1. HAPUA WG No.5 (ESI Services) Updates The WG2, 5, 6 and Chairman of APGCC Meeting Jakarta, Indonesia ● 26 February 2009 By WG 5 Project Coordinator: MR. MELBURGO S. CHIU VP – Sales and Services, Luzon Generation, WM & DRFF National Power Corporation PHILIPPINES

2. Recommendations of the WC & APGCC  Conduct the study and identify features of existing bilateral arrangements to be used later to Multilateral Arrangement.  Carry out study on bilateral basis first between Members countries of Subsystem A. Commercial Issues, Tax, Regulation, Tariff System and Social Impact are to be included in the study.  Provide various contractual models between two countries and recommend for further improvement if needed.  Prioritize the major issue on the commercial/regulation tax and tariff aspect of the interconnection which may impasse the study.

3. WG5 Updates WG5 conducted on 25 Feb 2009 kick-off meetings of its 2 new projects that will undertake aforementioned APGCC-related tasks: WG5 conducted on 25 Feb 2009 kick-off meetings of its 2 new projects that will undertake aforementioned APGCC-related tasks:  Project No. 5 – Regulatory Issues & Challenges of Regulated Entity/ Owner/ Investor and Consumers  Project No. 6 – Bilateral Interconnection Arrangement

4. Project 5 Update  Inclusion of the following in its TOR Objectives and Scope of Study :  To identify the regulatory and legal challenges/ issues related to cross border electricity trading/ transaction.  Addition of the following Deliverable:  Information and recommendations on the regulatory and legal challenges/ issues related to cross border electricity trading/ transaction.

5. Project 5 Update Timeline of Work Plan was adjusted: Timeline of Work Plan was adjusted:  Conduct survey among members – March to Sept 2009  Initial draft of the report – Oct 2009  Preliminary results of the study – Dec 2009  Finalization of the study – March 2010  Submission of Project Completion Report – May 2010

6. Project 6 Update The Kick-off meeting of Project 6 was held with 18 participants from 9 member countries; 5 from Subsystem A and 2 each from Subsystems B and C. The Kick-off meeting of Project 6 was held with 18 participants from 9 member countries; 5 from Subsystem A and 2 each from Subsystems B and C. A brief presentation on the Project TOR already approved by HAPUA WC and APGCC meetings in December 2008 was given with additional recommendations as follows. A brief presentation on the Project TOR already approved by HAPUA WC and APGCC meetings in December 2008 was given with additional recommendations as follows.

7. Project 6 Update Terms of Reference (TOR) Terms of Reference (TOR)  The Meeting agreed to change the Project title from “Bilateral Contract Benchmarking” to “Bilateral Interconnection Arrangement” and the project deliverable will be the Model of Bilateral Interconnection Agreement.  The Meeting had detailed discussion on the instruction made by the APGCC that the relevant study should also include the social impact. Considering that it is a very broad issue, the Meeting agreed that it should be excluded from the Project scope of work.

8. Project 6 Update Framework of Study [1/3] Framework of Study [1/3]  An overview of the ASEAN interconnection: the existing, the ongoing and the potential projects in each Subsystem, highlighting on Subsystem A which is the Project first step, had been made with recommendation to update with current scheme of the ASEAN Power Grid.

9. Project 6 Update Framework of Study [2/3] Framework of Study [2/3]  According to the Project TOR, a common understanding had been emphasized that at the first step “Bilateral Contract” is defined here as contract for cross border power purchase and sale between utility and utility of HAPUA member countries. Also, to meet the 12 month timeline as committed in the TOR, the first stage of the Project will be focused mainly on Subsystem A.

10. Project 6 Update Framework of Study [3/3] Framework of Study [3/3]  The Meeting agreed with the project framework of study as proposed by the Project Leader with brainstorm covering technical, commercial, and legislations and regulatory issues. Pro and Con factors for cross border interconnection were also mentioned.  According to the meeting concept, benchmarking study of the Bilateral Interconnection Agreement will be based on exchanges of information, knowledge sharing to be developed as guidelines for the contract model.

11. Project 6 Update Model of Bilateral Interconnection Agreement, preliminary prepared by the EGAT Power Purchase Agreement Division, was presented to the Meeting. Model of Bilateral Interconnection Agreement, preliminary prepared by the EGAT Power Purchase Agreement Division, was presented to the Meeting.

12. Bilateral Interconnection Agreement Model Definitions and Interpretation Term Coordinating Committee Interconnections Interconnected Utility Responsibility Miscellaneous Provisions Sale and Purchase of Electrical Energy Billing and Payments Tax and Tariff Metering Default and Termination BIA Conditions Precedent

13. Model of Bilateral Interconnection Agreement (BIA) Model of Bilateral Interconnection Agreement (BIA)  Detailed discussion, comments and recommendations on each item had been deliberated and expressed.  Focus was made on commercial issue regarding the reliability and viability of the interconnection with conclusion that alternative provisions be incorporated in the model e.g. long/short term agreement, capacity and energy transactions, price quotation/fixed tariff with variable factors. Project 6 Update

14. Next step Next step  EGAT as Project Leader will develop the first draft of the Model Agreement as discussed and will distribute to all Project Members for consideration by e- mail expecting to have feedback incorporated in the second draft ready for the next meeting.

15. Project 6 Action Plan

16. Date and Venue of Next WG5 Meeting The WG 5 and its projects will have back to back meetings, in Vietnam around October 2009. Exact date will be confirmed at a later date. The WG 5 and its projects will have back to back meetings, in Vietnam around October 2009. Exact date will be confirmed at a later date.

17. Thank you! Terima kasih! WG5 Project Coordinator: MR. MELBURGO S. CHIU Vice President, Sales & Services, Luzon Gen, WM & DRFF National Power Corporation (NPC) Quezon Avenue corner BIR Road, Diliman 1100 Quezon City, PHILIPPINES Tel. no.: +63-2-922-8430, +63-2-924-5241 Fax no.: +63-2-924-5241 E-mail: MSChiu@napocor.gov.ph