EDC PR 2016 (FS section)

Financial Statement
FG Hydro shall generate and deliver to these customers the contracted energy on a monthly
basis. FG Hydro is bound to service these customers until the end of the stipulated terms, the range
of which falls between August 2018 to December 2020.
Upon expiration, these contracts may be renewed upon renegotiation with the customers and due
process as stipulated by the ERC. As of December 31, 2016, there are three (3) remaining PSCs
being serviced by FG Hydro.
Details of the existing contracts of FG Hydro are as follows:
Related Contracts Expiry Date Other Developments
Nueva Ecija II Electric Cooperative,
Inc., Area 1 (NEECO II-Area 1)
August 25, 2018 The ERC granted a provisional approval of
the PSC between FG Hydro and NEECO II
Area 1 that took effect on January 13, 2014.
Nueva Ecija II Electric Cooperative,
Inc., Area 2 (NEECO II - Area 2)
December 25, 2016 The contract with NEECO II - Area 2 was not
renewed.
Edong Cold Storage and Ice Plant
(ECOSIP)
National Irrigation Administration
(NIA) Upper Pampanga River
Integrated Irrigation System
(NIA- UPRIIS)
December 25, 2020
October 25, 2020
A new agreement was signed by FG Hydro
and ECOSIP in November 2010 for the
supply of power in the succeeding ten years.
FG Hydro and NIA-UPRIIS signed a new
agreement in October 2010 for the supply of
power in the succeeding ten years.
PAMES December 25, 2008 There was no new agreement signed between
FG Hydro and PAMES. However, FG Hydro
had continued to supply PAMES’ electricity
requirements with PAMES’ compliance to
the agreed restructured payment terms.
In addition to the above contracts, FG Hydro entered into a PSC with First Gen Energy Solutions,
Inc. The PSC commenced on February 26, 2016 and will remain effective until February 25, 2018.
FG Hydro also entered into a PSC with BGI for the supply of replacement power to FG Hydro. The
contract is for a period of thirty months, commencing on February 26, 2016 and effective until
August 25, 2018.
Operation and Maintenance Agreement (O&M Agreement)
In 2006, FG Hydro entered into an O&M Agreement with NIA, with the conformity of the NPC.
Under the O&M Agreement, NIA will manage, operate, maintain and rehabilitate the
Non-Power Components of the PAHEP/MAHEP in consideration for a service fee based on actual
cubic meter of water used by FG Hydro for power generation.
In addition, FG Hydro will provide for a Trust Fund amounting to ₱100.0 million within the first
two years of the O&M Agreement. The amortization for the Trust Fund is payable in 24 monthly
payments starting November 2006 and is billed by NIA in addition to the monthly service fee.
The Trust Fund has been fully funded since October 2008.
The O&M Agreement is effective for a period of 25 years commencing on November 18, 2006
and renewable for another 25 years under the terms and conditions as may be mutually agreed
upon by both parties.
Total service fees incurred amounted to ₱100.2 million, ₱90.6 million and ₱81.1 million in 2016,
2015 and 2014, respectively, and are included under the “Cost of sale of electricity” account in the
statements of income (see Note 21).
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