Posting Republic of the Philippines \__ wwwercgov-ah ENERGY REGULATORY COMMI: Pasig City IN THE MATTER OF THE APPLICATION FOR APPROVAL OF CAPITAL EXPENDITURE PROGRAM FOR THE YEAR 2010 TO 2013 WITH PRAYERS FOR PROVISIONAL AUTHORITY AND AUTHORITY TO SECURE LOAN, ERC Case No. 2010-118 RC NUEVA ECIJA I ELECTRIC COOPERATIVE, INC. DOCKETED (NEECO D, 208, Applicant. Xoo aa--X DECISION Before the Energy Regulatory Commission (Commission) for resolution is the Application dated 15 September 2010 (Application) filed by Nueva Ecija I Electric Cooperative, Inc. (NEECO I) on 29 September 2010 for the approval of its capital expenditure projects for the years 2010-2013. NEECO 1 is an electric cooperative duly organized and existing under and by virtue of Presidential Decree No. 269, otherwise known as National Electrification Administration Decree (PD 269), as amended by Republic Act No. 10531, otherwise known as, National Electrification Administration Reform Act of 2013 (RA 10531), and other laws of the Republic of the Philippines, with principal office at Barangay Malapit, San Isidro, Nueva Ecija. It has an exclusive franchise, issued by the National Electrification Commission (NEC), to operate an electric light and power distribution service in the: City of Gapan; and (2) Municipalities of San Isidro, Cabiao, Jaen and San Antonio, all in the Province of Nueva Ecija.é ERC Case No. 2010-118RC Decision / 20 March 2018 Page 2 of 27 NEECO I filed the instant Application pursuant to Section 43 (A) (v)}: of Republic Act No. 9136, otherwise known as Electric Power Industry Reform Act (EPIRA); Rule 20, A? of ERC’s Rules of Practice and Procedure (ERPP); ERC Resolution No. 26, Series of 20093; and ERC Resolution No 20, Series of 20114. FACTUAL ANTECEDENTS NEECO | filed the instant Application for the approval of its proposed capital expenditure projects for 2010 to 2013 (Capex Projects). NEECO I submits that the said Capex Projects will improve its technical capability, power quality and reliability, as well as reduce system loss.5 Having found the said application compliant with the pre-filing requirements mandated under Section 2, Rule 6 of the ERPP®, the Commission issued an order and a notice of public hearing dated 18 October 2010 setting the same for jurisdictional hearing, expository presentation, pre-trial conference and evidentiary hearing on 12 November 2010. The said Order further directed NEECO I to file its Pre-trial brief within five (5) days prior to the date of the hearing, to furnish all those who made a request for the copy of the application + EPIRA, Section 43 (A) (v) - Any significant operating costs or project investments of the ‘TRANSCO and distribution utilities which shall become part of the rate base shall be subject to verification by the ERC to ensure that the contracting and procurement of the equipment, assets and services have been subjected to transparent and accepted industry procurement and purchasing practices to protect the public interest. 2 Section 1. In General. - Any plan for expansion or improvement of distribution facilities shall be reviewed and approved by the Commission to ensure that all capital projects are optimized and that the contracting and procurement of the equipment, assets and services have been subjected to transparent and competitive bidding and purchasing processes to protect public interest. Applications of this nature shall be governed by the Guidelines to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects. + Amended Rules for Approval of Regulated Entities’ Capital Expenditure Project 4A Resolution the Revised Timelines for the Filing of Multi-Year Capital Expenditure (CAPEX) Applications if Electric Cooperatives Prescribed in Section 6.2 (Transitory Provision) of the ‘Amended Rules for Approval of Regulated Entities’ Capital Expenditure Project, 5 Application, Annex II, NEECO I Capex Plan for Year 2010-2013 © Resolution No. 38, Series of 2006 -Rule 6, Section 2, Pre-filing Requirements for Rate Applications and Other Applications/Petitions for Relief Affecting the Consumers. - Before the ‘Commission shall accept and docket rate applications and other applications or petitions for relief affecting the consumers, the applicant or petitioner must comply with the following requirements: (a) The applicant or petitioner must furnish the Local Government Unit (LGU) Legislative Body (and not the Office of the Mayor) of the city or municipality where it prineipally. operates, a copy of the application or petition, and not a mere notice of application/petition, with all its annexes and accompanying documents. If such principal place of operation is a component city or a municipality, the applicant or petitioner shall likewise furnish the LGU Legislative Body of the province of which such component city or municipality is part. (®) The applicant or petitioner must cause the publication of the entire application or petition, excluding its annexes, and not a mere notice of filing or notice of application or petition, in a newspaper of general circulation within its franchise area or area where it principally operates.ERC Case No. 2010-118RC Decision / 20 March 2018 Page 3 of 27 and its annexes, and to comply with the Commission’s jurisdictional requirements on posting and publication of the notice of hearing pursuant to Section 4, Rule 14 of ERPP during the initial hearing date.7 In compliance with the Order dated 18 October 2010, NEECO T filed its “Pre-trial Brief’ on 8 November 2010. During the hearing on 12 November 2010, the following transpired: (1) The hearing started at nine-thirty in the morning (9:30 A.M.) with Atty. Gregorio L. Ofalsa as the Hearing Officer (HO) and Mr. Joevyn V. Peralta as the Clerk of the Commission (COC). (2) Only Applicant NEECO I appeared through its counsel, Atty. Carlos Roman Uybarreta. (3) Initially, Atty. Ofalsa inquired on the presence of any interested parties who may want to intervene or oppose the instant application. When none signified his or her intention to intervene or oppose, Atty. Ofalsa verified with the COC if there were petitions for intervention filed on record. The COC answered in the negative. (4) Thereafter, the HO directed Applicant NEECO I to present its compliance to the Commission's jurisdictional requirements and other directives provided in the Commission’s Order dated 8 November 2010. (5) Following the said directive, Applicant’s Counsel presented the following: (a) Complete issues of The Manila Times newspaper dated 238 and 309 October 2010, respectively, showing the Notice of Public Hearing for the instant case dated 18 October 2010; 7 Section 4. Publication and Other Requirements. - The notice of hearing for any application or petition for rate adjustment or for any relief affecting the consumers shall be published by the applicant or petitioner, at its own expense, at least twice for two (2) successive weeks in two (2) newspapers of nationwide circulation, the last day of publication not to be later than ten (10) days before the scheduled hearing, In all other applications or petitions, the publication of the notice shall only be once in a newspaper of general circulation in the locality or localities where the applicant or petitioner operates its business, if there be any such local newspaper, or in a nevspaper of nationwide circulation, at least ten (10) days before the scheduled hearing. S Exhibit “Q” Exhibit “R”