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Distribution Development Plan

2008-2017

Electric Power Industry Management Bureau

Department of Energy

August 2009

TABLE OF CONTENTS

Page

EXECUTIVE SUMMARY

INTRODUCTION 1

HIGHLIGHTS OF 2008 DDP 1

SUMMARY TABLES

Annex 1. Total Number of Customers 2006-2016 8

Annex 2. Projected Infrastructure Requirements 2007-2016 9

Annex 3. Projected Capital Investment Requirements (Million Pesos) 2007-2016 10

LUZON DUs DISTRIBUTION DEVELOPMENT PLAN

4.1 Vicinity Map of Luzon Distribution Utilities 11

4.2 Luzon Distribution Utilities Peak Demand (MW) 12

4.3 One-Page DDP Summary

4.3.1 Luzon PIOUs and LGUOUs 13

4.3.2 Luzon ECs 24

VISAYAS DUs DISTRIBUTION DEVELOPMENT PLAN

5.1 Vicinity Map of Visayas Distribution Utilities 79

5.2 Visayas Distribution Utilities Peak Demand (MW) 80

5.3 One-Page DDP Summary

5.3.1 Visayas PIOUs and LGUOUs 81

5.3.2 Visayas ECs 87

MINDANAO DUs DISTRIBUTION DEVELOPMENT PLAN

6.1 Vicinity Map of Mindanao Distribution Utilities 120

6.2 Mindanao Distribution Utilities Peak Demand (MW) 121

6.3 One-Page DDP Summary

6.3.1 Mindanao PIOUs and LGUOUs 122

6.3.2 Mindanao ECs 128

LIST OF TABLES

Page

TABLE 1 2008 DDP Submission Rate 1

TABLE 2 Luzon DUs Peak Demand 2008-2017 12

TABLE 3 Visayas DUs Peak Demand 2008-2017 78

TABLE 4 Mindanao DUs Peak Demand 2008-2017 119

LIST OF FIGURES

FIGURE 1 Peak Demand per Grid (MW) 2003-2017 1

FIGURE 2 Luzon DUs Peak Demand (MW) 2003-2017 2

FIGURE 3 Visayas DUs Peak Demand (MW) 2003-2017 2

FIGURE 4 Mindanao DUs Peak Demand (MW) 2003-2017 3

FIGURE 5 DUs Energy Purchased/Generated per Grid (GWh) 2003-2017 3

FIGURE 6 Expansion and Rehabilitation (ckt-km) 2008-2017 4

FIGURE 7 Total Substation Capacity Addition (MVA) 2008-2017 4

FIGURE 8 Capital Expenditure Requirement (PhP B) 2008-2017 4

FIGURE 9 DUs Number of Customers ( x 1000) 2007-2017 5

FIGURE 10 Luzon: Growth Rate of number of Customers and Energy Sales 5

FIGURE 11 Visayas: Growth Rate of number of Customers and Energy Sales 6

FIGURE 12 Mindanao: Growth rate of number of Customers and Energy Sales 7

ANNEXES

Annex 1 Total Number of Customers 2007-2017 8

Annex 2 Projected Infrastructure Requirements 2008-2017 9

Annex 3 Projected Capital Investment Requirements 2008-2017 10

Annex A List of Distribution Utilities in the Philippines 166

Executive Summary

In the planning period 2008-2017, the Distribution Utilities (DUs) expect an increase in peak demand of 4,547 MW from 8,810 MW in 2008 to 12,956 MW in 2017, representing an average growth of 4.4% annually. Luzon is projected to have a 4.3% annual average growth rate in peak demand, from 6,535 MW in 2008 to 9,505 MW in 2017. Visayas and Mindanao will have a higher growth rate at 5.1% and 4.7%, respectively from 1,097 MW in 2008 to 1,701 MW in 2017 for Visayas, and from 1,177 MW in 2008 to 1,751 MW in 2017 for Mindanao.

In terms of energy requirement, DUs in Luzon is projected to grow at an annual average growth rate of 4.7% over the ten-year planning period, from 38,844 GWh in 2008 to 58,433 GWh in 2017. Visayas DUs is seen to register an annual average growth rate of 5.0%, from 5,871 GWh in 2008 to 9,026 GWh in 2017, Mindanao DUs will register a 5.0% annual average growth rate, from 6,436 GWh in 2008 to 9,664 GWh in 2017.

DUs are projecting a substantial increase in the number of customers in 2017: Luzon at 11.079 million; Visayas at 3.295 million; and Mindanao at 3.051 million. These translate to an annual average growth rates of 4.5% in Luzon, 5.1% in Visayas, and 5.6 % in Mindanao in energy sales, respectively.

To meet the projected increase in energy requirements over the planning horizon, an estimated 23,929 ckt-km of lines are programmed for rehabilitation and/or upgrading, 17,448 ckt-km of lines are for construction, and an additional 7,871 MVA substation capacity will be constructed. These will have corresponding investment requirements amounting to PhP70.7 billion, broken down into: PhP21.1 billion for electrification projects, PhP30 billion for construction of new lines and additional substation capacity, and Php19.6 billion for rehabilitation of distribution lines.

2008 Distribution Development Plan

Introduction

The Department of Energy (DOE) publishes annually the Distribution Development Plan (DDP) of all distribution utilities (DUs) in the country. The DOE consolidates into the national DDP the individual DDPs of DUs: the Private Investor-Owned Utilities (PIOUs), Local Government Unit-Owned Utilities (LGUOUs), Multi-purpose Cooperatives, and the Electric Cooperatives (ECs) as endorsed by the National Electrification Administration (NEA).

The annual submission and preparation of the DDP is in compliance with Republic Act No. 9136 and is prescribed by the DOE Department Circular No. 2004-02-002. The DDP covers the DUs1 10-year program on acquisition of sub-transmission assets, expansion and rehabilitation of distribution facilities and the costs associated to these activities, projected number of customers, and the corresponding energy and demand requirements.

The 2008 DDP contains the individual DDPs of 118 DUs (Table 1).

Highlights of the 2008 DDP

Note: Figures include data from 2006 and 2007 DDP. Please see Table 5, 6, and 7.

Figure 1. Peak Demand per Grid (MW), 2003-2017

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Peak Demand Requirement

In the planning period, 2008–2017, the DUs total peak demand3, which stood at 8,132 MW in 2007, is expected to grow annually at an average rate of 4.4% (Figure 1). Luzon’s peak demand is estimated to increase annually at an average of 4.3%, with demand reaching 6,535 MW in 2008 and 9,505 MW in 2017 (Figure 2).

1 A total of 17 DUs did not submit its 2008 DDPs. These DUs are: Luzon DUs; IEEC, PUD, Corcuera Electric System, Banton Electric System, Concepcion Electric System, PANELCO III, ISELCO I, QUIRELCO, BATANELCO, PELCO III, SAJELCO, and SORECO II, Visayas DUs; Hilabaan Multipurpose Coop., Maripipi Multipurpose Coop., Mindanao DUs; Bumburan Electric Light System and CASELCO.

2 In the case of DUs without 2007 DDP submission (footnote 1), data from their respective 2006 and 2007 DDP are used.

3 Peak Demand indicated is non-coincident peak.

GRID Type of DUs Total DUs

In the Visayas, DUs demand is estimated to peak at 1,097 MW in 2008 and 1,701 MW in 2017, equivalent to an annual average growth rate of 5.1% over the planning period (Figure 3). In Mindanao, DUs are projecting an annual average rate of 4. 7% increase in peak demand, from 1,177 MW in 2008 to 1,751 MW in 2017 (Figure4).

Note: Figures include data from 2006 and 2007 DDP. Please see Table 5.

Figure 2. Luzon DUs Peak Demand (MW), 2003-2017

Luzon PIOUs and LGUOUs peak demand will increase annually at an average of 3.8%, with demand reaching 6,535 MW in 2008 and 9,505 MW in 2017 while the ECs estimate an annual average increase of 6.2%.

Note: Figures include data from 2007 DDP. Please see Table 6.

Visayas PIOUs peak demand will increase at an average of 4.3% annually, with demand reaching 473 MW in 2008, 564 MW in 2012 and further to 681 MW in 2017 while Visayas ECs are expected to increase by an annual average rate of 5.6%. (Figure 3). Mindanao PIOUs are projected to increase annually by an average rate of 3.7% in peak demand, with demand reaching 459 MW in 2008 and 616 MW in 2017. ECs expected a higher increase in peak demand at an average rate of 5.4% annually, bringing peak demand from 718 MW in 2008 to 1,135 MW in 2017 (Figure 4).

Figure 4. Mindanao DUs Peak Demand (MW), 2003-2017

Energy Requirement

Energy requirement of the DUs is estimated to increase to 51,151 GWh in 2008, 60,940 GWh in 2012 and 77,123 GWh in 20174 (Figure5). An annual average growth rate of 4.7% in the energy requirements of Luzon is projected over the ten-year planning period, from 38,844 GWh in 2008 to 58,433 GWh in 2017. Visayas is seen to register an annual average growth rate of 5.0%, from 5,871 GWh in 2008 to 9,026 GWh in 2017, whereas Mindanao will register a 5.0% annual average growth rate, from 6,436 GWh in 2008 to 9,664 GWh in 2017 (Figure 5).

Luzon’s PIOUs and LGUOUs energy requirement will increase at an average of 4.3% annually, from 32,684 GWh in 2008 to 47,376 GWh in 2017, while Luzon ECs are expecting an increase of 6.6% annually from 6,160 GWh in 2008 to 11,057 GWh in 2017. Visayas PIOUs energy requirements will grow at an average of 4.0% annually, from 2,732 GWh in 2008 to 3,833 GWh in 2017, while that of Visayas ECs will rise by 5.9% from 3,138 GWh in 2008 to 5,192 GWh in 2017.

Mindanao PIOUs energy requirement will increase at an average of 3.5% annually while their EC counterparts see a growth of 5.6%.

Infrastructure and Capital Requirements

To meet projected increase in energy requirements, about 23,929 ckt-km of lines are programmed for rehabilitation and/or upgrading and 17,448 ckt-km of lines are for construction while an additional 7,871 MVA substation capacity will be constructed5 (Figure 6 and 7). On a per grid basis, Luzon DUs will require 4,707 MVA additional substation capacity, 9,192 ckt-km of new distribution lines and rehabilitation of 19,734 ckt-km of lines. In the Visayas, DUs plan to rehabilitate 2,059 ckt-km of lines, extend coverage of distribution lines by 4,026 ckt-km, and construct new substation capacity of 1,285 MVA. In Mindanao, developments in the infrastructure requirements are focused on construction of 780 MVA substation capacity and 4,372 ckt-km of distribution lines, and rehabilitation of 2,136 ckt-km of lines. Implementing all these projects will require P70.7 billion investments (Figure8). The largest bulk of the financial investments, estimated at about P21.2 billion is for the electrification projects while P30.0 billion will be utilized in the construction of new distribution lines and additional substation capacity and P19.6 billion for rehabilitation of distribution lines. In Luzon, costs for rehabilitation of distribution lines will amount to PhP9.4 billion whereas construction of additional substation capacity and implementation of electrification projects will require P3.4 billion and P10.6 billion, respectively. Expansion projects will entail P7.6 billion in cost. Looking at similar infrastructure requirements in Visayas, expansion of new distribution lines will reach P6.1 billion. Moreover, total cost for new substation capacities is estimated at P6.3 billion, electrification projects at P4.8 billion and rehabilitation projects at P5.2 billion. Similarly, to improve system performance in Mindanao, DUs are projecting an investment of P4.7 billion in expansion of new distribution lines, P2.2 billion in additional substation capacities, P5.8 billion in electrification projects, and P5.1 billion in rehabilitation and upgrading of existing distribution lines.

Number of Customers

In 2007, DUs provided electricity services to at least 12.631 million customers. Over the 2008-2017 planning period, the DUs are expecting a 3.6% increase in the number of customers in 2008, 3.6% in 2012 and 3.5% in 20176 (Figure 9). The DUs in Luzon are projecting that their customers will reach 11.079 million in 2017 whereas DUs in the Visayas and Mindanao will have to expand their services to 3.295 million and 3.051 million customers, respectively by 2017.

Note: 2007 Figures are actual.

Figure 9. DUs Number of Customers , 2007-2017

DUs NUMBER OF CUSTOMERS

Over the planning period Luzon PIOUs and LGUOUs are projecting an increase of 2.0% in their number of customers whereas Luzon ECs project a 4.9% increase in its customers. The projected growth rate of 3.2% in the total number of customers in the Luzon grid, from 8.310 million customers in 2008 to 11.079 million customers in 2017, will have a corresponding increase in energy sales of 4.5%, with a estimated energy sales of 33,801 GWh in 2008 to 50,018 GWh in 2017 (Figure 10).

Note: 2007 Figures are actual.

In 2007, residential customers of Luzon PIOUs/LGUOUs and ECs account to approximately 55% and 36% respectively of Luzon’s total number of customers. Over the planning period, residential customers of Luzon PIOUs/LGUOUs will comprise of 48% of Luzon DUs total customers and around 43% will be that of ECs. PIOUs / LGUOUs customers will be in average 90% residential, while for the ECs an average of 92% are residential customers. In the Visayas, PIOUs are expecting an increase of 2.5% in their number of customers while the ECs project an increase of 4.8% in its customers. In 2007, of the total number DU customers in the Visayas region, 73% are residential customers of ECs and 17% are PIOU customers. Over the planning period, 77% of ECs customers will be residential while 14% for PIOUs customers. Approximately 91% in the Visayas region will be residential customers. A growth rate in energy sales of 5.12% is projected in the Visayas Grid, from 5,193 GWh in 2008 to 8,001 GWh in 2017. This is in comparison with the 4.4% expected growth rate in the number of customers over the planning period from 2.258 Million customers in 2008 to 3.295 million customers in 2017 (Figure 12).

Note: 2007 Figures are actual.

Visayas Customers - Energy Sales Profile

In Mindanao, PIOUs are projecting an increase of 3.4% in their number of customers while the ECs project an increase of 4.3% in its customers. In total, it is estimated that there will be 3.051 million customers in 2017 from 2.116 million customers in 2008. This is equivalent to a growth rate of 4.3%. With this increase in the number of customer, Mindanao DUs expect an equivalent growth rate in energy sales over the planning period by an average growth rate of 5.6%, from 5,863 GWh in 2008 to 9,095 GWh in 2017. Approximately 87 % of Mindanao DUs were residential customer in the year 2007. This percentage will relatively not change over the planning period. Of the total customers of Mindanao DUs, 21% are residential customers of PIOUs while 72% are residential customers of ECs.

Note: 2007 Figures are actual.