DC2022-05-0016: Graduation and Rationalization of the UC-ME Subsidy

Status: operative
Confidence: high
Effective date: 2022-06-09

Signed: 24 May 2022 | Effectivity: 15 days after publication

Implementing instrument for the UC-ME graduation and rationalization mandate in DC2019-01-0001 Rule 10 (2019); also implements Section 14(a) of RA 11646 (Microgrid Systems Act, 2022) requiring an NPC Graduation Plan.

Key Provisions by Rule

Rule 1 — Scope: DUs, NPC, TransCo, NPPs, RE developers (§17D cash incentive), MGSPs, all UC-ME-receiving customers.

Rule 3 — Interconnection: UC-ME ceases automatically upon Grid connection (§3.1). TRANSCO must submit updated 10-year interconnection plan to DOE within 60 days of effectivity (§3.3). New PSAs must consider TDP interconnection timelines (§3.5).

Rule 4 — Least-Cost Generation Planning: Amends DC2019-01-0001 §6.5 to cover ALL off-grid areas (§4.1). TRANSCO leads least-cost planning for SGSO areas; DUs/TRANSCO report to DOE within 180 days (§4.4.3). NREB to study RE developer cash incentive mechanism within 6 months (§4.4.6). NPC submits annual plant efficiency improvement program to DOE by June 15 (§4.4.7). NPC must convert diesel pocket islets to RE-based hybrid microgrids (§4.5.6).

Rule 6 — Customer-Level Rationalization: ERC has sole authority to set new rate structures (§6.1.2). Large customers pay more than marginal customers (§6.1.3). Non-technical losses (pilferage) excluded from UC-ME cost recovery (§6.3). Four eligible subsidy categories (§6.2): NPC missionary activities, NPP cost recovery, MGSP/DU-microgrid, RE developer cash incentive.

Rule 7 — 10-Year Graduation and Rationalization Plan: Each EC must prepare plan with 6 required components (§7.2); reviewed every 3 years. NEA consolidates into Integrated Plan → DOE. NPC Graduation Plan required per RA 11646 §14(a) (§7.7).

Rule 8 — Monitoring: NPPs report monthly to NPC and DU. MGSPs report monthly to NPC. NPC semi-annual report to PSALM on UC-ME utilization (§8.1.3). PSALM quarterly to DOE/DOF/ERC (§8.1.5).

Annex A: 18 indicative/potential interconnection projects from TDP 2022-2040 Ch. 11; 4 filed to ERC (BMIP, CCIP, QMIP, PALECO/ORMECO/OMECO); 14 for further study.

Pages Updated

Universal Charge for Missionary Electrification (UC-ME) — added source to frontmatter; added pilferage exclusion (§6.3), customer-class differentiation (§6.1.2-6.1.3), 4 UC-ME eligibility categories (§6.2), 6-component 10-year plan (§7.2), NPC Graduation Plan (§7.7)
Island Grid Interconnection — added full Annex A 18-project table; added source to frontmatter

Full text: Cleaned copy