Republic of the Philippines

ENERGY REGULATORYCOMMISSION
San Miguel Avenue, Pasig City

IN THE MATTER OF THE

APPLICATION FOR
AUTHORITY TO DEVELOP,
OWN AND OPERATE A
DEDICATED POINT TO
POINT LIMITED
TRANSMISSION LINE TO
CONNECT THE ENFINITY-
DIGOS SOLAR POWER
PLANT TO THE NATIONAL
GRID CORPORATION OF THE
PHILIPPINES'MATANAO
SUBSTATION, WITH PRAYER
FOR PROVISIONAL
AUTHORITY

ERC Case No. 2015-096 MC

ENFINITY PHILIPPINES
RENEWABLE RESOURCES
FOURTH INC.,
Applicant.
)( -- - - - -- - - - - - - - - - - -- -,- --)(

DECISION

Before the Commission for resolution is the application filed on

24 November 2015 by Enfinity Philippines Renewable Resources
Fourth Inc. (ENFINITY) for authority to develop, own and operate a
dedicated point to point limited transmission line to connect the
Enfinity-Digos Solar Power Plant to the National Grid Corporation of
the Philippines' Matanao Substation, with prayer for provisional
authority.

Having found said application sufficient in form and in

substance with the required fees having been paid, an Order and a

"tting the ,",e [0'

initi,1 hearing on Maceh 09 20l/{ .
Notice of Public Hearing, both dated 18 January 2016 were issued
ERC CASE NO. 2015-096 MC
Decisionj13 June 2016
Page 2 ofn

In the same Order, ENFINITY was directed to cause the

publication of the said Notice of Public Hearing, at its own expense,
once (1X)in a newspaper of general circulation in the Philippines, at
least ten (10) days before the scheduled date of initial hearing.

The Office of the Solicitor General (OSG), the Commission on

Audit (COA) and the Committees on Energy of both Houses of
Congress were furnished with copies of the Order and Notice of Public
Hearing and were requested to have their respective duly authorized
representatives present at the initial hearing.

Likewise, the Office of the Governor of Davao Del Sur and Offices
of the Mayors of Makati City and Digos City, Davao Del Sur were
furnished with copies of the Order and Notice of Public Hearing for the
appropriate posting thereof on their respective bulletin boards.

On 04 March 2016, ENFINITYfiled its "Pre-Trial Brief'.

During the 09 March 2016 initial hearing, only ENFINITY

appeared. No intervenorjoppositor appeared nor was there any
interventionj opposition registered.

At the said hearing, ENFINITY presented its proofs of

compliance with the Commission's posting and publication of notice
requirements which were duly marked as Exhibits "CC" to "HH-4".
Thereafter, it conducted an expository presentation of its application.

At the termination of the expository presentation, ENFINITY

moved for the declaration of general default against parties who may
have interest in participating at the hearing as an intervenor or
oppositor but failed to appear thereat. The Commission granted said
motion.

In the absence of any adverse party, intervenor, or oppositor, the

Commission admitted ENFINI-n:~ p~rial Brief as documentary
evidencein ,upport ofits apPlicati0-J

2
ERCCASENO. 2015-096 MC
Decision/13 June 2016
Page 3 of 11

Thereafter, ENFINITY presented its witnesses, Engr. Santiago S.

Navarro and Engr. Samuel Julio, who testified in support of the
application. The Commission propounded clarificatory questions and
directed ENFINITY to submit various documents.

On 09 March 2016, ENFINITY filed its "Formal Offer of

Evidence" and "Compliance".

On 06 June 2016, the Commission issued an Order admitting the

exhibits contained in the said formal offer of evidence and declaring
the case submitted for resolution.

DISCUSSION

1. Project Description

ENFINITY proposes to dispatch its generated power by

connecting its Digos Solar Power Plant (DSPP) to the Mindanao Grid
of the National Grid Corporation of the Philippines' (NGCP) Matanao
Substation, through the use of the following dedicated point-to-point
limited transmission facilities:

(i) 3.2 kilometer 69 kV line which is a 336-4 MCM ACSR

conductor on single circuit structures;

(ii) Twenty (20) 2.2 MVA 0-42/0-42/11 kV three winding

step-up transformers and two (2) 25 MVA 11/69 kV step-
up transformers; and

(iii) Switch bay at the NGCP's Matanao Substation.

2. Project Rationale

The dedicated point to point limited transmission facility is

nece""'" foethe poweeplant to deliveeit, genecatedpoweeto the g~

3
ERCCASENO. 2015-096 MC
Decision/13 June 2016
Page 4 ofn

3. Project Cost

ENFINIlY engaged the services of JS Engineering and

Marketing Services for the completion of the dedicated point to point
limited transmission facility in the following contract amounts:

(i) Sixteen Million Pesos (Php16,000,000.00) for the design,

procurement of materials, installation, testing and
commissioning of the 3.2 kilometer 69kV transmission
line;

(ii) Sixteen Million Pesos (Php16,000,000.00) for the

installation of switchbay at the NGCP Matanao
Substation; and

(iii) One Hundred Nine Million One Hundred Twenty-One

Thousand Two Hundred Twenty-Two Pesos and Twenty
Centavos (Php 109,121,222.20) for the Switchyard;

The total estimated cost of the subject dedicated point to point

transmission facility is One Hundred Forty One Million One Hundred
Twenty One Thousand Two Hundred Twenty-Two and 20/100 Pesos
(PhP141,121,222.20)

It is worthy to note that the estimated cost is just for the purpose
of computing the required permit fee. It should not be used for
rate making purposes for this is not yet the actual cost, or the
Optimized Depreciated Replacement Cost (ODRC).

It should also be emphasized that the aforementioned amounts

are not necessarily the fair market value that should be used when the
subject assets are actually transferred to Transco/NGCP.

Since the approved Feed-in Tariff (FIT) Rate includes the cost of
the dedicated point to point limited transmission facilities, the said
amount shall ~.~ e ~co .dered once the asset is transferred to
NGCP/TRANSC
7/ .

4
ERC CASENO. 2015-096 MC
Decision/13 June 2016
Page 5 of 11

If the fair market value is higher than the facilities'

cost incorporated in the determination of the FIT
rate, NGCP/TRANSCO shall pay the difference
between the said cost and the fair market value.

If the fair market value is lower than the facilities'

cost incorporated in the determination of the FIT
rate, the asset shall be treated as Contribution in Aid
of Construction (CIAC).

NGCP shall maintain a separate account of these

amounts and the assets should not appear in the rate
base or in its asset appraisal.

4. Single Line Diagram

I(lc!o)low<m
ceneral
Sant", Torti

MATANAOS/S

soMVA SOiMVA
1381G9ll\1 IW6!lbll

3.21:lm
0190< Ila_ian

MallIa
ENFINITY SIS
2x :lSMVA
11l09bV

JOx:uMVA
4JOVf4JOVII1W

40 x 1.o78.8WJ
4JOVac

5
ERCCASENO. 2015-096 MC
Decision/13 June 2016
Page 60fll

5. Result of the System Impact Study (SIS) conducted by

NGCP

A Third Party SIS for the proposed connection of ENFINITY's 40

MWp DSPP to the grid was conducted in accordance with the
requirements of the Philippine Grid Code (PGC) to determine the
technical feasibility of the said connection.

Based on the result of the Third Party SIS, the connection of the
Power Plant to the Mindanao Grid will not require any major
transmission reinforcement and that the existing NGCP transmission
networks are sufficient to accommodate the said generation plant.

NGCP, through its Final Review Report, approved the Third

Party SIS Report stating that the results of the SIS report provides an
acceptable assessment on the impact of the Power Plant's connection
to the transmission system. Results reveal that the entry of the Power
Plant has no major impact to the grid even with its significant capacity.

Notably, the study was based on the proposed 40 MWp capacity

of DSPP and not the actual 28.59 MWp. During the hearing of the
case, the applicant explained that they had issues in the acquisition of
land to install the committed 40 MWp capacity of DSPP. Nevertheless,
EPRRI4 is currently negotiating with land owners to acquire the
adjacent land which shall be part of its 15 MWp expansion.

ENFINITY conducted a Facility Study as a requisite of receiving

permission to connect to the grid. The study summarizes the scope of
works, equipment, devices and materials needed for the
interconnection of DSPP to the Mindanao Grid. The Facility Study was
likewise approved by NGCP.

6. . Need for the Project

As stated in the application and as manifested during the

hearing, the dedicated point to point limited transmission facility will
be utilized by DSPP to connect and deliver its generated power to the
MindanaoGrid by tapping to NGCP'sMatanao SUbstati~

6
ERC CASE NO. 2015-096 MC
Decision/13 June 2016
Page 7 of 11

7. Technical Configuration

The project involves the construction, operation and

maintenance of the 69 kV dedicated point to point transmission line to
transmit the generated power output of the 28.59 MWp DSPP to the
Matanao Substation ofNGCP.

The said transmission line will pass through the acquired right of
way and easement at Brgy. San Roque, Brgy. Colorodo, the National
Highway of Brgy. Sinaragan and Brgy. Cablingan in the Municipality of
Matanao.

It has a distance of 3.2 km and constructed as 69 kV, 3-phase, 4

wire single circuit. The transmission lines are utilizing a 336.4 MCM
ACSR conductor with an overhead optical ground wire (OPGW) for
protection and communication.

Based on the ocular inspection on 10 February 2016, the revenue

meter of DSPP is located at the connection point inside the NGCP
switchyard.

ENFINITY considered the option of connecting to Davao del Sur

Electric Cooperative, Inc. (DASURECO) 69 kV transmission line.
However, the alternative connection scheme was not pursued because
of Right of Way (ROW) acquisition problem at the tapping point.

Further, the single line diagram submitted by the applicant

shows that the proposed project is to be used solely by the applicant
and no other user is connected in compliance with Rule 5 Section 5a(i)
of the Implementing Rules and Regulations of the Electric Power
Industry Act of 2001 to wit:

xxx. Such dedicated point-to-point limited transmission

facilities are required onlyfor the purpose of connecting to
the Grid which will be used solely by the Generation
Facili~ an~e not used to serve End-users or Suppliers
directl"/j

7
ERC CASENO. 2015-096 MC
Decision/13 June 2016
Page 8 ofn

8. Technical and Financial Capability

In the application of DSPP, it was noted that ENFINITY has the

technical capability to develop, operate and maintain the proposed
transmission line through its consultant JS Engineering and Marketing
Services (JSEMS). JSEMS has extensive experience in substation
design and its installation, transmission design and its construction,
generator installation and repair, motor controls installation and
interlock system. It has vast experience in the installation and
maintenance of 69 kV transmission lines.

However, on 9 March 2016, ENFINITY manifested that they will

negotiate an Operation and Maintenance Agreement (O&M
Agreement) with NGCP for the operations and maintenance of the
transmission line. JSEMS shall operate and maintain the line in the
interim that the O&MAgreement has not been finalized and signed by
NGCP and EPRRI4.

ENFINITY claims that it has the financial capability to undertake

the development and construction of the dedicated point to point
limited transmission line. Its financial capability will be assessed in the
application of ENFINITY for COC ensuring that the applicant is
complaint with the financial qualifications set forth in the Financial
Guidelines for Generation Companies.

A perusal of the evidence presented herein showed that the

approval of ENFINITY's application for authority to develop, own and
operate a dedicated point to point limited transmission line to connect
the Enfinity-Digos Solar Power Plant to the NGCP's Matanao
Substation is in accordance with the provisions of Section 9 paragraph
3 of Republic Act No. 9136 (R.A. 9136), or the Electric Power Industry
Reform Act of 2001 (EPIRA) and other issuances of the Commission
and will redound to the benefit of the power consumers in terms of
,ontinuous,quality,reliableandefficient
pow",,up~

8
ERC CASE NO. 2015-096 MC
Decision/13 June 2016
Page 9 ofu

WHEREFORE, the foregoing premises considered, the

application filed by ENFINI1Y for authority to develop, own and
operate a dedicated point to point limited transmission line to connect
the Enfinity-Digos Solar Power Plant to the NGCP's Matanao
Substation, with prayer for provisional authority, is hereby
APPROVED subject to the following conditions:

The NGCP shall operate and maintain the subject dedicated

point to point limited transmission facilities subject to
applicable charges;

The subject facility shall be developed and constructed in

accordance with the System Impact Study (SIS) and Facility
Study (FS) requirements so as not to result in the
degradation ofNGCP's transmission system;

The subject facilities shall be used solely by the generating

facility;

The metering point shall be as close as possible to the

connection point in accordance with the Philippine Grid
Code (PGC); and

Any portion thereof required for competitive purposes or

connect any other user, ownership of the same shall. be
transferred to TransCo/NGCP at a fair market price. In
determining the fair market price, the cost of the facilities as
incorporated in the determination of the Feed-in-Tariff
should be accounted for, as well as the optimal design.

Relative thereto, ENFINI1Y is hereby directed to remit to the

Commission, within fifteen (15) days from receipt hereof, a total
permit fee in the amount of One Million Fifty Eight Thousand Four
Hundred Nine Pesos and Seventeen Centavos (Php 1,058,409.17),
computed.,fonows~

9
 ERC CASE NO. 2015-096 MC
Decision/13 June 2016
Page 10 ofn

Permit Fee = Total Project Cost X 0.75

100

= 141,121,2,22.20 X 0.75
100

Permit Fee = PhP1,058,409.17

SO ORDERED.

Pasig City, 13 June 2016 .

.-~- - - - \
ERe
Office o/the Chairman I

\11~~~II~I\\l\~I"II\lllt!li,m~III\~~lmll~\~~\
'~ - - - . - - - -. ~ -
H_2016-012-0C-04283 JOSE VICENTE B. S~
7
i

- - ---- Chairman & CEO

AmUlCJ!!."-
~
Commissioner
G~~~~"~AP-TARUC
Com~~~;

(On Official Travel) (On Official Travel)

JOSEFINA PATRICIAA. MAGPALE-ASIRIT GERONIMO D. STA. ANA
Commissioner Commissioner

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ERC CASE NO. 2015-096 MC
Decision/13 June 2016
Page U ofu

Copy Furnished:
1. Atty. Cecilia R. Layug, Atty. Rio Q. Balaba
And Atty. Marcelino C. Arce, IV
Counsels for Applicant Enfinity
Unit 2904, One San Miguel Building
Corner Shaw Boulevard
Ortigas Center, Pasig City

2. Office of the Solicitor General

134 Amorsolo Street, Legaspi Village
Makati City, Metro Manila

3. Commission on Audit
Commonwealth Avenue
Quezon City, Metro Manila

4. Senate Committee on Energy

GSIS Bldg. Roxas Blvd., Pasay City
Metro Manila

5. House Committee ou Energy

Batasan Hills, Quezon City, Metro Manila

7. Office of the Mayor

Makati City

8. Office of the Mayor

City of Digos, Davao Del Sur

9. Office of the Governs~ /

Province of Davao Del; i /

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