Manila Electric Co. · PSE:MER
Manila Electric — Crowdfunding (September 2019)
52 slides from Manila Electric's crowdfunding presentation, Sep 27, 2019
Slide 1: ER 1-94 Program, Issuances, and Fund Allocation for MERALCO
ER 1-94 Program, Issuances, and Fund Allocation for MERALCO September 27, 2019 Department of Energy Powering the Nation
Slide 2: Presentation Outline
Presentation Outline ▪ Origin and evolution of Energy Regulations (E.R.) 1-94 ▪ Salient features of DC2018-08-0021 and 1st Advisory: ER Program Flow ▪ Salient features of DO2019-01-0001: Allocation, Process, Requirements ▪ Sample case ▪ Latest reconciled electrification fund and allocation Departmen
Slide 3: ER 1-94 Origin and Evolution Story
ER 1-94 Origin and Evolution Story 1992 Republic Act No. 7638 Section 5(i) “Devise ways and means of giving benefits…” 1994 Energy Regulations No. 1-94 Republic Act No. 9136 Section 66 “Benefits to Host Communities” 2001 Rule 29 Part (A) of EPIRA IRR “Benefits to Host Communities” Department Circula
Slide 4: Salient Features of DC2018-08-0021 Relevant to Distribution Utilities
Salient Features of DC2018-08-0021 Relevant to Distribution Utilities Allocation Accounts Work Plan 50% Electrification Fund AGDB trust account for Annual Work Program 25% DLF DUs and GenCos (AWP) preparation by DU 25% RWMHEEF in accordance with DDP (SECTION 6) (SECTIONS 8 and 7.5) (SECTION 10.2) Ut
Slide 5: DC2018-08-0021 and 1st Advisory Process Flow for ER1-94
DC2018-08-0021 and 1st Advisory Process Flow for ER1-94 Establishment of Trust Accounts DU GENCO/ERD Preparation and Remittance of AWP Implementation Validation of AWP Financial Benefits DU GENCO/ERD GENCO/ERD DU Audit of Electricity Audit of Completed Sales, Remittances, Projects and Allocation DOE
Slide 6: Process Flow: Establishment of Trust Account
DC2018-08-0021 and 1st Advisory Process Flow for ER1-94 Preparation and Validation of Remittance of Financial Audit of Electricity Sales and Establishment of Trust Account Project Implementation Annual Work Program Benefits Projects under AWP Requirements: 1. Memorandum of Agreement (MOA) between Ge
Slide 7: Process Flow: Preparation and Validation of Annual Work Program
DC2018-08-0021 and 1st Advisory Process Flow for ER1-94 Preparation and Validation of Remittance of Financial Audit of Electricity Sales and Establishment of Trust Account Project Implementation Annual Work Program Benefits Projects under AWP • The Annual Work Program (AWP) refers to the tangible pr
Slide 8: Process Flow: Eligible Projects under AWP
DC2018-08-0021 and 1st Advisory Process Flow for ER1-94 Preparation and Validation of Remittance of Financial Audit of Electricity Sales and Establishment of Trust Account Project Implementation Annual Work Program Benefits Projects under AWP Eligible projects to be included under AWP (Section 10.3
Slide 9: Process Flow: Remittance of Financial Benefits
DC2018-08-0021 and 1st Advisory Process Flow for ER1-94 Preparation and Validation of Remittance of Financial Audit of Electricity Sales and Establishment of Trust Account Project Implementation Annual Work Program Benefits Projects under AWP • Quarterly remittance of benefits from GenCos and/or ERD
Slide 10: Process Flow: Project Implementation
DC2018-08-0021 and 1st Advisory Process Flow for ER1-94 Preparation and Validation of Remittance of Financial Audit of Electricity Sales and Establishment of Trust Account Project Implementation Annual Work Program Benefits Projects under AWP • Within 30 days after the end of every year, the GenCos
Slide 11: Process Flow: Audit of Electricity Sales and Projects
DC2018-08-0021 and 1st Advisory Process Flow for ER1-94 Preparation and Validation of Remittance of Financial Audit of Electricity Sales and Establishment of Trust Account Project Implementation Annual Work Program Benefits Projects under AWP • For the electrification fund (EF) utilization, the foll
Slide 12: DC2018-08-0021 and 1st Advisory Summary
DC2018-08-0021 and 1st Advisory Summary (New AWP amount New AWP submission, Prepare and submit (AWP amount based based from remaining and liquidation of AWP: deadline from existing fund + 2020 remitted funds) projects deadline from DOE + 2018-2019 March 15, 2020 GenCo remittances) March 15, 2021 Rem
Slide 13: DC2018-08-0021 and 1st Advisory Summary
DC2018-08-0021 and 1st Advisory Summary (New AWP amount New AWP submission, Prepare and submit (AWP amount based based from remaining and liquidation of AWP: deadline from existing fund + 2020 remitted funds) projects deadline from DOE + 2018-2019 March 15, 2020 GenCo remittances) March 15, 2021 Rem
Slide 14: DC2018-08-0021 and 1st Advisory Summary
DC2018-08-0021 and 1st Advisory Summary New AWP 2021 (New AWP amount New AWP 2022 (New AWP amount submission, but failed based from 2021 submission, and basis from remaining + to liquidate projects remitted funds) liquidation of projects 2020 remitted funds) of AWP 2020 deadline March 15, 2021 March
Slide 15: Guidelines for the Transfer of Existing Funds
DO2019-01-0001: Guidelines for the Transfer of Existing Funds Administered by DOE Cash funds • Allocation Method • Requirements • Process Department of Energy Powering the Nation
Slide 16: Salient Features of DO2019-01-0001: Transfer of Existing Funds
Salient Features of DO2019-01-0001: Transfer of Existing Funds EXISTING FUNDS FOR TRANSFER (Section 3) REGULAR TRANSACTIONS Distribution Utilities DID NOT OPERATE GenCo/ERD DECOMMISSIONED Distribution Utilities INTEREST ACCOUNT Insufficient funds Traversed by lines Isolated & remote Determined by DO
Slide 17: Salient Features of DO2019-01-0001: Allocation Method
Salient Features of DO2019-01-0001: Allocation Method “based on the AD’s final reconciled list of available cash balances and accounts receivables REAMD shall allocate the funds due to the concerned DUs….” (Section 4) DU Serving the RWMHEEF (25%) Resettlement Area and Host Barangay and City/Municipa
Slide 18: Hypothetical Region Hosting One Power Plant
Salient Features of DO2019-01-0001: Allocation Method X POWER PLANT HOST MUNICIPALITY HYPOTHETICAL REGION HOSTING ONE POWER PLANT HOST PROVINCE HOST REGION Department of Energy Powering the Nation
Slide 19: Allocation Method: Case 1
Salient Features of DO2019-01-0001: Allocation Method CASE 1: DU 2 HOST MUNICIPALITY Different DUs serving host municipality, host 30% province, and host region DU 1 60% DU 1 will receive entire 60% of the fund HOST PROVINCE DU 2 will receive entire 30% of the fund DU 3 DU 3 will receive entire 10%
Slide 20: Allocation Method: Case 2
Salient Features of DO2019-01-0001: Allocation Method DUMUNICIPALITY HOST 1 DU 2 CASE 2: 60% Exact same set of DUs serve the host municipality and DU 3 host province. HOST PROVINCE DU 1 and DU 2 will share the 60% of the fund 40% DU 3 and DU 4 will share the (30% + 10%) of the fund DU 4 HOST REGION
Slide 21: Allocation Method: Case 3
Salient Features of DO2019-01-0001: Allocation Method DU 1 DU 2 HOST MUNICIPALITY 60% 30% CASE 3: DU 1 will receive entire 60% HOST PROVINCE DU 2 will receive entire 30% DU 3 and DU 4 will share the remaining 10% DU 4 DU 3 For DU 3 and DU 4, allocation still pro-rated on the basis of household popul
Slide 22: Allocation Method: Extreme Case 1
Salient Features of DO2019-01-0001: Allocation Method HOST MUNICIPALITY EXTREME CASE 1: Only one DU serving the entire host region DU 1 HOST PROVINCE Sole DU will receive 100% of the fund HOST REGION Department of Energy Powering the Nation
Slide 23: Allocation Method: Extreme Case 2
Salient Features of DO2019-01-0001: Allocation Method DU 2 HOST MUNICIPALITY EXTREME CASE 2: Exact same set of DUs serve the host municipality, DU 1 host province, and host region HOST PROVINCE DU 3 Set of DUs will share 100% based on their household population and land area HOST REGION Allocation s
Slide 24: Effect of 70% Household Population and 30% Land Area
Salient Features of DO2019-01-0001: Allocation Method What is the effect of the “70% household population” and “30% land area”? For this case, DU 1 and DU 2 will share the 60% of the fund. DU 2 Household population Land area DU 1 1,000 60 DU 1MUNICIPALITY HOST DU 2 500 100 TOTAL 1,500 160 1,000 60 H
Slide 25: Salient Features of DO2019-01-0001: Process and Requirements
Salient Features of DO2019-01-0001: Process and Requirements Requirements for DUs to avail of EXISTING FUNDS administered by DOE (Section 7) 1. Establishment of trust account “DU-GenCo/ERD-EF (ER1-94)” 2. Certification from any AGDB of established account 3. Authorized representative certification 4
Slide 26: Sample Case 1: MERALCO transfer from MakBan
SAMPLE CASE 1: MERALCO transfer of existing fund from MakBan Geothermal Power Plant and new ER1-94 program setup Department of Energy Powering the Nation
Slide 27: Transfer of Funds from MakBan Geothermal Power Plant to MERALCO
Transfer of Funds from MakBan Geothermal Power Plant to MERALCO STEP 1: Establish trust account in AGDB named “MERALCO-MakBan GPP -EF- (ER1-94)” STEP 2: Submission of bank certificate and authority to sign. Make sure no pending liquidation of projects with DOE. STEP 3: DOE allocation and remittance
Slide 28: Step 3: DOE allocation and remittance of financial benefits
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Makban Geothermal Power Plant Aboitiz Power Renewables, Inc. HOST MUNICIPALITIES: Calauan, Bay, and Sto. Tomas HOST PROVINCES: Laguna and Batangas HOST REGION: IV-A Electrification Fund Amount: ₱64,265,011.71 Department of Energy
Slide 29: Step 3: Host Municipalities
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Municipalities MERALCO Serves all host municipalities 60% of the Electrification Fund ₱38,559,007.03 Department of Energy Powering the Nation
Slide 30: Step 3: Host Provinces
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Provinces Department of Energy Powering the Nation
Slide 31: Step 3: Host Provinces
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Provinces FLECO BATELEC I BATELEC II FBPC IEEC MERALCO Already recipient of 60% Department of Energy Powering the Nation
Slide 32: Step 3: Host Provinces Allocation
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Provinces FLECO ₱2,963,457.58 BATELEC I ₱5,816,050.89 BATELEC II ₱9,451,379.60 FBPC ₱600,797.30 IEEC ₱447,818.15 Department of Energy Powering the Nation
Slide 33: Step 3: Host Region
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Region Department of Energy Powering the Nation
Slide 34: Step 3: Host Region
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Region QUEZELCO II MERALCO Already recipient of 60% FLECO Already recipient from 30% BATELEC I Already recipient from 30% BATELEC II Already recipient from 30% FBPC Already recipient from 30% IEEC Already recipient from 30%
Slide 35: Step 3: Host Region Allocation
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Region QUEZELCO II ₱1,740,478.37 QUEZELCO I ₱4,686,022.80 Department of Energy Powering the Nation
Slide 36: Example No. 1: Transfer of Funds from Makban to MERALCO
Example No. 1: Transfer of Funds from Makban to MERALCO Serves host Serves host Serves host Distribution Utility % Share Amount Share municipalities? province? region? MERALCO Yes Yes Yes 60.00% ₱38,559,007.03 BATELEC I Yes Yes 9.05% ₱5,816,050.89 BATELEC II Yes Yes 14.71% ₱9,451,379.60 FBPC (BELS)
Slide 37: Transfer of Funds from MakBan Geothermal Power Plant to MERALCO
Transfer of Funds from MakBan Geothermal Power Plant to MERALCO STEP 1: Establish trust account in AGDB named “MERALCO-MakBan GPP -EF- (ER1-94)” STEP 2: Submission of bank certificate and authority to sign. Make sure no pending liquidation of projects with DOE. STEP 3: DOE allocation and remittance
Slide 38: Sample Case 2: MERALCO transfer from Sem Calaca
SAMPLE CASE 2: MERALCO transfer of existing fund from Sem Calaca Coal-Fired Power Plant and new ER1-94 program setup Department of Energy Powering the Nation
Slide 39: Transfer of Funds from Sem Calaca Coal Power Plant to MERALCO
Transfer of Funds from Sem Calaca Coal Power Plant to MERALCO STEP 1: Establish trust account in AGDB named “MERALCO-Sem Calaca -EF- (ER1-94)”” STEP 2: Submission of bank certificate and authority to sign. Make sure no pending liquidation of projects also STEP 3: DOE allocation and remittance of fin
Slide 40: Step 3: DOE allocation and remittance of financial benefits
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Coal-fired Power Plant Sem Calaca Power Corporation HOST MUNICIPALITIES: Balayan and Calaca HOST PROVINCE: Batangas HOST REGION: IV-A Electrification Fund Amount: ₱102,654,098.41 Department of Energy Powering the Nation
Slide 41: Step 3: Host Municipality
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Municipality Balayan and Calaca BATELEC I 60% of the Electrification Fund ₱61,592,459.05 Department of Energy Powering the Nation
Slide 42: Step 3: Host Province
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Province Batangas Department of Energy Powering the Nation
Slide 43: Step 3: Host Province
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Province Batangas BATELEC I Already received 60% FBPC BATELEC II MERALCO IEEC Department of Energy Powering the Nation
Slide 44: Step 3: Host Province Allocation
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Province Batangas FBPC (0.21%) ₱215,545.82 BATELEC II (3.75%) ₱3,848,259.59 MERALCO (25.86%) ₱26,548,946.60 IEEC (0.18%) ₱183,477.51 Department of Energy Powering the Nation
Slide 45: Step 3: Host Region
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Region Batangas Department of Energy Powering the Nation
Slide 46: Step 3: Host Region
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Region Batangas QUEZELCO II FLECO BATELEC I Already received 60% FBPC Already received from 30% BATELEC II Already received from 30% MERALCO Already received from 30% IEEC Already received from 30% QUEZELCO I Department of E
Slide 47: Step 3: Host Region Allocation
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Host Region Batangas QUEZELCO II (2.29%) ₱2,348,315.26 FLECO (1.76%) ₱1,804,983.91 QUEZELCO I (5.95%) ₱6,112,110.66 Department of Energy Powering the Nation
Slide 48: Step 3: Allocation Summary by Distribution Utility
STEP 3: DOE allocation and remittance of financial benefits to MERALCO Serves host Serves host Serves host Distribution Utility % Share Amount Share municipalities? province? region? BATELEC I Yes Yes Yes 60.00% ₱61,592,459.05 BATELEC II Yes Yes 3.75% ₱3,848,259.59 FBPC (BELS) Yes Yes 0.21% ₱215,545
Slide 49: Transfer of Funds from Sem Calaca Coal Power Plant to MERALCO
Transfer of Funds from Sem Calaca Coal Power Plant to MERALCO STEP 1: Establish trust account in AGDB named “MERALCO-Sem Calaca -EF- (ER1-94)”” STEP 2: Submission of bank certificate and authority to sign. Make sure no pending liquidation of projects also STEP 3: DOE allocation and remittance of fin
Slide 50: E.R. 1-94 Electrification Fund Available to MERALCO
E.R. 1-94 Electrification Fund Available to MERALCO* Region Electrification Fund Number of Power Facilities NCR ₱44,325,914.71 10 Region III ₱24,825,330.05 34 Region IV-A ₱547,127,151.13 33 ₱ 616,278,395.89 TOTAL EF FOR EST. NO. OF TRUST MERALCO ACCOUNTS TO OPEN *Figures not final *Power plants with
Slide 51: Challenges and Ways Forward
Challenges and Ways Forward Challenges 1. Allocation and transfer of existing fund administered by DOE 2. Establishment of multiple trust accounts by the DUs 3. Liquidation of previous ER 1-94 projects Ways Forward 1. Formation of ER 1-94 reconciliation team 2. DU establishment of trust accounts and
Slide 52: Thank you.
Thank you. Department of Energy Powering the Nation