The unprecedented challenges of 2020 were overwhelming, but 1AP powered through and remained steadfast in Advancing Business and Communities. Our experiences and learnings from the past year made us stronger and more resilient than ever, ready to conquer greater heights in the next decade and beyond.

Emmanuel V. Rubio

President and CEO, AboitizPower

Metrics That Matter

9.68

Billion

Income contribution to AEV

3494

MW

Attributable Net Sellable Capacity

0.43

Total Recordable Injuries Rate

Zero Fatality Incidence in our operations in 2020

40

Number of Initiatives

Environmental Improvement and Biodiversity Initiatives in 2020

Meanwhile, our Distribution business continued keeping the lights on for our customers and communities. Even with the quarantine measures in place, efforts were made to do meter readings for the majority of our customers and various initiatives were implemented to make bills payment safer and more convenient amid challenging times. All our distribution units have complied with the applicable guidelines and advisories from the Department of Energy (DOE) and ERC despite its impact on our collection efficiency and cashflow.

Among the key achievements of our Distribution Group in 2020 was the franchise renewal of Davao Light and Power Company. RA 11515 was signed into law effective December 26, 2020 to renew the Davao Light franchise for another 25 years once it expires in September 2025.

As part of our commitment to continuously improving our services, Davao Light also launched its new Calinan substation, Davao City’s first digital substation located within the district. Cotabato Light and Power Company also upgraded its Malagapas substation. These upgrades provide our distribution utilities with an increased energy capacity, ensuring the reliability and better delivery of power supply across our franchise areas.

The two 50-MW transformers of Malvar Enerzone Corporation were successfully energized and started supplying the energy needs of the various locators of the 212-hectare Light Industry & Science Park IV (LISP IV) in Malvar, Batangas. These operational developments, both in our Generation and Distribution businesses, are well aligned with our availability and reliability targets to ensure the continued delivery of our energy products and services to the customers and communities we serve.

POSITIVE ENERGY

At the core of AboitizPower’s 2020 milestones was the positive energy that gave our 1AP team a boost up, along with our 1AP culture of high performance, owner’s mindset, learning and growth, atmosphere, and our values of integrity, teamwork, innovation, responsibility, and service excellence. With this positive energy, all our team members — onsite, in the field, and working from home — contributed to our strategic objectives and helped ensure that these remain relevant to our stakeholders. Even while grappling with the impact of the pandemic themselves, our 1AP team went the extra mile to support one another and worked together to fulfill our ABC.

We were able to sustain our corporate social responsibility (CSR) efforts for our customers and host communities. We continued to be stewards of our environment through various conservation initiatives. We remained steadfast and always ready to lend a helping hand to typhoon-stricken areas, as well as communities that needed support in the fight against COVID-19.

In 2020, AboitizPower was also not short of accomplishments in terms of our ESG performance. AboitizPower has continued to be recognized as a constituent company in the FTSE4Good Index Series for three years in a row, affirming our long-standing commitment to sustainability. We have also seen an improvement in our score in the Corporate Sustainability Assessment (CSA), from 69th place in 2019, we now rank 47th in this global benchmarking index.

With our invaluable experiences and learnings from 2020, AboitizPower is well positioned to carry out our growth strategy in the next 10 years and support the country’s economic growth and recovery.

Our key strategy remains the same, which is to aggressively expand our Cleanergy portfolio, aiming for a 50:50 balance between our Cleanergy

AboitizPower is a pioneer of renewable energy in the Philippines and today, together with our partners, we are the country’s largest owner and operator of renewable energy based on installed capacity.

While we continue to help address the country’s energy trilemma of energy security, energy equity, and environmental sustainability, we will also pursue our international aspirations, focusing on wind, hydro, and solar projects. We will also explore gas as an addition to our portfolio in an effort to serve our ever-increasing baseload energy demand.

We are bullish about the future of AboitizPower and of the country as the economy is slowly getting back on track and with the government’s well thought out roadmap for the power sector. With the unwavering support of our 1AP team and our strong partnerships with our stakeholders, we trust that AboitizPower will be able to sustain the positive energy and continue to add value to the Aboitiz Group’s 100 years of Advancing Business and Communities.

MILESTONES

  • Posted an income contribution to AEV of PHP9.68 billion, down by 27% year-on-year from PHP13.33 billion in 2019
  • Remitted PHP671 million in ER 1-94 funds for COVID-19 response and relief to 130 host beneficiaries
  • Smoothly transitioned to Work-From-Home (WFH) and 14-day Facility Quarantine (FQ) set-up without any COVID 19-related business interruption
  • Rolled out a 1AP-wide Operational Technology (OT) Security Minimum Standard, and deployed Continuous Threat Detection (CTD) System for OT assets in Therma Visayas, Inc. (TVI) and Visayan Electric, to manage cybersecurity risks
  • Developed a Safety, Health, and Environment (SHE) maturity model and index designed to ensure an objective, evidence-based SHE culture assessment of every facility and business unit
  • Achieved a 0.43 injury rate for every 1 million manhours worked in 2020, a remarkable 69% improvement from when the 1AP safety culture was launched in 2015 Achieved Quality Management

GENERATION BUSINESS GROUP

  • AboitizPower owned 4,429 MW of net attributable capacity with the addition of GNPower Dinginin supercritical coal-fired power plant in Bataan to our portfolio
  • Scatec ASA (formerly Scatec Solar ASA), a Norwegian company and a major global power player with extensive experience in renewable energy development and operation, signed a binding agreement to acquire 100% of SN Power, our partner in MORE and its subsidiaries
  • Renewable and Oil Business Units exceeded their availability targets and surpassed their 2019 performance
  • SNAP plants demonstrated an excellent operating performance despite the twin impacts of COVID-19 and the drought; Commercial availability reached 98.9% and combined trading efficiency reached 95%
  • Therma South, Inc. (TSI) Unit 2 in Toril, Davao City, returned to service in May and planned outages were executed as scheduled despite challenges brought about by COVID-19
  • Ancillary Services (AS) Certification was secured for Unit 2 of TVI in Toledo City, Cebu; Ancillary Services Procurement Agreement (ASPA) – Contingency Reserve (CR) Compliance of Pagbilao Units 1 and 2 in Quezon Province has significantly improved in the fourth quarter
  • Contracted an Embedded ASPA with the National Grid Corporation of the Philippines (NGCP) for the 145-MW Therma Mobile, Inc. (TMO) in Navotas City
  • Commenced the operation of Hedcor’s Southern Mindanao Regional Control Center
  • Started the commercial operations of the 39-MW Therma Power Visayas, Inc. power plant in Naga, Cebu
  • Completed the modified steam turbine design and ongoing manufacture of turbine for the
  • AP Renewables, Inc. (APRI) Makban Geothermal Plant Unit 1 Steam Path Upgrade in Laguna
  • Commenced the make-up well drilling activities at APRI Tiwi Geothermal Plant in Albay, where one 12-MW production well successfully flowed and was put into service
  • Issued a Notice to Proceed (NTP) to Wartsila and Aboitiz Construction for the 49-MW Therma Marine, Inc (TMI) Battery Energy Storage System (BESS) Hybrid Project in Maco, Davao de Oro
  • Completed the technical and commercial viability testing of the pilot floating solar project in Isabela; Started formal feasibility study for a floating solar plant in Magat Reservoir with a potential capacity of 150 MW
  • Oil Business Unit secured its Energy Management System Certification ISO 50001 – the first of its kind across AboitizPower
  • Coal Business Unit has achieved 8.1 million safe manhours since 2016
  • Kicked off SNAP’s Data Acquisition, Reporting, and Analytics (DARNA) data science and artificial intelligence (AI) program
  • Implemented the Process Safety Program to provide an objective, evidenced-based gauge of the operations and maintenance of critical safety equipment in a facility

DISTRIBUTION BUSINESS GROUP

  • RA 11515 was signed into law effective December 26, 2020 to renew the Davao Light franchise for another 25 years once it expires in September 2025
  • Energization of the new Malvar Enerzone (Malvez) 50 MVA substation
  • Performance on the System Average Interruption Duration Index (SAIDI) and resolution of emergency troubles within 1.5 hours have significantly improved compared to 2019 levels; Visayan Electric, Cotabato Light, and the Enerzone Group were able to respond to emergency calls within 30 minutes at 96% of the time
  • Overall Customer Satisfaction Index of all Distribution Utilities is at 91% despite constrained mobility of team members brought about by community quarantines
  • Increased roll out of digital solutions to enhance customer convenience and safety: (1) MobileAP for customers to view their electricity bills anytime, anywhere; (2) electronic billing (eBill); (3) Meter Reader App; and (4) electronic Master Service Contract (eMSC) for new service applications
  • Additional cashless payment channels such as automatic debit arrangements (ADA) were rolled out in Visayan Electric and Subic Enerzone, and UBP online and over-the-counter modes of payment have been extended to Lima Enerzone — bringing the total number of customers availing of cashless payment transactions to 103,239
  • With the massive slowdown of economic activity at the height of the pandemic, peak demand significantly dropped to -25% versus 2019 levels but gradually picked up in the succeeding months and ended the year at -6%
  • All Distribution Utilities successfully passed the Surveillance Audit for the Environmental Management System (EMS) ISO 14001 and Occupational Health and Safety Management System (OHSMS) ISO 45001, with zero non-compliance
  • Visayan Electric and Davao Light successfully passed the recertification with zero non-compliance, while Cotabato Light and the Enerzone Group passed the Surveillance Audit for Quality Management System (QMS) ISO 9001
  • Public Safety performance metrics were put in place to ensure that all actions that could prevent third-party electrocution incidents are accounted for and improved

OUTLOOK

  • Participation in the Green Energy Auction Program (GEAP), the competitive bidding process for the procurement of renewable energy supply
  • Deployment of Continuous Threat Detection (CTD) System for all other Business Units
  • Implementation of vaccination program for team members

Generation Business Group

  • Commissioning and full commercial operations of Unit 1 of the 2×668-MW GNPower Dinginin supercritical coal-fired power plant in Bataan
  • Commissioning and commercial operations of the 49-MW TMI BESS project by the fourth quarter of 2021 and first quarter of 2022, respectively, to boost TMI’s capability to support the Mindanao grid
  • Construction of the Magat BESS project is targeted in the second half of 2021 while commercial operations are targeted to commence in 2023. In connection with the project, SNAP is also looking at upgrading the Magat-
  • Santiago transmission line, which is now included in the Transmission Development Plan of NGCP
  • Start construction of a 50-MW solar project in Luzon within the second half of 2021
  • Securing of ASPA Contract for Therma Power Visayas Inc
  • Energization of Sacasun Southline by March 2021, that will allow the 59-MWp San Carlos Sun Power Inc (SACASUN) utility-scale solar photovoltaic power plant in San Carlos City, Negros Occidental to connect to the grid
  • Based on the results of the pre-feasibility studies, phase one of the SNAP Magat Floating Solar project in Ramon,
  • Isabela, will be for 67 MW with a plan to install up to 150 MW, depending on the final technical solution and layout

Distribution Business Group

  • 100% completion of rural electrification projects
  • Fully Digital 50MVA Ponciano Substation of Davao Light and two units of 33MVA Paknaan Substation of Visayan Electric
  • Elevated Metering Centers in the Cotabato Light service areas
  • Expansion of Advanced Metering Infrastructure (AMI) communication coverage
  • Deployment of (1) eBill-through-SMS (2) MobileAP v2.0 with additional features on registration, login, and payment; and (3) Prepaid 2021 for prepaid electric service, which covers enhancements, fixes and support, as we onboard more customers
  • Re-certification of Visayan Electric and Davao Light on the Environmental Management System (EMS) ISO 14001 and Occupational Health and Safety Management System (OHSMS) ISO 45001
  • Re-certification of Cotabato Light and Enerzone Group on the Quality Management System (QMS) ISO 9001

ABC Story

Experts have been warning of a pandemic for several decades already, and while developments in the field of medical science are far more advanced today than it was 30 years ago, nobody expected the effects of COVID-19 across all facets of life to be this dire.

Economies across the globe, even the most developed ones, were not spared from the health crisis. Businesses are still reeling from the repercussions of extended lockdowns and the staggered rollout of vaccines has left communities in developing countries vulnerable.

The Aboitiz Group’s power arm, AboitizPower, had its share of organizational challenges brought about by the pandemic in 2020, but these did not hinder the company from fulfilling its promise of advancing business and communities.

At the onset of local quarantines in the country, the Department of Energy (DOE) issued a circular allowing communities that host power generation projects to use their revenue shares from these facilities under the Energy Regulations No. 1-94 (ER 1-94) program to help combat the effects of COVID-19.

“Given the severity of the COVID-19 crisis, we at the DOE came up with the necessary circular that would enable host LGUs to use their available ER 1-94 funds to augment their COVID-19 response funding,” DOE Secretary Alfonso G. Cusi said. “We are pleased to learn that our vision is being fully realized. Malayo ang nararating ng bawat tulong sa panahon nitong pandemya (Every help goes a long way during this pandemic),” he added.

AboitizPower President and Chief Executive Officer Emmanuel V. Rubio welcomed this move, saying this development was a push in the right direction as it was expected to aid in strengthening local government response to the ongoing health crisis.

“This is our contribution to the government’s efforts to ensure that all LGUs have enough resources to help contain, mitigate, and eventually eliminate the spread of COVID-19 in their areas,” Rubio added.

As of December 2020, the AboitizPower group and the DOE have remitted a total of P671 million in direct benefits to around 130 host communities all over the Philippines, helping them stay afloat during these trying times.

The ER 1-94 Program is a policy under the DOE Act of 1992 and the Electric Power Industry Reform Act of 2001 (EPIRA), which stipulates that host communities will get a share of one centavo for every kilowatt-hour (P0.01/kWh) generated by power plants operating in its area.

The fund can be used by host beneficiaries for the electrification of areas or households that have no access to power, development and livelihood programs, as well as reforestation, watershed management, health, and environmental enhancement initiatives. The circular covering ER 1-94 funds allows host LGUs to use their shares to help manage their COVID-19 response in accordance with the Bayanihan to Heal as One Act.

Initiatives that were implemented by AboitizPower’s host LGUs include holding areas or distribution centers, medical and PPE supplies, facility decontamination, and relief goods to feed low-income households during the prolonged quarantine period.

AboitizPower has been at the forefront of social development in its host communities throughout the years and will even be more so as the nation continues to face this health crisis.

In strategic collaboration with our partner organizations and local governments, we will pursue our brand promise of advancing business and communities even more implicitly as the nation continues to face this global health crisis.