EFFECTS ON THE INTERIM AGREEMENT
WITH PHILPHOS & CENTURY *
* Based on Hourly Average Spot Market Prices from April 23 to April 30, 2011
INTERIM AGREEMENT
CUSTOMER TO BE CONTRACTED
AGREEMENT
Philphos 9.4 MW May – December 2011 = 0 MW January 2012 onwards= 9.7 MW
Century 6.7 MW Incremental power demand from May to December 2011 (from 2.4223 to 6.7 MW)
PHILPHOSScenario 1
To maximize nomination of contracted capacity equivalent to 9.4 MW
Expected Result:
Amount
MEI's Payable to KSPC
(252,689,146)
MEI's Collectible from Philphos 0
MEI's Collectible from Market Operations
122,673,821
Total Payable in PhP
(130,015,324)
PHILPHOSScenario 2
To nominate zero (0) and pay the 75% of theUnnominated Quantity at the end of the year
Expected Result:
Amount
MEI's Payable to KSPC 0
MEI's Collectible from Philphos 0
MEI's Payable to KSPC for UQ (193,137,739)
Total Payable in PhP (193,137,739)
PHILPHOSStrategy in the Nomination of Hourly Contracted Quantity
*If Forecasted Market Price is higher than 1.4017 P/kWh, Adopt Scenario 1: Maximize Nomination of Philphos @ 9.4 MW*If Forecasted Market Price is equal or lower than 1.4017 P/kWh, Adopt Scenario 2: Nominate Zero (0) and Pay the 75% of the Unlifted Quantity at the end of the year*To get the Break-even Spot Market Price of 5.9477 P/kWh the prevailing latest Average Spot Market Price must increase by 32%
Amount
MEI's Payable to KSPC (247,726,528)
MEI's Collectible from Philphos 0
MEI's Collectible from M.O. 118,343,892
Total Payable in PhP (129,382,636)
Expected Result:
PHILPHOSHour 1 Hour 2 Hour 3 Hour 4 Hour 5 Hour 6 Hour 7 Hour 8 Hour 9 Hour 10 Hour 11 Hour 12
1.59
1.65
1.97
1.27
2.05
3.83
3.90
1.56
0.67
0.51
0.55
0.90
2.2975
2.2475
2.0041
2.6227
1.9521
1.2323
1.2137
2.3243
3.5636
3.9421
3.8375
3.1309
59% 65% 97% 27% 105% 283% 290% 56% -33% -49% -45% -10%
Hour 13 Hour 14 Hour 15 Hour 16 Hour 17 Hour 18 Hour 19 Hour 20 Hour 21 Hour 22 Hour 23 Hour 24 Ave.
0.92
0.27
0.40 0.65 1.15 1.39 0.29 0.91 1.44 1.36 1.09 1.37
3.0952
4.6823
4.2571 3.6039 2.7710 2.4918 4.6032 3.1132 2.4353 2.5195 2.8520 2.5063
-8% -73% -60% -35% 15% 39% -71% -9% 44% 36% 9% 37% 32%
CENTURYScenario 1
To maximize nomination of contracted capacity equivalent to 6.7 MW
Expected Result: Amount
MEI's Payable to KSPC
(180,108,221)
MEI's Collectible from Century
130,025,851
MEI's Collectible from Market Operations23,309,018
Total Payable in Php
(26,773,352)
CENTURYScenario 2
To nominate the scheduled incremental consumption andpay the 75% of the Unnominated Quantity at the end ofthe year.
Expected Result:Amount
MEI's Payable to KSPC 0 MEI's Collectible from Century 0 MEI's Payable to KSPC for UQ (40,353,844) Total Payable in PhP (40,353,844)
CENTURYStrategy in the Nomination of Hourly Contracted Quantity
*If Forecasted Market Price is higher than 1.5313 P/kWh, Adopt Scenario 1: Maximize Nomination of Century @ 6.7 MW*If Forecasted Market Price is equal or lower than 1.5313 P/kWh, Adopt Scenario 2: Nominate Zero (0) and Pay the 75% of the Unlifted Quantity at the end of the year*To get the Break-even Spot Market Price of 5.9329 P/kWh the prevailing latest Average Spot Market Price must increase by 32%
Amount
MEI's Payable to KSPC (168,462,023)
MEI's Collectible from Philphos 130,025,851
MEI's Collectible from M.O. 20,222,792
Total Payable in PhP (18,213,380)
Expected Result:
Comparison of PayablesPhilphos vs Century
9.4 MW Philphos Estimated Payable = 129,382,636 PhP (Scenario 1*)
6.7 MW Century Estimated Payable = 18,213,380 PhP (Scenario 1*)
* - Trade in full with due consideration of the threshold price
Expenses for PHILPHOSMNE = 3.7255 P/kWh x 225,600 kWh x 63 days x 1.12 VATPR => MNE = P59,303,761
Where: P3.7255 P/KWH = Average NPC TOU price in Visayas225,600 kWh = (9400 kW x 24 Hours) daily market exposure of PHILPhos.
COMMITMENT FEE:= ¼ * 1% (MNE)= P148,259
COMMISSION FEE:= 1/8 * 1% (MNE)= P74,130
Total Commitment Fee & Commission Fee = P 222,389
Total = P 59,526,150
Other Expenses to be Incurred
Expenses for CENTURY PEAK
MNE = 3.7255 P/kWh x 100,800 kWh x 63 days x 1.12 VATPR => MNE = P16,771,152
where: 100,800 kWh = (4200 kW x 24 Hours) market exposure of Century Peak.
COMMITMENT FEE:= ¼ * 1% (MNE)=P 66,244
COMMISSION FEE:= 1/8 * 1% (MNE)= P 33,122
Total Commitment Fee & Commission Fee = P 99,366 Total = P 16,870,518
Other Expenses to be Incurred