Philippine Energy Policy Wiki

Small Grid System Operator (SGSO) Framework

Status
operative
Confidence
high

The Small Grid System Operator (Small Grid SO) framework governs generation dispatch and real-time control of power systems in off-grid areas. The framework originated in Rule 7 of DC2019-01-0001 (January 2019), which set the default: the distribution entity is SO when a Small Grid has only one DU and one generator; otherwise a Third Party SO (NPC-SPUG or ERC-accredited ISO) is engaged [DC2019-01-0001, Rule 7.1.2, 2019-01]. DC2021-11-0039 (November 2021) amended Rule 7.1.2, mandating TransCo as SO in areas with HV lines or multiple GenCos [DC2021-11-0039, Rule 3, 2021-11]. The current operative classification rules are set by DC2021-11-0039.

Definitions

Small Grid — the backbone system of interconnected High Voltage (HV) or Medium Voltage (MV) lines, substations, and related facilities not connected to the Grid of Luzon, Visayas, or Mindanao [DC2021-11-0039, §2.25, 2021-11].

Small Grid SO — the party responsible for generation dispatch, real-time control, management of operating reserves, reactive power support, black start, and other operating requirements to ensure safety, power quality, stability, reliability, and security of the Small Grid [DC2021-11-0039, §2.27, 2021-11].

Small Grid Control Center (SGCC) — the control center that operates and controls the Small Grid power system [DC2021-11-0039, §2.26, 2021-11].

SO Classification Rules

DC2021-11-0039 Rule 3 assigns SO responsibility based on the Small Grid configuration [DC2021-11-0039, Rule 3, 2021-11]:

ConfigurationSystem Operator
More than one DU + HV line + more than one GenCoTransCo
One DU + HV line + more than one GenCoTransCo
One DU + MV line + more than one GenCoTransCo
One DU + MV line + one GenCoDU (default) — may opt for third-party SO
Other off-grid areas not covered aboveNPC-SPUG, Qualified Third Party, or ERC-determined entity

A DU that is the default SO may seek a third-party SO (NPC-SPUG or any ISO accredited by ERC) per DC2019-01-0001 Rule 7 [DC2021-11-0039, §3.2, 2021-11].

TransCo Implementation Requirements

Implementation Plan (Rule 4)

Within 60 days of effectivity, TransCo must submit a Small Grid SO Implementation Plan to the DOE covering [DC2021-11-0039, Rule 4, 2021-11]:

  • Area-specific dispatch protocol
  • Control strategies and procedures
  • Supporting tools for efficient dispatch
  • Criteria for entry into each area as SO
  • Plan for conveyance or acquisition of existing facilities from DU/NPC-SPUG/ISO

The Plan must include a Capital and Operating Expenditure Program defining a 5-year timeline of off-grid areas. It is updated annually (approved by TransCo Board, submitted by January each year) and integrated into the Missionary Electrification Development Plan (MEDP) [DC2021-11-0039, §4.2, 2021-11].

Operational Setup (Rule 6)

  • For HV facilities: TransCo enters an agreement with the transmission asset owner and/or existing SO on operation, maintenance, improvements, and ownership [DC2021-11-0039, §6.4, 2021-11]
  • For MV facilities: TransCo enters an agreement with the DU for DU-owned distribution and substation facilities [DC2021-11-0039, §6.5, 2021-11]
  • TransCo establishes an SGCC and develops system operation tools [DC2021-11-0039, §6.6, 2021-11]
  • TransCo establishes an SO Technical Committee — SO manager as head + DU/NEA/NPC/other user representatives — to formulate area-specific governance rules [DC2021-11-0039, §6.7, 2021-11]
  • System operation is guided by the Philippine Small Grid Guidelines (PSGG) (ERC Resolution 15/2013) and the Philippine Small Grid Dispatch Protocol (PSGDP) (ERC Resolution 15/2014) [DC2021-11-0039, §6.3, 2021-11]
  • TransCo submits annual system operation reports to DU, DOE, ERC, NEA, and NPC [DC2021-11-0039, §3.5, 2021-11]

Optional Assistance to DUs (Rule 5)

Upon DU request, TransCo may also [DC2021-11-0039, Rule 5, 2021-11]:

  • Assist in optimal power development planning, including PSPP and UC-ME subsidy rationalization/graduation plans
  • Conduct optimal generation expansion planning (least-cost capacity, technology, location, timing)
  • Develop backbone network expansion plans, considering DDP and eventual grid interconnection
  • Prepare the Island Interconnection Development Plan (IIDP)
  • Verify UC-ME subsidy claims for eligible power plants
  • Prepare Small Grids for eventual interconnection (technical advisory, protection/communication/automation upgrades, PSA amendment advice, ancillary service assessment)

Transitional Provisions (Rule 9)

  • Default SO/NPC-SPUG/ISO: submit phase-out plan to TransCo within 30 days of effectivity
  • TransCo: submit priority list of small grids to DOE, NEA, NPC, and DUs upon receipt of phase-out plans
  • Default SO continues until TransCo or third-party SO assumes functions
  • Upon ERC application for interconnection: existing SO prepares revised phase-out plan and continues until the Transmission System Operator of the main Grid assumes [DC2021-11-0039, Rule 9, 2021-11]

ERC Regulatory Support

ERC must develop rules and procedures to support this Circular’s implementation within 120 days of effectivity [DC2021-11-0039, Rule 8, 2021-11].

Implementation: Mindoro Grid

The most prominent application of this framework is the Mindoro Grid, where TransCo operates as Stand-alone Small Island Grid System Operator (SIGSO). TransCo is finalizing the Mindoro Grid Protection Philosophy and Setting Guidelines. An SO exit/phase-out plan will be prepared ahead of the Mindoro Grid’s eventual interconnection with the Luzon Grid via the Mindanao-Visayas Interconnection Project (MVIP) [PEP 2023-2050 Vol. III, p.48, 2023].