republic ofthephilippines energy regulatory commissio

Republic of the PhilippinesENERGY REGULATORY COMMISSIO

San Miguel Avenue, Pasig City

IN THE MATTER OF THEAPPLICATION FOR THEAPPROVAL OF THE LEVEL OFMARKET TRANSACTION FEESFOR CALENDAR YEAR 2014FOR THE PHILIPPINEWHOLESALE ELECTRICITYSPOT MARKET (WESM)

ERe CASE NO. 2013-137 RC

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

PHILIPPINEMARKET(PEMC),

ELECTRICITYCORPORATION

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DECISION

Before the Commission for resolution is the application filed onJune 27, 2013 by the Philippine Electricity Market Corporation(PEMC) for the approval of the level of Market Transaction Fees(MTFs) for calendar year (CY) 2014 for the Philippine WholesaleElectricity Spot Market (WESM).

,

In the said application, PEMC alleged, among others, thefollowing:

1. It is a non-stock, non-profit corporation duly organizedand existing in accordance with Philippine laws, withprincipal office at the 9th Floor, Robinsons-EquitableTower, ADB Avenue corner Poveda Street, OrtigasCenter, Pasig City. It is represented by its President, Ms.Melinda L. Ocampo, who is duly authorized by its Boardof Directors as evidenced by the Secretary's Certificateattached to the application as Annexes "A-1" and "A-2"and made integral parts thereof;

ERC CASE NO. 2013-137 RCDECISION/October 15, 2014 of 35

2. The instant application is filed pursuant to Section 30 ofRepublic Act No. 9136, otherwise known as the "ElectricPower Industry Reform Act of 2001 (EPIRA)", whichreads:

"The cost of administering andoperating the wholesale electricity spotmarket shall be recovered by the marketoperator through a charge imposed on allmembers; Provided, That such charge shallbe filed with and approved by the ERG.,,1

3. The instant application is filed within the period providedby the Commission in its Decision dated January 30,2008 in its CY 2007 Market Fees (MFs) Application2;

PROPOSED LEVEL OF MARKET FEES

4. The MTF applied for is Eight Hundred Fourteen MillionFive Hundred Twenty-Nine Thousand Pesos(PhP814,529,000.00) broken down as follows:

a. Its budgetary requirements for CY 2014amount of Seven Hundred Ninety-SixTwenty-Four Thousand(PhP796,024,OOO.00); and

in theMillionPesos

b. Eighty percent (800/0) of the Year 1 budget for theMarket Design and Structural Feasibility Study(Forwards Market) and the Market Research andDevelopment Platform (MRDP) Projects in theamount of Eighteen Million Five Hundred FiveThousand Pesos (PhP18,505,000.00).3

1 See also Rule 9, Section 9 (a) of the Implementing Rules and Regulations (IRR) of the EPIRA

2 Docketed as ERC Case No. 2007-124 RC

3 PEMC also prayed for the recovery of the remainder (80%) of the proposed Year 1 budget forthe Forwards Market and MRDP Projects in its "Motion for Reconsideration" dated January 25,2013 and "Manifestation and Omnibus Motion" dated May 27, 2013, both filed in connectionwith its CY 2012 MTF application. Said "Motion for Reconsideration" and "Manifestation andOmnibus Motion" are pending resolution by the Commission


Budgetary Requirements for CY 2014

5. Its budgetary requirements for CY 2014 consist of thefollowing:

15.608

82.412

309.363

Amount388.641

Expenditures

Bud et Com onentsPersonnel ServicesMaintenance and OtherOperating ExpensesMODECapital(CAPEXProvision for theDepartment of Energy(DOE)/Energy RegulatoryCommission (ERC)Monitorin FacilitiesTotal 796.024

Table 1 - CY 2014 Budgetary Requirements, in PhP Million

5. The PS pertains to the salaries and benefits of onehundred sixty (160) employees in Luzon and Visayas;

6. The MODE includes, among others, honorarium, rent,utilities, repairs and maintenance, contracted services,insurance, training, travel and transportation, participantdevelopment costs and the costs of the market auditrequired under the WESM Rules;

7. The CAPEX consists of enhancements and upgrades tothe Market Management System (MMS) and corporateinfrastructure and the cost of lease improvements;

8. The Provision for the DOE/ERC Monitoring Facilitiesequals two percent (20/0) of the proposed PS, MODE andCAPEX budget for CY 2014 to support the monitoringfunctions of the DOE and the Commission pursuant to itsDecisions in its previous MF Applications4;

4 See January 30, 2008 and June 22,2006 Decisions of the Commission in PEMC's CY 2007 andCY 2006 MF Applications, docketed as ERC Case Nos. 2007-124 RC and 2005-048 RC,respectively


9. The Market Development Projects cover: a) the servicesthat are intended to improve the performance of its corefunctions, e.g. Market Research and DevelopmentPlatform (MRDP); and b) the services that are notinherently part of its core functions but are required by theDOE or the Commission, e.g. Business-to-Business(828) System for RCOA;

10. In preparing its budgetary requirements, it adjusted itsproposed PS budget for CY 2013 by eight percent (8%) toaccount for the projected Consumer Price Index (CPI) inCY 2014 (3%) and the rate approved by its Board ofDirectors to cover reasonable annual performanceincreases of its employees. In MODE, most of theproposed amounts are based on the budgets approved bythe Commission5 or the actual costs it incurred for CY2012, adjusted by the projected CPI for CY 2013 (3%)and further adjusted by the projected CPI for CY 2014(3%). Some amounts covered by contracts, such asthose for Rent and Market Audits, were escalated by tenpercent (10%). Proposed CAPEX costs are based onestimates and quotations from suppliers;

11. A discussion of the specific budgetary allocations fallingwithin the foregoing cost components and theirjustifications is attached as Annex uB" and is made anintegral part thereof;

Remainder (80%) of the Year 1 Budget for the ForwardsMarket and MRDP Projects

12. The Forwards Market Project is a research anddevelopment project with the primary objective ofdeveloping a market design in support of the studies anddirectives of the DOE regarding electricity derivatives;

13. The MRDP Project aims to establish a hardware andsoftware testing and development platform where marketmodeling, simulation, design and development can beconducted without actually investing into a full scaleproduction setup;

5 December 3,2012 Decision, PEMC's CY 2012 MTF application, ERC Case No. 2011-111 RC


14. Its proposed budget for the Forwards Market and MRDPprojects are spread across its various MTF applications,to wit:

Project

MRDPForwardsMarket

Year 1 CYs2010 - 2011

MTFA Iications6

14.4008.731

Year 2 CY2012 MTFAp lication

9.200

Year 3 CY2013 MTF

A plication7

6.000

TotalProjectCost29.6008.731

Table 2 - Project Cost, in PhP Million

15. In its Decision in its CYs 2010-2011 MTF application, theCommission approved an initial funding for the Forwards. Market and MRDP projects equivalent to twenty percent(200/0) of its proposed Year 1 budget. The Commissionalso approved the proposed Year 2 budget for the MRDPin its December 3, 2012 Decision in its CY 2012 MTFapplication. The proposed Year 3 budget for the MRDPwas approved by the Commission in its Decision datedJuly 8, 2013 in the MTF CY 2013 Application;

16. However, the approval of the entire project cost isrequired to complete the Forwards Market and MRDPProjects. Hence, the remainder (80%

) of the proposedYear 1 budget for these projects, in the amount ofEighteen Million Five Hundred Five Thousand Pesos(PhP18,505,000.00), is included in the instantapplication8. This amount may be broken down asfollows:

RequiredProject Year 1 Year 1 Additional

Bud et A roval FundinMRDP 14.400 2.880 11.520Forwards Market 8.731 1.746 6.985Total 18.505

Table 3 - Required Additional Funding, in PhP Million



8 See Footnote 3


17. The amounts proposed are net of applicable taxes, suchas corporate income and value added taxes. These alsodo not cover possible changes in expenses due tochanges in law, rules or regulations, compliance withother regulatory requirements and other external factors;

18. The following are not included in the instant application:

a) The Provisions for the Repayment of the MMS Loan- On August 14, 2012, it filed a separate applicationfor the approval of additional MTF for the repaymentof the MMS Loan pursuant to the terms of theMemorandum of Agreement (MOA) among theNational Power Corporation (NPC), NationalTransmission Corporation (TRANSCO), PowerSector Assets and Liabilities ManagementCorporation (PSALM) and PEMC9

; and

b) New MMS (NMMS) Project - It filed on September15, 2011 a separate application for the approval ofadditional MTF for the NMMS Project1O.

19. The MMS Loan and NMMS applications are pendingresolution by the Commission;

20. The MTF shall be apportioned among generators wherethe WESM operates according to the volume traded byeach in the WESM pursuant to the approvals of theCommission, as follows:

Total Annual Market Transaction Fee/12Market Transaction Fee Rate (PhP/kWh) = -------------------------------------------------------

Total Generated Metered Quantity

21. Should the Commission approve its application for theapproval of the Pricing and Cost Recovery Mechanism forReserves to be traded in the WESM11

, the MF shall beapportioned among generators, as follows:




ERC CASE NO. 2013-137 RCDECISION/October 15,2014 of 35

Total Annual Market Transaction Fee/12Market Transaction Fee Rate (PhP/kWh) = ------------------------------------------------------

Total Generated Metered Quantities+ Total Scheduled Reserves

22. Based on initial indicative figures, the estimated MTFRate is PhPO.0125/kWh for CY 2014. This represents afour percent (4%) reduction in its proposed MTF rate ofPhPO.0130/kWh for CY 2013;

23. The indicative MTF rate is based on the Luzon andVisayas energy forecast of 63,789 GWh for CY 2014.The energy forecast is attached to the application asAnnex "C" and is made an integral part thereof;

24. The prevailing market fee rate or MTF level approved bythe Commission shall continue to be implemented in CY2014 pending the approval of the instant application; and

25. It prayed that after due hearing, its proposed MTF for CY2014 in the amount of PhP814.529 Million be approved,without prejudice to the resolution of its NMMS and MMSLoan MTF applications.

Having found said application sufficient in form and insubstance with the required fees having been paid, an Order and aNotice of Public Hearing, both dated July 29, 2013, were issuedsetting the same for initial hearing, expository presentation, pre-trialconference and evidentiary hearing on August 20, 2013 in Cebu Cityand August 22, 2013 in Pasig City.

In the same Order, PEMC was directed to cause the publicationof the Notice of Public Hearing, at its own expense, twice (2x) for two(2) successive weeks in two (2) newspapers of general circulation inthe Philippines, with the date of the last publication to be made notlater than ten (10) days before the scheduled date of the initialhearing. It was also directed to inform the consumers within itsfranchise area, by any other means available and appropriate, of thefiling of the instant application, its reasons therefor, and of thescheduled hearing thereon.


The Office of the Solicitor General (OSG), the Commission onAudit (COA) and the Committees on Energy of both Houses ofCongress were furnished with copies of the Order and the attachedNotice of Public Hearing and were requested to have their respectiveduly authorized representatives present at the aforesaid initialhearing.

Likewise, the Office of the Mayor of Pasig City was furnishedwith copies of the said Order and the Notice of Public Hearing, for theappropriate posting thereof on its bulletin board.

On August 1, 2013, Manila Electric Company (MERALCO) filedits "Petition for Intervention (with Entry of Appearance)".

On August 15, 2013, PEMC and MERALCO filed theirrespective "Pre-trial Briefs".

On August 16, 2013, Engr. Robert F. Mallillin filed his "Motion toParticipate as Intervenor" and "Pre-trial Brief'.

During the August 20, 2013 initial hearing for the Visayasstakeholders, only PEMC appeared. No intervenor/oppositorappeared nor was there any intervention/opposition registered.

In the said hearing, PEMC presented its proofs of compliancewith the Commission's publication and posting of noticerequirements, which were duly marked as Exhibits "A" to "J-4",inclusive. Thereafter, it conducted an expository presentation of itsapplication. The Commission propounded c1arificatory questions.

Subsequently, PEMC moved for a declaration of generaldefault. Said motion was granted.

During the August 22, 2013 hearing for the Luzon stakeholders,PEMC, MERALCO and Engr. Mallillin appeared.

In the said hearing, PEMC conducted an expositorypresentation of its application. Thereafter, the Commission,MERALCO and Engr. Mallillin propounded their respectivec1arificatory questions.


PEMC interposed an objection with respect to Engr. Mallillin'sintervention since he is not its customer as its customers are powergenerators. Engr. Mallillin moved that he be given an opportunity torectify his "Motion to Participate as Intervenor". Said motion wasgranted. Accordingly, he was given a period of five (5) days fromsaid date of hearing within which to submit the aforesaid rectifiedmotion.

Subsequently, a pre-trial conference was conducted among theparties wherein they admitted and/or denied their respectiveproposed stipulation of facts and issues.

The pre-trial conference having been terminated, PEMCpresented the following witnesses: 1) Ms. Marissa P. Gandia, itsFinance Manager, who testified, among others, on the following: a)her participation in the preparation of the budget for CY 2014; b) theapprovals secured from PEMC's Board of Directors in connectionwith the filing of the instant application; c) the justifications and detailsof the budget applied for; d) the assumptions used in the preparationof the budget; e) the background on the required additional fundingfor the Market Design and Structural Feasibility Study (ForwardsMarket Project) and the Market Research and Development Platform(MRDP) Project; f) the costs that are not included in the instantapplication; and g) the impact of the budget on the estimated MF ratefor CY 2014; 2) Mr. Salvador D. Subaran, its Systems Developmentand Support (SDS) Manager under the Systems and TechnologyDepartment, who testified, among others, on the following: a) thedescription of the MRDP Project; b) the justification and details of thebudget applied for the MRDP Project; and c) the status of the MRDPProject; and 3) Mr. Zigfred Nino C. Viray, its Corporate PlanningManager, who testified, among others, on the following: a) thedescription of the Forwards Market Project; b) the justification anddetails of the budget applied for the Forwards Market Project; and c)the status of the Forwards Market Project. In the course of theirrespective direct examinations, various documents were presentedand duly marked as exhibits.

Thereafter, MERALCO conducted its cross-examination of thesaid witnesses. On the other hand, Engr. Mallillin moved that hisc1arificatory questions during the expository presentation beconsidered as his cross-examination to the aforesaid witnesses.

Upon termination of the cross-examination, the Commissionpropounded c1arificatory questions and directed PEMC to submit


various documents, within fifteen (15) days from said date of hearing,and its formal offer of evidence (FOE), within ten (10) days from thesubmission of the required documents. Relative thereto, MERALCOand Engr. Mallillin were given a period of ten (10) days from receipt ofPEMC's FOE within which to file their respective comments thereon,if they so desire.

MERALCO and Engr. Mallillin manifested that they would notpresent any evidence.

The Commission would recall the parties for a clarificatoryhearing, if deemed necessary.

On August 27, 2013, Engr. Mallillin filed his rectified "Motion toParticipate as Intervenor".

On September 6, 2013, PEMC filed a "Compliance (Re: August22, 2013 Hearing)" comprising of the Macro-economic Assumptionsfrom the Development Budget Coordination Committee (DSCC),Forwards Market Write-up, MRDP Project Write-up and DemandForecast Write-up.

On September 16, 2013, PEMC filed its "Formal Offer ofEvidence with Motion for Additional Marking of Documents".

On October 7, 2013, MERALCO filed its "Comment (ToPEMC's Formal Offer of Evidence) with Motion (For Time to FileMemorandum)". Relative thereto, on October 17, 2013, PEMC filedits "Reply to MERALCO's Comment (Re: PEMC's Formal Offer ofEvidence)".

On October 21, 2013, MERALCO filed its "Memorandum",Relative thereto, on November 5, 2013, PEMC filed its "Comment(Re: MERALCO's Memorandum)".

On December 23, 2013, the Commission issued an Orderauthorizing PEMC to continue imposing the approved MF of CY 2013in ERC Case No. 2012-084 RC, on the market participants in theLuzon and Visayas WESM, pending the final resolution of theproposed MF for CY 2014.


On October 1,2014, the Commission issued an Order admittingPEMC's "Formal Offer of Evidence" and declaring the instantapplication submitted for resolution of the Commission.

DISCUSSION

Pursuant to Section 30 of the EPIRA, PEMC sought theCommission's approval of its proposed budgetary requirements forCY 2014 in the amount of PhP814,529,000.00 to be imposed on allmarket participants in Luzon and Visayas, broken down as follows:

A. The amount of PhP796,024,000.00 for its budgetaryrequirements for CY 2014, broken down into the followingbudget components:

Budget Components In PhPTotal Personnel Services (PS) 388,641,000.00Honorarium 34,216,000.00Rental 38,812,000.00Utilities 32,828,000.00Repairs and Maintenance 33,632,000.00Contracted Services 32,505,000.00Conference 9,709,000.00Insurance 11,228,000.00Participants Development Costs 5,000,000.00Advertising and Promotions 6,902,000.00Taxes and Dues 9,835,000.00Travel and Transportation 15,701,000.00Trainings 9,965,000.00Materials and Supplies 8,824,000.00Subscriptions 6,023,000.00Research and Development 6,066,000.00Market Audit 48,117,000.00

Total Maintenance and OtherOperating Expenses (MOO E) 309,363,000.00Provision for DOE and ERC MonitoringFacilities 15,608,000.00Total Capital Expenditures (CAPEX) 82,412,000.00Total 796,024,000.00


B. The amount of PhP18,505,000.00 for the remainingeighty percent (80%) of the proposed Year 1 budget forthe Forwards Market and MRDP Projects, as discussedbelow:

It is worthwhile to mention that the Commission, in its Decisionapproving the CYs 2010-2011 MF Application, has already approvedthe initial funding for the Forwards Market and MRDP Projects,equivalent to twenty percent (200/0) of PEMC's proposed Year 1budget. Thus, PEMC prayed for the approval of the remaining eightypercent (80%) of the said budget in the amount ofPhP18,505,000.00.

On the other hand, the proposed budget for Years 2 and 3 wasapproved by the Commission in its Decisions dated December 3,2012 in ERC Case No. 2011-111 RC (MF Application for CY 2012)and July 8,2013 in ERC Case No. 2012-084 RC (MF Application forCY 2013), respectively.

Table 1

Projects

MRDPForwards MarketTotal

Table 2

Year 1ProposedBud et

14,400,000.008,731,000.00

Year 1Commission-A roved2,880,000.001,746,000.00

RequiredAdditionalFundin

11,520,000.006,985,000.0018,505,000.00

Projects

MRDPForwardsMarket

Year 1CYs 2010-2011MF A Iication

14,400,000.00

8,731,000.00

Year 2CY 2012

MF A Iication9,200,000.00

Year 3CY 2013

MF A Iication6,000,000.00

Total(In million)

29,600,000.00

8,731,000.00

The indicative MF rate at a projected volume of 63,789 GWh forLuzon and Visayas is PhPO.0128/kWh.

After a thorough evaluation of the instant application, theCommission approves the amount of PhP702,984,727.73.00 asPEMC's budgetary requirements for CY 2014, as shown below:


Commission-PEMC's ApprovedProposed Budget Variance

Particulars Budget (PhP) (PhP) (PhP)

PS 388,641,000.00 380,450,736.00 8,190,264.00

MOOE 309,363,000.00 249,017,530.00 49,881,470.00

CAPEX 82,412,000.00 61,077,000.00 21,335,000.00MarketEnhancementProjects 18,505,000.00 3,312,310.00 15,192,690.00Provision forERC/DOE 15,608,000.00 13,877,152.00 1,730,848.00Total BudgetaryRequirement 814,529,000.00 707,734,728.00 106,794,272.00Unutilized MF forCY 2013 4,750,000.00Total ApprovedMF for CY 2014 702,984,727.73

In evaluating the proposed budgetary requirements of PEMCfor CY 2014, the Commission deemed it prudent to utilize theactual expenditure of PEMC for each cost item for CY 2013 asreflected in the Variance Report it submitted, with dueconsideration to any pertinent adjustment, such as inflation ratesand CPI, to come up with a circumspect analysis of the proposedbudget.

The budget components are hereby discussed in seriatim:

A. PERSONNEL SERVICES (PS)

PEMC's proposed budget for PS is PhP388,641,OOO.00for its one hundred sixty (160) employees, including theadditional employees as a result of the reorganization dulyapproved by its PEM Board and for the RCOA. Saidreorganization was recommended by SGV & Co. due to theincreasing workload of PEMC.


The PS budget, which is based on the mid-point plusadjustment on CPI, covers the annual salaries and otherbenefits of PEMC's employees based on the compensationpackage approved by its PEM Board. This includes otherbenefits, such as overtime pay, 13th month pay, bonus,retirement fund, uniform allowance, sick and vacation leavesand other mandatory benefits like Social Security System(SSS), Philippine Health Insurance (Philhealth) and HomeDevelopment Mutual Fund (HDMF) contributions.

PEMC proposed an across-the-board increase of threepercent (3%) in PS from its previous year's proposed budget,based on a projected increase in CPI for 2014 plus a three tofive percent (3%-5%) increase in accordance with its PEMBoard Circular No. 2007-003 issued on February 1, 2007, towit:

"b.2) Across the Board Annual Increase

xxx all regular employees having at leastone year of tenure as of December 31st ofthe previous year will be given an annualacross the board increase which shall takeeffect every 1st of June of the year. Theacross the board shall be based on inflationrate (year to date consumer price index atNCR) plus 3-5% maximum increase subjectto management discretion. "

In evaluating the proposed PS budget, the Commissionused the CY 2013 Variance Report adjusted by the projectedthree percent (3%) CPI plus five percent (5%) maximumincrease in accordance with PEMC Board Resolution No. 2007-03. The five percent (5%) increase is subject to the conditionthat any unutilized budget on the PS or the MF as a whole shallbe reported to the Commission and will be deducted from theMF of the following year.

The CY 2013 Variance Report discloses that the actualexpenditure for PS for CY 2013 was PhP330,317,OOO.00,inclusive only of the budget for the additional employees hiredin July to December 2013 in the amount of PhP23,124,250.00.Considering that the equivalent budget for additional employeesfor the months of January to June 2013 was not included in the


Variance Report, it shall be added to the approved budget forCY 2014. The budget for the contractual personnel in Visayasfor the months of January to June 2013 shall be accordinglydeducted to the approved budget given that these contractualpersonnel will be replaced by permanent personnel in Visayas.Thus, the Commission approves the amount ofPhP380,450,736.00, adjusted by CPI of 3% plus 5°J'o maximumincrease in accordance with PEMC Board Resolution No. 2007-03 for PEMC's CY 2014 budget for PS.

B. MAINTENANCE AND OTHER OPERATING EXPENSES(MOO E)

PEMC's proposed budget forPhP309,363,000.00, broken down as follows:

MOOE is

Budget Components In PhPHonorarium 34,216,000.00Rental 38,812,000.00Utilities 32,828,000.00Repairs and Maintenance 33,632,000.00Contracted Services 32,505,000.00Conference 9,709,000.00Insurance 11,228,000.00Participants Development Costs 5,000,000.00Advertising and Promotions 6,902,000.00Taxes and Dues 9,835,000.00Travel and Transportation 15,701,000.00Traininqs 9,965,000.00Materials and Supplies 8,824,000.00Subscriptions 6,023,000.00Research and Development 6,066,000.00Market Audit 48,117,000.00

Total MOOE 309,363,000.00

PEMC's proposed budget for the cost items Honorarium,Utilities, Conference, Insurance, Advertising and Promotions, Taxesand Duties, Trainings, Materials and Supplies and Subscriptions, wasbased on the budget previously approved by the Commission or theactual cost it incurred for CY 2012, adjusted by the projected CPI ofthree percent (3%) for CY 2013, and further adjusted by the projectedCPI of three percent (3%) for CY 2014.


On the other hand, for the other cost items Rental, Repairs andMaintenance, Contracted Services and Market Audit, PEMCproposed an increase of ten percent (10%) from its previous year'sapproved budget since the contracts it entered into with the serviceproviders provide for an annual increase of ten percent (100/0)fromthe previous rate.

In evaluating the proposed MOOE budget, the Commissionutilized the actual expenditure of PEMC for each cost item asreflected in the CY 2013 Variance Report adjusted by a three percent(3%) CPI.

1. HONORARIUM

PEMC proposed a budget of PhP34,216,000.00 forHonorarium which represents the monthly allowances paid tothe members of its PEM Board and PEM Committees and Sub-committees which were created to support the Board in its taskof governing the WESM. The five (5) PEM Committees are: 1)Audit; 2) Market Surveillance; 3) Rules Change; 4) Technical;and 5) Dispute Resolution. On the other hand, the five Sub-committees are: 1) Market Operations; 2) System Operations;3) Billing and Settlement; 4) Metering; and 5) Legal andRegulatory Services.

The grant of Honorarium is in accordance with PEMCBoard Resolution No. 200-22, entitled "Grant of Honoraria forCommittee Members", dated September 27 2005 as amendedby Board Resolution Nos. 2007-16 dated April 27, 2007 and2007-297 dated June 20, 2007. Considering that the amountof Honorarium to be granted to each member is fixed pursuantto the said resolutions and dependent on the additionalmembers for each Committee, the Commission approves theamount of PhP28,065,250.00, subject to the submission of anupdated report on the filled-up members of the PEM Board andits Committees.

2. RENTAL

PEMC proposed a budget of PhP38,812,000.00 for rentalexpense, which accounts for the use of office and parking


spaces, warehouse and lease of office equipment. Includedalso in the budget is the cost of the new back-up site.

Accordingly, the Commission approves the amount ofPhP34,107,400.00, which is based on the actual expense asshown in the CY 2013 Variance Report, adjusted by a tenpercent (100/0) increase as provided in the lease contractsentered into by PEMC. Included in this approved amount is thebudget for the new back-up site for the months of July toDecember 2014.

3. REPAIRS AND MAINTENANCE

The proposed budget of PhP33,632,000.00 includesrepairs and maintenance of other assets, such as PABX, DataManagement System, vehicle maintenance, air conditioningunit cleaning, carpet cleaning, pest control, other maintenanceservices and the annual renewal of its anti-virus software.

It also covers expenses for the annual maintenance andtechnical support of the MMS and its other components basedon PEMC's existing contracts with regular suppliers, such asASS, HP and IBM.

Accordingly, the Commission approves the amount ofPhP29,533,900.00 for this cost item, an adjustment of tenpercent (10%) increase from the actual expenditure for CY2013 as reflected in the CY 2013 Variance Report.

4. CONTRACTED SERVICES

The budget for Contracted Services in the amount ofPhP32,505,000.00 covers consultancy/outsourced services,such as external legal counsel, financial audit, Net SettlementSurplus (NSS) audit, actuarial, tax consultancy, security andjanitorial services and other operation and managementconsulting needs.


The CY 2013 Variance Report discloses that PEMC'sactual expenditure exceeded the approved budget for this costitem.

Recognizing the importance of this cost item to PEMC forthe effective discharge of its mandate, the Commissionapproves the proposed amount of PhP32,505,OOO.00, subjectto the submission of the contracts it entered into with theservice providers.

5. MARKET AUDIT

The proposed Market Audit budget of PhP48,117,OOO.00covers cost for the payment of professional fees for auditservices as required by the WESM Rules.

Under the said Rules, the PEM Board established thePEM Audit Committee (PAC), which is mandated, on its own orthrough appointment of external auditors, to conduct,coordinate and supervise effective and independent audits ofthe operations of the spot market and the Market Operator inorder to reinforce the trading participants' confidence in thetransparency and adequacy of the operation of the WESM.This mandate is provided under Clause 1.5 of the WESMRules, which reads:

xxx

"The PEM Auditor shall:

a) Conduct annual audits of the MarketOperator and the settlement system andany other procedures, persons, systemsor other matters relevant to the spotmarket."

xxx

Further, Section 7.2.2 of the PEM Audit Market Manualprovides the general objectives of the annual audit of the spotmarket, among which is to assess the procedures, workingprocesses and the appropriateness of the WESM settlementsystem, data management and other systems used by theMarket Operator to administer the WESM.


The Commission approves the budget for this cost item inthe amount of PhP37,653,000.00, which is based on the actualcost as reflected in the CY 2013 Variance Report, adjusted by aten percent (10%» increase as provided in the contracUsentered into by PEMC with the audit provider. This budget willensure that market operations maintain a certain standard ofefficiency, effectivity and transparency, thereby, providing acertain level of comfort to the market participants.

The approval of the budget for Market Audit is subject tothe submission of the contracts of PEMC with the selected auditprovider.

Relative thereto, PEMC must observe strict solicitationprocess in the selection of an audit provider as the audit reportprovides a reliable third-party information on the integrity,accuracy and adequacy of WESM operations, procedures,results and reports.

6. UTILITIES

Utilities expenses include payments for electricity, waterand communication or network services, such as leased linesand telephone lines, used in the operation of WESM. Theproposed budget for this cost item is PhP32,828,OOO.00, whichis based on the approved budget for CY 2012, adjusted by CPIfor CYs 2013 and 2014.

The CY 2013 Variance Report discloses that the actualexpenditure for CY 2013 was only PhP26,180,OOO.00. Thus,there is a variance of PhP6,648,OOO.00 from its proposedamount of PhP38,045,OOO.00 in CY 2013.

Accordingly, the Commission approves only the amountof PhP26,965,OOO.00, which is based on its actual expenditurefor CY 2013, adjusted by a three percent (30/0)CPI.

The approval of the budget for Utilities is subject to thesubmission of the contracts of PEMC with the communicationlines provider.


7. CONFERENCE

The proposed budget of PhP9,709,000.00 coversexpenses for the regular meetings of the PEMC Board, PEMCCommittees and meetings of PEMC personnel with the WESMparticipants and other third parties. Such conferences serve asa venue to discuss updates and issues about the market, whichinclude various participants' events held in Luzon and Visayas,such as the Quarterly COP conferences, WESM anniversaryand WESM Annual Participants' Meeting.

Accordingly, the Commission approves the proposedbudget of PhP9,709,OOO.00since said venues ensure that themarket participants will be kept abreast with the developmentsin the market.

8. ADVERTISING AND PROMOTIONS

PEMC proposed a budget of PhP6,902,000.00 for thecost of newspaper and print ads as well as promotional exhibitsthat will serve as an avenue to provide information andunderstanding of the Philippine WESM. It also covers costs forpublic relations, print and media advertisements and advertisingevents, such as the exhibits participated by the energy industryplayers which may be held locally or in foreign countries.

It should be noted that PEMC failed to submit documentsto justify the reasonableness of this cost item, thus, theCommission is constrained to deny the proposed budget.

9. TRAVEL AND TRANSPORTATION

Travel and transportation include costs incurred for localand foreign travels, particularly, airfare, per diem, lodging andmeal allowances. The proposed budget for foreign travels in2014 is allotted for joining the annual EISG Conference, APEXGlobal and Regional ASEAN Energy Business Forum andofficial meetings with other energy markets.

., .


The budget of PhP15,701,000.00 also covers the cost ofgasoline and oil of PEMC's service vehicles.

Accordingly, the Commission approves the amount ofPhP14,438,540.00, which is based on the actual expenditurefor CY 2013 as shown in the CY 2013 Variance Report,adjusted by three percent (3%) CPI.

10. TRAININGS

PEMC proposed a budget of PhP9,965,000.00 for theannual training programs for its employees, which coverscourses for managerial, technical and other specialized skills.With the new challenges in technology and the continuousdevelopment in the WESM, the employees of PEMC mustsustain and enhance their expertise to be able to perform theirmandate.

The Commission recognizes the need to enhance theskills and talent of PEMC's employees to ensure efficient andeffective operation of the market.

Accordingly, the Commission approves the amount ofPhP5,017, 100.00, which is based on its actual expense for CY2013 as shown in the CY 2013 Variance Report, adjusted by aten percent (100/0)increase.

11. SUBSCRIPTIONS

PEMC proposed a budget of PhP6,023,000.00 for thiscost item which includes newspaper publication of PEMCapplications submitted to the Commission or the DOE, such asMF applications, revisions in the WESM Rules, PDM or NSS,which require notice to the public. It also includes the costs ofannual subscription of newspaper for official use.

A perusal of the CY 2013 Variance Report shows that theactual expense for this cost item for CY 2013 was onlyPhP1,033,000.00. Thus, the Commission approves only the


amount of PhP1,063,990.00, adjusted by three percent (3%»CPI.

Anent this item, PEMC should submit relevant documentsto apprise the Commission as to the actual expenditure of theapproved budget.

12. MATERIALS AND SUPPLIES

PEMC's proposed budget of PhP8,824,000.00 forMaterials and Supplies covers costs for the purchase ofmaterials, office supplies and small office equipment which areregularly used in its daily business operations.

Recognizing the need for this cost item and consideringthat the actual expenditure for CY 2013 is higher than theproposed budget for CY 2014, the Commission approves theamount of PhP8,824,OOO.00 as proposed.

13. INSURANCE

PEMC's proposed budget of PhP11,228,000.00 forInsurance covers premium payments for PEMC's assets andprotection against risk or possible lawsuit, such as propertyinsurance and insurance coverage for its service vehicles,travels and for the Directors and Officers' Liability andCorporate Reimbursement Insurance.

Accordingly, the Commission approves the amount ofPhP9,731,440.00, which is based on the actual expense ofPhP9,448,000.00 for CY 2013 as reflected in the CY 2013Variance Report, adjusted by three percent (30/0)CPI.

14. TAXES AND DUES

PEMC's proposed budget of PhP9,835,OOO.00 for Taxesand Dues covers expenses for the payment of local business


taxes to the local government, association dues, registrationand membership fees.

Considering that this cost item is obligatory in nature, theCommission approves the amount of PhP6,403,510.00, whichis based on the actual expenditure for CY 2013 as shown in theCY 2013 Variance Report, adjusted by three percent (3%

) CPI.

15. PARTICIPANT DEVELOPMENT

PEMC proposed a budget of PhP5,OOO,000.00 for itsinformation drive and public awareness programs for theelectricity consumers, WESM members and other externalparties. This budget covers costs of accommodation, venueand meals for prospective participants and honoraria/fees forexternal organizer/speakers.

The cost item Participant Development differs from thecost item Conference in the sense that the former is intendedfor annual and quarterly conferences held between and amongPEMC and WESM members while the latter covers activities,such as WESM lecture series and WESM fundamentals forWESM and non-WESM members. The Commission believesthat information drives and public awareness programs arenecessary to apprise the industry players and consumersregarding the WESM and the electricity market, in general.

It should be noted that the approved budget ofPhP5,OOO,000.00 for the previous year as shown in the CY2013 Variance Report was fully spent by PEMC.

Accordingly, the Commission approves a budget ofPhP5,OOO,OOO.00 for Participant Development, subject toPEMC's submission of the programs and projects conducted atthe end of CY 2014, with corresponding breakdown of the costsincurred for the said activities.


16. RESEARCH AND DEVELOPMENT

PEMC proposed a budget of PhP6,066,000.00 forResearch and Development which is two percent (20/0)of thetotal proposed budget for MOOE. This is in compliance withthe recommendation of its auditor in the previous year's marketoperation audit to allocate this fund to support theimprovements in the market operations.

The Commission believes, however, that the otherprojects of PEMC can sufficiently finance this cost item, likeMarket Enhancement and Development Projects, which consistof MRDP, inasmuch as the objectives of the said projects arealigned or consistent with the objective of this cost item. Thus,PEMC's proposed budget for this cost item is disallowed.

In summary, the Commission approves a total budget ofPhP249,017,530.00 for PEMC's MOOE for CY 2014, broken down asfollows:

PEMC's Commission-Proposed ApprovedBudget Budget Variance

Particulars (PhP) (PhP) (PhP)Honorarium 34,216,000 28,065,250 6,150,750Rental 38,812,000 34,107,400 4,704,600Utilities 32,828,000 26,965,400 5,862,600Repairs and Maintenance 33,632,000 29,533,900 4,098,100Contracted Services 32,505,000 32,505,000 -Conference 9,709,000 9,709,000 -Insurance 11,228,000 9,731,440 1,496,560Participants Development Cost 5,000,000 5,000,000 -Advertising and Promotions 6,902,000 - 6,902,000Taxes and Dues 9,835,000 6,403,510 3,431,490Travel and Transportation 15,701,000 14,438,540 1,262,460TraininQs 9,965,000 5,017,100 4,947,900Materials and Supplies 8,824,000 8,824,000 -Subscriptions 6,023,000 1,063,990 4,959,010Research and Development 6,066,000 - 6,066,000Market Audit 48,117,000 37,653,000 10,464,000Total MOOE 309,363,000 249,017,530 49,881,470


C. CAPITAL EXPENDITURES (CAPEX)

PEMC proposed a budget of PhP82,412,000.00 for CAPEX, towit:

ParticularsMMS Enhancement and U radeEnhancementiRe lacement of E mentCor orate InfraLease 1m rovementTotal CAPEX

PhP, Million48,831,000.0017,963,000.003,372,000.0012,246,000.0082,412,000.00

The aforesaid CAPEX covers. costs allocated for theenhancement and upgrade of the Corporate Infrastructure, MMSEquipment (hardware and software) and Lease Improvement.

Majority of the budget is allotted for MMS Enhancement andUpgrade, which shall require additional man-hours from the vendorsto perform such activities. Said enhancements/upgrade emanatedfrom the operational requirements of the System Operator with regardto the forthcoming Reserve Market and recommendations fromPEMC's Market Surveillance Committee (MSC) and managementinitiatives to achieve efficient operation of the market. PEMCexplained that these proposals were intended to resolve issuesconcerning MMS or provide contingency in case of unforeseenproblems in its current operations while the design, procurement,development, testing and installation of the NMMS are underway.The NMMS Project, which is a three (3) - year project, is expected tobe fully operational by the latter part of 2016 or early 2017 assumingthat the negotiations are complete or the contract has been awardedby the end of the year.

These activities include:

a) Revision of the current MMS software's functionality toallow limitation in the scheduling of the reserve provider tostrictly one reserve category. The costs proposed are forman-hour estimates that will cover the vendor's (ASS)design, coding, testing and project management. This is


in . preparation for the implementation of the ReserveMarket;

b) Revision of the participant interface functionality in thecurrent MMS to achieve a more efficient assessment ofthe trading participants' compliance with the relevant ruleson submission and cancellation of offers. The additionalman-hour estimates, also from ASS, shall be foradditional offer validation and enhancement to thecancellation of offers;

c) Upgrade of the MMS Uninterruptible Power Supply(UPS) to 80 kVA capacity to augment the existing UPScapacity due to increase in additional computingequipment and user computer terminals; and

d) Acquisition of an IT service management software (helpdesk and technical support ticketing system) to automatethe day-to-day incident reporting, corrective repairs andservice request management in support of the MMS.

In view of the foregoing, the Commission deems it necessary toapprove the budget amounting to PhP48,831,OOO.00 for MMSEnhancement and Upgrade to enable PEMC to operate and maintaina reliable and efficient electricity market.

Corporate Infra pertains to acquisition of hardware and softwarefor the procurement and upgrade of corporate management system.The enhancement/replacement of equipment includes the costs ofthe hard disk drives, workstations and server computers which aredue for upgrades and replacements.

It should be noted that the Commission, in its Decisionsapproving the CYs 2012 and 2013 MF Applications, has alreadyapproved the budget for this cost item. Thus, the Commission finds itprudent to maximize the service life of this equipment/hardware whichis, on the average, three (3) to five (5) years before considering itsreplacement or procurement.

Accordingly, the Commission disapproves the proposed budgetfor the cost items Enhancement/Replacement of Equipment and


Corporate Infra amounting toPhP3,372,OOO.00, respectively.

PhP17,963,OOO.00 and

Meanwhile, the budget for Lease Improvement in the amount ofPhP12,246,OOO.00 pertains to the cost for the refurbishment ofadditional office space in Luzon. PEMC explained that thepreparation, negotiation and refurbishment, pertinent to this cost item,are on-going. The Commission believes that this cost item may beapproved in order for the projects to be implemented, subject to thesubmission of the negotiated contract between PEMC and the serviceprovider and its supporting documents showing the details of work,office area specifications and cost breakdown of the project.

Accordingly, the Commission approves a total amount ofPhP61,077,OOO.00 as PEMC's budget for CAPEX for CY 2014.

D. MARKET ENHANCEMENT PROJECTS

PEMC's proposed Market Enhancement Projects consist of theMRDP and Forwards Market Projects, which are intended forimproving or enhancing the performance of its core functions. Thiswill also allow PEMC to evaluate and implement market rules andregulatory changes.

The MRDP is a hardware and software testing anddevelopment platform where market modeling, simulation, design anddevelopment can be conducted without actually investing into a fullscale production set-up.

On the other hand, Forwards Market Project is a research anddevelopment project with the primary objective of developing amarket design in support of the studies and directives of the DOEregarding electricity derivatives.

Shown below is the proposed budget of PEMC for its MRDPand Forwards Market Projects as prayed for in its various MFApplications:


Year 1 Year 2 Year 3Projects CYs 2010-2011 CY 2012 CY 2013 Total

MF Application MF Application MF Application (In Million)

MRDP 14,400,000.00 9,200,000.00 6,000,000.00 29,600,000.00ForwardsMarket 8,731,000.00 - - 8,731,000.00

The Commission, in its Decision approving the CYs 2010-2011MF Application, has already granted an initial funding ofPhP4,626,000.00, equivalent to twenty percent (20%) of theproposed Year 1 budget for the MRDP and Forwards MarketProjects. On the other hand, the budget for Years 2 and 3 wasgranted in the Commission's Decisions approving the CYs 2012 and2013 MF Applications dated December 3, 2012 and July 8, 2013,respectively.

PEMC asserted that it cannot completely implement bothprojects unless full funding is granted. Thus, it prayed that theremaining eighty percent (80%) of the proposed Year 1 budget in theamount of PhP18,505,000.00 be approved in the instant application,as shown below:

Projects Year 1 Year 1 RequiredProposed Approved AdditionalBudget Budget Funding

MRDP 14,400,000.00 2,880,000.00 11,520,000.00ForwardsMarket 8,731,000.00 1,746,000.00 6,985,000.00Total 23,131,000.00 4,626,000.00 18,505,000.00

PEMC explained that with the implementation of the MRDPProject, it can study and simulate proposed changes to the currentmarket design, such as: 1) day-ahead market; 2) reduction of tradinginterval; 3) integration of the Mindanao Grid into the WESM; 4)enhancements to the EMS-MMS data exchange; 5) changing valuesand priorities of Constraint Violation Coefficients (CVCs); and 6)shorter gate closure. The software/hardware of this project will beindependent from the MMS and corporate network andcommunication system. With the aforesaid simulations, PEMC maybe able to identify potential problems and study the impact of the


proposed changes in the market before it can be fully implemented,thus, preventive measures can be addressed immediately.

On the other hand, PEMC explained that the Forwards MarketProject is merely for research and development study, the output ofwhich is not a commercially operational Forwards Market. It hasproposed a Forwards Market in the form of an Over-the-CounterBulletin Board (OTCB) Facility to facilitate the development of theauctioning and trading of electricity forward contracts.

Shown below are the components of the Forwards MarketProject cost:

550,000.002,940,000.001,139,000.008,731,000.001,746,000.006,985,000.00

The project activities involve, among others, research anddevelopment activities to gain full understanding of the conceptualdesign of Forwards Market and its mechanism and engagement of aconsultant. Said consultant will be commissioned to prepare themarket design document and draft framework for market rules andnecessary manuals. In addition, the said consultant will also betasked to draft the necessary amendments to existing market rules toprovide for the establishment of Forwards Market upon consultationwith industry participants.

PEMC acknowledged during the August 22, 2013 hearing ofthis case that the implementation of the said project depends on theresult of the study of the consultant on whether or not ForwardsMarket may be applied to the current market given the current WESMoperations or market design. Aside from the study and drafting ofrules, the consultant should also recommend appropriate actions forthe establishment of this kind of market. Should the Forwards


Market Project be deemed not feasible by the consultant, then, it willnot be considered for implementation.

Given this scenario, the Commission believes that the full costof this project is not commensurate to its expected output since theproposed subsequent activities will depend on the applicability of theproject based on the resulting outcome of the consultant's study.

In this regard, the Commission deems it reasonable to approveonly another twenty percent (20%) of the Year 1 budget in theamount of PhP4,626,000.00. The Commission believes that since theapproved budget for Years 2 and 3 have not yet been spent andtherefore, remains intact, the total amount of PhP19,826,000.00 maybe used and is sufficient to fund any scheduled project for Year 1.

The approval of the entire eighty percent (80%) of the Year 1budget is unwarranted under the circumstances considering that upto date, PEMC has not submitted any supporting document tosubstantiate the alleged need for the full funding of the said projects.Thus, with the approved budget for Years 1, 2 and 3(PhP19,826,000.00), plus the herein approved twenty percent (20%)or PhP4,626,000,OO or a total amount of PhP24,452,000.00, PEMCmay now commence with not only initial works, such as hiringsoftware programmers to create software codes, purchase computerservers, terminals or software development tools and equipment, butalso other projects to fully utilize the budget which is readily availableto it.

Accordingly, the Commission approves the amount ofPhP4,626,000.00 for the MRDP and Forwards Market Project.PEMC is hereby authorized to utilize the approved budget for Years1, 2 and 3 and start implementing the scheduled projects for Year 1.

With regard to the carrying charges that accrued from the timethe Commission approved the budget for MRDP and ForwardsMarket in the CYs 2010-2011 MF Application until the approval of theCY 2013 MF Application, the Commission deems it appropriate todeduct the said carrying charges from the herein approved budget forthe MRDP and Forwards Market Projects it appearing that the funds,although collected, have not been utilized.


In this note, the Commission deems it prudent and reasonableto utilize the ninety-one (91) day T-bill rates plus 300 points for everymonth from January 2012 to September 2014, equivalent toPhP1,313,689.80. This is consistent with the Generation RateAdjustment Mechanism (GRAM) wherein carrying charges areimposed for every month of delay in the implementation of the newgeneration rates, equivalent to 91- day T-bill rates plus 300 points.

Accordingly, the Commission approves the total amount ofPhP3,312,310.20 intended for the remaining Year 1 budget of theMRDP and Forwards Market Projects, computed as follows:

4,626,000.001,313,689.803,312,310.20

E. PROVISION FOR THE DOE AND ERC MONITORINGFACiliTIES

This represents the budget, pegged at two percent (20/0)of theMF, to support the monitoring functions/facilities of the Commissionand the DOE pursuant to CY 2007 MTF Decision dated January 30,2008, which reads:

xxx

"Recognizing the need to continually support themonitoring functions of the Commission and theDepartment of Energy (DOE), PEMC is herebydirected to set aside two percent (2%) of its totalannual MTF for the Commission's and DOE'smonitoring facilities."

xxx


Given the approved budgetary requirement for PS, MODE,CAPEX, Market Enhancement Projects, the consequent amount to beset aside for the ERC and DOE monitoring facilities isPhP13,877,152.00.

II. UNUTILIZED MARKET TRANSACTION FEES IN CY 2013

The CY 2013 Variance Report discloses that there was anunutilized MF in the amount of PhP4,750,000.00 out of PEMC'sapproved budget for CY 2013.

Pursuant to the Commission's Decision dated January 30, 2008in ERC Case No. 2007 -124 RC, any over-recovery or excess in theMF of the previous year shall be refunded to the customers anddeducted from the total budget approved for the succeeding year.Thus, the herein approved MF for CY 2014 shall be reduced by theunutilized MF for CY 2013, computed as follows:

A roved MF for CY 2014Unutilized MF for CY 2013Total PhP

707,734,728.00(4,750,000.00)702,984,728.00

WHEREFORE, the foregoing premises considered, theapplication filed by the Philippine Electricity Market Corporation(PEMC) for approval of the level of Market Transaction Fees (MTF)for calendar year (CY) 2014 for the Philippine Wholesale ElectricitySpot Market (WESM) is hereby APPROVED with MODIFICATION,subject to the following conditions:

1. PEMC is granted the budgetary requirements for CY 2014in the amount of Seven Hundred Two Million NineHundred Eighty-Four Thousand Seven HundredTwenty-Eight Pesos (PhP702,984,728.00), broken downas follows:


Unutilized MF for CY 2013

Total Approved MF for CY 2014

Commission-Approved Budget

PhP380,450,736.00

249,017,530.0061,077,000.003,312,310.0013,877,152.00

707,734,728.00

4,750,000.00

702,984,728.00

2. PEMC is directed to submit the following documents,within thirty (30) days from receipt hereof:

a. Contracts entered into with the service providersunder the cost items Contracted Services, MarketAudit and Repairs and Maintenance;

b. List of programs and projects undertaken at the endof CY 2014, with corresponding breakdown of costsfor the awareness activities under the cost itemParticipant Development;

c. Status of projects and other supporting documents,including requests for proposals and the proposalsmade by the consultants, with correspondingbreakdown of costs for the MRDP and ForwardsMarket Projects; and


d. Contracts entered into with the service providersunder the cost items Lease Improvement and MMSEnhancement and Upgrade, with supportingdocuments showing details of work and costbreakdown of the projects.

SO ORDERED.

Pasig City, October 15,2014.

tb .Ar~NAIDA G. CRUZ-DUCUT

Chairperson

ALFR DO%Commissioner

G~!{ff~1 fJ!YAP-TARUCcommi12~ner

. MAGPALE-ASIRIT


Copy Furnished:

1. Attys. Criselda S. Martin-Funelas and Gladys Evette G. NebabCounsel for Philippine Electricity Market Corporation (PEMC)18th Floor, Robinsons-Equitable TowerADB Avenue corner Poveda Street, Pasig City

2. Office of the Solicitor General (OSG)134 Amorsolo Street, Legaspi Village,City of Makati 1229

3. Commission on Audit (COA)Commonwealth Avenue,Quezon City 1121

4. Senate Committee on EnergyGSIS Building, Roxas Boulevard,Pasay City 1300

5. House of Representatives Committee on EnergyBatasan Hills, Quezon City 1126

6. The Office of the City MayorPasig City

7. PresidentPhilippine Chamber of Commerce and Industry (PCCI)3rd Floor, ECC Building,355 Gil Puyat Ave., Makati City

8. Manila Electric Company (MERALCO)Ortigas Avenue, Barangay Ugong, Pasig City

9. Engr. Robert F. Mallillin151 EDSA, Brgy. Wack-Wack, Mandaluyong City