DC2023-05-0014 — Revised RPS Off-Grid Rules (May 2023)

Full title: Promulgating the Revised Rules and Guidelines Governing the Operationalization of the Renewable Portfolio Standards for Off-Grid Areas Pursuant to Section 12 of the Renewable Energy Act of 2008 Issued: May 2023 (exact date blank in source; Secretary Raphael P.M. Lotilla) Effectivity: ~June 2023 (15 days after publication in 2 newspapers + UPLC-ONAR filing) Source: raw/regulations/dc2023-05-0014.md (408 lines; cleaned from raw/_ocr/regulations/dc2023-05-0014.txt, 945 lines) Repeals: DC2018-08-0024 (original RPS Off-Grid Rules, suspended during COVID-19)

Coverage

8 RULES, 27 SECTIONS, 18 pages. Operationalizes the off-grid RPS framework under RA 9513 §12, which was previously enacted (DC2018-08-0024) but never implemented due to COVID-19 and unresolved operational issues. Incorporates RA 11646 (Microgrid Systems Act, 2022) terminology renaming QTPs as MGSPs. Public consultations: 7 March 2023 Iloilo; 15 March 2023 Davao; 23 March 2023 Clark.

RULE 1 — General Provisions (SEC. 1-4)

• Scope: OSM attainment, minimum RE requirements, eligible RE facilities, dispatch protocols, Mandated Participant obligations, compliance framework
• Key definitions: DER, Eligible RE Facility, Embedded Generation, Force Majeure, Mandated Participant, Minimum RE Generation Requirement, Optimal Supply Mix (OSM), RE Developer, Small Grid, SGSO

RULE 2 — RPS Policy, Optimal Supply Mix and Minimum RE Requirement (SEC. 5-8)

• OSM definition: Total generation mix that achieves adequacy + grid reliability at least cost; optimality criterion = UC-ME subsidy reduction
• NPC-SPUG obligations: Multi-year RPS Compliance Plan as part of MEP (NPC Board → DOE → MEDP); three plan components: (i) Hybridization Program (diesel hybridized with RE); (ii) PSP Program through NPPs (competitive procurement + Take Over Program); (iii) own RE Project Development
• NEA/TransCo support for DUs: OSM software/tools, trainings (Hosting Capacity Analysis, DIS, permitting), RE resource assessments at no cost to MPs
• Minimum RE requirement: Whatever share is needed to attain the OSM, considering existing RE resources and hybrid/distributed RE adoption
• OSM determination methodology: Internationally accepted optimization software or locally developed equivalent; two constraints (stability + optimal RE penetration ceiling)
• Annual review: DOE reviews RPS Off-Grid Rules by September 30 each year for NREP/PEP alignment

RULE 3 — Eligible RE Facilities and Dispatch Protocols (SEC. 9-11)

• 10 eligible technologies: Biomass, WTE, Wind, Solar, ROR Hydropower, Impounding Hydropower, Ocean, Geothermal, Hybrid systems (RE component), other DOE/NREB-identified
• COD requirement: Commercial operations must have started on or after RA 9513 effectivity
• Eligible generation types: New installations; incremental (expansion/upgrade); non-RE to RE conversion; restored mothballed RE; other DOE-identified
• Priority dispatch: SGSO gives RE facilities priority; among multiple RE, dispatch priority = least-cost TCGR inclusive of 50% UC-ME cash generation-based incentive (if availed)
• MGSPs exception: Exempt from SGSO dispatch instructions (all other RE Developers must comply)

RULE 4 — Mandated Participants and Framework for Compliance (SEC. 12-15)

• Mandated Participants: GenCos (NPC-SPUG, NPPs, MGSPs); DUs and LGUs operating off-grid electric systems; other DOE-identified
• Three compliance cases:
  • Case 1 (single DU + single GenCo): GenCo determines OSM + prepares Compliance Plan; same applies to NPC-SPUG/MGSPs for their service areas
  • Case 2 (single DU + multiple GenCos): Host DU determines OSM; requirement shared pro-rata by contracted MWh
  • Case 3 (multiple DUs + multiple GenCos): NEA/TransCo coordinate; requirement shared pro-rata per GenCo per DU
• 5 compliance mechanisms: (a) NPC-SPUG own/contracted RE; (b) MGSP/NPP RE; (c) embedded DU RE; (d) purchased/acquired RECs from RE Market; (e) other DER (DOE/RPSCT-determined)
• RE Developer guidelines: DOE RE Contract holders are potential NPPs; most-advantageous RE subsidy offer (reducing UC-ME, inclusive of UC-ME cash incentive) wins the PSA; existing pre-DC2018 PSAs/MGSP Service Contracts recognized until expiry; additional RE beyond existing contracts must follow CSP Policy; back-to-back GenCo–RE Developer contracts allowed subject to ERC framework (SEC. 22)
• DU/LGU guidelines: Facilitate timely CSP per OSM; conduct distribution impact studies (PSGG/PDC); may develop own RE (register as RE Developer, conduct CSP for JV); may enter JV for microgrid systems (RA 11646 §15 + NEA Guidelines); may apply for CSP/competitive procurement exemption (10 MW Luzon/5 MW each Visayas-Mindanao embedded indigenous resources); integrate OSM + Compliance Plan into DDP

RULE 5 — Composite Team (SEC. 16-17)

• RPSCT creation: Multi-agency DOE-led oversight body; NEA and TransCo as resource persons/observers; DOE Legal Services for legal support
• REMB-TSMD: Technical and administrative secretariat of the RPSCT
• RPSCT responsibilities: (a) Evaluate and monitor Compliance Plans per MP; (b) Validate against OSM-derived minimum requirements; (c) Submit annual Compliance Report to DOE Secretary, ERC, and NREB after RE Registrar validation; (d) Other DOE-directed duties

RULE 6 — Timeline and Carry-Over (SEC. 18-19)

• Compliance Year 1: Based on MP’s submitted/validated RPS Requirements and Compliance Plan (no fixed start date; plan-driven)
• Carry-over: 1-year only; allowable grounds: (i) over-contracting (10-yr outlook + PSA status before ERC establishes compliance would require over-contracting); (ii) force majeure (RE supply inadequate, REC supply inadequate, or grid capacity unavailable); (iii) other causal circumstance with narrative of compliance efforts
• Carry-over process: Request addressed to RPSCT with Board Resolution-adopted plan for the carry-over period; DOE approval upon RPSCT recommendation; deemed approved 60 days after complete documents (clock paused during rectification period)

RULE 7 — Reportorial Requirements and Sanctions (SEC. 20-21)

• Annual reports: Due 15 March; 5 required documents per Missionary/Off-Grid Area
• Administrative penalty: PhP100,000–PhP500,000 or license/franchise/authority revocation
• Criminal penalty: 1–5yr imprisonment or PhP100,000–PhP100,000,000 fine or 2× damages, whichever is higher; DOE Rules of Practice and Procedure applies until RPS-specific rules issued; no cost pass-through to customers

RULE 8 — Final Provisions (SEC. 22-27)

• ERC 60-day mandate: Develop regulatory framework covering: fossil-fuel displacement stranded assets/contracts; compliance cost impacts; UC-ME rationalization; cost recovery mechanisms; DOE-ERC regular coordination meetings
• IEC: DOE to develop comprehensive IEC campaign per RA 9513 IRR §31
• Repealing clause: Repeals DC2018-08-0024; all inconsistent issuances repealed/amended/modified

Pages Created/Updated

Full text: Cleaned copy