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!Approved for %z
Posting
ww~.erc.gov,ph
Republic ofthe Philippiues \
ENERGY REGULATORY COMMISSION
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San Miguel Avenue, Pasig City
I

IN THE MAlTER OF THE

APPLICATION FOR
AUTHORITY TO DEVELOP,
OWN, AND OPERATE A
DEDICATED POINT -TocpOINT
LIMITEI) TRANSMISSION LINE
TO CONNECT THE 25 MW-
PEAK BULACAN SOLAR
POWER PLANT I"OCATED IN
BARANGAYS PASONG
BANGKAL AND CASALAT, SAN
ILDEFONSO, BULACAN I TO
MERALCO'S DISTRIBUTION
SYSTEM WITH PRAYER I FOR
PROVISIONAL AUTHORITY,

ERC CASE NO. 2015-097 MC

BULACAN SOLAR ENERGY

CORPORATION (BSEC), j D 0 q.K l!l :r 1llJ!,
ApplIcant. Date:1 .4~NU!JBll
x------------------------x R.
Y ••.•. _.. _."_

DECISION

For resolution before the Commission is Bulacan Solar Energy

Corporatiou's (BSEC) 27 November 2015 Application filed on even
date for authority to develop, own, and operate a dedicated point-to-
point limited transmission line to connect the 25 MW-Peak Bulacan
Solar Power Plant (BSPP) located in barangays Pasong Bangkal and
Casalat, San I1defonso, Bulacan to Manila Electric Company's
(MERALCO) distribution system, with prayer for the issnance of
provisional authority. I

The Commission having fonnd said Application to be sufficient

in form and substance, issued an Order and a Notice of Public
'Hearing, both dated 21 January 2016, setting the case for initial
hearing on 17 Febl'llary 2016,

I
ERC Case No. 2015-097 MC I
DECISION/13 December 2016
Page 2 of13

The Order directed BSEC to cause the publication ofthe Notice

of Public Hearing, at its own expense, once (IX) in a newspaper of
general circulation in the Philippines, not later than ten (10) days
before the date of the scheduled initial hearing. It was also directed to
inform the consumers within its affected area of the filing of the
instant application, its reasons therefor, and ofthe scheduled hearing
thereon.

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 application, 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 Provincial Governor of Bulacan, the

cities and the mayors of the municipalities within the affected area of
BSEC were furnished with copies of the Initial Order and Notice of
Public Hearing for the appropriate posting thereof on their respective
bulletin boards. I

On 9 February 2016, Mahila Electric Company (MERALCO)

filed a Petition for Intervention (With Entry of Appearance] dated 5
February 2016.
,
On 12 February 2016, BSEC filed its Pre-trial Brief and the
Judicial Affidavit of Edwin R. Almara, both of even date. The same
day, MERALCO filed its Pre-trial Brief.

During the 17 February 2016 initial hearing, MERALCO

appeared as an Intervenor.

On 22 February 2016, BSEC filed its Compliance with Motion

with attached exhibits in relation to the directive of the Commission
during the 17 February 2016 hearing, as well as its Formal Offer of
Evidence.

On 24 February 2016, MERALCO filed a Manifestation of even

date stating that it has no comment on BSEC's FOE.

On 3 May 2016,BSEC filed its Motion to Withdraw Prayer for

Confidential Treatment dated 3 May 2016 withdrawing its prayer for
a protective order for Exhibit"P" and the information contained
therein.
ERCCase No. 2015-097 MC
DECISION/13 Dece~her 2010
Page 3 of13 I

On 22 November 2016, Ithe Commission issued an Order

admitting the exhibits contained in BSEC's Formal Offer of Evidence
and declaring the case submitted for resolution.

ISSUE

The issue to be resolved b~ the Commission is whether BSEC

should be given the authority to qevelop, own and operate a dedicated
point-to-point limited
. transmission
,
line to connect the 25 MW Peak
BSPP located III barangays Ijasong Bangkal and Casalat, San
Ildefonso, Bulacan to MERALCO's distribution system.

DISCUSSION

BSEC is a corporation duly organized and existing under and by

virtue of the laws of the Republic, of the Philippines. It constructed its
25 MWp Solar Power Plant and proposes to dispatch its generated
power to the Grid through the diJtribution line of MERALCO.

In order to dispatch the clpacity to be generated by the BSPP,

BSEC deems it necessary to coltnect to MERALCO's Cruz na Daan
(CND) Substation's 69 kV bus I in San Rafael, Bulacan through a
dedicated point-to-point limited facility; hence, the application.

I. Project Rationale

The dedicated point-to-poi t limited facility is necessary for the

power plant to deliver its genetated power to the grid through the
distribution system of MERALCd>.

II. Project Description

BSEC developed a 25 lv\Wp Solar Power Plant located in

Barangay Pasong Bakal and <1asalat, San Ildefonso, Bulacan. It
proposes to dispatch its power Ito the grid through the distribution
line of MERALCO connecting ~o its CND Substation through the
construction and installation of the following:
I
1. 69 kV bus at the CND Substation;
2. 69 kV line; and I
3. 69 kV switchyard inside the BSPP compound.
ERC Case No. 2015-097 MC
DECISION/13 December 2016
Page 4 of 13

III. Project Cost

The total estimated cost of the proposed project is Ninety Two

Million Pesos (PhP92,000,000.00) covering all the facilities to be
constructed by BSEC, including the cost of assets that are not
dedicated point-to-point limited facilities.

It is worthy to note that the estimated cost is only for the

purpose of computing the applicable permit fee (based on the total
project cost evaluated disregarding the functions and classification
of each facility] and not for ratemaking purposes considering that
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 MERALCO.

Since the approved Feed-in Tariff (FIT) Rate includes the cost
of the dedicated point-to-point limited facility, the said amount shall
be considered once the asset is transferred to MERALCO:
I
a. If the fair market value (subject to optimization) is higher
than the facility's co~t incorporated in the determination
of the FIT rate, MERALCO shall pay the difference
between the said cost and the fair market value; and

b. If the fair market value (subject to optimization) is lower

than the facility's co~t incorporated in the determination
of the FIT rate, the ~sset shall be treated as Contribution
in Aid of Constructidn (CIAC). MERALCO shall maintain
a separate account of these amounts and the assets should
not appear in the rate base or in its asset appraisal.

(Intentionally left blank)

 ERC Case No. 2015-097 MC
DECISION/13 December 2016
Page50f12

IV. Single Line Diagram

Cruz~na-Daan Substation
(Single Lme Ol~gr3m)
,~ - • -;-

line &e«kew
&1'1'\'.'4 ut fi¥E_a
sv!n!<i:i()'l tk1 to
OPEN po$llion

"
.. < ~- V<7A'-,'
fCCe

69 ~',VUn'.':
Discrnm-::ft Swft::h -~---)
(NOHll<lH'\' ConstftH;;tfon 0: (;9 XV Litle u~tn{l
i 79'0M~M fleSH PEr pLnv:
(tIDpr15JlJrnDle f1'i1(lltt: 14.0 ~:rn)

LEGEND: •4 ,
PrOF-:)~ed is'ttv;:. Bulaam SQlar
E.;(IS~I;'g Z- 20Yv:} 1~ r\vy ! Pf;tW('!' PIDnt
____ .J •• ; (I3:SPPI
,

V. Result oftbe Distribution Impact Study (DIS) conducted

byMERALCO

As agreed by BSEC and MERALCO and in compliance with the

Distribution Services and Open .Access Rules (DSOAR), MERALCO
performed the Distribution Impact Study (DIS) to determine the
impact of connecting the BSPP to the distribution system with respect
to all applicable planning criteria of MERALCO.

The DIS includes the power flow analysis, short circuit analysis
and power quality analysis to determine whether interconnecting the
ERC Case No. 2015-097 MC
DECISIONj13 December 2016
Page60f13

BSPP would have a significant effect on the steady-state and fault

conditions and power quality of the MERALCO's distribution system.
Also, the DIS evaluated if the BSPP is capable of providing grid
support at the connection point of MERALCO's 69 kV system.

Based on the result of the said DIS, MERALCO confirmed that

it is feasible to interconnect BSPP to its distribution system. BSEC
shall, among others:

1. Construct a new 69 kV bus to accommodate the installation

of one (1) 69 kV p00er circuit breaker and associated
disconnect switches, 'including protection and control
equipment at the CND substation for the termination of
BSPP's 69 kVline (CND-BSPP Line, in brevity).

2. Construct approximately 14 kilometer CND- BSPP Line using

1-795 MCM ACSR per phase from the CND substation up to
BSPP's main substation.

3. Install a 69 kV metering facility at the CND substation for

the export and import billing meters of BSPP.

Detailed design and cost estimate including bill of materials for

the above works are the subject of the Distribution Asset Study (DAS)
by MERALCO, completed in February 2016.

It is worthy to note that in January 2016, BSEC informed

MERALCO that its capacity will be reduced from 25 MWp to 15 MWp.
Thus, changes in the connection schemes in DAS were implemented.
. ,

VI. Technical configuratioJ

As stated in the apPlicaton and as manifested during the

hearing, the dedicated point-t01point limited facility will be utilized
by BSPP to deliver its gener~ted power to the Luzon Grid by
connecting through the distribtition system of MERALCO via CND
Substation. I

In order for BSEC to dispatch its generated power to the grid, it

should connect its BSPP to the distribution system of MERALCO via
CND Substation. By default, it is the obligation of NGCP or
MERALCO, whichever was granted the exclusive franchise, to build,
operate and maintain the transmission or distribution system,
respectively.
 ,
I
ERC Case No. 2015-097 MC I
DECISION/13 December 201p
Page70f13

However, Section 2.9.2 of the DSOAR provides the generation

company an option to develop and own or operate its dedicated
point-to-point limited facilities, to wit:

"A generation company may develop and own or

operate dedicated point-to-point limited facilities
provided, that such facilities are required only for the
purpose of connecting to the distribution system, and
are used solely by the generating facility, subject to
prior authorization by the ERG. x x X."

As such, BSEC applied for an interconnection of its 25 MWp

BSPP to MERALCO's distribution system. In January 2016, BSEC
officially informed MERALCO that its capacity will be reduced from
25 MWp to 15 MWp.

Thereafter, the DIS and DAS were prepared by MERALCO in

compliance with Article II, Section 2.9.5 of the DSOAR. All technical
details are further discussed herein.

I
BSEC constructed a 14km CND-BSPP 69 kV line using a 1-795
MCM ACSR per phase from conbection, point at the CND Substation
to BSPP's main substation. BSEC constructed the 69 kV line in
accordance with the approved I designs and in accordance with
MERALCO's standards. MERALf::Orequired a 1-795 MCM ACSR per
phase as it is their standard conductor size for new 69 kV lines. The
conductor has a maximum capabty of 107.6 MVA (530 Amp), high
enough for present and future cohnections, since the 69 kV line is the
backbone of MERALCO's distribrttion system in the area of Bulacan.
I
I
Further, BSEC tapped the 69 kV line to CND-Baliuag 69 kV line
near the Breaker 61CND4 at the CND Substation. MERALCO
required in its DAS the installation of two sets of disconnect switches
and lightning arresters, one set along the Baliuag-CND line and one
set along CND-BSPP line. The requirement of MERALCO for BSEC
to install one 69 kV power circuit breaker was changed in the final
DAS due to the change in capacity from 25 MWp to 15 MWp, as
professed by BSEC.

The disconnect switch and !lssociated equipment along Baliuag-

CND line is recommended to be turned over to MERALCO and
should not be part of the dedicated point-to-point limited facility
following ERC Resolution No. 23, Series of 2016, entitled "Resolution
ERC Case No. 2015-097 MC
DECISION/13 December 2016
Page 8of13

Adopting the Amended Rules on the Definition and Boundaries of

Connection Assets for Customers of Transmission Provider". The cost
of the said equipment however, I should not be recovered from the
consumers by MERALCO, it should be treated as CIAC. MERALCO
shall maintain a separate account of these CIAC and the assets should
never appear in its rate base or in its asset appraisal.

BSEC also installed power system protections, Supervisory

Control and Data Acquisition cSCADA) and applicable Information
and Communications Technology (ICT) infrastructure in compliance
with the requirements of MERALCO in its DAS.

BSEC installed MERALCd.s , 69 kV metering facilities at the

CND Substation for the export and import billing meters of BSPP
following the provisions of the Philippine Distribution Code (PDC), to
wit:

"Section 7.3.3.3. Active and Reactive Energy and

Demand metering shall be provided for each User at
each Connection Point and shall be accessible for
inspection and reading. If the metering cannot be
installed at the Connection Point due to the Distribution
System's design construction or for other reasons, the
metering shall be installed as close as possible to the
Connection Point. In this' case, a procedure shall be
established to account for: the Energy loss between the
Connection Point and point , of metering.
I
I
As to the issue of metering locations of RE plants, Section 2.9 of
the FIT Rules provides that "the process of settlement includes the
determination of the monthly payments to each Eligible RE Plant
based on actual metering and the applicable FITs."
;,
I
This is further clarified in Section 3-4 of the FIT-All Guidelines
which provides that: I
I,
"Each eligible RE Plant sh,all be paid its corresponding
Actual FIT Revenue based on electricity actually
exported to the relevant I transmission or distribution
Grid, as the case may be. Imeasured at the high voltage
side ofthe step-up transformer at the RE Plant (Metering
Point) and reflected in its Record of Meter Reading."

It is worthy to note that Jection 3.4 should be interpreted in

conjunction with the provisions of the Philippine Distribution Code
ERC Case No. 2015-097 MC
DECISION/13 December 2016
Page90f13

(PDC) on the location of the Metering Point vis-a-vis the Connection

Point. The objective of the said provision is to account the System
Loss (SL) from the Power Plant up to the injection point to the
distribution system.

Section 3-4 of the FIT-All Guidelines reflects the

aforementioned general provisi6n, that "RE Plant shall be paid its
corresponding Actual FIT Revenue based on electricity actually
exported to the relevant transmission or distribution Grid", thus, the
Metering Point should be located at the Connection Poiut. It
reiterates the necessity of complying with such provision. If for ,
"
justifiable reason it is not possible to do so, the PDC provides that an
adjustment procedure to account ,forlosses shall be established.

VII. MERALCO's Petition for Intervention

I
On 9 February 2016, MERi'lLCOfiled a Petition for Intervention
to the Commission given that BSEC's generating facilities and its
dedicated point-to-point limited facility will be embedded in its
distribution system. BSEC's applicatiou, if approved, will have an
impact on the operations, reliability and security of MERALCO's
system, thus, the necessity for MERALCOto participate in the case as
1
an intervenor. At any rate, I MERALCO manifested that its
participation in the case will not lunduly broaden the issues iuvolved I'
and would let the Commission th,resh out all possible relevant issues "I

to the benefit of all concerned. ' I

,I,
"

VIII. Technical and Financial Capability

On the onset of the application, BSEC manifested that it will

engage the services of MERALCG> or any of its authorized operation
and maintenance providers in 6rder to undertake the operation,
service and maintenance of the d~dicated point-to-point facility.

BSEC further claimed thJ it has the financial capability to

undertake the development and tonstruction of the dedicated point-
to-point limited line. Its financial capability will be assessed in the
application of BSEC for Certificate of Compliance (COC) ensuring
that the applicant is compliant With the financial qualifications set
forth in the Financial Guidelines for
,
Generation Companies.
,
I
•I
"

i
ERC Case No. 2015-097 MC I
DECISION/13 December 2016
Page 10 of 13 I

IX. Prescribed Fees

Permit fee for the authority to construct the subject project is

prescribed under Commonwealth Act No. 146, as amended, for the
reimbursement of the expenses of the Commission in evaluating the
case based on its total project cost. As to the subject case, the project
includes facilities that have a transmission function and not just
dedicated point-to-point limited facilities. Since the application is
filed solely by BSEC (including facilities to be transferred to
MERALCO), the permit fee should be paid solely by the applicant
based on the total cost of the project and computed based on the
existing ERC Schedule of Fees and Charges, as follows:

Permit Fee = Total Project Cost X 0.75

100

= 92,000,000.00 X 0.75
100

Permit Fee 1= PhP690,000.00

From the foregoing, the ptmit fee to be imposed on BSEC's

dedicated point-to-point limitJd transmission facilities is Six
Hundred Ninety Thousand Pesos I(PhP690,000.00).

WHEREFORE, the foregoing , premises considered, Bulacan

Solar Energy Corporation (BSEC) is hereby AUTHORIZED to
develop and own a dedicated poirlt-to-point limited facility to connect
its 25 MWp Bulacan Solar Power Plant (BSPP) to the Manila Electric ,
Company's (MERALCO) Distribution System, subject to the following
conditions:

1. MERALCO shall operate the subject dedicated point-to-point

limited facility subject to applicable charges;

2. BSEC shall execute an undertaking or similar document/s

stating that after construction, it will turn over to MERALCO
the disconnect switch and its related accessories and
equipment, which are not part of the dedicated point-to-
point limited facility as Contribution in Aid of Construction
(ClAC). MERALCO shall maintain a separate account of
these CIAC and the assets should not appear in its rate base
nor in its asset appraisal;
ERC Case No. 2015-097 MC
DECISIONj13 December 2016
Page 11of 13

3. The subject facility shaH be developed and constructed in

accordance with the Distribution Impact Study (DIS) and
Distribution Asset Study (DAS) requirements, so as not to
result in the degradation of MERALCO's Distribution
system;

4. The dedicated point-to-point limited facility shall be used

solely by the generating facility;

5. The metering point shall be installed at the connection point

in accordance with the Philippine Distribution Code (PDC);
and
I
6. Any portion of the dedicated point-to-point limited facility
required for competitive purposes or to connect any other
user, ownership of t~e same shall be transferred to
MERALCOat a fair market price, subject to optimization. In
determining the fair matket price, the cost of the facility as
incorporated in the ddtermination of the Feed-in Tariff
should be accounted for.

Further, BSEC is directed to strictly comply with the directive

that all related accessories and ~quipment installed in the Baliuag-
Cruz-na-Daan (CND) 69 kV lihe are not Connection Assets or
dedicated point-to-point limited facility from the start.
I
Relative thereto, BSEC is hereby directed to remit to the
Commission, within fifteen (15) days from receipt hereof, the total
Permit Fee in the amount of Six Hundred Ninety Thousand
Pesos (PhP690,000.oo) computed based on Commonwealth Act
No. 146 and the Revised Schedule of ERC Fees and Charges.

SO ORDERED.
ERC Case No. 2015-097 MC I
DECISION/13 December 2016
Page 12 of13

Pasig City, 13 December 2016.

(on leave)
JOSE VICENTE B. SALAZAR
Chairman and CEO

l
ALF~k Commissioner
G~fi:.c~-:rP~
co~s?ioner
YAP-TARDC

. MAGPALE-ASIRIT ERONIMO D. STA. ANA

I
Commissioner

J4h;/ AK{[J
L~LAN ""'" PARI '" I decision 2015-091: I
MV APV mcv
<?' ( I
Copy furnished:

1. Attys. Cecilia R. Layug, Rio Q. ealaba and Marcelino C. Arce, IV

lAYUG lAW OFFICE
Counselsfor Applicant BSEC
Unit 2904, One San Miguel Building
San Miguel Avenue corner ShaW Boulevard
Ortigas Center, Pasig City, Metfa, Manila
2. Bulacan Solar Energy Corporation (BSEC)
1'fh Floor, Tower 2, Insular Life Corporate Center
Insular Life Drive, Filinvest Corporate City
Alabang, Muntinlupa City, Metro Manila

3. Office of the Solicitor General I

134 Amorsolo Street, Legaspi VIllage
Makati City, Metro Manila '

4. Commission on Audit
Don Mariano Marcos Avenue
Diliman, Quezon City, Metro Manila

l
ERC Case No. 2015-097 MC I
DECISIONj13 December 2016
Page 13 oft3 I

5. Senate Committee on Energy !

GSIS Building, Roxas Boulevard, Pasay City, Metro Manila

6. House Committee on Energy I

Batasan Hills, Quezon City, Me:tro Manila

7. Office of the President of PCCI I

Philippine Chamber of Commerce and Industry (PCCI)
3'd Floor, ECC Building, Sen. Gil Puyat Avenue
Makati City, Metro Manila

8. Office of the City Mayor

Muntinlupa City, Metro Manila
'
I

,
I
,
I
I'
9. Office of the Municipal Mayor j
San Ildefonso, Bulacan :
!
10. Office of the Punong Barangay;
Pasong Bakal, San Ildefonso, Bulacan

11. Office of the Punong Barangay

Casalat, San Ildefonso, Bulacan
I
12. Office of the Provincial Governor
Province of Bulacan I

i,
'3. Manila Electric Company (MERALCO)
Lopez Building, Ortigas Avenue, Pasig City, Metro Manila

14. Standard and Compliance Moriitoring Division

Energy Regulatory Commissio» (ERC)
rrh Floor, Pacific Center Building, San Miguel Avenue ,
Pasig City, Metro Manila

~,