DC2024-03-0010 — ERC PDM Authority Amendment to DC2023-10-0029

Full title: Amendment to Department Circular No. DC2023-10-0029 Providing Specific Auction Policy and Guidelines for Non-FIT-Eligible Renewable Energy Technologies in the Green Energy Auction Program Issued: 25 March 2024 Issuing authority: DOE Secretary Raphael P.M. Lotilla Effectivity: Immediately after publication in two newspapers of general circulation Amends: DC2023-10-0029 (§5.1 ¶2, §5.2 ¶2 deleted, §5.4 ¶2, §6)

Flagged discrepancy: the knowledge page’s frontmatter used effective-date: 2024-03-25 (the signing date), while the body text states effectivity is “immediately after publication in two newspapers of general circulation” — i.e., not necessarily the same day as signing. The source summary’s frontmatter used the coarser effective-date: 2024-04. Per merge policy the source-summary’s value is preferred and used above, though it is an approximation rather than an exact date confirmed in either file.

This circular makes four changes to DC2023-10-0029: it transfers Price Determination Methodology (PDM) rulemaking authority from the DOE to the ERC; removes the DOE’s obligation to publish price evaluation parameters; revises the price offer evaluation process to flow through the ERC’s own PDM; and softens the winning bidder standard from “approved” to “consistent with PDM.” It also introduces indexation for Non-FIT GET as part of the ERC’s PDM.

Context

DC2023-10-0029 (December 2023) gave the ERC authority to set parameters and criteria for evaluating Non-FIT Price Offers within 90 days of notification by the DOE [DC2023-10-0029, §5.1, 2023-12-12]. Under that original framework, both the DOE (which published the criteria) and the ERC (which issued them) had overlapping roles. This circular clarifies the split: the ERC owns the PDM entirely, and DOE is a conduit that endorses qualified bids [DC2024-03-0010, §Whereas, 2024-03-25].

The circular was issued nine months before the GEA-3 auction proper (11 February 2025) — giving the ERC its 60-day window to issue a PDM before GEA-3 bids were evaluated.

Section 1: ERC Promulgates Its Own PDM (§5.1 ¶2 amended)

New text:

“Within sixty (60) calendar days from effectivity of this Circular, the ERC shall promulgate the rules on the Price Determination Methodology (PDM) for Non-FIT-Eligible RE Technologies in the GEAP taking into consideration the set of parameters and criteria based on, among others, cost range assumptions and weighted cost of capital of Project Internal Rate of Return (PIRR). These shall be used in its evaluation of Price Offers submitted by Bidders.” [DC2024-03-0010, §1, 2024-03-25]

The ERC has 60 days from effectivity to issue a PDM incorporating cost range assumptions and PIRR-based weighted cost of capital. The DOE no longer sets or publishes these parameters.

Section 2: DOE Parameter Publication Deleted (§5.2 ¶2 deleted)

The second paragraph of §5.2 — which required the DOE to publish the parameters and criteria for evaluating Price Offers — is deleted in its entirety [DC2024-03-0010, §2, 2024-03-25]. This removes the DOE from the price methodology chain; the ERC’s PDM is now the sole published standard.

Section 3: ERC Evaluates Against Its Own PDM (§5.4 ¶2 amended)

New text:

“After evaluation, the DOE shall endorse the respective Price Offers of legally and technically compliant bids to the ERC. The ERC shall, within sixty (60) days upon receipt of the DOE endorsement, evaluate the said Price Offers based on its approved PDM for Non-FIT-Eligible RE Technologies, which shall include indexation as may be determined by the Commission. After the ERC completes its evaluation and endorses the Price Offers to the DOE, the latter will confirm which bidders’ Price Offers are deemed acceptable.” [DC2024-03-0010, §3, 2024-03-25]

Two changes here:

1. ERC evaluates against its own PDM (not DOE-published parameters). The split is now clear: DOE endorses legally and technically compliant bids; ERC evaluates price compliance against its PDM.

2. Non-FIT GET indexation introduced. The PDM “shall include indexation as may be determined by the Commission.” This means the ERC’s GEA-3 evaluation framework incorporates an indexation component — distinct from the annual FIT-track GET indexation introduced later by DC2025-03-0004. The ERC determines the indexation methodology as part of its PDM rulemaking.

Section 4: Winning Bidder Definition Revised (§6 amended)

New text:

“Section 6. Winning Bidders. The Winning Bidders for each auction round of Non-FIT-Eligible RE technology will be those whose Price Offers have been evaluated and found consistent by the ERC with its PDM for Non-FIT-Eligible RE Technologies.” [DC2024-03-0010, §4, 2024-03-25]

Under the original §6, Winning Bidders were “those whose Price Offers were endorsed by the DOE to, and approved by, the ERC after evaluation based on the approved set of parameters and criteria.” The new standard — “found consistent” with the PDM — ties the ERC’s decision to its published methodology rather than allowing open-ended approval authority. This increases transparency and constrains ERC discretion to criteria-consistency rather than broader judgment.

Policy Significance

Authority shift. Under DC2023-10-0029, the DOE had a role in defining the price evaluation criteria (publishing them, even if ERC formally issued them). DC2024-03-0010 fully vests PDM authority in the ERC. This aligns the Non-FIT GEAP price evaluation role with the ERC’s rate-setting function under EPIRA.

Indexation for Non-FIT GET. This is separate from the indexation introduced for FIT-track GET by DC2025-03-0004 (March 2025). Under DC2024-03-0010, Non-FIT GET for GEA-3 technologies (geothermal, impounding hydro, PSH) was already subject to an ERC-determined indexation component as part of the PDM. The scope and formula of that indexation is set by the ERC’s PDM, not the FIT Rules.

GEA-3 sequencing. DC2024-03-0010 (March 2024) triggered a 60-day ERC PDM deadline. The GEA-3 auction proper occurred February 11, 2025 — the ERC PDM would have been issued by approximately May 2024 to meet the circular’s deadline.

“Consistent with PDM” standard. Replaces open-ended “approval” — more transparent and methodology-bound.

See Digest: DC2023-10-0029 — Non-FIT-Eligible RE Technologies in the GEAP for the full Non-FIT GEAP framework, Digest: DC2024-09-0028: PSH Settlement Amendment to DC2023-10-0029 for the subsequent PSH settlement amendment, and Pumped-Storage Hydropower (PSH) in GEAP for PSH pricing mechanics.

Full text: Cleaned copy