The accommodation and meal allowances shall cover basic minimumstandards, while also giving the employees an appropriate incentive forcarrying out their tasks. Hence, a premium may be paid above thestandard allowances paid by ECs to compensate and encourage itsemployees to provide an efficient service to remote rural and islandcommunities.

The base operating costs shall also include cost for the insurance of theSHS package.

The Monthly Base Operating Costs shall be calculated according to thefollowing equations:


MBOC = MSB + MPA + MTC + MIN + MIE

Where,

(2)

MBOC - Monthly Base Operating Costs

MSB - Monthly Salaries and Benefits of Personnel

ASBj - Annual Salaries and Benefits of Personnel i

MPA - Monthly Personnel Allowances for the scheduled and unscheduled

visits to maintain the SHS

(3)

Where,

PDP; - Per Diem of Personnel i

TNVj - Total number of days ofscheduled and unscheduled

visits in a year of Personnel i

MTC - Monthly Transport Cost

(4)

Where,

AICjUV - Annual Investment Cost of Utility Vehicle i

AIC-UV = "'~ 1ICpv/AFuvt L..t= t t

IC;UV- Investment Cost of Utility Vehicle i

AF;uv- Annuity Factor of Utility Vehicle i

=[(1+ r)N - l]/[r * (1+ r)N]r - Interest rate per annum

N- Period of Annuity, Economic life of

AMC;UV-Annual Maintenance Cost of Utility Vehicle i

AFC/JV-Annual Fuel Cost of Utility Vehicle i

AFCFV = L7=1 FCj * (DTS * 2 + DWS) * (NDSV + NDUV) * NS

(5)

(6)


FC;- Fuel Cost of Utility Vehicle i, PHPjkm.

DTS- Distance to Site from Office of the EC

DWS - Distance within Site travelled by the Utility Vehicle

NDSV - No. of Days of Scheduled Visits per visit at the site

NDUV - No. of Days of Unscheduled Visits per visit at the site

NS - Total No. of Sites

MIN - Monthly Insurance for the SHS

MIN = AIN/12

AIN - Annual Insurance for the SHS

(7)

MIE - Monthly Interest Expense for Advances in Capital Investment

according to Output-Based Aid Program of DOE

MIE = {SHSIC * [1- (l + r)RP]}/12

Where,

SHSIC - Solar Home System Installed Cost

r - Annual interest rate

RP- Repayment period

(8)

Section 3. Incremental Cost Adjustment. As the cost to service SHScustomers can be expected to rise significantly in more remote areas andareas with lower population densities given the much greater travellingtime, the base operating costs shall be adjusted to reflect this bymultiplying them by an incremental cost adjustment (expressed as apercentage) for more remote areas. The cost adjustment shall be basedon the additional time required and, therefore, the additional manpowerneeded to achieve the target frequency of visits.

Specific identifiable additional costs shall be allowed to be added to thebase costs such as additional transport costs.

The Incremental Cost Adjustment for Personnel Allowances shall becalculated according to the following equations:

MPAAdj = MPA * ICAFpA (9)


Where,

MPA~~r Adjusted Monthly Personnel Allowance

ICAFpA- Incremental Cost Adjustment Factor for Personnel Allowance

ICAF = [NO. of Days per Visit in Zone [B or C]]PA No. of Days of Visit in Zone A (10)

The Incremental Cost Adjustment for Transportation Cost shall be

calculated according to the following equations:

(11)

Where,

MTCX~- Adjusted Monthly Transportation Cost for Zone {B or Cj

AFCX~- Adjusted Annual Fuel Costfor Zone {B or Cj

AFCAdj = AFC * ICAFpc

Where,

(12)

ICAFpc- Incremental Cost Adjustment Factor for Fuel Cost

ICAF = Distance to Site, Zone [B or C]FC Distance to Site, Zone A (13)

Section 4. Overheads. SHS member-consumers shall also pay theadministrative costs for the SHS program (including staff and associatedoffice costs), plus an allocation of the overall overhead costs for the EC.

The administrative costs for an SHS program can be directly estimatedand are assumed to be the same across all ECs. The contribution tooverall overheads would be determined following the ERC's Accountingand Cost Allocation Manual (ACAM) guidelines on the allocation of un-attributable costs.

The Monthlv Office Overhead Costs shall be calculated according to thefollowing equations:


MOOC MOOC *. No. ot SHSCustomersSHS = EC No. ot SHSCustomers+No. ot GridCustomers

Where,

MOOCsHS -Monthly Office Overhead Cost for SHS

MOOCE:c-Monthly Office Overhead Cost of the EC

(14)

Section 5. Replacement Cost Fund. The EC shall be responsible forreplacing major components of the SHS (module, mounting, controllers,batteries) and providing distilled water. Bulbs or other electricity-usingappliances shall be the responsibility of the SHS member-consumer. Thecosts of replacements will be covered from a separate and ring-fencedReplacement Cost Fund (RCF).

The RCF charge shall be determined as the sum of the replacement costsof the individual components of an individual SHS divided by theirexpected life (in months).

The Monthly Replacement Costs shall be calculated according to thefollowing equations:

MRC = [Lr ICCJELCd/12

Where,

MRC -Monthly Replacement Costs

ICCi- Investment Cost of Component i ofSHS

ELC - Economic Life of Component i ofSHS

(15)

Section 6. Taxes. SHS customers shall not be required to pay ExpandedValue Added Tax (EVAT) pursuant toSection 13(g) of the RenewableEnergy Act 2008 (RA. 9513) which prescribes the application of zeropercent VA T rate to power generated from renewable energy sources.

Further, pursuant to Section 13 of RA. 10531 in relation to Section 193 ofthe Local Government Code (RA. 7160) and Section 234 of Phil.Cooperative Code of 2008 (RA. 9520), the SHS shall not be subject toReal Property Tax.

Section 7. Exemption from Universal Charges and Other charges.SHS customers shall be exempt from Universal Charges and other similarcharges imposed to grid-connected customers.

Section 8. Agent Collection Fees. The EC's collection agent shallreceive a fee fixed monthly or a percentage mark-up on the tariffcalculated above to compensate them for their own costs.

The Monthly Agent Collection Costs shall be calculated according to thefollowing equations:


MACC = CAMU * (MBOC + MOOC + MRC)

or

MACC = FMCF

Where,

MACC -Monthly Agent Collection Costs

MAMU -CollectionAgent Mark-Up in percent

FMCF - Fixed Monthly Collection Fees

(J6a)

(16b)

Section 9. Adjustments to the Benchmark Tariff. The benchmark tariff,once established, will be indexed to general inflation as measured by theConsumer Price Index. The level of the benchmark tariff will be reviewedat regular three (3) year intervals.

ARTICLE IVInitial Benchmark SHS Tariff

Section 1. Basis of Initial SHS Tariff. The Initial Benchmark SHS Tariffshall be set based on a business case of an EC with three (3) full timestaff composed of an Engineer, Senior Technician and Junior Technicianwho are dedicated for the maintenance of SHS and attend to needs SHScustomers in providing reliable electricity services. The SHS team has two(2) utility motorcycles and is supported by the head office foradministrative, financial and other corporate services. Table 1 summarizesthe parameters for the calculation of Benchmark SHS Tariff.

Table 1. Parameters for SHS Tariff Calculation

Parameter Value

Ave. No. of Customer/Site 52

No. of Sites 17

Total No. of SHS Customers 884

No. of Working Days/year 228

No. of Visits, Scheduled 4

No. of Visits, Unscheduled 1

No. of Days of Visit per Visit, Zone A 2

No. of Days of Visit per Visit, Zone B 3

No. of Days of Visit per Visit, Zone C 4


Salary, Engineer (PHP/month) 19,111.00

Salary, Senior Technician (PHP/month) 14,036.50

Salary, Junior Technician (PHP/month) 13,579.00

Annual Benefits, Engineer (PHP/year) 9,625.18

Annual Benefits, Senior Technician (PHP/year) 7,712.23

Annual Benefits, Junior Technician (PHP/year) 7,375.63

Per Diem (PHP/day) 361.50

Distance to Site from EC Office, Zone A (km) 40

Distance to Site from EC Office, Zone B (km) 45

Distance to Site from EC Office, Zone C (km) 55

Distance within the Site (km) 5.2

Utility Vehicle Investment Cost, Motorcycle (PHP) 65,000.00

Utility Vehicle Economic Life, Years 5

Utility Vehicle Annual Maintenance Cost (% of AIC) 27%

Fuel Economy (km/Li) 50

Cost of Fuel, Gasoline(PHP/Li) 59.83

Fuel Cost per km (PHP/km) 1.20

No. of Vehicles 2

Investment Cost, Solar Panel, 50 Wp (PHP) 8,500.00

Investment Cost, Battery, 65-70 Ah (PHP) 6,840.00

Investment Cost, Controller, 5-10 A (PHP) 2,445.00

Economic Life, Solar Panel (Years) 25

Economic Life, Battery (Years) 8

Economic Life, Controller (Years) 5

Repayment Period, OBA Loan (Years) 2

Interest Rate per annum (%) 6.00%

Section 2. SHS Tariff for Zone A. The components of the fixed monthlySHS Tariff for Zone A is as follows:

PARAMETER PHP/Month/Cust.

1 Base Operating Costs

1.1 Salaries and Benefits and Per Diem

Engineer 24.33

Senior Technician 17.93

Junior Technician 17.34

ERC CASE NO. 2014-003 RMORDER/June 16,2014 of 21

1.2 Personnel Allowance

Engineer 2.90



1.3 Transportation Cost

Investment Cost 2.91

Maintenance Cost 3.31

Fuel Cost 1.63

1.4 EC Office Overhead Cost 0.08

1.5 Insurance 4.45

1.6 Interest Expense 2.49

2 Replacement Cost Fund (RCF)

2.1 Solar Panel 28.33

2.2 Battery 71.25

2.3 Controller 40.75

3 AGENT COLLECTION FEE 20.00

MONTHLY SHS TARIFF (ZONE A) 249.00

Section 3. SHS Tariff for Zone B. The components of the fixed monthlvSHS Tariff for Zone B is as follows:




Engineer 24.33



1.2 Personnel Allowance (Adj. Zone B)

Engineer 4.34






Fuel Cost (Adj. Zone B) 1.84



1.5 Insurance 4.45




2.2 Battery 71.25

2:3 Controller 40.75

3 AGENT COLLECTION FEE

MONTHL Y SHS TARIFF (ZONE B) 257.00

Section 4. SHS Tariff for Zone C. The components of the fixed monthlvSHS Tariff for Zone B is as follows:




Engineer 24.33



1.2 Personnel Allowance (Adj. Zone B)

Engineer 5.79






Fuel Cost (Adj. Zone C) 2.25


1.5 Insurance 4.45




2.2 Battery 71.25

2.3 Controller 40.75

3 AGENT COLLECTION FEE

MONTHLY SHS TARIFF (ZONE C) 264.00

July 24, 2014 at two o'clock inthe afternoon (2:00 P.M.)

"" .

ERC CASE NO, 2014-003 RMORDER/June 16, 2014 of 21

Finding the said petition for rule-making to be sufficient in formand in substance with the required fees having been paid, the sameis hereby set for expository presentations and public consultations onthe following dates and venues:

EXPOSITORY PRESENTATION AND PUBLIC CONSULTATION

DATE AND TIME VENUEJuly 7, 2014 at two o'clock in ERC Hearing Room, 15th Floor, Pacificthe afternoon (2:00 P.M.) Center Bldg., San Miguel Ave., Pasig City

Cebu Grand Hotel, Cebu CapitolCommercial Complex, N. Escario St.,

Cebu City

August 1, 2014 at nine o'clock Ritz Hotel at Garden Oases, Porras St.in the morning (9:00 A.M.) Brgy. Obrero, Davao City

August 18, 2014 at two o'clockin the afternoon (2:00 P.M.)

ERC Hearing Room, 15th Floor, PacificCenter Bldg., San Miguel Ave., Pasig City

The Commission shall cause the posting of the attached Noticeof Proposed Rule-Making as well as copies of the instant petition andall its annexes at its official website at www.erc.gov.ph.

All interested parties are hereby directed to submit theircomments on the proposed Rules on or before August 11, 2014.

PHILRECA is hereby directed to cause the publication of theattached Notice of Public Consultation, at its own expense, once (1)in a newspaper of general circulation in the Philippines, with the dateof the last publication to be made not later than ten (10) days beforethe date of the scheduled public consultation. It is also directed toinform all the member-consumers of the ECs by any other meansavailable and appropriate of the filing of the instant petition, its reasontherefore, and of the scheduled hearings thereon.

PHILRECA is directed to furnish all those making requeststherefor with copies of the petition and its attachments, subject toreimbursement of reasonable photocopying costs.

http://www.erc.gov.ph.

. '


On the date of the public consultation, PHILRECA must submitto the Commission its written compliance with the jurisdictionalrequirements attaching therewith, methodically arranged and dulymarked, the evidence on the actual publication of the Notice of theProposed Rule-Making together with the complete issue of the saidnewspaper, and such other proofs of compliance with the 'requirements of the Commission.

SO ORDERED

Pasig City, June 16,2014.

FOR AND BY THE AUTHORITYOF THE COMMISSION:

~

~'h ILr~NAIDA G. CRUZ-DUCUT

Chairperson h/

r.-tJ - rJ

(

". '

ERC CASE NO. 2014-003 RMORDERlJune 16, 2014 of 21

COPY FURNISHED:

1. Philippine Rural Electric Cooperatives Association, Inc.(PHILRECA)4/F Casman Bldg., 1198 Quezon Avenue, Quezon City.

2. National Electrification Administration

3. ALL ELECTRIC COOPERATIVES

order, erc case no. 2014-003 rm

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