national power corporation small power utilities group power supply agreement

National Power CorporationNational Power CorporationSmall Power Utilities GroupSmall Power Utilities Group

POWER SUPPLY POWER SUPPLY AGREEMENTAGREEMENT

Small Power Utilities GroupSmall Power Utilities GroupPower Supply AgreementPower Supply Agreement

Power Supply Agreement

Test our interest in participative discussion

Story about:

The KUBA Family

The Consultant and the Driver

National Power CorporationNational Power Corporation

27 January 2009

Small Power Utilities GroupSmall Power Utilities Group

Power Supply AgreementPower Supply AgreementBetweenBetween

NPC-SPUGNPC-SPUGAndAnd

Distribution UtilitiesDistribution Utilities



PSA MEANS:


Para Sa Atin



Why do we need to discuss and to sign PSA?

Types of Agreement: Purchase Order Memorandum of Understanding Memorandum of Agreement Contract of Supply and/or Services


Power Supply AgreementWhy do we need to discuss and to sign PSA?

Source of Funds:SAGRRevenue – Opex = Loss = UCME 0.00 – Fixed Cost = Loss 0.00 – Variable cost = Loss Capex = Loss = UCME

UCME > ERC Approved UCMESecure funds from the GAA, if possibleIf not, what will happen?

PRIORITIZE OPERATIONS



Why do we need to discuss and to sign PSA?

SPUG has the mandate to provide power

DUs should pay SPUG for the service

Therefore,

“No Revenue, No funds for Operation”

Both Parties should do each responsibility


Power Supply AgreementWhy do we need to discuss and to sign PSA?

Signing the PSA is inevitable

Energy forecasting

Capacity allocation

Funding requirements

Legal considerations


Table of ContentsSECTION ONE – SCOPE OF AGREEMENTSECTION TWO - TERM OF AGREEMENTSECTION THREE - SERVICE SPECIFICATIONSSECTION FOUR - CHARGES AND ADJUSTMENTSSECTION FIVE - DEFAULTSECTION SIX - TERMINATIONSECTION SEVEN - INDEMNIFICATIONSECTION EIGHT - MISCELLANEOUS PROVISIONS

LIABILITIES FORCE MAJEURE SETTLEMENT OF DISPUTES:

ARBITRATION COURT LITIGATION

ATTORNEY’S FEES AND LITIGATION EXPENSES

NOTICES VALIDITY AND BINDING EFFECT AMENDMENT ENTIRE AGREEMENT UNDERTAKING EFFECTIVITY

Annex A - DEFINITION OF TERMSAnnex B - CONTRACTED DEMAND AND ENERGYAnnex C - CHARGES AND ADJUSTMENTS



Signing the PSA is Inevitable



Conclusion

Let us join forces in order to have a better supply of electricity in your franchise areas



Salamat Po



The KUBA Family

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ALL are KUBA ? ? ?



The Consultant and the Driver


Table of Contents

SECTION ONE – SCOPE OF AGREEMENTSUPPLYSupply of electric power and energy

between NPC – SPUG and Distribution Utilities


Table of Contents

SECTION TWO - TERM OF AGREEMENT

Cooperation period is ten (10) years from Effectivity Date and renewable by mutual consent of the parties.

DU or NPC has an option to enter into a Power Supply Agreement with new power provider (NPP).


Table of Contents

SECTION THREE - SERVICE SPECIFICATIONS

CONTRACT DEMAND AND CONTRACT ENERGY Allocation of Contract Demand and Contract

Energy as set forth in Annex A. To increase the contracted volumes, notify at least

two (2) years in advance to adjust capacity


Table of Contents

SECTION THREE - SERVICE SPECIFICATIONS SERVICE RELIABILITY

Supply shall be available continuously except for allowable interruption or reduction

The parties shall have a period of three (3) years to improve their respective facilities, including ensuring the compliance of the CUSTOMER with the pertinent technical specifications and performance standards of the Distribution Code.


Table of Contents

SECTION THREE - SERVICE SPECIFICATIONS APPLICATION FOR INCREASE IN DEMAND AND

ENERGY Through an amendment in Contract Demand or

Contract Energy for any particular year or years subject to the technical constraints of generating

plants, transmission, substation, and other facilities and

subject to such rates and to other terms and conditions as the parties may agree upon.


Table of Contents

SECTION THREE - SERVICE SPECIFICATIONS ASSIGNABILITY

NPC-SPUG shall assign, cede, transfer, allocate wholly or partly its rights and obligations under this agreement unilaterally to an NPP which will be selected by the NPC-SPUG/CUSTOMER to take over the former’s power generation function by reason of private sector participation.

CUSTOMER shall not assign any of its rights and/or obligations under this Agreement without the prior written consent of NPC-SPUG, which consent shall not be unreasonable withheld, and subject to the terms and conditions imposed in this Agreement.


Table of Contents

SECTION FOUR - CHARGES AND ADJUSTMENT

Billing and payment for energy delivered by NPC-SPUG

Subsidized Approved Generation Rate (SAGR) Other adjustments and procedures as approved by the ERC and provided in Annex B on Charges and Adjustments.


Table of Contents

SECTION FIVE - DEFAULT The occurrence of the following events:

Breach or failure in the performance An assignment by either party Repeated breaches of this agreement Cessation by either party


Table of Contents

SECTION SIX - TERMINATIONDefault Initial TermExtended Term


Annex B

CHARGES AND ADJUSTMENTS TARIFF

Basic Rate = P /kW-hr Capex/Fixed Cost = P /kW-hr Variable Cost = P /kW-hr

Overdue Accounts = P /kW-hrGRAM = P /kW-hr ICERA = P /kW-hr


Annex B

PENALTIES If the CUSTOMER fails to meet the annual

Contracted Energy, CUSTOMER shall still pay for the Full Fixed Cost component of the True Cost Generation Rate (TCGR) of the undelivered Contracted Energy;

If the CUSTOMER offtakes is in excess to the Contracted Energy, CUSTOMER shall pay for the Full Variable Cost component of the True Cost Generation Rate (TCGR) of the incremental excess energy;


Annex B

PENALTIES If NPC-SPUG fails to meet the Contracted

Energy, and the CUSTOMER secures an alternative supplier to meet the deficiency, NPC-SPUG shall pay for the electricity produced by the CUSTOMER equivalent to the true cost of generation of NPC-SPUG.


Annex B

CHANGES TO CHARGES AND ADJUSTMENTS The charges and adjustments may from time to

time be reviewed and amended in accordance with prevailing laws, rules or regulations.

national power corporation small power utilities group power supply agreement

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