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BIR Road corner Quezon Avenue, Diliman, Quezon City, PhilippinesTel. No.: (632) 921-3541 • Fax No.: (632) 921-2468E-mail: [email protected] 2 0 1 4

A N N U A L R E P O R T

C A S C A D I N GT H E S P A R K O F P R O G R E S S

National Power Corporation

2 • N A T I O N A L P O W E R C O R P O R A T I O N

C A S C A D I N G

In 2014, the National Power Corporation realized a good deal of wins through the collective efforts of its employees. It sustained a positive net income and improved collection efficiency, thereby bringing the corporation in a strong fiscal position. NPC has also gained a number of awards for its hard work toward continuous improvement and innovation. Aiming to leave no one behind, NPC has also rallied its plants and offices all over the country to cascade the progress to the missionary areas and communities it serve. This is evidently seen in the dialogues it hold with its customers, training and seminars (livelihood and educational) for the stakeholders of its watershed areas and dams, and the ISO certification of its Small Power Utilities Group in Luzon and Mindanao. 2014 is one living proof that development does not only happen in the NPC head office, but it cascades in the islands and far-flung villages.

T H E S P A R K O F P R O G R E S S

COVER STORY

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8

ACCOMPLISHMENTREPORT

MESSAGE OF THECHAIRMAN

2 0 1 4 A N N U A L R E P O R T • 1

NPC • VISION

NPC • MISSION

With social progress as our ultimategoal, we shall be a partner in nation building.

We shall electrify the country to itsfarthest communities and manage ourassets to ensure their sustainability.

We commit to continuously improveourselves to better serve the public.

All these for God and country.

We play a vital role in the electricpower industry. With our wealth ofexperience and technical expertise, weuplift the quality of life in the countryand its islands.

We extend the same values ofsustainability, reliability and safety tothe management of power systems,dams and watershed areas.

This is our commitment to theFilipino people.

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OPERATIONALHIGHLIGHTS

INDEPENDENTAUDITOR’S REPORT


M a . G l a d y s c r u z - s t a . r i t aP R E S I D E N T & C E O

2 0 1 4 A N N U A L R E P O R T • 3

2014 Accomplishments of the National Power Corporation

In 2014, the Philippines has successfully posted a vibrant economic and social growth rate that saw the rise of industries and investment opportunities for Filipinos. The public utilities sector has consistently led in this resurgence, particularly in the energy sector and its agenda for continuing total electrification of the country. In its 77th year, the National Power Corporation (NPC) has not only sustained its sterling performance but also relished significant victories within and outside the corporation. As a state-owned corporation, NPC attained milestones that strengthened its position as one of the best performing government-owned and controlled corporations in the country. Its numerous awards and citations attest to this. It was conferred with the Environmental Excellence Award by the Department of Environment and Natural Resources (DENR) during its 2014 Recognition Awards for Eco-Friendly Government Offices. NPC-Corporate Affairs Group performed vital studies and simulation to maximize the usage of the Kalayaan Pumped Storage Power Plants to boost power supply for 2015 summer months. NPC’s Small Power Utilities Group (SPUG) Luzon and Mindanao are also recipients of International Organization for Standardization on Quality Management System (ISO 9001:2008) certification from certifying bodies in 2014.

Likewise, the ISO certification of SPUG Visayas and the Power Engineering Services were renewed. MINGEN bagged the 2014 Corporate Safety and Health Excellence Award given by the Safety & Health Association of the Philippines Energy Sector, Inc. and the Department of Energy for the Agus 1, 2, 4, 5, 6, 7 and Pulangi IV -hydroelectric power plants (HEP). They also received the triple ISO certification for its 7 Agus-Pulangi HEPs. Priming its fiscal health, NPC also posted a Net Operating Income (NOI) of P2.54 billion which is inclusive of the P1 billion approved National Government Subsidy, enabling it to fund the 2014 capital expenditures for its Small Power Utilities Group (SPUG). Yet, even exclusive of this subsidy, the corporation’s net income of P1.54 billion

remains three times bigger than its 2013 net income of P505 million. The increase in revenue by P1.03 billion is attributed to the combined positive impact of the revenue increase from Universal Charge, improvement in collection efficiency, decrease in fuel cost, and increase in other income derived from the lease of NPC facilities and proceeds of insurance claims from GSIS for the fire incident in Power Barge 105 in June 2006. The increase in revenue was partly offset by the higher subsidy for the New Power Provider (NPP), accrual of terminal leave and higher bad debt expense as a result of higher factor used to estimate uncollectible accounts. In 2014, total cash collections from power customers reached P2.018 billion, while the average collection efficiency in Luzon, Visayas and Mindanao, excluding Basilan, Sulu and Tawi-Tawi (BASULTA) was sustained at 97%. Conversely, the collection efficiency including BASULTA areas is at 49.65%, which is 0.41% higher than that of 2013. The gradual improvement of payment performances of BASULTA areas is a direct result of the constant dialogues being organized by NPC with concerned electric cooperatives, local government units, the Department of Energy (DOE), and National Electrification Administration (NEA). The improved financial performance and cash collections have alleviated the once problematic sourcing of working funds for the efficient operation and upkeep of power plants. With its strong fiscal position, NPC was also able to remit P150 million in dividends to the National Government through the Bureau of Treasury. As NPC braves the challenges of the energy industry, it remains hopeful that it would continuously sustain its financial turnaround while continuously delivering quality service in missionary areas.

MISSIONARY ELECTRIFICATION

To meet bigger challenges ahead, the NPC’s Small Power Utilities Group (SPUG) and Power Engineering


Services (PES) have completed the supply, delivery, installation, test and commissioning of the four (4) units of 600 KW generator sets to Siasi Diesel Power Plant (DPP), Power Barge 113 (2 units) in Siquijor Island and Sitangkai DPP in 2014. These were the remaining 4 units from the 14x600 KW of capacity addition in 2013. A new SPUG area became operational in Atulayan DPP in Sagnay, Camarines Sur on 15 April 2014 benefiting around 70 households. SPUG has also increased the operating hours of some 50 power plants from 6 to 8 hours and from 16-24 hours among others to respond to the growing demand for electricity in these areas. This increase was originally programmed for 2015. But the good financial standing and efficient fuel supply management of the corporation enabled the implementation of the program earlier than scheduled which in turn benefited 26,184 households in 29 municipalities across the country. Likewise, NPC provided 24 operating hours to the municipalities of El Nido, San Vicente and Taytay in Palawan; and Caluya in Antique.

Restoration and rehabilitation of several SPUG plants were also realized in 2014. Jolo DPP’s Unit 1 was rehabilitated, resulting to an additional 1.2 MW power supply, thus increasing the area’s total dependable capacity from 7.45 MW to 8.8 MW. The rehabilitation of Unit 3 of Power Barge 108 sustained the stability of power supply in Bongao Grid at 5.75 MW while peak demand is only 3.24 MW. Guintarcan DPP, Doong DPP and Gigantes DPP, three of the power plants damaged by Typhoon Yolanda in 2013 were fully rehabilitated and re-energized.

Furthermore, two units (2) of Kalamansig DPP were restored after provision of spare parts thus, increasing plant dependable capacity in the area. Maripipi DPP has restored its Unit 2 thus enabling the plant to improve its capacity provision. On 05 December 2014, SPUG’s Mindanao Operations Department was awarded a Certificate of Accreditation by the Technical Education and Skills Development Authority (TESDA) as a Competency Assessment Center in Diesel Power Plant Operation and Maintenance NC II. This would enable the department to enhance and constantly update the operating personnel’s skills and knowledge in the operation and maintenance of SPUG generating units. SPUG and PES had also completed in September 2014, 3.81 circuit kilometers of river crossing transmission line in Occidental Mindoro.

MILESTONES IN THE PRIVATIZATION OF SPUG OPERATIONS

For 2014, Busuanga Island Electric Cooperative (BISELCO) and Palawan Electric Cooperative, Inc. (PALECO) inked two successful agreements with Calamian Island Power Generation (CIPG) and DMCI Power Corporation (DPC) respectively which effectively transferred NPC’s generation functions in Busuanga and Coron, as well as in Roxas, all in Palawan.

Further, Powersource Philippines, Inc. as Qualified Third Party (QTP), has taken the supply and distribution of electricity in the island of Malapascua in 2014, thereby doubling the area electrified by QTPs.

The entry of the private sector in missionary areas is prescribed by the Department of Energy through its Circular No. 2004-01-001, titled “Prescribing the Rules and Procedures for Private Sector participation in Existing NPC-SPUG Areas.”

WATERSHED MANAGEMENT

The National Power Corporation is also mandated to manage 11 watershed systems, covering 476,258.02 hectares of protected land across the Philippines. These watershed areas are instrumental for water supply, power generation, and climate change mitigation.

In 2014, NPC, through its Watershed Management Department (WMD) rehabilitated a total of 1,471.80 hectares through reforestation, agroforestry, and Non-Timber Forest Resource Management. Out of this total, 960.80 hectares have been established in partnership with public and private groups/institutions such as the Philippine Army, DENR (through the National Greening Program), San Roque Power Corporation (SRPC), Epson Philippines, Boy Scouts of the Philippines Albay Provincial Jamboree, among other partners.

A total of 13,239 board feet of lumber/timber, 130 sacks of wood charcoal, 5 units of chainsaw and 6 conveyances have been confiscated in joint operations of NPC, PNP/AFP, DENR, the LGUs and the 700 Bantay Watershed Task Force volunteers of NPC. WMD had likewise dispersed 124,781 seedlings of both forest and fruit-bearing species to various local stakeholders, LGUs, members of the academe, attached institutions and private organizations for their re-greening programs and dispersal of 331 gilts (swine) in the areas of Tiwi in Albay, Buhi in Camarines Norte, and Bokod in Benguet, and 54 heads of goat in Pulangi, Maramag, Bukidnon.

2 0 1 4 A N N U A L R E P O R T • 5

NPC also facilitated capacity building through livelihood training to communities as part of a program to enrich local skills and knowledge in various potential livelihood engagements such as organic farming, handicraft making, and seedling production, among others. A total of 16 livelihood training/seminars were conducted in CY 2014, while 41 school lectures/film showing and 4,117 print materials produced and distributed to build awareness of watershed protection and rehabilitation.

In its bid to contribute to the government’s inclusive growth agenda through local tourism, the corporation also inaugurated the Angat Rainforest and Eco Park (AREP) in Bulacan on December 17, 2014. The new facility aims to promote environmental education and awareness to the public and tourists. An eco-tourism framework for the Caliraya Lumot watershed in Laguna was also formulated to support local efforts to further boost tourism in the area.

MANAGEMENT OF DAM OPERATIONS

Seventeen (17) dams in the country are under NPC’s stewardship. NPC ensures the safe operation of these dams and supports local government units in safeguarding the communities living downstream. For 2014, NPC through its Dams Management Department (DMD) has conducted semi-annual mandatory dam safety inspections to confirm the satisfactory behavior and condition of dam structures and facilities of Ambuklao, Binga, San Roque, Angat and Caliraya-Lumot and other non-power components of hydroelectric power plants in the Luzon Grid.

Dam safety inspections were also conducted in smaller dams such as Buhi-Barit and Cawayan Dam in Bicol, and Amlan and Loboc Dams in Visayas. The Dams, Reservoirs, and Waterways Management Division of the Mindanao Generation has likewise conducted safety inspections of the Agus, Pulangi, Agusan and Talomo Dams in Mindanao. The DMD also conducted several Public Information and Education Campaigns (PIEC) involving downstream communities of NPC-operated and maintained dams, to continually update, inform, and educate people on how NPC operates these dams in accordance with the Dam Safety Program and Flood Forecasting and Warning System for Dam Operation. The PIEC also aims to strengthen the capacity of Local Government Units (LGUs) to deal with flood-related hazards.

Moreover, NPC convened in 2014 the Philippine National Committee on Large Dams (PNCOLD) in a technical seminar in San Roque Power Corporation (SRPC),

San Manuel, Pangasinan. The event was led by International Dam Experts like Dr. Martin Wieland, Chairman of the Committee on Seismic Aspects of Dam Design of the International Committee on Large Dams (ICOLD). He discussed earthquake hazard, seismic design and safety aspects of large storage dams. The event also included the signing of the PNCOLD Declaration on the need for “Water Resources for Future Sustainable Development in the Philippines”, which signifies the organization’s call for joint efforts to develop the country’s water storage infrastructure in a sustainable way

PNCOLD, established in 1958, is a non-profit organization of owners and operators of large dams that is tasked to share the knowledge and techniques in the design, construction, operation and maintenance of dams; bring together relevant reports, lessons learned and large dam engineering practices, and conduct studies in the different aspects of dam maintenance.

Member organizations of PNCOLD include the NPC, Metropolitan Waterworks and Sewerage System (MWSS), Cal Energy Casecnan, Engineering and Development Corporation of the Philippines (EDCOP), National Irrigation Administration (NIA), SN Aboitiz Power, San Roque Power Corporation and Local Water Utilities Administration (LWUA). The NPC President is the current president of the PNCOLD. With the dry advisory of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) on November 28, 2014, NPC’s DMD was able to manage and conserve the water of Angat Dam by efficient reservoir operation of the Flood Forecasting and Warning System for Dam Operation. This enabled the Angat reservoir level to store excess flood water to El. 214.26 masl last 29 December 2014, equivalent to 46 MCM of water or stored energy of 15,937 MWH and domestic/irrigation water supply. The prudent reservoir operation of NPC alleviated the impending water crisis for the year 2015.

RESOURCE MANAGEMENT SERVICES

The National Power Corporation – Resource Management Services (RMS) continues to operate and maintain the remaining undisposed power assets of the government eleven years after the implementation of the Electric Power Industry Reform Act (EPIRA). These assets include Power Barges 101-104 and the Ilijan Natural Gas Receiving Facility in Batangas.


RMS facilitated the successful turnover of the Angat Hydroelectric Power Plant to its new owner and addressed human resources, administrative, and personnel issues of affected employees.

NPC also exceeded the agreed performance targets with PSALM for Power Barges 101, 102 and 104. The group also generated revenues in the amount of P9,731,560.85 from land lease, as well as lease and operation of facilities under the Asset Preservation Department.

On July 2014, RMS’s IPP-Contract Management Department along with Powerhouse Industrial Sales and Services Inc. and ROSEN Asia Pacific successfully conducted the pigging or in-line inspection of the 14.6 kilometer gas pipeline from Shell Philippines Exploration BV, Malampaya On-Shore Gas Plant in Brgy. Tabangao, to the Ilijan Natural Gas Receiving Facility (INGRF) in Brgy. Ilijan, Batangas City.

The procedure inspected the condition and integrity of the pipes using in-line tools or ‘pigs.’ These pigs also remove deposits along the pipeline to ensure the unimpeded flow of gas to the 1200 MW Ilijan combined cycle power plant.

Furthermore, NPC through RMS, worked with the Manila Electric Company (Meralco) in ensuring the completion of the Caliraya-Botocan 115 kV transmission line which is the only link of the Botocan Hydroelectric Plant (Botocan HEPP) to the Luzon Grid. The completion effectively delivered an additional 20 MW of power from Botocan HEPP to the main grid in preparation for the critical summer months of 2015.

Other decommissioned plants and facilities that RMS continues to maintain include the Bataan Nuclear Power Plant (BNPP) and West Nuk Beach Resort in Morong Bataan; Nuclear Village Management Training Center, Guesthouses and Hotels, Bagac, Bataan; Sucat Thermal Power Plant in Brgy. Sucat, Muntinlupa City including the ten inch diameter/ 22 kilometer long underground fuel oil pipeline from Sucat to Manila Thermal Power Plant; Navotas 1 and 2 Gas Turbine Power Plant excluded assets, Navotas Fish port complex in Navotas City; Bataan Thermal Power Plant (BTPP), Bataan Gas Turbine Power Plant and BTPP Housing Complex, Limay, Bataan and Malaya Gas Turbine Power Plant (MGTPP) in Malaya, Pillilia, Rizal; Talavera, Aplaya and General Santos Diesel Power Plant excluded assets located in Cebu, Cagayan de Oro and General Santos City.

MINDANAO GENERATION

Another major power facility of the National Government included in the NPC’s mandate is the 982 MW Agus-Pulangi Hydroelectric Power Plant complex in Mindanao, operated and maintained by the Mindanao Generation (MinGen) Group of the corporation.

The Mindanao Generation portfolio is comprised of the Agus 1 HEP (80 MW); Agus 2 HEP (180 MW); Agus 4 HEP (158.1 MW); Agus 5 HEP (55 MW); Agus 6 HEP (200 MW); Agus 7 HEP (54 MW); and Pulangi 4 HEP (255 MW). Other power plants generating power for Mindanao Region are the geothermal plants of Mt. Apo 1 and 2, which both have 54.2 MW capacity; the oil based SPPC, WMPC, and power barge PB 104 having rated capacities of 53.5 MW, 113.0 MW and 32 MW, respectively; and the coal-fired power plant STEAG which has 210 MW capacity. The Agus-Pulangi plants combined with other power plants, contributed a total of 7,656.1 GWH in energy generation.

The six cascading Agus Power Plants and the Pulangi Power Plant have contributed a total of 4,493.1 GWh or 58.7% to the whole Mindanao Grid in 2014. This equates to a net operating income of P8.554 billion.

The Agus-Pulangi hydroelectric power plants and the other Mindanao plants also cater to a total of 49 customers, 27 of these are electric cooperatives, 15 are industries, 4 are power utilities and the remaining 3 are government agencies. This number of customer accounts for the 53.26% of customers in Mindanao.

It was also in February 27, 2014 when a region-wide power interruption occurred in Mindanao. The power plants under MinGen portfolio – the Agus-Pulangi plants, the fossil-fired (oil based) plants and the STEAG coal-fired plant units with a total capacity of 677.2 MW sequentially tripped. The Agus-Pulangi plants were able to restore operations immediately, leaving mainly the STEAG coal-fired plant units at bay. In the absence of STEAG plants, power deficiency in Mindanao escalated. The Agus-Pulangi plants, along with other merchant plants and embedded units were tapped to serve the needed capacity to cope up with the load demand in the region. However, the hydroelectric power plants were able to come-up with additional capacity requirement by deferring the implementation of scheduled preventive maintenance due to the tight power situation. Nevertheless, the Agus-Pulangi plants were able to generate electricity at par with the previous year. In fact, results of the assessment by the Plant Performance Measurement Team of PSALM-NPC gave the Pulangi IV and


2 0 1 4 A N N U A L R E P O R T • 7

Agus 6 and 7 ‘Very Satisfactory’ and ‘Outstanding’ marks, respectively, while Agus 1 and 2 obtained a 100% of their targets joining the ranks of Agus 4 and 5 that garnered such rating since the previous year.

In the next two years, the existing capacity of Agus-Pulangi is expected to increase by 19 MW due to the completion of Agus 6 HEP’s Units 1 and 2 Uprating Project. A capacity restoration and improvement is also anticipated due to the upcoming Agus 6 HEP Unit no. 4 rehabilitation project as well as the Pulangi IV’s dredging project.

LEGAL WINS

On January 2014, NPC was able to reclaim titles to the NPC Main Office Complex land and building from the Power Sector Assets and Liabilities Management Corporation (PSALM) after both companies signed the Memorandum of Agreement and Deed of Transfer. The MOA covers 24,117 square meters of land based on the approved survey plan.

NPC, through its Office of the Legal Counsel (OLC), continues surveys of the corporation’s landholdings and facilities to properly identify property areas and boundaries. These properties include SPUG areas, Watershed, Dams and RMS. For 2014, OLC has conducted verification, relocation, structural and segregation surveys to a total of sixty-six (66) NPC lots and facilities. Moreover, the OLC has also secured decisions/ decrees/ titles, and filed applications or petitions for forty-seven (47) lots.

--xoxoxo--

The National Power Corporation has taken remarkable strides in 2014. It sustained its robust financial performance that continues to be the moving force in the country’s power industry. The NPC prides itself to be completely aligned with the economic progress achieved by the government as the corporation continues to bring hope for a brighter life through missionary electrification and prudent management of its power resources. The NPC is confident that the sound management of its assets will pave the way for economic and social progress to the communities it serves.

2 0 1 4 A N N U A L R E P O R T • 7


Message of the Chairman


C E S A R V . P U R I S I M AS E C R E T A R Y O F F I N A N C E

C H A I R M A N , N A T I O N A L P O W E R B O A R D

I would like to congratulate the National Power Corporation (NPC) for garnering awards and numerous certifications in 2014, and for netting P1.536 billion, the highest income NPC has had in years. NPC has also been a good steward to the 11 watersheds and 17 dams in the country, leading the rehabilitation of 1,010 hectares of denuded areas this year through the Universal Charge-Environmental Charge, and engaging dam communities as active partners.

These show that no challenge is insurmountable and that NPC can afford to set bigger goals. Today, we stand on a ground built on good macroeconomic fundamentals with a virtuous growth cycle that opens up more opportunities for growth. But economic growth cannot be real unless it reaches every corner of our archipelago.

Today, we face not one but two challenges: First, we must strive to finally reach our target of 100% electrification in every part of our country without our people having to worry about blackouts. After all, it is already 2015 and this problem still has not been resolved in the course of Philippine history. To be able to overcome this would change the trajectory of our economic development.

At the beginning of 2014, the national electrification rate stood at 83%, translating to 16 million Filipinos who had no access to electricity. What this figure does not show, however, is that most of these people are from rural areas, where the electrification rate in the urban area is 94% while it is only 73% in rural areas. Now more than ever, NPC’s role of missionary electrification in the Philippines is critical in order to promote not only inclusive but also sustainable growth. NPC is already gaining momentum where it has increased power generation capacity and has extended the operating hours of SPUG plants across the country, even going beyond and giving 24 full hours of power to the rising economies of El Nido, Taytay, and San Vicente in Palawan and Caluya in Antique province.

Secondly, climate change is a reality we must face where we must go beyond long-term planning to even longer-term planning. It is therefore vital that the NPC proactively seek and effectively implement sustainable solutions to our power challenge.

May the lights of our future shine ever brighter.

Congratulations, NPC, and Mabuhay!

2 0 1 4 A N N U A L R E P O R T • 9

Outlook for 2015

2 0 1 4 A N N U A L R E P O R T • 9

C A R L O S - J E R I C H O L . P e T I L L AS E C R E T A R Y

D E P A R T M E N T O F E N E R G Y

The National Power Corporation (NPC) shall take active role in the realization of the Philippine Energy Plan for 2012-2030 that aims to attain the vision of “Energy Access for More.” With its knowledge and expertise in the electrification of missionary areas, it shall continue providing power to far-flung communities and islands in the country that are not connected to the main transmission system.

As mandated by EPIRA, NPC continues to pursue its missionary electrification mandate while facilitating private sector participation in missionary areas. In 2015, NPC envisions to reflect 203.64 MW existing capacities to improve generation performance as well as to install additional 27.4 MW capacities in various Small Power Utilities Group (SPUG) plants across the country to meet the growing demand, realize increase in operating hours and electrification in new areas. It is also implementing various transmission projects totaling 123.11 circuit kilometers in the provinces of Palawan, Mindoro, Masbate and Catanduanes to manage grid stability and reliability. Further, NPC has facilitated the privatization of Siquijor Island with the entry of Siquijor Island Power Corporation. Privatization of Balut Island in Sarangani and Liminangcong and Candawaga in Palawan are anticipated in 2015.

Further, NPC ensures the filing of petitions to maintain the Universal Charge for Missionary Electrification (UCME) which will fund the subsidy requirements of New Power Providers (NPPs) and Qualified Third Parties (QTPs) as well as the cash-based incentives for Renewable Energy developers.

In the Main Grid, NPC will remain to be the agency responsible for operating and maintaining the undisposed power generating assets owned by the Power Sector Assets and Liabilities Management (PSALM) Corporation. These assets include the 981 MW-Agus-Pulangi complexes and Power Barges 101-104 in Mindanao. The Angat Hydroelectric Power Plant in Bulacan has already been turned over to the winning private bidders this year.

Likewise, NPC will continue to manage the contracts of the Independent Power Producers (IPPs) and those whose outputs have been privatized through the IPP Administration Agreements for and in behalf of PSALM.

Mandated to be stewards of 11 watershed systems that sustain power generation and water supply, NPC plans to carry out

its rehabilitation and protection programs in these areas as approved by the Energy Regulatory Commission based on filed Universal Charge-Environmental Charge applications. NPC shall also ensure the safe operations of the 17 dams under its care.

Being a banner year for NPC, it will continue to be the nation’s prime mover in missionary electrification by making sustainable development through countryside electricity generation.

1 0 • N A T I O N A L P O W E R C O R P O R A T I O N

OPERATIONAL HIGHLIGHTS

NPP / QTP / REDCY 2014 ENERGY SALES, KWHNEW POWER PROVIDER ENERGY SALES (KWH)

1 Palawan Power Generation, Inc. 78,349,664.102 Delta P 61,266,352.003 DMCI Power Palawan 52,533,299.004 DMCI Masbate 79,230,977.005 ORMIN Power 47,581,968.006 Power One 41,349,756.007 Mindoro Grid Corp. 60,286,695.618 Bantayan Island Power Corp. (BIPCOR) 18,292,512.259 Catanduanes Power Generation Inc. (CPGI) 20,080,408.50

10 Calamian Island Power Corp (CIPC) 6,770,159 QUALIFIED THIRD PARTY

11 Power Source - Rio Tuba 2,641,350.03SUB -T O T A L 468,383,141.69

RENEWABLE ENERGY DEVELOPERS12 Cantingas Mini Hydro Power Corp 5,278,980.00 13 Sunwest Water & Electric Co. (SUWECO) 34,614.00 14 Linao-Cawayan Mini-Hydro Power Plant 8,145,510.00 15 Dulangan Mini Hydro Power Plant 8,566,423.32

SUB -T O T A L 22,025,527.32 16 Balongbong Mini Hydro Power Plant 3,472,327.80

SUB -T O T A L 3,472,327.80 TOTAL 493,880,996.81

TOTAL ENERGY SALES IN THE MISSIONARY AREAS(By Grid & By Customer Type), KWH As of December 2014

CY 2014NPC NPP/QTP/RED TOTAL

PHILIPPINES 399,479,348.59 493,880,996.81 893,360,345.40

Electric Coop/Distribution Utilities 393,751,719.08 493,880,996.81 887,632,715.89 Local Government Units (LGU) 3,558,001.08 - 3,558,001.08 Residential 2,169,628.43 - 2,169,628.43

LUZON 240,187,953.69 475,588,484.56 715,776,438.25 Electric Coop/Distribution UtilitieS 234,992,264.42 475,588,484.56 710,580,748.98 Local Government Units (LGU) 3,558,001.08 - 3,558,001.08 Residential 1,637,688.19 - 1,637,688.19

VISAYAS 32,671,121.58 18,292,512.25 50,963,633.83 Electric Coop/Distribution Utilities 32,139,181.34 18,292,512.25 50,431,693.59 Local Government Units (LGU) - - - Residential 531,940.24 - 531,940.24

MINDANAO 126,620,273.32 - 126,620,273.32 Electric Coop/Distribution Utilities 126,620,273.32 - 126,620,273.32 Local Government Units (LGU) - - - Residential - - -

INSTALLED CAPACITY (BY GRID & BY ENERGY SOURCE) IN THE MISSIONARY AREAS, MWAs of December 2014

CY 2014NPC NPP TOTAL

NO. OF PLANTS (MW) NO. OF PLANTS (MW) NO. OF. PLANTS (MW)PHILIPPINES BY ENERGY SOURCE 291 203.44 16 125.56 307 329.00

Diesel Power Plant 111 155.86 10 114.96 121 270.82Hydro 1 1.80 5 10.00 6 11.80Wind 1 0.18 - - 1 0.18Power Barge 8 44.02 - - 8 44.02Mini-Grid 17 1.58 - - 17 1.58PRES & Solar Home System 153 - - - 153 -Biomass - - 1 0.60 1 0.60

BY GRID 291 203.44 16 125.56 307 329.00Luzon 221 120.38 15 119.56 236 239.94Visayas 46 20.12 1 6.00 47 26.12Mindanao 24 62.95 - - 24 62.95

2 0 1 4 A N N U A L R E P O R T • 1 1

LUZON

80.12%

MINDANAO

14.17%

npP/QTP/RED

55.28% npc

44.72%

ELECTRIC COOP/DIST. UTILITIES

99.36%

RESIDENTIAL

0.24%

BY GRID (MWH)

LUZON 715,776.44VISAYAS 50,963.63MINDANAO 126,620.27TOTAL : 893,360.35

BY CUSTOMER TYPE (MWH)

ELECTRIC COOP/DIST. UTILITIES 887,632.72LOCAL GOVERNMENT UNITS 3,558.00RESIDENTIAL 2,169.63TOTAL : 893,360.35

BY CUSTOMER TYPE (MWH)

NPC 399,479.35NPP/QTP/RED 493,881.00TOTAL : 893,360.35

VISAYAS

5.71%

ENERGYSALES

(%)

LOCAL GOVERNMENT UNITS

0.40%

TOTAL ENERGY

SALES IN THEMISSIONARY AREAS

(BY GRID )(BY GRID)

TOTAL ENERGYSALES IN THE

MISSIONARY AREAS(BY CUS TOMER

TYPE)(BY CUSTOMER

TYPE)


Table 1. Energy Generation by Plants, 2014 Mindanao

Plants Rated Cap. Energy Gen., GWh Fuel Type

1. Mindanao Generation

Agus 1 & 2 HEPC 260.0 1,080.0 Hydroelectric



Pulangi 4 HEP 255.0 1,008.5 Hydroelectric

2. Other Plants (NPC-IPPs)

PB 104 32.0 24.3 Oil Based

Mt. Apo 1 54.2 431.5 Geothermal

Mt. Apo 2 54.2 432.0 Geothermal

SPPC 53.5 342.4 Oil Based

WMPC 113.0 609.9 Oil Based

STEAG 210.0 1,322.9 Coal

Total 1,499.0 7,656.1 Note: Based on the Operating Results for 2014 of PSALM

Figure 1. Generation Mix, Mindanao

GENERATION MIX, MINDANAO

12.8%O I L B A S E D

11.3%G E O T H E R M A L

17.3%C O A L

58.7%H Y D R O

100%T O T A L

2 0 1 4 A N N U A L R E P O R T • 1 3

WATERSHED MANAGEMENT DEPARTMENT

Operational Highlights for 2014

• 1,045 hectares of open and denuded areas wererehabilitated through reforestation, agroforestry and non-timber forest resource management.

• Produced549,000seedlingsofmostlyindigenousforestand fruit-bearing species.

• Dispersed160,000seedlingsofvariousforestryspeciesand fruit trees to rehabilitation projects, landholdings development and greening projects of local groups.

• Confiscated 13,239 board feet of lumber/timberthrough the help of Bantay Watershed Task Force, DENR, Philippine Army and Philippine National Police.

• Tapped 700 volunteers for effective watershedprotection.

• ForitsLivestockDispersalProgramthataimstoupliftthelivelihood of local residents within the watershed, WMD has dispersed 331 gilts in Tiwi, Camarines Sur and Bokod, Benguet; and 95 goats in Pulangi watershed.

• Conducted 41 school and barangay lectures on theimportance of watershed.

• Distributed 4,100 print materials on watershedprotection.

• Organized16 livelihood trainings for thecommunitiesliving in and near the watershed areas.

• Launched the first ecotourism park among NPC’s 11watershed. The Angat Rainforest and Ecological Park was opened with its initial attractions like the Tarictic Fun Trail and View Deck.

GENERATION PORTFOLIO

Table 2. Generation Mix of 2014, Mindanao

Fuel Type Capacity, MW

Energy Gen., GWh

Percentage of Gen., %

Hydroelectric 982.1 4,493.1 58.7%

Coal 210.0 1,322.9 17.3%

Geothermal 108.4 863.5 11.3%

Oil Based 198.5 976.6 12.8%

Total 1,499.0 7,656.1 100.0%

Table 3. Operation Results – Comparative Data

Agus-PulangiHydroelectric Plants

2014 2013 % Inc./Dec.

Rated Capacity, MW 982.1 982.1

Energy Generation, GWh 4,493.1 4,449.2 0.99

Energy Sales, GWh 4,271.1 4,282.8 -0.27

Ave. Selling Rate, P/kWh 2.7562 2.84006 -2.95

Net Utility Revenue, PhP (in Millions)

11,772.3 12,163.4 -3.22

Less: Operating Expenses, PhP (in Millions)

3,218.4 2,697.6 19.31

Variable Cost - -

Depreciation 1,168.6 1,151.4 1.49

Opex - Plant/HO Al-located

2,049.8 1,546.2 32.57

Net Operating Income (Loss), PhP (in Millions)

8,553.8 9,465.8 -9.63

Note: Based on the Operating Results for 2013 & 2014 of PSALM

Table 4. Mindanao Generation Plant Performance Results

Plant Overall Rating Adjectival Rating

Agus 1 & 2 HEPC 100.00% Outstanding



Pulangi 4 HEP 92.47% Very Satisfactory Note: Based on Joint PSALM-NPC Plant Performance Validation

References:1. 2014 Annual Reports of Agus-Pulangi plants.2. 2014 Operating Results of Mindanao Plants - PSALM

Corporation – Annex A3. 2013 Operating Results of Mindanao Plants - PSALM

Corporation – Annex B

12.8%O I L B A S E D

11.3%G E O T H E R M A L

17.3%C O A L

58.7%H Y D R O

100%T O T A L


The Board of DirectorsNational Power CorporationDiliman, Quezon City

Report on the Financial Statements

We have audited the accompanying financial statements of the National Power Corporation, which comprise the statement of financial position as at December 31, 2014, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with state accounting principles generally accepted in the Philippines, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Basis for Qualified Opinion

The existence, validity and accuracy of “Operations and Management Agreement (OMA) Trust” account with year-end balance of P8.066 billion consisting of Utility Plants, Cash and Cash Equivalents, Other Receivables, Advances, Materials & Supplies for Operation and Other Assets, were not ascertained due to:

a. Unreconciled variance of P2.637 billion between OMA Trust account and the reciprocal account, “Assets Held in Trust with NPC” maintained by PSALM for fund transfers for the operation and maintenance of the generation and other assets under the OMA, with reported balance of P5.429 billion in the books of PSALM, registering a decrease of P484 million from P3.121 billion in CY 2013;

b. inclusion of Utility Plants owned by PSALM with a carrying value of P1.668 billion;

c. Unreconciled variance of P322.276 million between book balance at P2.545 billion, and the total amount per physical inventory report at P2.223 billion for Material and Supplies for Operation; and

d. Non-recording in the books Stocks for disposal amounting to P21.243 million. The Construction Work in Progress (CWIP) account continued to carry a balance at

P1.516 billion, whose validity and accuracy remained unascertained due to the inclusion of:

a. cost of personnel services amounting to P317.719 million which remained unallocated to the completed projects;

Republic of the PhilippinesCOMMISSION ON AUDIT

Commonwealth Avenue, Quezon City, Philippines

I N D E P E N D E N T

A U D I T O R ’ S R E P O R T

b. 18 work orders in the total amount of P162.430 million which remained dormant for three years, of which P102.902 million worth of equipment were already delivered in CY 2009;

c. cost of suspended work orders due to Right of Way (ROW) problems amounting to P1.022 million;

d. cost of work orders amounting to P17.736 million that was not related to the construction of Electric Plant in Service;

e. cost of completed projects amounting to P16.047 million, of which P0.534 million pertained to SPUG-Mindanao; and

f. Charging of SPUG-Visayas drydocking expenses for Power Barge 113 amounting to P5.536 million to CWIP account instead of to Maintenance-Diesel Plant.

The aggregate year-end balances of P2.584 billion for asset accounts and P41.250 billion for liability accounts under PSALM-Retained and TRANSCO-Retained accounts remained outstanding/dormant since CY 2009, and remained undocumented, hence, the validity and accuracy of the accounts’ balances were doubtful.

Qualified Opinion

In our opinion, except for the effects and the possible effects of the matters discussed in the Basis for Qualified Opinion paragraphs, the financial statements present fairly, in all material respects, the financial position of the National Power Corporation as at December 31, 2014, and of its financial performance and cash flows for the year then ended in accordance with state accounting principles generally accepted in the Philippines.

Emphasis of Matter

We draw attention to Note 34.a of the Notes to Financial Statements which describes the uncertainty pertaining to the NPC-Drivers and Mechanics Association (NPC-DAMA) case filed against the Corporation which may cost approximately P67 billion. Our opinion is not qualified in respect of this matter.

Supplementary Information Required Under Revenue Regulation No. 15-2010

Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supplementary information required by the Bureau of Internal Revenue on taxes, duties and license fees disclosed in Note 37 to the financial statements is presented for purposes of additional analysis and is not a required part of the financial statements prepared in accordance with state accounting principles generally accepted in the Philippines. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

COMMISSION ON AUDIT

MINERVA T. CABIGTINGSupervising Auditor

June 30, 2015

2 0 1 4 A N N U A L R E P O R T • 1 5

Notes 2014 2013

ASSETSNon-Current AssetsUtility plant - net 4 6,819,509,267 6,798,300,860Construction work in progress 5 1,516,564,768 1,218,736,907Non-utility property - net 6 86,081,350 133,226,250Non - current power receivables 7 1,893,097,255 1,917,595,152Other Assets 8 9,103,436 5,411,983

Total Non-Current Assets 10,324,356,076 10,073,271,152

Current AssetsCash & cash equivalents 9 6,687,613,818 5,515,344,341Power receivables - net 10 7,008,416,757 6,733,149,696Other receivables - net 11 7,149,574,464 5,247,145,425Materials and supplies for operation 12 1,251,265,184 1,089,331,543Advances, prepayments and deposits 13 127,822,552 63,541,254

Total Current Assets 22,224,692,775 18,648,512,259Trust Assets (PSALM) 14 8,066,043,145 7,290,555,250Temporary Registry 15 2,583,570,109 3,621,194,498

TOTAL ASSETS 43,198,662,105 39,633,533,159

EQUITY AND LIABILITIESEquity 16/17/18 25,315,682,642 22,615,102,247

Non-Current LiabilitiesLong-term debts (net of current portion) 19 718,871,241 852,017,974Provision for vacation and sick leave benefits 22 564,929,608 571,030,542Deferred Credits 22 1,107,466,935 143,107,645

Total Non-Current Liabilities 2,391,267,784 1,566,156,161

Current LiabilitiesAccounts payable and accrued expense 20 4,638,849,537 4,372,958,839Current portion of long-term debts 19 42,404,222 47,458,721Retention on contract payments 21 110,216,731 88,200,820Deposits and trust funds 23 50,220,656 31,450,797Interest payable 19/30 407,279 455,826

Total Current Liabilities 4,842,098,425 4,540,525,003Trust Liabilities (PSALM) 14 8,066,043,145 7,290,555,250Temporary Registry 15 2,583,570,109 3,621,194,498

TOTAL EQUITY and LIABILITIES 43,198,662,105 39,633,533,159

See accompanying Notes to Financial Statements.

S T A T E M E N T O F F I N A N C I A L P O S I T I O N

December 31, 2014(With Comparative Figures as at December 31, 2013)

(In Philippine Peso)


Notes 2014 2013

OPERATING REVENUEUtility income 2,175,629,691 2,175,735,664 Transmission services income 9,555,322 12,380,079 Universal charge 24.a 8,696,594,212 7,443,873,876 Total operating revenue 10,881,779,225 9,631,989,619 Prompt payment discount (25,775,867) (25,144,661)Other demand energy adjustment income (61,190,220) (59,838,251)

Net Operating Revenue 10,794,813,138 9,547,006,707

OPERATING EXPENSESGeneration 24.b 5,330,659,479 5,706,713,190 Administrative and general expenses 24.c 767,216,580 684,452,728 Depreciation and depletion 306,114,469 326,243,550 Bad debts 621,340,873 297,469,211 Transmission and distribution 36,559,304 29,033,646 Other operating expenses 24.d 482,983,493 83,940,508

Total Operating Expenses 7,544,874,198 7,127,852,833 OPERATING INCOME (LOSS) 3,249,938,940 2,419,153,874

OTHER INCOME(EXPENSES)Interest income 511,439,063 464,827,846 Income from admininstrative fee 27 94,099 6,401,339 Extraordianry Gain 28 383,490,512 0 Gain (Loss) on forex fluctuation 26 96,346,918 (93,809,001)Gain (Loss) on debt service - ICERA/forex recovery 25 591,039 (2,606,190)Gain on diesel/fuel transfer 0 41,229 Gain Retirement of Assets 0 11,741,071 Miscellaneous income 29 107,135,010 50,813,399 Subsidy to NPP’s of MEA 31 (2,750,398,947) (2,200,745,985)Depreciation - other plants/property (29,642,317) (117,833,737)Interest expense 30 (14,577,005) (17,111,986)Finance & other bank charges (34,327) (74,537)Loss on diesel/fuel transfer (6,015,325) 0 Miscellaneous expenses 32 (12,093,195) (15,721,266)

Other Income (Expenses) (1,713,664,475) (1,914,077,818)NET INCOME (LOSS) Before NG Subsidy 1,536,274,466 505,076,056 NG Subsidy 33 1,000,000,000 987,761,000 NET INCOME (LOSS) Before Income Tax 2,536,274,466 1,492,837,056 Income Tax 38 0 0 NET INCOME (LOSS) 2,536,274,466 1,492,837,056


S T A T E M E N T O F

C O M P R E H E N S I V E I N C O M E

For the Year Ended December 31, 2014(With Comparative Figures for the Year Ended December 31, 2013)(In Philippine Peso)

2 0 1 4 A N N U A L R E P O R T • 1 7

Notes 2014 2013

CAPITAL STOCK P100 par valueAuthorized 500,000,000 shares, issued 270,488,708 27,048,870,789 27,048,870,789

DONATED CAPITAL 16Balance, Beginning 3,051,865 2,822,788 Donation during the year 65,456 650,710 Amortization (210,816) (421,632)Balance, End 2,906,505 3,051,866

RETAINED EARNINGS 17Balance, Beginning (6,659,122,654) (8,031,337,130)Appropriated Retained Earnings - Sinking Fund 187,194,690 66,236,996 Net income (loss) during the year 2,536,274,466 1,492,837,056 Correction of prior year’s income (16,531,439) (186,859,576)Balance, End (3,952,184,937) (6,659,122,654)

APPRAISAL CAPITAL 18Balance,Beginning 2,222,302,246 2,222,386,744 Adjustments (6,211,961) (84,498)Balance, End 2,216,090,285 2,222,302,246 EQUITY 25,315,682,642 22,615,102,247


S T A T E M E N T O F C H A N G E S I N E Q U I T Y

For the Year Ended December 31, 2014(With Comparative Figures as at December 31, 2013)

(In Philippine Peso)


Notes 2014 2013

CASH FLOWS FROM OPERATING ACTIVITIESCash collected from Universal Levy 7,955,355,000 7,018,907,839 Subsidies Received from Other Govt Agencies 1,062,802,737 167,241,480 Collections from power customers 2,040,001,277 2,079,571,825 Amount withheld from employees, suppliers & other creditors 872,062,196 766,959,471 Interest and dividends received 347,184,003 337,743,750 Deposits and trust funds received 27,529,215 17,955,494 Collections on deposits & advances 16,905,623 590,334 Collections of other receivables 10,446,146 141,580,603 Net fund remittance 0 21,149,737 Purchase of fuel for generation (4,839,064,586) (3,808,478,536)Statutory remittances (2,010,555,874) (1,738,407,890)Other operating expenses (1,683,085,403) (2,115,578,738)Other expenses (1,871,345,490) (1,171,535,714)Personnel cost (340,709,086) (449,496,306)Financial Assistance (32,284,180) 0 Refund of deposits and trust funds (8,134,993) (9,191,156)Net funds transferred (5,857,068) 0 Realty tax paid (1,822,458) (560,043)Share of local government units in the national wealth (1,090,937) 0 Deposits and other advances (4,383,613) 0

Net Cash Provided by/(Used in) Operating Activities 1,533,952,509 1,258,452,150

CASH FLOWS FROM INVESTING ACTIVITIESInterest received from investments 32,713,374 44,013,676 Proceeds from sale of assets 2,942,282 13,023,416 Capital expenditures (237,908,708) (60,219,091)

Net Cash Used in Investing Activities (202,253,052) (3,181,999)

CASH FLOWS FROM FINANCING ACTIVITIESGain on FOREX (Debt Service) 591,039 0 Transfer from restricted cash account 0 0 Transfer to restricted cash account 0 (66,271)Dividend payment to Bureau of Treasury (100,000,000) 0 Interest paid on loans (14,625,552) (17,203,667)Loss on FOREX (debt service) 0 (2,606,190)Payment of loans (45,395,467) (43,390,174)

Net Cash Used in Financing Activities (159,429,980) (63,266,302)EFFECT OF EXCHANGE RATE ON CASH & CASH EQUIVALENTS 0 0 NET INCREASE IN CASH & CASH EQUIVALENTS 1,172,269,477 1,192,003,849 CASH & CASH EQUIVALENTS, BEGINNING OF THE YEAR 5,515,344,341 4,323,340,492 CASH & CASH EQUIVALENTS, END OF YEAR 6,687,613,818 5,515,344,341


S T A T E M E N T O F

C A S H F L O W S

For the Year Ended December 31, 2014(With Comparative Figures for the Year Ended December 31, 2013)(In Philippine Peso)

2 0 1 4 A N N U A L R E P O R T • 1 9

1. CORPORATE INFORMATION

The National Power Corporation (NPC) was established originally as a as non-stock government corporation under Commonwealth Act No. 120 on November 3, 1936. It was later on converted to stock Corporation wholly owned by the government under Republic Act 2641 in 1960. Not for long in 1971, by virtue of Republic Act 6395, its charter was then revised as amended.

As mandated by the Revised NPC Charter, the Corporation shall undertake the development of hydroelectric generation of power and the production of electricity from nuclear, geothermal and other sources, as well as the transmission of electric power on a nationwide basis, shall continue to exist for fifty years from and after expiration of its present corporate existence. It shall, as far as feasible spread the benefits of its projects and operations to the greatest number of the population possible, and the Corporation shall prosecute faithfully such projects as will promote total electrification of Luzon Islands, Visayan Islands, and Mindanao Islands.

NPC’s Charter provides that it shall be non-profit and shall devote all its returns from its capital investment, as well as excess revenues from its operation, for expansion. To enable the Corporation to pay its indebtedness and obligations and, in furtherance and effective implementation of the government’s policy of power generation, the Corporation, including its subsidiaries, is declared exempt from the payment of all forms of taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersede as bonds, in any court or administrative proceedings.

With the enactment of RA#9337, otherwise known as the Reformed Value-Added Tax (RVAT) Law of 2005, which took effect on November 1, 2005, NPC’s purchases of fuel and purchased power as well as its sale of electricity are subjected to VAT, specifically stated under Sec. 24(A) of R.A. 9337 repealing Section 13 of R.A. No. 6395 on the Corporation’s exemption from VAT. However, its non-profit character and exemption from all other taxes, including income tax, has not been affected. Moreover, the Bureau of Internal Revenue (BIR) in its Ruling 018-2000 dated January 20, 2000 categorically stated that pursuant to Section 32(B) (7) (b) of the National Internal Revenue Code (NIRC) as amended by RA 8424, the income of NPC from its operation as public utility or from the exercise of any essential governmental functions shall be exempt from corporate income tax.

The EPIRA

Republic Act No. 9136, otherwise known as the “Electric Power Industry Reform Act of 2001”, the “EPIRA”, was enacted to institute reforms and provide framework for the restructuring of the electric power industry including, among others, the privatization of generation assets, real estate, other disposable assets, independent power plants and the liquidation of all liabilities and stranded contract cost of NPC.

The EPIRA organized the industry into four (4) sectors: generation, transmission, distribution and supply. The structural reforms resulted, among others, in the creation of two (2) Government Owned and Controlled Corporations (GOCC’s), the National Transmission Corporation (TRANSCO) and the Power Sector Assets and Liabilities Management Corporation (PSALM). NPC was retained as a GOCC to perform the missionary electrification function, through the Small Power Utilities Group (SPUG), watershed management and the operation and maintenance of all undisposed generation assets.

Separation of TRANSCO Books from NPC and the Transfer of Assets and Liabilities from NPC to PSALM

As mandated under the EPIRA and pursuant to the instructions from the respective Boards and Managements of NPC, PSALM and TRANSCO, the actual separation of books of TRANSCO from

N O T E S T O F I N A N C I A L S T A T E M E N T S

(With Comparative Figures for CY 2013)

NPC and the assets-debt accounts transfer from NPC to PSALM was implemented on October 1, 2008 based on the balances of interim financial report (except for SPUG) as of September 30, 2008. Full implementation was effected on December 31, 2008. This momentous event significantly affected the current financial structure of NPC, as only the accounts pertaining to SPUG, watershed and other assets/facilities that are used and useful in the performance of its missionary function, watershed management and the operation of plants, under the Operation and Maintenance Agreement with PSALM, are retained in the books of NPC. Similar in 2008, NPC reported only the result of operation for SPUG and the financial condition of the residual NPC, consisting of accounts pertaining to SPUG & watershed and the retained PSALM/TRANSCO accounts which are reported in the balance sheet under the Temporary Registry Accounts. (See Note 15)

Operation and Maintenance Agreement (OMA)

The Operation and Maintenance Agreement (OMA) is an agreement entered into by and between NPC and PSALM on February 17, 2009 wherein NPC will act as the Operator of the transferred generation and other assets/facilities owned by PSALM prior to privatization of such assets. This agreement shall be effective until the second anniversary unless otherwise extended or renewed by the parties. For 2013, PSALM and NPC agreed to continue to observe the terms of the current OMA until the new OMA is executed and made effective by both parties.

The head office is located at the National Power Corporation, Building 1, BIR Road, corner Quezon Avenue, Diliman, Quezon City.

2. MAJOR ACCOMPLISHMENTS

Following are the highlights of accomplishments of SPUG and Watershed in 2014:

SPUG and WATERHED

FINANCIAL HIGHLIGHTS

• Revenue

NPC raised a revenue of P10.795 billion for CY 2014 which is higher by 13.07% or P1.248 billion over its actual revenue of P9.547 billion in CY 2013.

· Net Operating Income

NPC posted a Net Operating Income P3.250 billion which is higher by 34.34% from its Net Operating Income of P2.419 billion in CY 2013.

· Net Income

NPC reported a Net Income of P2.536 billion from its Net Income of P1.493 billion in CY 2013. The significant increase is attributed primarily from revenue derived from Universal Charge for Missionary Electrification of about P8.697 billion over the actual revenue level of P7.444 billion in CY 2013 or an increase of by P1.253 billion.

OPERATIONAL HIGHLIGHTS

In furtherance of its mandate to bring power as catalyst for development to the farthest, smallest and remotest areas and islands, the following are NPC’s programs and projects accomplishments in 2014:

Small Power Utilities Group (SPUG)

Project/Activity Capacity Description ABC/Project Cost Status Action Taken

1. Fuel Oil Storage Tank (Schedule II)

(1 x 10 m³)(1 x 35 m³)(1 x 10 m³)(1 x 10 m³)(1 x 10 m³)(1 x 10 m³)

(1 x 10 m³)(1 x 10 m³)

Fuel Oil Storage Tank for the ff:

• Nabuctot, San Pascual, Lahuy, Quinalasag, Peña, Chico

• Gilotongan, Ginawayan

14,485,975.53

15,074,000.00

• On-going construction- 91.00% of construction accomplishment

• Review of Billing• Waiting for valves/strainers shipment• For schedule Radiographic Testing• Metalite- suspension/cancellation of Luuk (Amendment of Contract)• Houston- For submission of revised Bar Chart.

• Request for extension date of deadline

• For preparation of Certificate of Accomplishment

2. Fuel Oil Storage Tank (Schedule III) (2 x 60 m³)

(2 x 60 m³)(1 x 35 m³)

Fuel Oil Storage Tank for the ff:• Pilar, Caluya, Gigantes 10,316,625.65 • On –going construction. -84.00% of const. accomplishment. Caluya

storage tank construction @ newly acquired lot thru donation.

• Review of Billing• Waiting for valves/strainers shipment• For schedule Radiographic Testing





3. Fuel Oil Storage Tank (Schedule V)

(2 x 60 m³)(1 x 35 m³)(1 x 10 m³)(1 x 35 m³)

Fuel Oil Storage Tank for the ff:• Siasi, Sitangkay, Luuk & Tandubas

13,144,990.17 • On –going construction. -66.00% of const. accomplishment • Review of Billing• Waiting for valves/strainers shipment• For schedule Radiographic Testing

• Request for extension date of deadline.


4. New Areas (Group 1)

(1 x 90 kW) Engineering Study for the ff:a. Tinaga (Mangcawayan & Pinagtigasan) & Guintinua Island (Banocboc), Cam Norteb. Tagubanhan, Ilo-iloc. Calagnaan, Ilo-Ilod. Sipaway, Negros Occidental

19,510,000.00 • For CRF preparation.

• Preparation of Topographic Drawing• Preparation of Topographic Drawing• Re-survey on January 2015.



Engineering Study for the ff:a. Pandaon, Jandayan & Jao Islands, Bohol

b. Pangapuyan, Tumalutab, Manalipa, Tictabon & Great Sta Cruz Islands, Zamboanga

• For schedule of travel.

• Conducted survey last 27 Aug. to 05 Sept. 2014• Finalization of report & started the Conceptual Design & BOQ.• Waiting for Topo

• For confirmation with BOHECO regarding the scheduled travel.



Engineering Study for the ff:a. Hilabaan & Tikling Islands, Doloresb. Homonhon Island, Eastern Samar c. Tarnate Island, Northern Samar d. Tubabao Island, Eastern Samare. Sulu-an Island, Eastern Samar

• Design preparation based on the data gathered on Site. Note: DX line will be const. by coop.• Waiting for Topo


7. Flow meters • Flowmeters for various SPUG Plants in Luzon, Visayas & Mindanao

26,880,000.00 • CRF forwarded to Logistics on 10 Sept. 2014• For evaluation

• Pre-Bidding held 15 October 2014

• Schedule for Bidding on 12 November 2014.

8. Auto Reclosers 163,044,000.00 • LCB report on 23 October 2014.• For post-qualification report 18 Nov. 2014• For issuance of NTP

9. Pangutaran DPP (2 x 300 kW) Administrative Works 15,764,000.00 • With Notice of Award• Contract awarded• With Notice to Proceed• For reversion of fund from OPD to PMD.

10. Languyan DPP (2 x 200 kW) Administrative Works 24,854,000.00 • Two (2) failed Biddings - For review of Scope of Works.

• Check @ Finance re: Budget

11. Pandami DPP (2 x 150 kW) Administrative Works 27,773,000.00/ 28,000,000.00

• @ BCSD• Reported pre-proc 08 January 2015.

12. Refleeting (13 x 600kW)

(1 x 600 kW)(1 x 600 kW)(4 x 600 kW)(1 x 600 kW)(2 x 600 kW)(1 x 699 kW)(1 x 600 kW)(1 x 600 kW)(1 x 600 kW)

Administrative Works

Roxas DPP San Vicente PB 110 PB 116 Polilio Tingloy Kalamansig Ninoy Aquino PB 111

252,248,000.00 • On going Procurement:

• 1st- Failed Bidding as of 30 September 2014.

• 2nd- Pre-procurement report scheduled on 19 November 2014.

• For Technical Evaluation

13. Refleeting Boac DPP

(5 x 1000kW)

Administrative Works 152,000,000.00/72,500,000.00

• Contract Request forwarded @ Logistics 07 October 2014• Pre-procurement schedule on 22 October 2014.• For updating of all documents needed for procurement b/c of adjustment of ABC.• For Bid Opening on 9 Dec. 2014• For Technical Evaluation

14. Modular Emergency Gensets

(10 x 300kW)

Administrative Works 49,213,000.00 • Contract Request Form (CRF) forwarded to Logistics last 09 Sept. 2014.• For advertisement on 18 Oct. 2014• Bid opening on 10 Nov. 2014• For BAC agenda either on 18 or 20 Nov. 2014 (Post-qua report of TWG)• With PO

15. Modular Calamity Gensets

(22 x 160kW) (22

x 80 kW)

Administrative Works 113,000,000.00 • For procurement process @ Logistics• TWG requested revision of the tender documents.• For reporting of result of Bidding.

• CRF forwarded to Logistics 07 October 2014

16. Modular Gensets (5 x 600 kW) Administrative Works 57,000,000.00 • Forwarded @ Logistics 07 October 2014• For procurement process @ Logistics on 24 October 2014.• For advertisement• For updating of all documents needed for procurement b/c of adjustment of ABC.• Pre-Bid on 13 Nov. 2014• Bid opening on 27 Nov. 2014• For LCB

• Follow-up procurement @ Logistics.

2 0 1 4 A N N U A L R E P O R T • 2 1


17. Fuel Oil Storage Tank (Schedule I, IV & VI) (2 x 60 m³)

(1 x 60 m³)(1 x 10 m³)(1 x 10 m³)

(1 x 60 m³)(1 x 35 m³)(1 x 10 m³)(1 x 10 m³)(1 x 10 m³)(1 x 10 m³)

(1 x 60 m³)(1 x 35 m³)

Administrative WorksSchedule IItbayatSabtangBalatubatMinabelSchedule IVSan AntonioCapulIlijanLunangTakutCabungaanSchedule VIKalamansigPalimbang

36,849,000.00 • For re-bidding (Negotiated Procurement) on 27 Nov. 2014• BAC created the Negotiating Panel.

• Pre-negotiation meeting on 12 Nov. 2014

18. Fuel Oil Storage Tank (Schedule I & II) (1 x 60 m³)

(1 x 60 m³)(1 x 35 m³)(1 x 35 m³)(1 x 35 m³)(1 x 10 m³)(1 x 10 m³)(1 x 10 m³)(1 x 10 m³)

(1 x 35 m³)(1 x 10 m³)(1 x 10 m³)(1 x 10 m³)(1 x 10 m³)(1 x 10 m³)

Administrative WorksSchedule IBiriMaripipiSan VicenteSto. NiñoAlmagroBiasongCosta RicaBatagKirekiteSchedule IILimasawaSiboloGuiwanonBatbatanLibucanCabul-an

39,863,000.00 • Procurement On-going @ Logistics• Bid opening on 22 October 2014.• No bidder on Schedule 2• Schedule 1- for evaluation of the lone bidder.• For re-bidding/advertisement on 28 Nov. 2014

• Pre-bid Conference 11 November 2014

19. Oil Spill Boom Administative Works • Mindanao submitted • Awaiting feedback from concerned groups for the requirements per our memo.• Barges instructed to make PR - RGF to get copy of PR.

20. Fuel Oil Storage Tank (BOAC)

(1 x 500 m³) Administrative Works 7,371,527.77/6,929,000.00

• With Notice of Award (NOA) to Houston Hydrotech Product & System Inc. dated Aug. 28 & confirmation on Sept 5,2014.• Contract signed by OIC-VP, SPUG last 27 October 2014.• For implementation, PMD has no manpower to implement the project. Hence, OPD will implement.• Issued NTP on 20 October 2014.

• Continuous follow-up @ Finance.

21. Design Expansion

• Preparation of typical design drawings and technical specifications.

• Drawings & BOQ

Architectural, ] Electrical ] Completed

Civil, ] Mechanical ] On-going

• Deadline was extended due to intervening works.

22. Camandag Project

(1 x 100 kW) Administrative Works 17,800,000.00/ 17,771,000.00

• Bid/Tender Documents received last 30 September 2014.• CFA received 14 Nov. 2014• @BCSD• Pre-proc for reporting to BAC.

23. Calayan Powerhouse

Administrative Works 29,000,000.00/ 28,629,000.00

• Bid/Tender Documents received last 27 August 2014. • @ BCSD• Pre-proc for reporting to BAC.

• PR for signature and approval

24. Divilacan Distribution Line Extension

(1 x 200 kW) (13.8 kV)

Administrative WorksSchedule I(1 x 200 kW)

Schedule II(13.8 kV)

86,700,000.00/ 86,862,000.00

• On revision of Bid Docs. • PR for signature and approval

25. Solar Hybrid Projects (Masbate)

Administrative Works 5,000,000.00 • On-going preparation of Bid Docs.

26. Limasawa Administrative Works • Follow-up Letter to Gody for the Conceptual Design. - Technical Consultant c/o LFM.

27. Mooring Facility of PB 120 - Dry docking of PB 120

Administrative Works • Bidding failure

• With NTP


DAMS

Dams Management DepartmentMajor Targets and Accomplishments for CY 2014

PROGRAM COMPONENTS / ACTIVITIES Status as of31-Dec-14

1 Dam structural/operational safety

1.1 Mandatory semi-annual dam safety inspections Completed

1.1.1 Ambuklao and Binga

1.1.2 San Roque

1.1.3 Angat

1.1.4 Caliraya-Lumot

1.2 Independent third party dam safety inspection/ review/assessment at 5-year interval

1.2.1 Caliraya-Lumot preparation of Final Report Completed

2 “Information and Education Campaign” IEC

2.1 Angat Completed

2.2 Ambuklao-Binga

2.3 San Roque

2.4 Caliraya-Lumot

NPC Corporate Program

3 Quality Management System Program On-going

4 Risk Assessment Management Program (RAMP) On-going

5 E-Geographic Instrumentation System On-going

Dams Reservoir Waterways Division (DRWD)

6 Dam Instrumentation Monitoring(OSP, weir,) Continuous Activity

Ambuklao, Binga, San Roque, Angat and Caliraya Dams

7 Reservoir Operation Monitoring (inflow, Outflow, elev, rainfall)Ambuklao, Binga, San Roque, Angat and Caliraya Dams

Continuous Activity

8 Deformation Survey:

8.1 Angat Dam and Dyke Completed

8.2 Caliraya and Lumot Completed

9 Maintenance Clearing of NPC Managed Dams:

9.1 Caliraya and Lumot Dams and Dykes Completed

9.2 Angat Dam and Dyke Completed

10 Fencing and Restoration of Lumot Dam and Dykes Completed

FLOOD FORECASTING & WARNING SYSTEM DIVISION (FFWSD)

11 Spillway Gate Testing

11.1 Angat Completed

11.2 San Roque

11.3 Caliraya

11.4 Ambuklao

11.5 Binga

12 Data Banking & Quality Control Continuous Activity

Flood Forecasting & Warning Activities

13 Preventive Maintenance of Telemetry and Warning Equipment

13.1 Angat FFWSDO Completed

13.2 Caliraya FFWSDO

13.3 San Roque FFWSDO

13.4 Ambuklao-Binga FFWSDO (as per SNAP Schedule)

14 Agno FFWS Work Order Implementation

14.1 Expansion of Warning System for San Roque FFWSDO Bid Submission Dec 15, 2014

14.2 Restoration of Hydrological Monitoring of San Roque FFWSDO

Tender Docs revision

14.3 New VHF Communication Network for Amb-Binga FFWSDO

Completed

15 Angat FFWS Work Order Implementation

Construction of Perimeter Fencing and Car Shed at Angat FFWSDO Office

On-going

WATERSHED

Watershed Rehabilitation

• Established a total area of 480 hectares of open and denuded areas in various watershed areas through reforestation, agroforestry and non-timber forest resources management (i.e. bamboo and tiger grass plantation). This translates to an average of 300,000 seedlings of indigenous forest and fruit bearing species produced and outplanted. Species includes narra, mosisi, dipterocarps (white lauan, apitong), banaba, guava, durian, manga, coffee, nangka, calliandra, kawayang tinik, among others. As of December 2013, a total of 3,188 hectares under the Universal Charge – Environmental Charge (UC-EC) fund. Details are as follows:

o Angat - 25 hectareso Lake Lanao-Agus - 150 hectareso Pulangi - 160 hectareso Pantabangan - 25 hectareso Magat - 70 hectareso Tiwi - 50 hectareso Total - 480 hectares

• Tree planting activities in partnership with various groups were also undertaken in 2014 such as with the NGCP, Philex Mining Corporation, San Roque Power Corporation, PNP/AFT, NPC Ladies Foundation, and multinational corporation through the Haribon Foundation, among others. A total of 524 hectares of open areas were rehabilitated in addition to the UC-EC funded projects.

• In support to the various rehabilitation projects and other environmental commitments of local groups to plant trees, the Department has embarked on the propagation of supplemental seedlings. More than 162,888 seedlings of various forestry species and fruit trees were produced/propagated for the rehabilitation projects, landholdings development and greening projects in partnership with other groups.

Watershed Protection

• Watershed protection and law enforcement through the “Bantay Gubat Patrol Program” has been launched in CY 2013 in the various watersheds under the NPC jurisdiction. Patrol operations including manning of checkpoints have been conducted jointly with other agencies like the DENR, PNP/military, LGUs and other groups together with the Bantay Watershed Task Force (BWTF) volunteers of NPC to ensure proper enforcement of forestry laws and regulation. This Program is carried out this year which resulted to the confiscation of illegally cut logs/lumber as mentioned below.

• A total of 13,239 board feet of lumber/timber, 130 sacks of wood charcoal, 6 conveyances have been confiscated by the joint operations of NPC, PNP/AFP, DENR, the LGUs and the BWTF volunteers (with 700 individuals from the 11 watersheds).

• Operationalization of the Caliraya-Lumot Watershed Ecological Community (CLWEC) with the conduct of the round table discussion with various stakeholders inside the Caliraya-Lumot Watershed Ecological Community (CLWEC) particularly the LGUs of CAvinti, Lumban and Kalayaan, Philippine Army, DENR, Department of Education, CBK Power Company Limited (CBKPCL), Caliraya Lake Conservation Society (CLCS), Caliraya Springs, Lagos Mountain Resort, Lagos del Sol Resort. This resulted to the formulation of guidelines on Rehabilitation; Education/IEC; Livelihood; Protection, Law Enforcement and Occupancy; Lake Safety; Water Quality and Waste Management; Ways and Means, Public Relations; and Tourism and Recreation to address various concerns inside CLWR.

Corporate Social Responsibility Program

• Dispersal of around 124,781 seedlings (both forestry species and fruit trees) to various stakeholders, LGUs, academes and institutions and private organizations for their re-greening programs.

• Dispersal of 331 gilts in the areas of Tiwi, Albay, Buhi (Camarines Sur) and Bokod, (Benguet) and 95 heads of goat in Pulangi Watershed. Animal dispersal is one of the activities of the Department aimed at uplifting the livelihood of local residents inside the watersheds.

Information Dissemination Campaign (IEC)

• Continuous implementation of Information, Education and Communication (IEC) activities are being undertaken by the Department such as TV and radio plugging and production and distribution of print materials such as poster, leaflets, flyers, brochures, calendars and billboards. Forty one (41) school lectures/film showing and 4,117 print materials conducted and produced.

• The Batang Kalikasan – Young Environment Champion (BK-YEC) Program among students from the elementary and high schools in Caliraya-Lumot Watershed Reservation (CLWR) is continuing. This Program is replicated in the other watersheds such as the Buhi-Barit, Tiwi and Makiling-Banahaw.

Community Development and Extension

• Conduct of various livelihood training to communities supporting and helping NPC in its endeavor of forest protection. A total of 16 livelihood trainings/seminars conducted;

• Continuing support fro technical assistance in the implementation of livelihood projects:

o Ubi Production in Pantabangan-Carranglan Watershedo Pangasius Catfish Production in Matampay, Lanao del Suro Abaca Fiber and Water Lily Handicraft Making in Lake Lanao – Aguso Tilapia Culture in Pod in Lanao del Suro Water Hyacinth Handicraft Production (with shredder) in Brgy. Tubigon, Maramag,

Bukidnono Livestock Dispersal in Benguet, Pulangi, Buhi and Tiwi Watersheds’ host communities

• Implementation of Lakbay Aral and educational tour to promote awareness on the importance of watersheds and its relation to climate change and best practices of similar projects which may be replicated in the UC-EC funded undertakings.

2 0 1 4 A N N U A L R E P O R T • 2 3

POWER ENGINEERING SERVICES

Major Targets and Accomplishments under Power Engineering Services (PES)As of 31 December 2014

Item No. Project Title Work Order No. STATUS/ACCOMPLISHMENT

TRANSMISSION LINE PROJECTS1 Supply and Erection/Installation of 138 kV Steel Towers and 69 kV Steel Poles for

Taguilan, Colonia and San Agustin River Crossing (3.81 km.)F301A01 Project completed last 26 September 2014.

For compliance of the remaining documentary requirements.

2 Mobo-Aroroy “3” 69 KV T/L Rehabilitation Project (10.83 kms.) 1315A01 On-going implementation, 97.07% complete.3 Mobo-Aroroy “1” & “2” 69kV T/L Project (32.59 kms.) 1315A02 On-going implementation, 25.37% complete.4 Mobo-Cataingan “1” & “2” 69KV T/L Project, Schedule 1 (34.0 kms.) 1321A01 On-going implementation, 73.11% complete.5 Mobo-Cataingan “1” & “2” 69KV T/L Project, Schedule 2 (42.0 kms.) 1321A02 On-going implementation, 52.05% complete.

CAPACITY ADDITION PROJECTS1 Supply, Delivery, Installation, Test & Commissioning of 14 x 600 KW Gensets for Various

SPUG AreasE800A01 Project construction completed last 01 May 2014.

Completion of the punchlisted items are simultaneously scheduled with the repair /rehabilitation works by TPI/Perkins for the defective unit.

2 Supply, Delivery, Installation, Test & Commissioning of 300 KW and Below Gensets for Various SPUG Areas

I601A01 On-going implementation, 82.71% complete.

3 Supply, Delivery, Installation, Test and Commissioning for 10 x 600 KW Modular Gensets for Various SPUG Areas

K606A01 On-going implementation, 51.04% complete.

4 Supply , Delivery, Installation, Test and Commissioning for 3 x 1000 KW and Below Genset for Various SPUG Areas

1800A01 On-going implementation, 47.81 % complete.

PLANT/FACILITIES BETTERMENT PROJECTS1 Restoration of Mindanao Generation Building K999Z18 Project is Substantially Completed, 95.82%.2 Renovation of CMTSD Building B185I02 On-going implementation, 82.66% complete.

Status of NPC Projects under Power Engineering Services (PES)As of 31 December 2014

Project Title Description Location REMARKS

A. PROJECT IMPLEMENTATION GROUP - CLUSTER A 1. Codon-Virac 69kV T/L Project 31.28 km., 69kV Catanduanes a. ROW - Controllable • There are 35 remaining unpaid PAP’s.

• On-going Payment of lot owners.

- Uncontrollable • On-going documentation/processing of documents for the filing of expropriation case for five (5) lot owners

b. Construction • Notice to Proceed for confirmation of the contractor. • Check survey - 60%

2. S/D & Const of Virac (Marinawa) S/S Project Catanduanes a. ROW • FICELCO Board President and the Gen. Manager have signed the Deed

of Sale to NPC last 26 December 2014. • For issuance of endorsement from the National Electrification Administration for the release of the Deed of Sale.

b. Construction 5MVA • Bid Submission/Opening conducted last 17 November 2014. • Award of Contract approved by the NP Board last 16 December 2014. Notice of Award already issued. Contract routed for signature.

3. Virac-San Miguel 69 kV T/L Project Catanduanes a. ROW ROW Activities • For implementation upon completion of Parcellary survey b. Geological and Geotechnical Investigation

Survey • Geological Investigation reports already submitted.

• For processing of Final Billing.

4. Supply, Delivery, Test and Commissioning of 3 x 1000 KW Marinawa DPP

Diesel Gensets Catanduanes • For approval of submitted drawings. • Factory Acceptance Test (FAT) in China was conducted last 15 – 19 December 2014. Result of FAT under evaluation by PES-ESD. • Contract expired last 17 December 2014.

5. Supply, Delivery , Test and Commissioning for 300 KW and Below Genset for Various SPUG Areas

Diesel Gensets Various SPUG AREAS • Test and Commissioning activities for all plants cannot proceed unless issues/concerns raised by NPC regarding the discrepancies in engine and generator model are resolved by TPI.• Contract expired last 29 June 2014.

6. Mobo-Aroroyo 69kV T/L Rehabilitation Project 43.42 km., 69 kV Masbate a. ROW - Schedule I & II • ROW Activities completed. - Schedule III • On-going ROW Activities.

• With only one remaining Lot owner under expropriation case.

b. Construction - Schedule I & II 32.59 km. • Construction on going

• 25 .31 % completed • Request for Contract Time Extension under evaluation. • Contract expired last 07 December 2014.

- Schedule III 10.83 km. • On-going implementation. • Contract expired last 28 December 2013. • 40 Calendar Days Contract Time Extension already approved. • Preliminary Joint Final Inspection was conducted by PIC A-PMD, SPUG-CMOD and the Contractor last 01 August 2014. For conduct of Joint Final Inspection with QASD-ESD and DDD.• Delays due to non-issuance of cutting Permit from DENR and ROW problems with a landowner.



7. Mobo-Cataingan 69kV T/L Project (Schedule I & II) “1”

76 km., 69kV Masbate

a. ROW • On-going ROW Activities. b. Construction • On-going construction

• Contract expired last 16 December 2014 • Contractor is requesting for Contract Time Extension. • Delays due to late delivery of materials, minor ROW issues and non-issuance of Cutting Permit from DENR.

8. Mobo-Cataingan 69kV T/L Project (Schedule I & II) “2”

Masbate

a. ROW • On-going ROW Activities. b. Construction • On-going construction.

• Contract expiry is 05 January 2015. • Delays due to late delivery of materials, minor ROW issues and non-issuance of Cutting Permit from DENR.

9. Puerto Princesa – Roxas 138 kV T/L Project 111.09 km.,138 kV

Palawan • Whole length of the transmission line cannot be energized due to uncompleted portions in Schedule I & II due to issues on ROW.

- Schedule I a. ROW ROW Activities • Court Hearing for filed Expropriation Cases are scheduled for CY 2015.

b. Construction • Terminated Contract: 07 June 2010 - Schedule II a. ROW • Court Hearing for filed Expropriation Case is scheduled for CY 2015. b. Construction • Terminated Contract: 07 June 2010 - Schedule III a. ROW ROW Activities • ROW Negotiation and Payment

- Remaining ROW classified uncontrollable due to non-registration of ROW Grants executed by heirs of deceased landowners.

b. Construction • Completed but not yet energized. - Schedule IV a. ROW ROW Activities • Remaining ROW classified uncontrollable due to non-registration of ROW Grants

executed by heirs of deceased landowners.

b. Construction • Completed but not yet energized. - Remaining Works of Puerto Princesa –

Roxas 138 kV T/L5 km.,138 kV • Bid Opening/Submission conducted last 01 October 2014. Award of Contract

already approved by the NPC President. • For issuance of Notice of Award upon securing the Special Land Use Permit (SLUP) from DENR.

10. Roxas 69kV/5MVA Substation 5 MVA Roxas, Palawan a. Construction • Not in commercial operation pending the completion of Puerto Princesa-Roxas

138 kV T/L. • Final Billing already paid.

11. Abo-Abo-Quezon-Rizal 69 kV T/L Project 78km. Palawan a. Investigation (Route) and Parcellary Survey Survey • Investigation Survey completed

• Parcellary Survey on going. b. ROW ROW Activities • For implementation upon completion of Parcellary Survey c. Geotechnical and Geological Investigation Survey Geology • Post Qualification Report for presentation to BAC

12. Roxas-Taytay 69 kV T/L Project Palawan a. ROW • For implementation upon completion of Parcellary Survey. b. Geological and Geotechnical Investigation 66 km. • On-going implementation.

13. Puerto-Narra 69 kV T/L Project Palawan a. Service Contract for the Parcellary Survey of the

Remaining lots AffectedSurvey • On-going implementation.

b. ROW ROW Activities • For implementation upon completion of Parcellary Survey.14. Narra- Brookes 69 kV T/L Project Palawan

a. Service Contract for the Parcellary Survey • Notice to Proceed: 21 November 2014 • Preliminary meeting: 27 November 2014

b. ROW ROW Activities • For implementation upon completion of the Parcellary Survey.15. Taytay- El Nido 69 kV T/L Project Palawan

a. Service Contract for Engineering Survey Survey • Bid Submission/Opening conducted last 18 December 2014. Bid result under evaluation.

b. ROW ROW Activities • For implementation upon completion of the Parcellary Survey.

PROJECT IMPLEMENTATION - CLUSTER B 1. Supply, Delivery, Installation, Test & Commissioning

of 14 X 600 KW GenSets for Various SPUG AreasCivil, Electrical and Mechanical Works

Various SPUG Areas (Luzon, Visayas,

Mindanao)

• Project construction completed last 01 May 2014. • Completion of the punchlisted items are simultaneously scheduled with the repair /rehabilitation works by TPI/Perkins for the defective units.

2. Supply and Erection/ Installation of 138 kV Steel Towers and 69kV Steel Poles for Taguilan, Colonia and San Agustin River Crossings

Dismantling and Erection of T/L

Occidental Mindoro Project completed last 26 September 2014.

3. Sta. Cruz-San Jose “3 & 4” 69 kV T/L Project, Schedule II

29.99 km, 69 kV Occidental Mindoro

a. Registration of ROW Grant • The project is delayed as the manpower for the work package were detailed to another assignment while present manpower is concentrated on the more critical projects such as the newly completed River Crossing Project and the re-bidding of Mamburao- Sab.

2 0 1 4 A N N U A L R E P O R T • 2 5


4. Calapan-Bansud 69kV T/L 84.00 km, 69 kV Oriental Mindoro a. Registration of ROW Grant (Initial 300 Affected Lots

with complete documents) • ROW Activities was temporarily put on hold since 01 April 2014 due to

concentration of works at Bansud-Mansalay-San Jose T/L and S/S projects.

b. Parcellary Survey of Remaining Lots affected by existing Calapan-Bansud 69 kV Transmission Line Project

Parcellary Survey • Survey works on-going. • Percent accomplishment is only tentative pending approval of the Project Implementation Schedule.

5. Bansud-Mansalay 69 kV T/L 69kV T/L Construction

Oriental Mindoro

a. ROW • On-going ROW acquisition.6. Mansalay-San Jose 69kV T/L Project Oriental/ Occidental

Mindoro

a. ROW • On-going ROW acquisition.7. Mamburao - Sablayan - Ligaya 69 kV T/L 69kV T/L

RehabilitationOccidental Mindoro

a. ROW • Remaining ROW activities not yet completed due to lack of manpower complement and issue on Proof of Ownership of affected lots.

b. Construction • For issuance of Notice of Award and Notice to Proceed.8. Mansalay S/S Project Oriental Mindoro

a. ROW Acquisition • On-going negotiation with the landowner for land acquisition. • Preparation of document for the filing of expropriation case.

C. PROJECT IMPLEMENTATION GROUP - CLUSTER C 1. Pulangi IV Dredging Restoration of Headworks Area

Phase 1Restoration/

RehabilitationBukidnon • Project Completed.

• The Contractor insists on their claim of dredging accomplishment of about 411,294.00 cu.m., NPC’s evaluation is only 176,519.00 cu.m. • FFCI in its letter dated 18 November 2013, is again requesting payment of its Final Billing

2. Restoration of Mindanao Generation Building Restoration/ Rehabilitation

Ditucalan, Iligan City • On-going implementation. Project is substantially completed .

3. Renovation of CMTSD Building Ditucalan, Iligan City • On-going implementation. The Contractor’s request for Contract Time Extension (due to unfavorable weather condition, additional works, etc.) is under evaluation by NPC.

4. Supply/Delivery, Installation, Test and Commissioning of Gensets, 10x600 KW

Various • On-going implementation. On-going mounting/installation works. • Contract expired last 30 October 2014.

The last revaluation of generation asset was made in 1996 and has not been updated to date. Considering the exemptions allowed under IFRS 1, paragraph 16-19, the Corporation may establish such revalued amounts of the generation assets as “deemed cost” in line with the ongoing privatization of the NPC’s plants.

Capitalization of Interest Interests incurred on external borrowings which relate to capital projects in progress and prior

to the commencement of operation are capitalized.

Allocation of Support Group Income and Expenses

Income and expenses of the Support Services Group are allocated among operating plants and construction. The allocation rate is based on the extent of support services rendered to operations and capital projects. The present ratio of operating expenses to capital expenses of NPC is 94/6. Cost Center services that cannot be clearly classified, as well as expenses identified as having no direct effect to projects, are treated as one hundred percent operating expenses.

Investments

Local Investments are recorded at face value. Investments in foreign currency are recorded in compliance with PAS 21 using Bangko Sentral ng Pilipinas (BSP) guiding rate at the date of the transaction. Balances are reported using the closing rate at each Balance Sheet date.

Interest earnings on placements follow the accrual method of accounting.

Receivables and Allowance for Doubtful Accounts

Power and other receivables are stated net of allowance for doubtful accounts. Allowances are determined through the specific identification of uncollectible accounts.

Materials and Supplies for Operation Materials and supplies (M & S) for operation are categorized as fuel (and its related products) and

non-fuel. The Fuel M & S are composed of the fuel oil, diesel, coal & thermal chemical stocks used by NPC plants for power generation. These inventories are valued using the weighted average method. The change in accounting treatment for Fuel M & S that is from Last-in-First-out (LIFO) to weighted average method has been made effective on January 1, 2006 in compliance with PAS 2 for “Inventories”.

The non-Fuel M & S, on the other hand, are valued using the moving average method and can be further broken down into the non-fuel M & S of NPC plants and areas and those non-Fuel M & S assigned to private IPPs.

The non-Fuel M & S of NPC plants and areas represent basically the materials, supplies and

equipment received by NPC property custodian for use in operations; while non-Fuel M & S assigned to private IPPs, which are included in the Asset in Trust account, includes spares, materials and supplies transferred to private contractors as stipulated in the individual contracts.

Taxes and Duties With the enactment of R.A. 9337, otherwise known as the Reformed Value-Added Tax (RVAT)

Law of 2005, which took effect on November 1, 2005, NPC’s purchases of fuel and purchased power as well as its sale of electricity are subjected to VAT specifically stated under Sec. 24(A) of R.A. 9337 repealing Section 13 of R.A. No. 6395 on the exemption from VAT of the National Power Corporation. Effective February 1, 2006, the value-added tax rate increased from 10% to 12% pursuant to Revenue Memorandum Circular No. 7-2006 dated January 1, 2006.

3. SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statement Preparation

The accompanying financial statements of NPC are prepared and presented in accordance with the accounting principles and standards presently accepted in the Philippines under the historical cost basis, except for property, plant and equipment, which are carried in the balance sheet at revalued amounts.

Pursuant to the provisions on the Scope and Authority, paragraph 7 of the Preface to Philippine Financial Reporting Standards, PFRS are designed to apply to the general purpose financial statements and other financial reporting of all profit-oriented entities. Hence, NPC, being a GOCC of non-profit character, may not be subject to the full compliance with the same, in its strict sense. Nevertheless, the following PFRS/Philippine Accounting Standards (PAS), as appropriate, were adopted and made the basis, in the preparation of the Financial Statements in order to achieve the primary objective of fairly presenting the Corporation’s financial condition, results of operation and cash flow, in so far as practicable and consistent with the standards and principles consistently applied pursuant to the former SFAS/IAS, which are now governed by PFRS/PAS.

Utility Plant and Depreciation Utility Plant is carried in the books at appraised values except for additions during the year which

are recorded at cost. These assets are revalued in consonance with NPC’s loan covenants with creditor banks and in pursuance to Philippine Accounting Standards (PAS) No. 16, which permits revaluation of properties, plant and equipment. Land and landholdings, which include all the cost of land and land rights used in connection with power generation and transmission, are also included in the revaluation.

Regular annual maintenance, repairs and minor replacements are charged to expense as

they are incurred, whereas major maintenance, which is done on periodic three-to five-year intervals, is deferred, amortized and charged to operations over the number of years’ interval. Rehabilitation expenditure which would result in improvement of the plant’s efficiency beyond five years are capitalized and transferred to plant cost upon completion of work orders.

Depreciation of fixed assets is charged from the date of acquisition of the fixed assets or after the completion of works. Depreciation based on depreciable values is computed using the straight line (SL) method pursuant to NPC Board Resolution No. 94-58 effective 1994, based on estimated economic lives as shown below:

Type of Plant Economic Life1. Diesel Plants and Barges 202. Transmission Lines 30

Appraisal of Utility Plants Electric Plants in Service are recorded at appraised values in pursuance to PAS No.16 which

permits the appraisal of property, plant and equipment.

An independent appraiser conducts the review and appraisal of NPC’s assets once every four years. In the interim, NPC undertakes the internal revaluation which is adjusted when there are variances between the internally appraised figures and those arrived at by the independent appraisers. The last external revaluation of NPC assets was done by Resource Management International Inc. (RMII) in 1996. In 1997 and 1998, NPC applied 6% and 8% trending factors respectively for the internal revaluation.

The difference between the new over the old appraised values is recorded under the Appraisal Capital account. This account is treated as a permanent account and is not diminished by any depreciation charges.


4. UTILITY PLANT

This account consists of the following

Hydradulic Production Plant

Other Production

PlantTransmission

PlantDistribution

Plant Others TotalCost

Beginning 72,111,563 10,487,525,577 5,112,424,308 487,186,749 1,967,275,731 18,126,523,928

Additions - - 235,159 -

1,011,765,962 1,012,001,121 Adjustments (166,787,701) (576,580) (1,789,346) 194,590 (168,959,037) Ending 72,111,563 10,320,737,876 5,112,082,887 485,397,403 2,979,236,283 18,969,566,012

Accumulated Depreciation/DepletionBeginning 42,863,298 7,900,678,662 2,069,503,357 110,921,930 1,204,255,821 11,328,223,068 Additions - - 160,868,461 19,168,426 676,494,558 856,531,445 Adjustments - (27,968,540) 1,421,773 (228,147) (7,922,854) (34,697,768)

Ending 42,863,298 7,872,710,122 2,231,793,591 129,862,209 1,872,827,525

12,150,056,745 Carrying ValueDecember 31, 2014 29,248,265 2,448,027,7544 2,880,289,296 355,535,194 1,106,408,758 6,819,579,267Carrying ValueDecember 31, 2013 29,248,265 2,586,846,915 3,042,920,951 376,264,819 763,019,910 6,798,300,860

Accounting for Foreign Exchange Transactions In compliance with PAS 21 which was made effective January 1, 2005, transactions denominated

in foreign currencies are recorded at BSP Guiding Rate at the date of the transaction. Foreign exchange differentials resulting from these transactions are recorded as project cost for projects under construction while differentials pertaining to operating plants are recorded as Gain/Loss on Foreign Exchange Fluctuations. Outstanding payable accounts are reported using the closing rate at each Balance Sheet date.

Accounting for Donated Assets

NPC adopts the capital approach under Paragraph 14 of PAS 20 – Accounting for Government Grants and Disclosure of Government Assistance in recognizing donated power plants that expand the asset base regardless of whether from government or private entity. The fair values of the plants are recorded as Donated Capital under Equity, which will be reduced by annual depreciation.

Income Determination

The Corporation uses the accrual method of accounting for income and expenses and an all inclusive concept of income determination wherein all ordinary and extraordinary items pertaining to current period are considered in computing net income while items applicable to prior periods are recorded as adjustment of prior years’ income and are reflected in the Statement of Changes in Equity.

Accounting for Taxes and Duties on Importation Taxes and duties on imported materials and equipment intended for projects are recorded

as part of project costs, while taxes and duties on materials and equipment for operation are expensed as incurred.

Composition of Rate Base Rate Base is the average value of the net fixed assets in operation at the beginning and at the end

of each year. The value of net fixed assets in operation equals the gross value of the operating assets less the amount of accumulated depreciation.

Plants undergoing major rehabilitation/repair and which are out of operation for less than one calendar year are included in the computation of Rate Base.

Accounting for Subsidy from National Government (Income Approach)

As per Philippine Accounting Standards (PAS) 20/IAS 20- Item No. 12. Government grants shall be recognized in profit or loss on a systematic basis over the period in which the entity recognized as expenses the related cost for which the grants are intended to compensate.

Rental/Lease of Generating Set

Payment for lease of generating sets to suppliers/contractors that augment the existing power plant capacity and sustain the demands of power customers

In case of the undelivered portion of the net generating capacity under the terms of the generating set lease contract the supplier/contractor shall be subjected to penalties for capacity shortfall. Likewise over-consumption of fuel based on agreed fuel cap curve limit shall also be subjected to penalties for excess fuel rate.

The increase pertains to the Memorandum of Agreement (Deed of Transfer) executed between PSALM and NPC transferring the ownership of NPC Main Office Bldg. and lot in favor of NPC with Transfer Certificate Title No. N326294, Tax Declaration Nos. E-084-05425, E-084-02107 and E-084-02093; reclassification of Manila Engineering Center from Non-Utility Property account to Other Utility Plant account and the transfer of Other Utility Plants from PSALM to NPC account as part of the cleaning of the assets accounts under the Temporary Registry Accounts (TRA) as agreed between PSALM and NPC;

Likewise, the increase was partly offset by the dropped off Polar Barge (Fels Fuel Barge) from the books which was sold on April 2005; the transfer of Power Barge 111 and Lubuagan Diesel Plant which are non-operating to Non-Utility Property account and the reclassification of NPC Office Bldg. in Port Area previously booked under Electric Plant in Service account to Other Utility Plant account.

5. CONSTRUCTION WORK IN PROGRESS (CWIP) This account consists of the following:

2014 2013 CWIP – Work Order 1,516,564,768 1,218,736,907 1,516,564,768 1,218,736,907

CWIP – Work Order refers to the costs of projects under construction, while CWIP – Materials & Supplies represents stock inventory intended for projects which are still in the custody of project custodians or are in transit.

6. NON-UTILITY PROPERTY

Non-utility property account consists of the following:

2014 2013Cost of Non-Utility Property 526,942,179 1,282,659,471Accumulated Depreciation (440,860,829) (1,149,433,221)Net Book Value 86,081,350 133,226,250

This amount pertains to other properties and equipments owned by the Corporation but are not used in utility operations. The Decrease pertains to dropped off Power Barge 105 from the books which was damaged by fire on June 2006. The proceeds of insurance claims was received from GSIS on May 2014; and reclassification of Manila Engineering Center from non-utility property to Other Utility Plant account.

7. NON-CURRENT RECEIVABLES

2014 2013Non-Current Power Receivables 1,893,097,255 1,917,595,152

The account represents the long-term portion of the restructured accounts of power customers in accordance with memorandum of agreements executed by and between NPC and the power customers.

The decrease in this account is due to:

a. Reclassification from non-current Power Receivables account to Restructured Power Receivables amounting to P46.486Mn of the following power customers namely: Masbate Electric Cooperative, Inc. (MASELCO), Cagayan Electric Cooperative, Marinduque Electric Cooperative, Occidental Mindoro Electric Cooperative, Siasi Electrici Cooperative and Ticao Island Electric Cooperative due to non moving accounts from January 2014 to Novermber 2014.

2 0 1 4 A N N U A L R E P O R T • 2 7

8. OTHER NON-CURRENT ASSETS

This account consists of the following:

2014 2013Restricted Cash 3,981,203 3,981,203Stock for Disposal 5,122,233 1,430,780

9,103,436 5,411,983

The Restricted Cash account pertains to the funds intended for purposes other than current operations and therefore, not immediately available to management for any disbursement transactions other than its specified purpose. The increase in stock for disposal pertains to Other Utility Plants items which were transferred to Stock for Disposal account.

9. CASH & CASH EQUIVALENTS

This account composed of the following:

2014 2013Cash in Bank 679,518,101 623,566,999Working Fund 31,095,717 8,480,006Temporary Investments 5,977,000,000 4,883,297,336 6,687,613,818 5,515,344,341

The increase in Cash in Bank pertains to the released of CY 2013 NG Subsidy (balance) per approved SARO Nos. F-13-0017603, F-13-01332 and partial of CY2014 NG Subsidy per SARO No. F-14-0005155 in the total amount of P1.063 billion, the undisbursed funds were placed in short term investment due to under process of documents for the payment CAPEX and operation and maintenance of Small Power Utilities as of the balance sheet date; further increases also attributed to the receipt of allocation of UCME for CY 2014 from PSALM.

The increase in Temporary Investments & Working Fund attributed to the released of NG Subsidy and the funds intended for payment of fuel payables and other financial obligations which are under process as of the balance sheet date.

10. POWER RECEIVABLES

Receivables from power customers consist of the following:

2014 2013Power Receivables 4,311,352,397 3,874,065,108Accrued Utility Revenue 172,108,426 482,025,666Restructured Power Receivables 78,132,889 51,082,252Due from Other Agency 4,573,069,094 3,831,829,882

9,134,662,806 8,239,002,908Allowance for Bad Debts (2,126,246,049) (1,505,853,212)

7,008,416,757 6,733,149,696

The increase in Power Receivables is due to build up/increase of outstanding balance of ARMM Customers by P442 million.

The decrease in Accrued Utility Revenue is mainly the result of monthly billing to power customers and no set up for CY 2014.

The increase in Restructured Accounts pertains to set-up of CY 2015 current restructured

account of MARECO, MASELCO, CAGELCO, OMECO, TICELCO, SIASELCO and PALECO.

The increase in Due From Other Agency represents receivables from PSALM pertaining to UCME which is due for remittance to NPC.

Increase of Allowance for Bad Debts is due to new estimates on the Provisions for Bad Debts using the following composite rates:

- 50 percent of power receivables aged over 5 years - 40 percent of power receivables aged over 2 years to 5 years - 30 percent of power receivables aged over 1 year to 2 years - 20 percent of power receivables aged over 6 months to 1 year

The estimate is based on the amount of Bad Debts experienced in past years as a percentage. Change in Accounting Estimate is applied in the computation of allowance for Bad Debts (ref:

PAS (vol. 2) IAS 8 page 16 & 17.(volume).

11. OTHER RECEIVABLES


2014 2013Interest Receivable 592,114,244 505,391,681Rent Receivable 324,405 473,214Receivable from the National Gov’t. 47,518,921 18,486,282Receivable from Officers & Employees 6,657,965 7,159,446Accounts Receivable – Others 2,600,152,133 1,648,755,624Output Tax Receivable 665,871,002 611,857,917Input Tax Credit on Non-Depr. Capital 3,232,610,507 2,451,857,806Input Tax Credit on Depreciable Capital 6,682,651 5,520,819

7,151,931,828 5,249,502,789Allowance for Bad Debts (2,357,364) (2,357,364)

7,149,574,464 5,247,145,425

The increase in Accounts Receivables – Others account is mainly attributed to the approved NG subsidy per SARO No. F 41-00051552 amounting to P2 billion with partial released of funds amounting to P242 million.

12. MATERIALS AND SUPPLIES FOR OPERATION


2014 2013Gasoline 159,874 192,633Diesel- 476,026,728 430,219,295Stock Transfer-Clearing Accounts 31,181,336 17,828,204Materials, Supplies and Equipment 505,012,141 397,034,633Fuel Oil 28,282,656 24,797,606Thermal Chemicals 422,035 633,790MSE in Transit - Operating Plants 134,154,631 136,733,837Materials & Supplies Temporary Adjustment 56,848,834 56,633,776Other Oil Products 19,176,949 257,769

1,251,265,184 1,089,331,543

13. ADVANCES AND PREPAYMENTS AND DEPOSITS


2014 2013Advances and PrepaymentsAdvances to Gov’t. Bodies & Institutions 378,093 378,093Advances to Contractors /Prepaid Charges 71,640,839 36,462,298Marginal & Guaranty Deposits 452,951 521,651

72,471,883 37,362,042Court and Other DepositsAdvances for Medical Group Life Ins. 6,838,672 11,443,732Court and Other Deposits 29,632,599 7,405,266Other Advances 18,831,897 7,277,960

55,303,168 26,126,958Cash Advances to Officers and Employees 47,501 52,254

127,822,552 63,541,254

The increase in Advances to Contractors/Prepaid Charges is mainly due to the payment of mobilization expenses with DMCI, FABMIK Const. & Equipment Co. Inc., Metalite Builders Dev. Power Dimension Incorporated and Thermo Power Incorporated for Work Order Nos. I321A01, I313A01, I315A02, E610A01, E610A02, E610A03, 4700400, I601A01 and K606A01.

Advances for Medical & Medical Group Life Insurance refers to the advance payment to insurance companies of employees’ medical benefits which are subject to reimbursement through salary deductions.

Court and Other Deposits refers to the impending compliance of Occidental Mindoro Electric

Cooperative’s (OMECO) to the Notice of Garnishment issued in the CC No. Q-1170129, Chona Dimayuga vs. NPC payment of power bills.

The increase in Other Advances pertains to the payment of insurance premiums for Motor Vehicles, Marine Cargo and Marine Hull Insurance Policy with GSIS.

14. TRUST ACCOUNTS

Trust Assets (PSALM) pertains to balances of accounts set-up as working capital for the operation, maintenance and management of the facilities and generation plants of the main grid under the OMA, details as follows:

2014 2013Net Utility Plant 1,667,615,994 0Total Investments & Other Assets 1,350,612,221 1,363,946,205Cash and Cash Equivalents 570,969,662 604,187,954Materials and Supplies for Operation 4,471,273,758 5,306,429,164Prepayments 633,520 895,167Court and Other Deposits 317,374 9,932,333Cash Advances - Officers and Employees 276,788 20,044Other Receivables 4,343,828 5,144,383

8,066,043,145 7,290,555,250

Trust Liability - (PSALM) represents the corresponding liability to PSALM for the Trust Assets.


15. TEMPORARY REGISTRY ACCOUNTS

Temporary Registry Accounts consist of the following:

2014 2013Retained PSALM Accounts 735,068,451 1,772,692,840Retained Transco Accounts 1,848,501,658 1,848,501,658

2,583,570,109 3,621,194,498

Details as follows:

RETAINEDPSALM

ACCOUNTS

RETAINEDTRANSCO

ACCOUNTSUTILITY PLANT at Appraised Values 1,861,413 2,544,297 Accumulated Depreciation & Depletion - (1,053,723)Construction Work in Progress 733,204,909 1,023,183,912 TOTAL UTILITY PLANT 735,066,322 1,024,674,486 Investment in government & Other Corporation - 36,262 Non-Utility Property - NET - 500,899,936 Accounts and Other Receivables - NET - 404,192 Other Assets - 1,000,331 TOTAL INVESTMENTS & OTHER ASSETS - 502,340,721 Cash & Cash Equivalent - 5,064,981 Other Receivables - 8,064,153 Materials & Supplies for Operation - 289,198,542 Advances - 2,624,243 Prepayments - 14,857 Court & Other Deposits - 5,797,624 Cash Advances - Officers & Employees - 10,454 TOTAL CURRENT ASSETS - 310,774,854 DEFERRED CHARGES 2,129 3,040,786 CONTINGENT ASSETS - 7,670,811 TOTAL ASSETS 735,068,451 1,848,501,658 PROPRIETARY CAPITAL & LIABILITIESRetained Earnings (40,257,431,205) 1,583,316,610 Appraisal Capital (57,438) -Contingent Surplus - 7,670,811 TOTAL PROPRIETARY CAPITAL (40,257,488,643) 1,590,987,421 LONG TERM DEBTS (Net of Current Portion) 40,992,590,278 -Accounts Payable and Accrued Expense - 72,344,024 Retention on Contract Payments - 158,093,550 Deposits and Trust Funds - 1,100,215 TOTAL CURRENT LIABILITIES - 231,537,790 DEFERRED CREDITS (33,184) 25,976,448 TOTAL PROPRIETARY CAPITAL & LIABILITIES 735,068,451 1,848,501,658

Retained PSALM and Transco Accounts consist of account balances retained at NPC by PSALM and TRANSCO as of the asset-debt transfer to PSALM and separation of TRANSCO books effective October 1, 2008, which are for further validation, reconciliation, adjustments and final transfer to PSALM, TRANSCO and/or NPC, as the case maybe.

16. DONATED CAPITAL

2014 2013Donated Capital 2,906,505 3,051,866

The decrease of the Donated Capital Account pertains to its amortization over the remaining life of the assets under the Equity Method for grant, partly offset by the additional donated capital from Sitangkay Diesel Power Plant.

17. RETAINED EARNINGS

The improvement of Retained Earnings is mainly the result of improved financial performance attributed to the implementation of ERC’s approval of the True-Up Adjustment of UCME Subsidy for CY2010 and CY2011 and basic UCME for CY2014.

APPROPRIATED RETAINED EARNINGS – SINKING FUND

As provided for in Section 8, item (a) of NPC Charter (R.A. 6395 as amended), the Corporation shall set aside five per centum (5%) of its annual net operating revenue before interest as reserve or sinking fund to answer for amount advanced to it by the National Government for any loan, credit and indebtedness contracted by the former the latter shall be held answerable as primary obligor or guarantor. The sinking fund reported for CY2014 amounting to P187.195 million represents the 5% of the net operating revenue of 2013 (P120.958 million) and 2012 (P66.237 million).

18. APPRAISAL CAPITAL

2014 2013Appraisal Capital 2,216,090,285 2,222,302,246

The decrease in Appraisal Capital pertains to the revaluation of Power Barge 105, Polar Barge, one unit of 26Okw generating set from Sitangkay Diesel Power Plant which were dropped off from the books.

19. LONG-TERM DEBTS/ CURRENT PORTION This account consists of the outstanding foreign borrowings as follows:

CREDITOR/PROJECT Maturities Interest Rates 2014 2013Natixis / Credit NationalProject-PRES Proj. of SPUG 2016 to 2031 Fixed at 0.40% 570,456,474 638,453,744Banque ParibasProject-PRES Proj. of SPUG 2009 to 2019 Fixed at 5.09% 148,414,767 213,564,230

718,871,241 852,017,974

Year-end BSP guiding rates:

December 31, 2014 December 31, 2013

Dollar USD 1 44.617 44.414Euro EUR 1 54.339 60.8161

CURRENT PORTION:

CREDITOR/PROJECT Maturities Interest Rates 2014 2013Natixis/Credit NationalProject-PRES Proj. of SPUG 2016to 2031 Fixed at 0.40% 0.00 0.00Banque ParibasProject-PRES Proj. of SPUG 2009 to 2019 Fixed at 5.09% 42,404,222 47,458,721

42,404,222 47,458,721

20. ACCOUNTS PAYABLES AND ACCRUED EXPENSES

This account consist the following payables:

2014 2013Financial Assistance/Benefits Payable 14,048,961 41,121,510Gasoline and Other Oil Products Payable 20,309,586 22,175,266Fuel Payable 938,372,670 1,144,357,315M & S Equipment Payables 179,277,985 107,324,060Accounts Payable - Others 318,393,214 292,961,792Check Vouchers Payable 779,688,948 726,872,350Certified Obligations - Suppliers and Contractors 1,209,092,405 917,888,192Certified Obligations - NPC Employees 235,684,346 239,768,670Accrued Salaries and Wages 98,504,748 97,916,171Interest Payable - Fuel 1,862 -GSIS Premiums and Loan Payable 11,993,006 19,343,480Phil Health Insurance Payable 1,193,600 1,397,540HDMF Contributions & Loans Payable 2,322,160 1,821,809Medical Insurance Premiums Payable 1,307 24,790Cash Vouchers Payable 46,419,312 7,438,008Due to Other Agency 9,051,125 8,671,976Output Tax Payable 774,494,302 1,733,875,910

4,638,849,537 4,372,958,839

The increase pertains to the payables due to suppliers and contractors processing of payments are under process as of the balance sheet date.

21. RETENTION ON CONTRACT OF PAYMENTS

2014 2013Retention on Contract of Payments 110,216,731 88,200,820

The Increase pertains to 10% retention for various work orders/purchase orders/contracts due to suppliers and contractors namely: DMCI, Engine Link International Co., Metalite Builders Dev. Co., Power Dimension, Incorporated, S.L. Dev. & Const. Corp and Taiyo Enterprises.

22. DEFERRED CREDITS

2014 2013Provision for Vacation and Sick Leave 564,929,608 571,030,542Unearned Interest Income – (Non-Current) 100,795,547 135,805,013Other Deferred Credits 1,006,671,388 7,302,632

1,672,396,543 714,138,187

Provision for Vacation and Sick Leave pertains mainly to accrued leave benefits of employees in compliance with PAS no.19 which requires that short term employee benefits, including paid annual vacation leave and sick leave, be recognized as either a liability or expensed on the period they were incurred.

Unearned Interest Income – (Non-Current) pertains to the new set-up of interest charges due on the restructured accounts.

Other Deferred Credits - pertains to the P1 billion NG Subsidy from the total approved P2 billion

SARO No. F 41-00051552.

23. DEPOSITS AND TRUST FUNDS

2014 2013Deposits and Trust Funds 50,220,656 31,450,797

Deposits and Trust Funds account mainly includes amounts received and segregated for the execution of specific projects or contracts. It also includes the amounts deposited/advanced by suppliers, contractors and power customers to the Corporation.

24. a. UNIVERSAL CHARGE

2014 2013Universal Charge 8,696,594,212 7,443,873,876

Section 34 of the EPIRA provides that a Universal Charge (UC) to be determined, fixed and approved by the Energy Regulatory Commission (ERC) shall be imposed on all end – users for the (a) payment of stranded debts and contract costs; (b) missionary electrification; (c) equalization of taxes and royalties; (d) environmental charge; and (e) cross subsidies.

2 0 1 4 A N N U A L R E P O R T • 2 9

The UC shall be a non – by passable charge which shall be passed on and collected from end – users on a monthly basis by the distribution utilities to be remitted to PSALM, the administrator of the Fund.

The UC for missionary electrification shall provide funds for the operation of the NPC – SPUG, together with the sales from the missionary areas. On the other hand, the UC for environmental charge, which is equivalent to one – fourth of one centavo per kilowatt – hour (P0.0025/kwh), shall accrue to an environmental fund to be used solely for watershed rehabilitation and management and shall be managed by NPC under existing agreements.

In August 12 2013 the Energy Regulatory Commission (ERC) issued the Decision for True-Up Adjustment of UCME Subsidy for CY 2011. The total approved amount was P4.65 billion or P0.0709/kwh effective December 26, 2013. The Commission also approved the same decision, which was the basic UCME of P2.7Bn for CY 2014. Last October 19, 2013, ERC issued the Decision for True-Up Adjustment of UCME Subsidy for CY 2010 amounting to P2.57Bn or P0.0381/kwh effective December 26, 2013. The implementation of ERC’s approval in CY2014 improved NPC’s revenue from Universal Charges.

24. b. GENERATION EXPENSES

This account consists of the following expenses for the power generation:

2014 2013Fuel & Additives 4,468,451,548 4,469,595,266 Operation of Hydro Plant 3,205,552 3,827,917Maintenance of Hydro Plant 58,170 0Operation of Diesel Plant 1/ 852,820,156 1,208,763,927Maintenance of Diesel Plant 6,124,053 24,343,520Operation of Renewable Source of Energy 0 182,560

5,330,659,479 5,706,713,190

1/The decrease in Operation of Diesel Plant in 2014 was the result of the reclassification of the amount of generating sets rental to Other Operating Expenses following the new accounting treatment as recommended by the Internal Audit Department.

24. c. ADMINISTRATIVE AND GENERAL EXPENSES – SUPPORT GROUP

This account consists of the following expenses of Support Group:

2014 2013Personnel Cost -

Salaries & Wages 232,818,081 243,067,714 Overtime/NSD Pay 25,974,316 36,044,772 Benefits/Allowances/Social Security 161,115,192 86,421,105

Maint. And Other Operating Exp. Maintenance of General Plant Equipment 33,952,286 14,922,446 Other Operating Expenses 313,356,705 303,996,691

767,216,580 684,452,728

24. d. OTHER OPERATING EXPENSES

This account consists of the following expenses:

2014 2013Insurance expense 42,570,467 36,833,890Cost of audit Services 37,190,043 4,963,963Realty tax 1,822,458 555,942Share in National Wealth 644,835 1,090,937Financial assistance 4,042,699 3,916,665Job Order for Support Group & Eng’g. 77,508,647 36,579,111Rental/lease of generating set 1/ 319,204,344 0

482,983,493 83,940,508 1/ Refer to Note 24.b

25. LOSS / GAIN ON DEBT SERVICE

2014 2013Gain(Loss) on Debt Service-Prin/ICERA 591,039 (2,606,190)

This account consists of the additional costs incurred as a result of the appreciation or devaluation of the peso currency which affects the costs of servicing foreign currency debts (excluding interest). These costs are recoverable / refundable from/to power consumers under the ICERA (Incremental Currency Exchange Rate Adjustment) upon approval by the ERC.

26. LOSS / GAIN ON FOREX FLUCTUATION

This account consists of:

2014 2013Gain(Loss) on RevaluationLoan Payable 96,346,918 (93,809,001)

The account pertains to the gain / loss in the restatement of the outstanding balance of foreign currency denominated loans as of reporting date using the BSP guiding rates.

27. INCOME FROM ADM./BACKUP/OTHER SERVICE FEE

2014 2013Income from Adm/Backup/Other Service Fee 94,099 6,401,339

The account consists on income derived from fees collected from new owners/administrators of NPC/IPP plants for the administration of the Transition Supply Contract between NPC and MERALCO under their respective Implementation Agreement with NPC. The decrease on 2014 level was due to reduction of SGCs (Successor Generating Companies).

28. EXTRAORDINARY GAIN/(LOSS)

2014 2013Extraordinary Gain 383,490,512 0

The account pertains to the insurance proceeds from GSIS on May 2014 for the Power Barge 105 which was damaged by fire on June 2006.

29. MISCELLANEOUS INCOME


2014 2013Income from Liquidated Damages 16,538,377 6,966,710Supplier’s Discount 117,785 17,904Rental Income 4,959,680 334,108Bid Related Income 4,811,642 8,782,330Revenue from Lease of Electric Plant 2,567,976 2,808,214Income from donation 5,612,743 1,569,784Others 72,526,807 30,334,349

107,135,010 50,813,399

The Increase of Other Miscellaneous Income pertains to the penalty of New Power Providers (NPP) for the undelivered portion of the net generating capacity and over consumption of fuel based on agreed fuel cap curve limit as provided in the generating set lease contract.

30. INTEREST EXPENSE

2014 2013Interest Expense 14,577,005 17,111,986

This account pertains to interest expense on foreign & domestic loans. The interest expense for CY 2014 pertains to the outstanding foreign loans with BNP Paribas and Natixis. Repayment of principal with BNP Paribas commenced on December 2009 and Natixis will start on September 2017.

31. SUBSIDY TO NPP’S OF MEA AND TO SIG CUSTOMERS

2014 2013

Subsidy to NPP’s of MEA and to SIG Customers 2,750,398,947 2,200,745,985

This account pertains to subsidy to New Power Providers (NPP) of Missionary Electrification Areas (MEA) as approved by the Energy Regulatory Commission (ERC). The increase in this account is attributed to the full of operation of NPPs namely: Catanduanes Power Genertion, DMCI Masbate, DMCI Palawan Power Corporation, Delta, Palawan Power Generation, Power Source Phils. Inc., Ormin Power, Power One Corporation, Bantayan, Mindoro Grid Corporation and Calamian Island Power Corporation.

32. MISCELLANEOUS EXPENSES

This account consists of:

2014 2013Other taxes 8,155,454 11,104,104Others 3,937,741 4,617,162

12,093,195 15,721,266

33. SUBSIDY FROM National Government (NG)

(Special Allotment Release Order) refers to NG Subsidy per approved SARO No. F-14-0005155 in the amount of P2 billion, the first P 1 billion was reported as Other Income and the balance of P P 1 billion reported under Other Deferred Credits of the Balance Sheet. (Note 21).

34. PROVISION FOR PRESENT OBLIGATIONS PURSUANT TO COURT RULINGS/DECISIONS

34. a

EXECUTIVE BRIEFre NPC DAMA, ET AL. VS. NPC, ET AL.

G.R. No. 156208 – Third Division, Supreme Court

• Section 63 (Separation Benefits of Officials and Employees of Affected Agencies) of EPIRA provides, among others, that i. employees displaced or separated from service as a result of restructuring of the electricity industry and privatization of NPC assets shall be entitled either to a separation pay and other benefits in accordance with existing laws, rules or regulations or be entitled to avail of the privileges provided under a separation plan which shall be 1.5 month salary for every year of service in the government and ii. those who avail of such privileges shall start their government service anew if absorbed by any government-owned successor company and that there shall no diminution of benefits under the separation plan until the full implementation of the restructuring and privatization;

• On 12 December 2002, petitioners (NPC DAMA, et al.) filed a petition before the Supreme Court questioning the authority of the NP Board in passing NPB Resolutions No. 2002-124 and No. 2002-125 on the ground that these were not passed and issued by the majority of the members of the duly constituted Board of Directors since only three of its members were present.

• NPC basically argued that the said Resolutions are valid because the Directors were ably represented by their respective alternates.

• On 26 September 2006, the Supreme Court ruled that National Power Board Resolutions No. 2002-124 and No. 2002-125 are “VOID and WITHOUT LEGAL EFFECT” on the ground that “department secretaries cannot delegate their duties as members of NPB, much less their power to vote and approve board resolutions, because it is their personal judgment that must be exercised in the fulfillment of such responsibility”.


• On 14 September 2007, NP Board issued Board Resolution No. 2007-55 that “ratifies and confirms NP Board Resolution Nos. 2003-01, 2003-11, 2003-12, 2003-15 and all other Board Resolutions related to the approval of the present Table of Organization of the National Power Corporation (NPC)”.

• Supreme Court issued its Resolution dated 17 September 2008 clarifying the legal effects of the 26 September 2006 Decision that is, the right to reinstatement or separation pay in lieu of reinstatement plus backwages, wages adjustment and other benefits.

• On 27 October 2008, an Entry of Judgment was issued. On 14 November 2008, an Urgent Motion for Execution was filed by petitioner NPC DAMA.

• The Supreme Court promulgated its Resolution on 10 December 2008 ordering the Chairman and Members of the NPC Board and the President of NPC to cause the preparation of a list, under oath, of the names of NPC employees and amounts due to each and directed the payment.

• On 09 March 2009, the OSG filed the Compliance to the December 10, 2008 Supreme Court Resolution wherein it manifested that:

1) Only the top level employees were terminated on January 31, 2003 pursuant to the nullified NPB Resolution Nos. 2002-124 and 2002-125;

2) These top level employees were also rehired the day after their termination and as such any additional payment of separation pay, backwages and other benefits would be unjust; and

3) The NP Board adopted Resolution No. 2007-55 ratifying and confirming Resolution Nos. 2002-124 and 2002-125 and other Board Resolutions for the reorganization. Resolution No. 2007-55 was not “made subject of” the DAMA Petition.

• The Supreme Court promulgated on 02 December 2009 a Resolution which GRANTED

Petitioners (NPC DAMA) Manifestation in the Urgent Omnibus Motion dated 09 February 2009. The following are the salient points of the said resolution:

1) Ordering NP Board and its President to SHOW CAUSE why they should not be held for contempt for failure to comply with the SC Resolution dated 10 December 2008;

2) Ordering the Clerk of Court of the Third Division to IMPLEAD or JOIN PSALM as party-respondent to the case (please refer to pages 21 to 25 re discussion on whether or not the assets of PSALM can be subject of execution);

3) Ordering NP Board and President of NPC to comply with the SC Resolution dated 10 December 2008; and

4) Directing the Clerk of Court of the Regional Trial Court and Ex-Officio Sheriff of Quezon City to immediately execute the SC decision and for the Clerk of Court to submit compliance within thirty (30) days from receipt of the Resolution.

• In promulgating the said resolution, the Supreme Court reasoned that:

1) The SC Resolutions dated 26 September 2006, 24 January 2007, 17 September 2008 and 10 December 2008 were referring to all employees of NPC and not only the sixteen (16) top-level employees.

2) It is only after the decisions/resolutions became final and executory when NPC revealed that only 16 top-level employees were terminated on 31 January 2003.

3) The approval of NP Board Resolution No. 2007-55 that adopted, confirmed and approved the contents of NP Board Resolution Nos. 2002-124 and 2002-125 only have prospective effect, not a retroactive effect.

4) The approval cannot ratify and validate the voided NP Board Resolutions.5) The approval of NP Board Resolution No. 2007-55 on 14 September 2007 means that

the services of all NPC employees have been legally terminated on said date.

• The OSG filed Urgent Plea to Defer Execution of the 02 December 2009 Resolution.

• A Status Quo Order was issued on 7 January 2010 such that no NPC assets/deposits will be garnished and at the same time, setting the case for oral arguments initially on 13 January 2010.

• Hearing on the oral arguments was actually held on 20 January 2010 and the following issues were discussed that are still pending resolution:

1) Who are the NPC personnel that were actually separated from the service as a result of the implementation of NP Board Resolution Nos. 2002-124 and 125;

2) Whether the 17 September 2008 Resolution granted relief not sought in the 26 September 2006 Decision;

3) Whether the 10 December 2008 Resolution exceeded the terms of the 17 September 2008 Resolution sought to be executed;

4) What was the effect, if any, of NP Board Resolution No. 2007-55 on the nullified NP Board Resolution Nos. 2002-124 and 125;

5) What is the extent of PSALM’s liability for NPC’s liabilities in this case.

• On the offer of settlement of all pending monetary claims, OSG opined in its letter dated 17 February 2012 that “(i)t would be proper and prudent to await the resolution thereof before any action is undertaken in relation thereto. This is to ensure that justice is served and that disbursement of government funds is made only to legitimate and valid claims”.

• In a meeting held on 12 July 2012, the NP Board confirmed that NPC management has no authority to start negotiation and placed on record its position to await the SC resolution.

• NPC through OSG filed an Urgent Motion to Resolve dated 08 April 2013.

• The Supreme Court in its Resolution dated 30 June 2014 ruled on the five (5) pending issues and concluded that:

1) The finalities of the 26 September 2006 Decision and 17 September 2008 Resolution contemplate and cover all the NPC employees whose illegal termination from employment stemmed from NP Board Resolution Nos. 2002-124 and 2002-125 hence, NPC is barred from estoppel from raising arguments aimed at modifying the final rulings;

2) The 17 September 2008 Resolution did not grant additional reliefs as it merely clarified the consequences of the 17 September 2006 Decision;

3) The dispositive portion of the 10 December 2008 Resolution did not exceed the terms of the final 17 September 2008 Resolution;

4) The final rulings declared the nullified NP Board resolutions as void and without legal effects and as such, cannot be ratified and the issuance of NP Board Resolution No. 2007-55 did not affect its final rulings;

5) PSALM assumed NPC’s liabilities existing at the time of the EPIRA’s effectivity including the separation benefits due to the petitioners. PSALM is considered as a necessary party to the case (please refer to pages 38 to 40 re discussion on whether separation benefits are existing liabilities of NPC); and

The Supreme Court likewise concluded that the refusal of NPC to comply with the 10 December 2008 Resolution and 2 December 2009 Resolution constitutes contumacious conduct for being unjustified and without legal and factual basis.

In effect, the Supreme Court denied, among others, the Motions for Reconsideration filed by NPC and PSALM and cited NPC and the Office of the Solicitor General for indirect contempt with fine of P30,000.00 each for non-compliance to final orders.

• The Clerk of Court and Executing Sheriffs issued a Demand for Immediate Payment in relation to the said Resolution of the Supreme Court addressed to the NP Board and NPC and the same was served upon NPC on 28 July 2014 involving the amounts of:

1. P60,244,316,841.88 less ten percent (10%) corresponding to the charging lien of DAMA, et al. counsels;

2. P6,024,431,684.18 which represents the attorney’s liens; and 3. P1,807,329,725.25 as lawful fees and costs for the execution.

• On 5 August 2014, NPC wrote PSALM formally informing it of the said Resolution considering the conclusion of the Supreme Court that the judgment obligation is part of PSALM’s assumed liability. NPC likewise wrote the Clerk of Court and Executing Sheriffs of RTC-QC with information that the Demand for Immediate Payment was referred to PSALM and its principal.

• Beginning 14 August 2014, notices of garnishment issued by the Executing Sheriffs of RTC, Quezon City were served upon Land Bank of The Philippines, National Transmission Corporation, STEAG State Power, customers and other energy industry partners against NPC and PSALM properties.

• NPC, through the OSG, filed a Manifestation and Motion on 22 August 2014 before the Supreme Court praying, among others, to declare the case as an en banc case and restrain the execution of the judgment obligation.

• PSALM, through the OGCC, likewise filed its Omnibus Motion (Second Motion for Reconsideration) dated 22 August 2014.

• On 09 September 2014, the Supreme Court issued a Resolution deferring the implementation of the Decision dated 26 September 2006 and Resolutions dated 17 September 2008, 02 December 2009 and 30 June 2014 until further notice and lifting the Notice of Garnishment dated 14 August 2014. The court likewise directed the parties to submit within forty-five (45) days the lists of NPC employees as of 31 January 2002. The required lists of the Supreme Court should include the data on the following:

1. full name; 2. date of hiring; 3. last date of uninterrupted service after date of hire; 4. position and salary as of last date of service; and 5. if termination or separation pay has been received at anytime from NPC, the amount of

termination or separation pay received and date of receipt.

• NPC and PSALM were likewise required to comment within ten (10) days on the (i) letter of 31 July 2014 of Atty. Perlita V. Ele and the letter of 05 August 2014 of Attys. Orocio and Aldon; (ii) Motion to Expunge filed by NPC-DAMA; and (iii) Special Appearance of MERALCO.

• NPC, through OSG, filed its Comment dated 7 October 2014 and prayed for the denial of petitioner’s Motion to Expunge and Meralco’s Special Appearance on the ground that the same were superseded by the 9 September 2014 Resolution. The OSG merely noted the letters of Attys. Ele, Orocio and Aldon.

• Attys. Orocio and Aldon, in a letter dated 16 October 2014, wrote the National Power Corporation that the “ xxx the rate of interest on the principal amount of the award was not correct as it was done on a straight basis, and not compounded as should have been the case xxx ”. It advised NPC that “in the event the pending incidents of the case in the Supreme Court are disposed of and the decision/resolution is ultimately implemented, a re-computation be made to arrive at the proper and correct amount of interests on the principal amounts of the award due our clients, the petitioners.” NPC referred the same to OSG per letter dated 4 November 2014.

• NPC through OSG filed its Compliance Ad Cautelam on 24 November 2014, within the extendible period to comply with the 09 September 2014 Resolution to submit the required list.

• NPC received on 27 November 2014 the Resolution dated 20 October 2014 of the Supreme Court modifying its 09 September 2014 Resolution by requiring the submission of list of NPC employees as of 26 June 2001 with additional information on the DAMA-affected employees’ separation pay; wage adjustments; date of rehire by NPC/PSALM/TRANSCO and their subsequent positions and salaries; subsequent termination and amount of separation pay received.

• Both NPC and PSALM, through its respective statutory counsels, filed Motions for Extension of Time to comply to the said 20 October 2014 Resolution. NPC has until 14 February 2015 to submit the required list.

34. b

EXECUTIVE BRIEFre NPC AND NP BOARD vs. Hon. RALPH LEE and

EMMA Y. BAYSIC and NARCISA G. SANTIAGOG.R. No. 213893 – Supreme Court

(CA-G.R. SP No. 115773 – Court of Appeals)

• Petitioners Baysic, et al. filed on 12 July 2007 a case for Mandamus with Prayer for Accounting and Motion for Evidentiary Hearing. Petitioners are retirees of NPC from 1998 to 2001. They are claiming full amount of financial assistance provided for under the Special Early Disengagement Plan (SEPD). The said plan was authorized under NP Board Resolution No. 98-130.

Petitioners claim that the financial assistance provided for under said Board Resolution was fixed at 1.5 months salary for every year of government service computed as:

a) the difference between the lump sum gratuity benefits under R.A. 1616 multiplied by 1.5; and the present value of the 5 years lump sum benefit under PD 1146 as amended by R.A. 8291 or R.A. 660, for those qualified to retire under both R..A. 1616 and either PD 1146 or R.A. 660; and

b) for those not qualified to retire under any of the retirement plans or those who have not yet reached 60 years old, a lump sum benefit equivalent to 1.5 months salary for every year of government service.”

2 0 1 4 A N N U A L R E P O R T • 3 1

Further, they claim that they did not receive financial assistance equivalent to 1.5 months salary for every year of government service because the amount of retirement pay they received from GSIS was deducted from the gross financial benefits.

When the EPIRA took effect in 2003, separation pay in the amount of 1.5 months for every year of government service was granted to legally terminated employees (as of 2003) without deducting gratuity/retirement pay received from GSIS.

• NPC filed its Answer dated 17 October 2008 alleging the following:

a) Petitioners Baysic, et al. should have first raised their issues before the Civil Service Commission as part of the exhaustion of administrative remedies;

b) Petitioners have no clear right because they are fully aware of the guidelines of retirement under NP Board Resolution No. 98-130 when they availed of it; and

c) The EPIRA provisions on separation/retirement cannot retroactively apply to the petitioners.

• A motion to strike out NPC’s Answer was filed by petitioners which questioned the Verification/ Certification of NPC and which the court immediately granted. NPC moved for the reconsideration but was denied.

• On 6 September 2010, NPC through the OSG filed a petition for certiorari and prohibition before the Court of Appeals based on the following:

a) NPC complied with the Rules on Verification;b) NPC’s Answer dated 17 October 2008 does not actually require Verification; andc) The trial court committed grave abuse of discretion in issuing the Order of Default.

• On the same date (6 September 2010), NPC received a copy of the 16 August 2010 Decision of the trial court ordering it to pay petitioners the aggregate sum of P301.5 million plus interest at 6% per annum, P1 million as exemplary damages and 10% of the total amount as attorney’s fees.

• Subsequently, OSG filed an Amended Petition on 16 September 2010 to include the 16 August 2010 Decision of the trial court.

• In a letter dated 14 February 2011, the petitioners offered to compromise certain components of the RTC decision. Petitioners are waiving portion of their separation pay under the EPIRA though this was not included in their original claim nor included in the Decision of the RTC. In addition, they are also proposing to waive the award of exemplary damages and one-half (1/2) of the award of legal interest.

• The initial proposal for settlement by petitioners was denied by the NP Board Review Committee in its 17 February 2011 meeting.

• Another proposal was received from the petitioners reducing by 5% the actual damages and waiving all its interest and the P1 million exemplary damages.

• As of June 2011, the reduced total amount claimed by petitioners is P315.105 million with

the waived components amounting to P97.3 million.

• After evaluation of the proposal, the OSG opined in its letter dated 21 February 2012 that “accepting the compromise agreement was not sound and will not serve the best interest of NPC”. Hence, it recommended that the petition for certiorari pending before the Court of Appeals be pursued.

• The proposal for settlement was again presented to the Board Review Committee in its 5 July 2012 meeting. In the said meeting, the BRC endorsed the matter to the NP Board.

• On various dates of October and November 2012, some of the individual claimants/petitioners wrote to the members of the NP Board seeking their assistance in the payment of their claims.

• During the BRC meeting held on May 2013, it confirmed that the issue will be decided upon by its principal. Subsequently, on the Special NP Board Meeting held on 31 July 2013, the Board decided to write the OSG on the matter of entering into Compromise Agreement with the claimants. As of July 2013, the judgment obligation is computed at P452.197 million with petitioners offering to settle at P315.015 million.

• In a letter dated 13 September 2013, DOF Undersecretary John P. Sevilla (as Alternate Chairman) and NPC President Ma. Gladys Cruz-Sta. Rita wrote OSG seeking clarification on the effect of the Betoy Case and sworn statements of Messrs. Delgado and Viray and an opinion on the legality of entering into settlement with the claimants taking into consideration the supervening circumstances surrounding the case.

• On 04 March 2014, the Court of Appeals issued a Resolution dismissing the Amended Petition for Certiorari and Prohibition for being an improper remedy. The Court of Appeals ruled that the proper remedy in case of default judgment is an Appeal, a remedy available to NPC when it filed its Amended Petition. As of 31 March 2014, the total judgment obligation based on the RTC Decision amounts to P467.123 million.

• NPC retirees through Ms. Emma Baysic wrote the NPC President on 13 March 2014 furnishing the latter with a copy of the said 04 March 2014 Resolution of the Court of Appeals and soliciting the kind assistance to facilitate the immediate resolution of the retirees’ financial claim.

• A Motion for Reconsideration dated 24 March 2014 was filed by OSG arguing that the certiorari will correct an invalid order and an order issued without jurisdiction. That jurisprudence does not prohibit the petition for certiorari if the order of default is being assailed, even if appeal is an available remedy. Hence, it stated that “the resort to certiorari by herein petitioners is justified because the default judgment is being assailed on the ground that it is intrinsically void for having been rendered pursuant to a patently invalid order of default”.

• The Court of Appeals issued a Resolution on 11 August 2014 denying the Motion for Reconsideration, there being no cogent and compelling reasons found to justify the modification or reversal of its 04 March 2014 Resolution.

• On 10 October 2014, NPC through the OSG filed a petition for review on certiorari before the Supreme Court.

34.c

EXECUTIVE BRIEFNEWU VS. DEL CALLAR (as NPC President)

CA-GR S.P. No. 113743

• A Petition for mandamus with prayer for a temporary restraining order and preliminary injunction was filed on 19 October 2007 by NEWU and 21 other NPC employees seeking the release of the so-called “net increase adjustment” which was purportedly withheld from them. NEWU also claims to represent other NPC employees similarly situated.

• Pursuant to NPC Circular No. 2003-09, a Step Increase Adjustment was given to employees. The said adjustment is a consequence of the step increment, a salary increase based on the number of years of service in the same position starting 1 January 1994.

• NPC discontinued the Step Increment because of the issue of Disallowance and that the EPIRA required the downsizing of personnel as a consequence of privatization. NPC employees were eventually terminated in January to February 2003.

• The issue arose on which amount of basic salary will be used in the computation of separation benefits. Some argued that it should be the “pre-rollback rate” or the highest monthly salary of the employee while in government service. Others argued that it should be the “rollback rate” or the basic monthly salary net of the total salary adjustments including additional bonus. This issue was brought before the court for adjudication.

• Pending resolution of the case, NPC deposited on escrow the amount corresponding to the difference between “pre-rollback rate” and “rollback rate”. The difference is the step increment adjustment.

• A substantial number of NPC employees voluntarily signed waivers losing their right to claim the difference. (They are now the petitioners in this case.)

• The step increment adjustment was intended for those NPC employees, whether rehired or not after legal termination, but did not waive their additional separation benefits.

• Petitioners filed the instant case seeking the release of the “net increase adjustment”. NPC posited that there was no “net increase adjustment”, only a “step increase adjustment”.

• On 31 August 2008, NPC moved for the dismissal of the case based on the following grounds:

1. Petitioner NEWU has no legal standing on behalf of all NPC employees before the court;2. The payment of Step Increment Adjustment to petitioners is not a ministerial duty of

NPC;3. Petitioners have no cause of action against NPC; and4. Petitioners failed to exhaust all administrative remedies.

• NPC’s motion to dismiss was denied by the court on 25 June 2008.

• NPC filed its Memorandum on 11 February 2009.

• The trial court in its decision dated 9 June 2009 denied the petition of NEWU for injunction but ordered NPC to pay the employees of the so-called net increase adjustment.

• NPC filed a Motion for Partial Reconsideration which was denied by the trial court in an Order dated 27 November 2009.

• NPC, through the OSG, filed a petition before the Court of Appeals and was submitted for decision as of 27 July 2010.

• On the offer of settlement of all pending monetary claims including the step increment (P549.408 Million per claimants’ proposal), OSG opined in its letter dated 05 March 2012 that “considering the merits of the NPC’s appeal which is anchored on the ground that NPC Circular No. 2001-51 is invalid, it having been repealed and superseded by NPC Board Resolution No. 2002-81, and considering further that a resolution of the appeal may already be forthcoming, it would be more prudent to await the same. It must be emphasized that NPC has raised meritorious grounds and thus its appeal must be pursued until the very end”.

• On 23 October 2013, the Court of Appeals rendered a Decision granting the appeal of NPC such that the 9 June 2009 Decision of the trial court was reversed and set aside insofar as it directed the NPC President to pay its employees covered under NPC Circular No. 2001-51. The denial of the prayer for injunction was sustained.

• In granting NPC’s appeal, the Court of Appeals noted that the issue raised by appellees’ NEWU was already decided in the case of Boncodin vs. NECU where the Supreme Court stated that “the step increments enjoyed by the NAPOCOR employees could not have ripened into vested rights. In brief, it is seriously contended that because they were granted without the required DBM approval, no vested rights to the step increments could have been acquired.”

• The 23 October 2013 Decision has become final and executory on 02 October 2014 as per Entry of Judgment received by the OSG on 03 February 2015.


34.d

EXECUTIVE BRIEFre RP, ET AL. VS. CORTEZ, NEWU/NECU (COLA/AA)

G.R. No. 187257 – Supreme Court

• January 3, 2008 – Petitioners Abner Eleria and Melito Lupangco filed their Petition for Mandamus before the Regional Trial Court of Quezon City, Branch 84. In the said petition, NECU/NEWU pray for the Court to order NPC and the NP Board to immediately release and pay the COLA and AA on the bases of:

1. De Jesus vs. COA (294 SCRA 152 [1998]) which invalidated DBM CCC No. 10 on the basis of its non-publication as required by law;

2. PPA vs. PPA Employees Hired After July 1, 1989 (469 SCRA 397 [2005]) which declared that all and not only incumbents as of July 1, 1989 should be allowed to receive back pay corresponding to the said benefits from July 1, 1989 to March 16, 1999.

3. MWSS vs. Bautista, et al. (G.R. No. 171351, March 14, 2008) reiterated the Supreme Court’s pronouncements in the De Jesus and PPA cases.

• February 18, 2008 – NECU and NEWU filed its Petition-in-Intervention supporting the release of the COLA/AA.

• May 30, 2008 – The OSG filed its Omnibus Motion praying that: (1) it be allowed to withdraw its appearance as counsel for NPC and the NP Board; (2) it be allowed to intervene as the People’s Tribune; and (3) the petition be dismissed.

• The Regional Trial Court of Quezon City, Branch 84 promulgated its Decision in favor of the Petitioners on November 28, 2008. The Decision orders the NPC and the NP Board to:

1. Release and pay the petitioners/intervenors/other non-union employees within 30 days from finality of the Decision, the amount of PhP6,496,055,339.98 representing the COLA and AA and P704,777,508.60 representing interest computed from December 28, 2007. The monetary judgment shall earn interest of 12% per annum from finality of the Decision until its full satisfaction;

2. Pay Attorney’s fees in the amount of P100,000.00 in favor of Petitioners and P200,000.00 in favor of intervenors NECU and NEWU;

3. Deduct the amount of P145,464,872.55 representing deficiency payment of docket and other legal fees from the NPC officials/workers/employees including non-union beneficiaries similarly situated, and Remit and Pay the same to the Clerk of Court of RTC of Quezon City, Branch 84. The amount is subject to final computation and assessment of the Clerk of Court; and

4. Deduct 5% of the amount payable to each NPC employee, including non-union beneficiaries similarly situated, for the said Attorney’s Fees pro-rata and to Pay the amount deducted to Attys. Galit and Presquito, after deducting the appropriate taxes.

• A Motion for Execution against the Respondent NPC was filed by the Petitioners and Petitioners-Intervenors on December 5, 2008. A Notice of Appeal was filed by the OSG on December 5, 2008.

• A Motion for Reconsideration of the RTC Decision was filed by Secretary Andaya (as member of the NP Board) on December 18, 2008. On the other hand, NPC-OGC filed a Manifestation in behalf of NPC Management on December 16, 2008 stating that the authority to decide upon the issue at hand rests with the NP Board, although it was likewise reiterated that NPC Management, consistent with its previous position, supports the release of the COLA and AA.

• March 20, 2009 – The Court promulgated its Joint Order with the following directive:

1. the Motion for Execution is granted. The Branch Clerk of Court is directed to issue the Certificate of Finality of Judgment and the Writ of Execution;

2. the Motion to Deposit the Amount Equivalent to the Judgment Award is granted. The NPC Management through its President, the NP Board and Treasurer are ordered to deposit the amount of P6,496,055,339.98 representing COLA and AA and P704,777,508.60 representing interest, with the Land Bank of the Philippines, with high yielding bearing interest, within 30 days from receipt of the order;

3. the Notice of Appeal filed by the OSG is denied and dismissed;

4. the Motion for Reconsideration filed by Secretary Andaya is denied with finality.

• March 23, 2009 – Finality of Judgment, Writ of Execution and Notice of Garnishment issued by the RTC

• March 27, 2009 – Letter of the OSG advising NPC to write its banks that the notice of

garnishment as well as the writ of execution cannot be implemented.

• April 15, 2009 - The SC issued a TRO/Injunction on the March 20, 2009 Decision and March 23, 2009 Writ of Execution issued by the RTC.

• May 27, 2009 - DBM filed a separate Petition for Certiorari with the SC questioning the RTC’s Decision, Joint Order and Writ of Execution.

• 9 September 2009 – The Supreme Court issued a Resolution directing that:

1. G.R. No. 187359 (NEWU and NECU, etc. vs. NPC, etc. et al.) be consolidated with G.R. 187257;

2. G.R. 187776 (Andaya, etc., et al. vs. Hon. Cortez, etc., et al.) and G.R. 187420 (PGEA, etc. et al. vs. NPC, et al) be transferred to the First Division where G.R. 187257 and the two consolidated cases are assigned, to avoid conflicting decisions; and

3. Note: G.R. 187359 and G.R. 187420 involve a common question of law – the validity of the Operations and Maintenance Agreement (OMA) dated 30 January 2009 in relation to the EPIRA.

• As of date, all the cases cited above are still pending resolution by the Supreme Court.

• On the offer of settlement of all pending monetary claims, OSG opined in its letter dated 17 February 2012 that “(i)t would be proper and prudent to await the resolution thereof before any action is undertaken in relation thereto. This is to ensure that justice is served and that disbursement of government funds is made only to legitimate and valid claims”.

• In a meeting held on 12 July 2012, the NP Board confirmed that NPC management has no authority to start negotiation and placed on record its position to await the SC resolution.

• On 03 May 2013, the Officers and Members of PGEA-NPC wrote the NP Board and NPC Management requesting the release of COLA and AA. It is the group’s contention that the disallowance of COLA and AA provided under the Salary Standardization Law does not cover the NPC and as such, its employees are long deprived of its rightful claim over the said allowances. The letter did not provide any terms except their willingness to execute a “Release, Waiver and Quitclaim”.

• The Department of Budget and Management, thru Director Lorenzo C. Drapete, in a letter dated 15 May 2013 referring to National Power the subject letter of NPC-PGEA, stated that “(t)he Supreme Court under G.R. No. 157492 dated March 10, 2006 (copy attached) denied the petition of Napocor Employees Consolidated Union, et. al. for Employee Welfare Allowance equivalent to 10% of employees basic salary since the subject allowance, like COLA and AA, are among the allowances factually integrated into the basic monthly salary of employees”.

• Several letters to NPC was submitted by petitioners claiming payment of the COLA/AA. The latest of said letters were on 18 and 28 August 2014 from petitioners’ counsel offering the settlement of the claims. The said letters were referred to the NP Board for its information and consideration.

STATUS OF PENDING CASES SUMMARY OF CONTINGENT CLAIMS AND LIABILITIES

As of 31, December 2014

NATURE

NO. OF CASES WITHOUT AMOUNT

INVOLVED/ NO BASIS TO BE

DETERMINED

CONTINGENT CLAIMS* (ESTIMATED AMOUNT INVOLVED) CONTINGENT LIABILITIES*

NUMBER OF CASES

TOTAL AMOUNT (Php)

NUMBER OF CASES TOTAL AMOUNT (PHP) NUMBER OF

CASESTOTAL AMOUNT ($ US

DOLLARS)

EXPROPRIATION (Plant Related/Spug) 63 20 38,604,508.30 Land Registration Cases 197 ERC 101 TAX Real Property Cases (IPP) 15 5 1,579,620,699.06 Real Property Cases (NPC) 4 8 13,468,324,498.94 Local tax 7 6 10,348,256,993.86 Franchise Tax Cases 9 8 137,016,156.90 OTHER CIVIL CASES 61 2 278,000,000.00 15 14,707,806,215.65

EJECTMENT/ RECOVERY OF POSSESSION/DAMAGES/JUST COMPENSATION 116 54 5,454,225,399.23 1 45,000,000.00LABOR CASES 16 7 8,000,743,802.20 CRIMINAL CASES 14 ADMINISTRATIVE CASES 23 TOTAL NUMBER OF CASES 626 2 123 1 TOTAL ESTIMATED AMOUNT (Php & $) 278,000,000.00 53,734,598,274.14 45,000,000.00

Note: * Claims and Liabilities of NPC are subject to change because the amounts among others are one of the areas under court litigation.

2 0 1 4 A N N U A L R E P O R T • 3 3

Handled by OLC(Filed by or Against NPC as of 31, December 2014)

Nature Number of CasesExpropriation 83Land Registration 197ERC 101Labor 23Criminal 14Administrative 23Tax Cases 62Other Civil Cases 79Just Compensation/Ejectment/Recovery of Possession/Damages 170

Total 752

35. TARIFF DEVELOPMENT IN THE YEAR 2014

The following are the developments in Tariff for the Year 2014: 20 JUNE 2014

• The National Power Corporation (NPC) filed its application for the recovery of revenue shortfall from the Universal Charge for Missionary Electrification (UCME) for CY 2013 before the Energy Regulatory Commission (ERC) and docketed under ERC Case No. 2014-089 RC. The proposed recovery of CY 2013 True-up adjustment amounted to P5.46 billion, or equivalent to P0.0769/kWh is in compliance with ERC Resolution No. 21, Series of 2011 and ERC Resolution No. 22, Series of 2006, respectively.

• NPC filed its application for the 11th Generation Rate Adjustment (GRAM) as part of its compliance to the directives of the power rate regulator and docketed under ERC Case No. 2014-090 RC. Adjustment corresponding to this filing which covers the billing period from January to June 2013 is referred to as Deferred Accounting Adjustments or DAAs which are just pass-thru costs in NPC’s rates. The proposed recovery amounted to P1.83 billion would translate into upward adjustments of rates (if approved as filed) in Luzon, Visayas and Mindanao grids amounting to P2.1097/kWh, P1.9125/kWh and P1.4873/kWh respectively, or an average increase of P1.8788/kWh. The 11th GRAM DAA is spread for over twenty-four (24) months to mitigate the impact to power customers in the NPC-SPUG areas.

• NPC filed its application for the 11th Incremental Currency Exchange Rate Adjustment (ICERA) as part of its compliance to the directives of the power rate regulator and docketed under ERC Case No. 2014-091 RC. Adjustment corresponding to this filing which covers the billing period from January to June 2013 is referred to as Deferred Accounting Adjustments or DAAs which are just pass-thru costs in NPC’s rates. The 11th ICERA DAA for recovery of P8.07 million, or equivalent to P0.0162/kWh is spread for over twelve (12) months in Luzon, Visayas and Mindanao areas.

15 SEPTEMBER 2014

• NPC filed its Consolidated Petition for the Approval of the Proposed New Subsidized Approved Generation Rate (SAGR) and the Universal Charge for Missionary Electrification (UCME) for the years 2015-2016 before the ERC and docketed under ERC Case No. 2014-135 RC. In the said filing NPC prays for the adoption of the Proposed New SAGR (Table 1) and the Proposed UCME for CY 2015 of P12.09 billion, or equivalent to P0.1476/kWh and for CY 2016 of P11.37Bn, or equivalent to P0.1467/kWh.

03 NOVEMBER 2014

• The ERC provisionally approved the petition filed by NPC for the Proposed Revised Subsidized Approved Generation Rate (SAGR) and the Universal Charge for Missionary Electrification (UCME) for the years 2015 to 2016, effective December 26, 2014, subject to the following conditions:

º the remaining Subsidized Approved Generation Rate (SAGR) in the SPUG areas shall remain as previously approved by the Commission pending the final resolution of the instant petition; and

º NPC is authorized to extend the implementation of the current CY 2014 UCME subsidy amounting to P0.1561/kWh from January 2015 to August 2015.

22 DECEMBER 2014

• NPC filed its application for the 12th Generation Rate Adjustment Mechanism (GRAM) and 12th Incremental Currency Exchange Rate Adjustment (ICERA) before the ERC as part of its compliance to the directives of the power rate regulator and docketed under ERC Case Nos. 2014-188 RC and 2014-189 RC, respectively. Adjustments corresponding to these filings which cover the billing period from July to December 2013 are referred to as Deferred Accounting Adjustments or DAAs which are just pass-thru costs in NPC’s rates. The proposed recovery amounted to P1.66 billion would translate into upward adjustments of rates in Luzon, Visayas and Mindanao grids amounting to P1.8473/kWh, P2.1779/kWh and P1.4848/kWh respectively, or an average increase of P1.7365/kWh. The proposed recovery for the 12th GRAM and 12 ICERA DAA are spread into twenty-four (24) months and twelve (12) months, respectively.

36. UPDATE ON PRIVATE SECTOR PARTICIPATION PROGRAM IN THE POWER GENERATION IN SPUG-SERVICED AREAS

In line with the government thrust to privatize the power industry including the operation of NPC – SPUG plants and minimize the subsidy on these areas, the following are the developments on the participation of the private sector in the power generation in the SPUG serviced areas:

NEW POWER PROVIDER LOCATIONSTATUS

1. Bantayan Island Power Corporation-(BIPCOR)

Bantayan Island

Operational and UCME recipientsince May 2006

2. Palawan Power Generation Inc. Mainland Palawan

Operational and UCME recipientsince May 2008

3. Delta P Mainland Palawan

Operational and UCME recipientsince April 2009

4. Powersource Phils. (QTP) Bataraza, Palawan

Operational and UCME recipientsince July 2010

5. D. M. Consunji Holdings –(DMCI)

Masbate Mini Grid

Operational and UCME recipientsince August 2010

6. Catanduanes Power Generation Inc.

Catanduanes Operational and UCME recipientsince July 2011.

7. Ormin Power Inc. Oriental Mindoro

Operational and UCME recipientsince November 2011.

8. Power One Corporation/ Mid Island Power Corporation

Oriental Mindoro

Operational and UCME recipientsince May 2012.

9. SUNWEST Water & Electric Company

Catanduanes Operational as of December 3, 2012

10. Calamian Islands Power Corporation

Busuanga Calamian Island Power Corporation is a joint venture of Vivant Energy Corporation & Giggawatt Power Inc. On-going processing of UCME Settlement Agreement. Inauguration of 7.734MW Coron Power Station & 910KW Busuangan Power Station – August 25, 2014

Oriental Mindoro

Operational As of December 3, 2012

12. Gigawatt-Vivant Busuanga On-going construction of power plant facilities

13. Siquijor Island Power Corporation

Siquijor Target start of commercial operation – February 2015.

14. Mindoro Grid Corporation Oriental Mindoro

Operational as of December 3, 2012

15. 3iPowergen Tablas, Marinduque, Romblon

No power plant yet

16. Coastal Power Development Corporation

Basilan No power plant yet

17. Philippine Hybrid Energy Systems, Inc.(PHESI)

Oriental Mindoro

No power plant yet

37. SUPPLEMENTARY INFORMATION REQUIRED UNDER RR No. 15-2010

In compliance with the requirements set forth by Revenue Regulations No 15-2010 hereunder are the information on taxes, duties and license fees paid or accrued during the taxable year.

The Corporation is a VAT - registered company with VAT output tax declaration of P243,535,876.43 the year based on the amount reflected in the Sales Account of P 2,029,465,636.92.

The Corporation has zero-rated/exempt sales amounting to P17,941,859.18 pursuant to the provisions of Sections 106 (A)(2) and 108 (B) of the National Internal Revenue Code, as amended.

The amount of VAT Input taxes claimed are broken down as follows:

Beginning Balance, January 2014 3,312,490,008.12Current year’s purchases:I. Non-Capital Goods (fuel, materials, equipment & spares) 587,452,783.76 II. Capital Goods 8,975,401.98 III. Services 421,832,137.06 1,018,260,322.80 Claims for tax credit/refund and other adjustment 0 Ending Balance December 2014 4,330,750,330.92

Other taxes and licenses pertain to:

Nature In pesosRealty Tax 1,822,457.73 1,822,457.73

The amount of withholding taxes paid/occurred for the year amounted to:

Nature In pesosI. Tax on compensation and benefits 89,070,716.94 II. Creditable withholding taxes 139,115,224.93 III. Finat VAT/Final withholding taxes 453,413,635.13 681,599,577.00

38. INCOME TAX

Pursuant to BIR Ruling 020-2002 – Tax Consequences of Electric Power Industry Reform Act of 2001 (B)(4) ( Annex C) states that, “While under the EPIRA, power generation shall no longer be considered a public utility operation, it may still be considered as essential governmental function insofar as the operation by NPC of the assets of SPUG is concerned. Hence, income derived there from shall be excluded from gross income pursuant to Sec. 32 (b)(7) OF THE 1997 Tax Code (Annex D)


1. MA. GLADYS CRUZ-STA. RITA, PRESIDENT AND CEO

2. DANILO S. SEDILLA, VICE PRESIDENT SMALL POWER UTILITIES GROUP (JAN-JULY 2014), OIC-SENIOR VICE PRESIDENT (AUG-DEC 2014)

3. RUDY P. BRIOSO, VICE PRESIDENT MINDANAO GENERATION 4. MELCHOR P. RIDULME, VICE PRESIDENT OFFICE OF THE GENERAL COUNSEL (JAN-MAR 2013), VICE PRESIDENT OFFICE OF THE LEGAL COUNSEL (APRIL-DEC 2013)

5. LORNA T. DY, VICE PRESIDENT ADMINISTRATION & FINANCE

6. KATAMBAYAN S. CELINO, VICE PRESIDENT TECHNICAL AND MAINTENANCE SERVICES (JAN-MAR 2013), VICE PRESIDENT POWER ENGINEERING SERVICES (APRIL-DEC 2013)

•MANAGEMENT COMMMITTEE

3 4

5 6

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9

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7. URBANO C. MENDIOLA, JR., OIC-VICE PRESIDENT CORPORATE SERVICES (JAN-MAR 2013), VICE PRESIDENT CORPORATE AFFAIRS (APRIL-DEC 2013)

8. MANUEL LUIS B. PLOFINO, SENIOR DEPARTMENT MANAGER RESOURCE MANAGEMENT SERVICES (APRIL-DEC 2013)

9. EMMANUEL A. UMALI, DEPARTMENT MANAGER WATERSHED MANAGEMENT DEPARTMENT

10. ROMUALD MA.T. BELTRAN, DEPARTMENT MANAGER DAMS MANAGEMEN T DEPARTMENT

11. EDMUNDO A. VELOSO, JR., OIC -VICE PRESIDENT SMALL POWER UTILITIES GROUP (AUG-DEC 2014)


•BOARD oF DIRECTORS


MA. GLADYS CRUZ-STA. RITA PRESIDENT & CEO, NATIONAL POWER CORPORATION, MEMBER

SEC. MANUEL A. ROXAS DEPARTMENT OF INTERIOR & LOCAL GOVERNMENT, MEMBER

SEC. RAMON J.P. PAJE DEPARTMENT OF ENVIRONMENT & NATURAL RESOURCES, MEMBER

SEC. PROCESO J. ALCALA DEPARTMENT OF AGRICULTURE, MEMBER

SEC. GREGORY L. DOMINGO DEPARTMENT OF TRADE & INDUSTRY, MEMBER

SEC. ARSENIO M. BALISACAN NATIONAL ECONOMIC & DEVELOPMENT AUTHORITY, MEMBER

SEC. FLORENCIO B. ABAD DEPARTMENT OF BUDGET & MANAGEMENT, MEMBER

SEC. CESAR V. PURISIMA DEPARTMENT OF FINANCE, CHAIRMAN

SEC. CARLOS JERICHO L. PETILLA DEPARTMENT OF ENERGY, VICE-CHAIRMAN

2 0 1 4 A N N U A L R E P O R T • 3 7 2 0 1 4 A N N U A L R E P O R T • 3 7

BOARD REPRESENTATIVES

JOSE EMMANUEL P. REVERENTEUNDERSECRETARY, DEPARTMENT OF FINANCE

JOSE RAYMUND A. ACOLASSISTANT SECRETARY, DEPARTMENT OF ENERGY

MA. GLADYS CRUZ STA. RITAPRESIDENT & CEO, NATIONAL POWER CORPORATION

ANALIZA R. TEHUNDERSECRETARY, DEPARTMENT OF ENVIRONMENTAND NATURAL RESOURCES

ANTONIO A. FLETAUNDERSECRETARY, DEPARTMENT OF AGRICULTURE

EDWIN R. ENRILEUNDER SECRETARY, DEPARTMENT OF THE INTERIORAND LOCAL GOVERNMENT

RUBEN S. REINOSO JR.ASSISTANT DIRECTOR-GENERAL, NATIONAL ECONOMICAND DEVELOPMENT AUTHORITY

LORENZO C. DRAPETEDIRECTOR, DEPARTMENT OF BUDGET AND MANAGEMENT

RAUL V. ANGELESEXECUTIVE DIRECTOR, DEPARTMENT OFTRADE AND INDUSTRY

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SPUG - LUZON AREA PROVINCE MUNICIPALITY RATED in Megawatt

1 BOAC DPP Luzon Marinduque Boac 11.222 MW2 TORRIJOS DPP Luzon Marinduque Torrijos 0.5 MW3 POWER BARGE 120 Luzon Marinduque Mogpog 7.20 MW4 POLILIO DPP Luzon Quezon Polillo 2.680 MW5 JOMALIG DPP Luzon Quezon Jomalig 0.423 MW6 PATNANUNGAN DPP Luzon Quezon Patnanungan 0.423 MW7 BASCO DPP Luzon Batanes Basco 4.400 MW8 WIND TURBINE Luzon Batanes Basco 0.180 MW9 SABTANG DPP Luzon Batanes Sabtang 0.326 MW

10 ITBAYAT DPP Luzon Batanes Itbayat 0.326 MW11 CALAYAN DPP Luzon Cagayan Calayan 0.426 MW12 KABUGAO DPP Luzon Apayao Kabugao 0.643 MW13 PALANAN DPP Luzon Isabela Palanan 0.523 MW14 CASIGURAN DPP Luzon Aurora Casiguran 2.535 MW15 BALONGBONG MHEP Luzon Catanduanes Bato 1.800 MW16 MARINAWA DPP Luzon Catanduanes Bato 5.040 MW17 VIGA DPP Luzon Catanduanes Viga 2.120 MW18 RAPU-RAPU DPP Luzon Albay Batan 0.826 MW19 BATAN DPP Luzon Albay Batan 0.489 MW20 TICAO DPP Luzon Masbate San Jacinto 1.500 MW21 PULANG LUPA DPP Luzon Occ. Mindoro San Jose 11.80 MW22 POWER BARGE 106 Luzon Occ. Mindoro San Jose 14.40 MW23 MAMBURAO DPP Luzon Occ. Mindoro Mamburao 11.60 MW24 LUBANG DPP Luzon Occ. Mindoro Lubang 2.304 MW25 TINGLOY DPP Luzon Batangas Tingloy 1.183 MW26 TABLAS DPP Luzon Romblon Odiongan 4.820 MW27 POWER BARGE 109 Luzon Romblon Romblon 2.340 MW28 POWER BARGE 114 Luzon Romblon Romblon 1.300 MW29 ROMBLON DPP Luzon Romblon Romblon 2.800 MW30 SIBUYAN DPP Luzon Romblon San Fernando 1.683 MW31 SAN JOSE DPP Luzon Romblon San Jose 0.554 MW32 BANTON DPP Luzon Romblon Banton 0.326 MW33 CORCUERA DPP Luzon Romblon Corcuera 0.826 MW34 CONCEPCION DPP Luzon Romblon Concepcion 0.326 MW35 EL NIDO DPP Luzon Palawan El Nido 2.850 MW36 TAYTAY DPP Luzon Palawan Taytay 1.600 MW37 SAN VICENTE DPP Luzon Palawan San Vicente 1.223 MW38 CULION DPP Luzon Palawan Culion 0.603 MW39 LINAPACAN DPP Luzon Palawan Linapacan 0.213 MW40 CUYO DPP Luzon Palawan Cuyo 2.000 MW41 ARACELI DPP Luzon Palawan Araceli 0.326 MW42 BALABAC DPP Luzon Palawan Balabac 0.326 MW43 CAGAYANCILLO DPP Luzon Palawan Cagayancillo 0.217 MW44 AGUTAYA DPP Luzon Palawan Agutaya 0.326 MW

Total Luzon Existing Plants: 109.5 28 MW

SPUG - VISAYAS AREA PROVINCE MUNICIPALITY RATED in Megawatt

45 GUINTARCAN DPP Visayas W. Visayas Sta. FE 0.263 MW46 DOONG DPP Visayas W. Visayas Bantayan 0.326 MW47 SIQUIJOR DPP Visayas Siquijor Siquijor 3.000 MW48 POWER BARGE 113 Visayas Siquijor Lazi 2.700 MW49 POWER BARGE 116 Visayas Siquijor Siquijor 3.480 MW50 GIGANTES DPP Visayas Iloilo Carles 0.326 MW51 CALUYA DPP Visayas Antique Caluya 0.955 MW52 CAMOTES DPP Visayas Cebu Poro 2.688 MW53 PILAR DPP Visayas Cebu Pilar 0.576 MW54 MARIPIPI DPP Visayas Biliran Maripipi 0.326 MW55 LIMASAWA DPP Visayas S. Leyte Maasin 0.326 MW56 ZUMARRAGA DPP Visayas W. Samar Zumarraga 0.589 MW57 TAGAPUL-AN DPP Visayas W. Samar Tagapul-an 0.263 MW58 ALMAGRO DPP Visayas W. Samar Almagro 0.263 MW59 STO. NIÑO DPP Visayas W. Samar Sto. Niño 0.263 MW60 SAN ANTONIO DPP Visayas N. Samar San Antonio 0.576 MW61 CAPUL DPP Visayas N. Samar Capul 0.326 MW62 SAN VICENTE DPP Visayas Palawan San Vicente 0.263 MW63 BIRI DPP Visayas N. Samar Biri 0.489 MW64 BATAG DPP Visayas N. Samar Laoang 0.050 MW

Total Visayas Existing Plants: 18.048 MW

SPUG - MINDANAO AREA PROVINCE MUNICIPALITY RATED in Megawatt

65 BASILAN DPP Mindanao Basilan Isabela City 0.263 MW66 POWER BARGE 119 Mindanao Basilan Isabela City 7.200 MW67 JOLO DPP Mindanao Sulu Jolo 11.940 MW68 LUUK DPP Mindanao Sulu Luuk 0.325 MW69 SIASI DPP Mindanao Sulu Siasi 2.680 MW70 BONGAO DPP Mindanao Tawi-Tawi Bongao 2.588 MW71 POWER BARGE 108 Mindanao Tawi-Tawi Bongao 5.400 MW72 BALIMBING DPP Mindanao Tawi-Tawi Panglima Sugala 0.726 MW73 TANDUBAS DPP Mindanao Tawi-Tawi Tandubas 0.258 MW74 SIBUTU DPP Mindanao Tawi-Tawi Sibutu 0.626 MW75 SITANGKAY DPP Mindanao Tawi-Tawi Sitangkay 1.160 MW76 MANUK-MANGKAW DPP Mindanao Tawi-Tawi Simunul 0.163 MW77 WEST SIMUNUL DPP Mindanao Tawi-Tawi Simunul 0.973 MW78 CAG DE TAWI² DPP Mindanao Tawi-Tawi Mapun 1.020 MW79 TANDUBANAK DPP Mindanao Tawi-Tawi Sibutu 0.435 MW80 DINAGAT DPP Mindanao Dinagat Dinagat 3.739 MW81 LORETO DPP Mindanao Dinagat Loreto 0.940 MW82 HIKDOP DPP Mindanao Surigao Hikdop 0.283 MW83 KALAMANSIG DPP Mindanao Sultan Kudarat Kalamansig 4.420 MW84 NINOY AQUINO DPP Mindanao Sultan Kudarat Sen. Ninoy

Aquino0.683 MW

85 BALUT DPP Mindanao Davao Del Sur Sarangani 0.326 MW86 TALICUD DPP Mindanao Davao Del

NorteSamal City 0.586 MW

Total Mindanao Existing Plants: 46.734 MW

No. Power Plant Name AREA PROVINCE MUNICIPALITY RATED in Megawatt

87 MANIWAYA DPP Luzon Marinduque Sta. Cruz 0.104 MW88 MONGPONG DPP Luzon Marinduque Sta. Cruz 0.104 MW89 POLO DPP Luzon Marinduque Sta. Cruz 0.092 MW90 BALATUBAT DPP Luzon Cagayan Calayan 0.120 MW91 MINABEL DPP Luzon Cagayan Calayan 0.109 MW92 MACONACON DPP Luzon Isabela Maconacon 0.240 MW93 GUINAWAYAN DPP Luzon Masbate Placer 0.035 MW94 GILOTONGAN DPP Luzon Masbate Cawayan 0.090 MW95 NABUCTOT DPP Luzon Masbate Placer 0.025 MW96 PEÑA DPP Luzon Masbate Cawayan 0.090 MW97 CHICO DPP Luzon Masbate Cawayan 0.035 MW98 LAHUY DPP Luzon Camarines Sur Caramoan 0.120 MW99 HAPONAN DPP Luzon Camarines Sur Caramoan 0.035 MW

100 QUINALASAG DPP Luzon Camarines Sur Harchitorena 0.150 MW101 ATULAYAN DPP Luzon Camarines Sur Harchitorena 0.022 MW102 BURIAS DPP Luzon Masbate San Pascual 0.983 MW103 DANCALAN DPP Luzon Masbate San Pascual 0.080 MW104 MABABANGBAYBAY DPP Luzon Masbate Claveria 0.060 MW105 MALAKING ILOG DPP Luzon Masbate San Pascual 0.060 MW106 OSMEÑA DPP Luzon Masbate Claveria 0.080 MW107 PEÑAFRANCIA DPP Luzon Masbate Claveria 0.080 MW108 QUEZON DPP Luzon Masbate Claveria 0.060 MW109 RIZAL DPP Luzon Palawan Rizal 0.679 MW110 CABRA DPP Luzon Occ. Mindoro Lubang 0.180 MW111 COSTA RICA DPP Visayas W. Samar Almagro 0.240 MW112 LUNANG DPP Visayas W. Samar Almagro 0.120 MW113 BIASONG DPP Visayas W. Samar Almagro 0.060 MW114 CABUNGAAN DPP Visayas W. Samar Sto. Niño 0.040 MW115 ILIJAN DPP Visayas W. Samar Sto. Niño 0.040 MW116 TAKUT DPP Visayas W. Samar Sto. Niño 0.100 MW117 KIRIKITE DPP Visayas W. Samar Almagro 0.060 MW118 LIBUCAN DACU DPP Visayas W. Samar Taranganan 0.080 MW119 BAGONGON DPP Visayas W. Samar Catbalogan 0.060 MW120 BULUAN DPP Visayas W. Samar Catbalogan 0.040 MW121 CINCO RAMA DPP Visayas W. Samar Catbalogan 0.100 MW122 BAGONGBANWA DPP Visayas Bohol Tubigon 0.038 MW123 BALICASAG DPP Visayas Bohol Panglao 0.038 MW124 BATASAN DPP Visayas Bohol Tubigon 0.056 MW125 BILANGBILANGAN DPP Visayas Bohol Tubigon 0.020 MW126 CUAMING DPP Visayas Bohol Inabanga 0.086 MW127 HAMBONGAN DPP Visayas Bohol Inabanga 0.020 MW128 MANTATAO DPP Visayas Bohol Calape 0.038 MW129 MOCABOC DPP Visayas Bohol Tubigon 0.020 MW130 PAMILACAN DPP Visayas Bohol Baclayon 0.056 MW131 PANGAPASAN DPP Visayas Bohol Tubigon 0.015 MW132 UBAY DPP Visayas Bohol Tubigon 0.012 MW133 CABUL-AN DPP Visayas Bohol Baclayon 0.064 MW134 BATBATAN DPP Visayas Antique Culasi 0.100 MW135 GUIWANON DPP Visayas Guimaras Nueva Valencia 0.036 MW136 SIBOLO DPP Visayas Antique Caluya 0.030 MW137 SACOL DPP Mindanao Zamboanga Zamboanga 0.020 MW138 PALIMBANG DPP Mindanao Sultan Kudarat Sultan Kudarat 0.698 MW

Total Mini-Grid/Transferred Plants: 5.92 MW

SPUG MINI-GRID AND TRANSFERRED PLANTS


139 B. TITONG MGE1 Luzon Masbate Masbate 0.012 MW140 B. TITONG MGE2 Luzon Masbate Masbate 0.012 MW141 CAWAYAN EXT. (POB) Luzon Masbate Masbate 0.012 MW142 CAWAYAN EXT. (BEL-AT) Luzon Masbate Masbate 0.012 MW143 UBONGAN DACU Luzon Masbate Masbate 0.012 MW144 BOLO MGE1 Luzon Masbate Masbate 0.012 MW145 BOLO MGE2 Luzon Masbate Masbate 0.012 MW146 BOLO MGE3 Luzon Masbate Masbate 0.012 MW147 TINAGO Luzon Masbate Masbate 0.012 MW148 CABANGCALAN Luzon Masbate Aroroy 0.012 MW149 PINANAAN Luzon Masbate Aroroy 0.012 MW150 LANANG Luzon Masbate Aroroy 0.012 MW151 SAN ISIDRO Luzon Masbate Aroroy 0.012 MW152 SYNDICATE Luzon Masbate Aroroy 0.012 MW153 SAWANG MG1 Luzon Masbate Aroroy 0.012 MW154 SAWANG MG2 Luzon Masbate Aroroy 0.006 MW155 TALIB MG1 Luzon Masbate Aroroy 0.012 MW156 TALIB MG2 Luzon Masbate Aroroy 0.012 MW157 CONCEPTION Luzon Masbate Aroroy 0.012 MW158 BALETE Luzon Masbate Aroroy 0.012 MW159 AMUTAG MG1 Luzon Masbate Aroroy 0.012 MW160 AMUTAG MG2 Luzon Masbate Aroroy 0.012 MW161 CALANAY MG1 Luzon Masbate Aroroy 0.012 MW162 CALANAY MG2 Luzon Masbate Aroroy 0.006 MW163 BALAWING Luzon Masbate Aroroy 0.006 MW164 CABAS-AN Luzon Masbate Aroroy 0.006 MW165 DAYHAGAN MG1 Luzon Masbate Aroroy 0.012 MW166 DAYHAGAN MG2 Luzon Masbate Aroroy 0.006 MW167 GUMAHANG MG1 Luzon Masbate Aroroy 0.012 MW168 GUMAHANG MG2 Luzon Masbate Aroroy 0.012 MW169 GUMAHANG MG3 Luzon Masbate Aroroy 0.012 MW170 MACABUG Luzon Masbate Aroroy 0.012 MW171 MARIPOSA Luzon Masbate Aroroy 0.012 MW172 MATABA Luzon Masbate Aroroy 0.012 MW173 MATALANGTALANG Luzon Masbate Aroroy 0.012 MW174 MATONGOG MG1 Luzon Masbate Aroroy 0.012 MW175 MATONGOG MG2 Luzon Masbate Aroroy 0.006 MW176 SAN AGUSTIN MG1 Luzon Masbate Aroroy 0.012 MW177 SAN AGUSTIN MG2 Luzon Masbate Aroroy 0.006 MW178 TIGBAO MG1 Luzon Masbate Aroroy 0.012 MW179 TIGBAO MG2 Luzon Masbate Aroroy 0.006 MW180 TIGBAO MG3 Luzon Masbate Aroroy 0.012 MW181 TIGBAO MG4 Luzon Masbate Aroroy 0.006 MW182 TINIGBAN MG1 Luzon Masbate Aroroy 0.012 MW183 TINIGBAN MG2 Luzon Masbate Aroroy 0.012 MW184 TINIGBAN MG3 Luzon Masbate Aroroy 0.012 MW185 TINIGBAN MG4 Luzon Masbate Aroroy 0.012 MW186 JAMORAWON MG1 Luzon Masbate Milagros 0.006 MW187 JAMORAWON MG2 Luzon Masbate Milagros 0.012 MW188 JAMORAWON MG3 Luzon Masbate Milagros 0.012 MW189 JAMORAWON MG4 Luzon Masbate Milagros 0.006 MW190 TAGBON Luzon Masbate Milagros 0.012 MW191 TIGBAO MG1 Luzon Masbate Aroroy 0.012 MW192 TIGBAO MG2 Luzon Masbate Aroroy 0.012 MW193 TIGBAO MG3 Luzon Masbate Aroroy 0.006 MW194 TIGBAO MG4 Luzon Masbate Aroroy 0.006 MW195 TIGBAO MG5 Luzon Masbate Aroroy 0.006 MW196 MAGSALANGI Luzon Masbate Milagros 0.006 MW197 PAMANGPANGON Luzon Masbate Milagros 0.012 MW198 CALUMPANG Luzon Masbate Milagros 0.012 MW199 CALASUCHE Luzon Masbate Milagros 0.012 MW200 DOCOL Luzon Masbate Baleno 0.006 MW201 BAAO Luzon Masbate Baleno 0.006 MW202 LOOC Luzon Masbate Mandaon 0.012 MW203 LANTANGAN MG1 Luzon Masbate Mandaon 0.012 MW204 LANTANGAN MG2 Luzon Masbate Mandaon 0.006 MW205 BUGTONG Luzon Masbate Mandaon 0.012 MW206 TUMALAYTAY MG1 Luzon Masbate Mandaon 0.012 MW207 TUMALAYTAY MG2 Luzon Masbate Mandaon 0.012 MW208 TUMALAYTAY MG3 Luzon Masbate Mandaon 0.006 MW209 CABANGCALAN Luzon Masbate Aroroy 0.012 MW210 CALUMPANG Luzon Masbate Milagros 0.006 MW211 LOCSOAN Luzon Masbate Placer 0.012 MW212 TAN-AWAN Luzon Masbate Placer 0.012 MW213 LUNA MG1 Luzon Masbate Placer 0.012 MW214 LUNA MG2 Luzon Masbate Placer 0.012 MW215 LUNA MG3 Luzon Masbate Placer 0.012 MW


216 MAHAYAHAY Luzon Masbate Placer 0.006 MW217 NAGARAO Luzon Masbate Placer 0.012 MW218 ITOMBATO Luzon Masbate Cawayan 0.012 MW219 IRAYA Luzon Masbate Cawayan 0.012 MW220 CABAYUGAN MG1 Luzon Masbate Cawayan 0.012 MW221 CABAYUGAN MG2 Luzon Masbate Cawayan 0.006 MW222 CALUMPANG Luzon Masbate Milagros 0.006 MW223 PANANAWAN MG1 Luzon Masbate Cawayan 0.012 MW224 PANANAWAN MG2 Luzon Masbate Cawayan 0.012 MW225 CAMPANA Luzon Masbate Uson 0.006 MW226 CANDELARIA MG1 Luzon Masbate Uson 0.012 MW227 CANDELARIA MG2 Luzon Masbate Uson 0.012 MW228 BONIFACIO MG1 Luzon Masbate Uson 0.012 MW229 BONIFACIO MG2 Luzon Masbate Uson 0.006 MW230 SAN JOSE Luzon Masbate Uson 0.012 MW231 MATAYUM MG1 Luzon Masbate Cataingan 0.012 MW232 MATAYUM MG2 Luzon Masbate Cataingan 0.012 MW233 MATAYUM MG3 Luzon Masbate Cataingan 0.006 MW234 PITOGO MG1 Luzon Masbate Cataingan 0.006 MW235 PITOGO MG2 Luzon Masbate Cataingan 0.006 MW236 MADAMBA MG1 Luzon Masbate Cataingan 0.012 MW237 MADAMBA MG2 Luzon Masbate Cataingan 0.006 MW238 LIBTONG Luzon Masbate Cataingan 0.006 MW239 OSMENA Luzon Masbate Cataingan 0.006 MW240 AGUADA Luzon Masbate Cataingan 0.012 MW241 SAN RAFAEL Luzon Masbate Cataingan 0.012 MW242 NADAWISAN Luzon Masbate Cataingan 0.006 MW243 MAGCARAGUIT MG1 Luzon Masbate Dimasalang 0.012 MW244 MAGCARAGUIT MG2 Luzon Masbate Dimasalang 0.012 MW245 MAGCARAGUIT MG3 Luzon Masbate Dimasalang 0.012 MW246 T.R. YANGCO Luzon Masbate Dimasalang 0.012 MW247 JINTOTOLO MG1 Luzon Masbate Balud 0.012 MW248 JINTOTOLO MG2 Luzon Masbate Balud 0.012 MW249 JINTOTOLO MG3 Luzon Masbate Balud 0.006 MW250 SAN ANTONIO MG1 Luzon Masbate Balud 0.012 MW251 SAN ANTONIO MG2 Luzon Masbate Balud 0.006 MW252 CANTIL MG1 Luzon Masbate Balud 0.012 MW253 CANTIL MG2 Luzon Masbate Balud 0.006 MW254 CANTIL MG3 Luzon Masbate Balud 0.006 MW255 CANTIL MG4 Luzon Masbate Balud 0.006 MW256 SAPATOS IS Luzon Masbate Balud 0.012 MW257 SAWMILL Luzon Masbate Mobo 0.012 MW258 BAANG Luzon Masbate Mobo 0.006 MW259 MABUHAY Luzon Masbate Mobo 0.012 MW260 SOROSIMBAJAN MG1 Luzon Masbate Esperanza 0.006 MW261 SOROSIMBAJAN MG2 Luzon Masbate Esperanza 0.012 MW262 COSTA RICA Luzon Masbate Ticao 0.012 MW263 MATABAO Luzon Masbate Ticao 0.012 MW264 RIZAL Luzon Masbate Ticao 0.006 MW265 ALTA VISTA Luzon Masbate Ticao 0.012 MW266 DON PABLO DELA ROSA Luzon Masbate Aroroy 0.012 MW267 PANGLE Luzon Masbate Aroroy 0.012 MW268 BARA MG1 Luzon Masbate Milagros 0.012 MW269 BARA MG2 Luzon Masbate Milagros 0.012 MW270 BARA MG3 Luzon Masbate Milagros 0.012 MW271 GUILUTHANGAN MG1 Luzon Masbate Milagros 0.012 MW272 GUILUTHANGAN MG2 Luzon Masbate Milagros 0.006 MW273 SAWMILL MG1 Luzon Masbate Milagros 0.006 MW274 SAWMILL MG2 Luzon Masbate Milagros 0.006 MW275 MATAGBAK Luzon Masbate Milagros 0.012 MW276 SAN CARLOS Luzon Masbate Milagros 0.012 MW277 BURI Luzon Masbate Mandaon 0.012 MW278 CAGMASOSO Luzon Masbate Mandaon 0.012 MW279 POLO DACU Luzon Masbate Mandaon 0.012 MW280 R. M. MAGBALON Luzon Masbate Cawayan 0.012 MW281 COBRE IS. PENA Luzon Masbate Cawayan 0.012 MW282 SAN VICENTE Luzon Masbate Uson 0.012 MW283 BURACAN Luzon Masbate Dimasalang 0.012 MW284 QUINAYANGAN DIOTAY Luzon Masbate Balud 0.012 MW285 QUINAYANGAN TONGA Luzon Masbate Balud 0.012 MW286 SAN ANDRES Luzon Masbate Balud 0.006 MW287 SAN ROQUE Luzon Masbate Esperanza 0.006 MW288 BUGTONG Luzon Masbate Mandaon 0.012 MW289 STO. NINO Luzon Masbate Ticao 0.012 MW290 DANAO Luzon Masbate Ticao 0.012 MW291 SAN ANTONIO Luzon Masbate Milagros 0.006 MW

Total PRES Plants: 1.56 MW

SPUG PRES PLANTS

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WORKING COMMITTEE2014 NPC ANNUAL REPORT

• CHAIRPERSON URBANO C. MENDIOLA, JR. VICE PRESIDENT, CORPORATE AFFAIRS GROUP

• VICE CHAIRPERSON LORNA T. DY VICE PRESIDENT, ADMINISTRATION & FINANCE GROUP

• VICE CHAIRPERSON EDMUNDO A. VELOSO, JR. VICE PRESIDENT, SMALL POWER UTILITIES GROUP

ATTY. PATRICK D. MABBAGU ACTING CHIEF OF STAFF, OFFICE OF THE PRESIDENT

MARIA LUISA A. BELMONTE OIC, CORPORATE COMMUNICATIONS DIVISION

• MEMBERS BEEJAY S. ABAD CORPORATE COMMUNICATIONS OFFICER D, CCD, OP

ALEXANDER P. JAPON SR. DEPARTMENT MANAGER, FINANCE

JUDITH M. MOJICA MANAGER, CONTROLLER’S DEPARTMENT

• MEMBERS ATTY. MANUEL LUIS B. PLOFINO SENIOR DEPARTMENT MANAGER, RMS

BERNADETTE T. RIVERO MANAGER, STRATEGIC & BUSINESS PLANNING DIVISION

ATTY. NATALIA O. GUINTO MANAGER, LOGISTICS DEPARTMENT

• CONSULTANTS JOSE RUEL V. BAGAY CORPORATE STAFF ANALYST, OP

NIÑA NERISA DL. TORRES CORPORATE STAFF ANALYST, OP

• MEMBER ALMA P. HERMOSURA CORPORATE COMMUNICATIONS OFFICER A, CCD, OP

• MEMBERS BIVERLY B. ESTELLA MANAGER, PLANNING & PERFORMANCE ASSESMENT DIVISION

EMMANUEL A. UMALI DEPARTMENT MANAGER, WMD

ROMUALDO MA. T. BELTRAN DEPARTMENT MANAGER, DMD

2 0 1 4 A N N U A L R E P O R T • 5 1

BIR Road corner Quezon Avenue, Diliman, Quezon City, PhilippinesTel. No.: (632) 921-3541 • Fax No.: (632) 921-2468E-mail: [email protected] 2 0 1 4

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