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DEPARTMENT OF ENERGY
(Kagawaran ng Enerhiya)

DEPARTMENT CIRCULAR NO. DC2020- 0y - 900 =

GUIDELINES GOVERNING THE ISSUANCE OF
OPERATING PERMITS TO RENEWABLE ENERGY SUPPLIERS UNDER
THE GREEN ENERGY OPTION PROGRAM

WHEREAS, Section 2 of Republic Act (RA) No. 7638, as amended, otherwise known
as the “Department of Energy Act of 1992,” mandates the Department of Energy
(DOE) to prepare, integrate, coordinate, supervise and control all plans, programs,
projects and activities of the Government relative to energy exploration, development,
utilization, distribution and conservation, among others:

WHEREAS, RA No. 9513, otherwise known as “An Act Promoting the Development,
Utilization and Commercialization of Renewable Energy Resources and For Other
Purposes” (the “RE Act”), declares as a policy of the State to accelerate the exploration
and development of Renewable Energy (RE) Resources to achieve energy self-
reliance through the adoption of sustainable energy development strategies;

WHEREAS, Section 9 of the RE Act provides that the DOE shall establish a Green
Energy Option Program (GEOP), which provides end-users the option to choose RE
Resources as their sources of energy:

WHEREAS, on 18 July 2018, the DOE issued Department Circular (DC) No. DC2018-
07-0019, entitled “Promulgating the Rules and Guidelines Governing the
Establishment of the Green Energy Option Program Pursuant to Renewable Energy
Act of 2008,” establishing the GEOP (the “GEOP Rules”);

WHEREAS, second paragraph of Section 11(a)(i) of the GEOP Rules provides that
the DOE shall, after conduct of public consultations, promulgate the necessary
guidelines and procedures for issuance of permits to RE Suppliers;

WHEREAS, the DOE and the National Renewable Energy Board (NREB) conducted
a series of public consultations on the draft GEOP Operating Permit Guidelines on 18
June 2019, 27 June 2019, 11 July 2019 and 25 July 2019 in Cebu, Davao, Batangas
and Pampanga, respectively:

Energy Center, Rizal Drive cor. 34th Street, Bonifacio Global City, Taguig City, Philippines 1632
Tel. Nos. (Trunkline) (632)479-2900;

Website: http://www.doe.gov.ph; E-mail: info@doe.gov.ph
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NOW, THEREFORE, for and in consideration of the foregoing premises, the DOE
hereby adopts and issues the following guidelines and procedures covering the
issuance of Operating Permits to RE Suppliers:

Section 1. Title. This Circular shall be known as the “Guidelines for the Issuance of
Operating Permits for RE Suppliers under the Green Energy Option Program,” and
shall hereinafter be referred to as the “GEOP Operating Permit Guidelines.”

Section 2. Coverage. This Circular shall prescribe the guidelines and procedures in
the issuance, administration, and revocation of GEOP Operating Permits to RE
Suppliers.

All contracts under the GEOP shall cover a minimum of 100kW, regardless of
percentage required by the End-User.

Section 3. Scope. This Circular shall apply to the following stakeholders:

3.1. End-Users;

3.2. RE Developers;

3.3. RE Suppliers:

3.4. Distribution Utilities;

3.5. Retail Electricity Suppliers;

3.6. Philippine Electricity Market Corporation and/or the Independent Market
Operator;

3.7. Supplier of Last Resort;

3.8. Central Registration Body;

3.9. RE Registrar;

3.10. National Grid Corporation of the Philippines;

3.11. National Transmission Corporation;

3.12. Metering Service Providers, duly licensed by the Energy Regulatory
Commission (ERC); and

3.13. Other entities which may later be created or otherwise identified relevant for
the successful implementation of the GEOP.

Section 4. Definition of Terms. This Circular hereby adopts, by reference, the terms
defined in RA No. 9136, RE Act, their respective implementing rules and regulations,
the GEOP Rules, as well as other relevant DOE Department Circulars. Furthermore,
the following terms, as used in this Circular, shall be defined as follows:

4.1. “Certificate of Registration” or “COR’ refers to an official document issued by
the DOE to any individual or juridical entity engaged in the development,
utilization and commercialization of RE Resources, either for own-use or
commercial purposes, awarded an RE Contract, after all the necessary
information and requirements have been satisfactorily complied with;
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4.2.

4.3.

4.4,

4.5.

4.6.

4.7.

4.8.

“Contestable Customer’ refers to electricity end users who have a choice of
a supplier of electricity, as may be determined by the ERC in accordance with
the RA No. 9136;

“End-User’ refers to any person or entity requiring the supply and delivery of
electricity for its own use. As used in this Circular, an End-User shall refer to
any person or entity who chooses RE Resources as sources of energy:
Provided, That it has satisfied the eligibility requirements stated under Rule 2,
Section 6 of the GEOP Rules;

“GEOP Supply Contract’ refers to the agreement between an End-User and
an RE Supplier for the supply of electricity generated from RE by duly
authorized RE Supplier, which shall contain, at the minimum, the following
terms and conditions:

4.4.1. Contract Period:

4.4.2. Name of Electricity End-User and Location:

4.4.3. Name of RE Supplier and Source of RE Supply:

4.4.4. Guaranteed Demand (in kW or MW) and Energy (in kWh or MWh);
4.4.5. Contract Price for the supply of electricity;

4.4.6. Payment Terms;

4.4.7. Replacement Power Provision;

4.4.8. Default Provision; and

4.4.9. Other Charges, if any, segregated and itemized:

“GEOP Operating Permit’ refers to a document issued by the DOE to an entity
allowing the supply of electric power to an End-User pursuant to this Circular;

‘Renewable Energy Facility” or “RE Facility’ refers to any power plant that
generates electricity using RE Resources;

“Replacement Power’ refers to the provision in the GEOP Supply Contract,
which shall be delivered to the End-User in any or all of the following events:

4.7.1. Whenever the RE Resource sourced and/or contracted by the RE
Supplier is not available due to scheduled preventive maintenance
services; or

4.7.2. Whenever needed to address the variability of an RE technology used
to supply electricity to the End-User.

“RE Registrar’ or “RER’ refers to the entity designated by the DOE to establish
and operate the RE Market pursuant to Section 8 of the RE Act and DC2019-
12-0016 (or the “REM Rules’).

Section 5. RE Supplier Qualifications.

5.1.

Any person, natural or juridical, registered and/or authorized to operate in the
Philippines under existing Philippine laws and engaged in the business of
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generating and/or supplying electricity from RE Resources may apply for a
GEOP Operating Permit as an RE Supplier under GEOP;

5.2. For avoidance of doubt, any RE Facility is eligible for GEOP, whether or not
the same is eligible for Renewable Portfolio Standards (RPS) compliance as
long as there is still available capacity or energy for supply under GEOP; and

9.3. Owners and operators of RE Facilities constructed and operating prior to RE

Act but registered under the RE Act may qualify as RE Suppliers under the
GEOP.

Section 6. Application Requirements. All applications for the GEOP Operating
Permit shall be in writing and verified. The application shall likewise contain the
following documents:

6.1. Affidavit of undertaking on the capability to supply and deliver the RE
generation to the End-User.

6.2. Proof of a Contract for the Supply of Replacement Power in accordance with
Section 10.1 of this Circular; and

6.3. Proof of payment of the processing fee.

Section 7. Qualification for Existing Retail Electricity Suppliers. Any person or
entity that has been issued a Retail Electricity Supplier’s license by the ERC and has
demonstrated the ability to serve its Contestable Customer under the Retail
Competition and Open Access may be automatically issued an Operating Permit as
RE Supplier under the GEOP subject to the applicant's submission of the following
documents:

7.1. Billing document from at least one (1) Contestable Customer for two (2) years
immediately preceding the date of application, or a sworn statement of such
Contestable Customer attesting to the fact that it has a contract with the

applicant effective for the two (2) years immediately preceding the date of
application;

7.2. Affidavit of undertaking on the applicant's Capability to supply and deliver the
RE generation to the End-User;

7.3. Proof of a Contract for the Supply of Replacement Power in accordance with
Section 10.1 of this Circular: and

7.4. Proof of payment of the processing fee.

Section 8. Processing and Approval of Applications.

8.1. The DOE, through its Renewable Energy Management Bureau (REMB), shall
be responsible for evaluating all applications for the issuance of GEOP
Operating Permits to eligible RE Suppliers.

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8.2.

8.3.

Within twenty (20) working days from the submission of complete application
documents and compliance with the requirements, the REMB Director shall
recommend to the Secretary the approval or disapproval of the application.

The application shall be acted upon by the DOE Secretary, upon endorsement
by the Supervising Assistant Secretary and Undersecretary of the REMB.

Section 9. Obligations of RE Suppliers. The RE Suppliers under the GEOP shall
have the following obligations:

9.1.

9.2.

9.3.

9.4.

9.5.

Comply with all the terms and conditions of the GEOP Operating Permit and
the provisions of this Circular, and the GEOP Rules;

Submit annual reports to the REMB on or before the 30* of January, which
Shall contain the following data:

9.2.1. Total kWh generated from owned and/or operated RE Facility;
9.2.2. Total kWh purchased per RE Resource;

9.2.3. Total kWh sold per customer; and

9.2.4. Total kWh purchased for Replacement Power on hourly basis;

Ensure that the total power dispatched from its RE Facilities should always be
greater than or equal to the total kWh sold to its customers;

Register in the Wholesale Electricity Spot Market and with the Central

Registration Body before it can supply electric power to the eligible End-Users;
and

Register with the RE Registrar pursuant to the RE Market Rules promulgated
by the DOE.

Section 10. Provision of Replacement Power. To ensure that End-Users are
supplied with sufficient and reliable electricity, the RE Supplier shall secure the
necessary Replacement Power, as follows:

10.1.

10.2.

During the first two years of implementation of this Circular, any RE Supplier
may opt to contract supply from generation facilities utilizing indigenous
resources as Replacement Power. Thereafter, in support of the greater
development and utilization of RE Resources, any Replacement Power shall
exclusively be sourced from RE Resources.

In cases where the supply is generated from hybrid RE technologies such as
solar and battery energy storage systems, the Replacement Power shall only
be required during the period when the facility is under maintenance services.

Section 11. Period of Validity. The GEOP Operating Permit shall be valid for a period
of five (5) years from date of issuance stated therein, unless earlier revoked by the
DOE for any violation of the GEOP Rules and this Circular.
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Section 12. Renewal of Application. Six (6) months prior to its expiration and upon
submission of required documents and payment of a renewal fee, the RE Supplier
may apply for renewal of its GEOP Operating Permit.

The DOE shall determine whether the RE Supplier has complied with all the DOE
requirements for RE Supplier in accordance with this Circular.

Section 13. Suspension, Revocation or Cancellation of GEOP Operating

Permits. The DOE may suspend, revoke or cancel any GEOP Operating Permit on
the following grounds:

13.1. Failure of the RE Supplier to comply with its obligations under the GEOP Rules
and the terms and conditions under which the GEOP Operating Permit was
issued:

13.2. Providing false or misleading information to the End-User or the DOE:

13.3. Failure to respond to DOE directives, communications, inquiries within the
periods provided therein, or address customer complaints within five (5) working
days from receipt of the same; and

13.4. Termination of the GEOP Supply Contract by the End-User for cause.

Upon a positive finding by the DOE that the RE Supplier has committed of any of the
above enumerated grounds, the latter shall be required to explain in writing why its
GEOP Operating Permit should not be suspended, revoked or cancelled. The RE
Supplier shall be given a non-extendible period of fifteen (15) calendar days to submit
its explanation, which shall be accompanied by supporting documents.

Not later than fifteen working (15) days from its receipt of the RE Supplier's written
explanation, the REMB shall submit its findings and recommendations to the DOE
Secretary, through its Supervising Assistant Secretary and Undersecretary. The DOE
Secretary shall have a period of five (5) working days to act upon said
recommendation. The decision of the DOE Secretary shall be final and immediately
executory.

The RE Supplier shall immediately be notified of the decision of the DOE Secretary in
writing, within three (3) days upon receipt by REMB of the DOE Secretary's decision,
through personal service, registered mail, private courier service, or in the absence of
the aforementioned modes of service, through electronic mail.

Section 14. Penalties. The following are the penalties which may be imposed upon
an RE Supplier which has been found to have committed any of the acts provided in
Section 13 hereof and has failed to provide justifications therefor:

14.1. First Offense. Suspension of the GEOP Operating Permit for one (1) month;

14.2.Second Offense. Suspension of the GEOP Operating Permit for three (3)
months; and
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14.3. Third Offense. Cancellation/Revocation of the GEOP Operating Permit.

Provided, That, in cases where the RE Supplier was found to have twice committed

the same violation in succession, the GEOP Operating Permit shall be
cancelled/revoked.

Section 15. RE Pool. To accelerate exploration, development and utilization of RE
Resources, and to ensure RE supply is available in a least-cost manner, RE Suppliers
and RE Generators/Developers may enter into a joint action or establish a pool of RE
supply under the GEOP to the extent permitted by applicable laws.

Section 16. Separability Clause. If for any reason, any provision of this Circular is
declared unconstitutional or invalid, the other parts or provisions not affected thereby
shall remain in full force and effect.

Section 17. Repealing Clause. The provisions of other department circulars which
are inconsistent with the provisions of this Circular are hereby repealed, amended or
modified accordingly.

Section 18. Effectivity. This Circular shall take into effect fifteen (15) days following
its publication in at least two (2) newspapers of general circulation and its filing with
the National Administrative Register of the UP Law Center.

‘here bo”
eae CUSI
ecretary
EPR 22 2028

Issued on at the Department of Energy, Energy Center,
Merritt Road, Fort Bonifacio, Taguig City, Metro Manila

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