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Republic of the Philippines
Department of Energy
(Kagawaran ng Enerhiya)

BAGONG PILIPINAS

DEPARTMENT CIRCULAR NO. _DC “25 -/0 — 00/9

FRAMEWORK FOR THE INTEGRATION OF NUCLEAR ENERGY IN THE
COUNTRY’S GENERATION MIX TO IMPLEMENT THE CLEAN ENERGY
SCENARIO UNDER THE PHILIPPINE ENERGY PLAN 2023-2050

WHEREAS, Republic Act (RA) No. 7638, as amended, otherwise known as “The
Department of Energy (DOE) Act of 1992,” declared it a policy of the State to ensure
a continuous, adequate, and economic supply of energy with the end in view of
ultimately achieving self-reliance in the country’s energy requirements through the
integrated and intensive exploration, production, management, and development of
the country’s indigenous energy resources, and through the judicious conservation,
renewal and efficient utilization of energy to keep pace with the country’s growth and
economic development and taking into consideration the active participation of the
private sector in the various areas of energy resource development; and to rationalize,
integrate, and coordinate the various programs of the Government towards self-
sufficiency and enhanced productivity in power and energy without sacrificing
ecological concerns;

WHEREAS, RA No. 9136, otherwise known as the “Electric Power Industry Reform
Act of 2001” or the EPIRA, states that it is the policy of the State to, among others: (i)
ensure the quality, reliability, security and affordability of the supply of electric power;
(ii) protect the public interest as it is affected by the rates and services of electric
utilities and other providers of electric power; (iii) assure socially and environmentally
compatible energy sources and infrastructure; and (iv) promote the utilization of
indigenous and new and renewable energy resources in power generation in order to
reduce dependence on imported energy;

WHEREAS, the EPIRA mandates the DOE to, among others: (i) formulate policies for
the planning and implementation of a comprehensive program for the efficient supply
and economical use of energy consistent with the approved national economic plan
and with the policies on environmental protection and conservation and maintenance
of ecological balance, and provide a mechanism for the integration, rationalization,
and coordination of the various energy programs of the Government; (ii) develop and
update annually the existing Philippine Energy Plan (PEP), which shall provide for an
integrated and comprehensive exploration, development, utilization, distribution, and
conservation of energy resources, with preferential bias for environment-friendly,
indigenous, and low-cost sources of energy. The PEP shall include a policy direction
towards the privatization of government agencies related to energy, deregulation of
the power and energy industry, and reduction of dependency on oil-fired plants; and
(iii) prepare and update annually a Power Development Program (PDP) and integrate
the same into the PEP. The PDP shall consider and integrate the individual or joint
development plans of the transmission, generation, and distribution sectors of the
electric power industry, which are submitted to the DOE;

Energy Center, Rizal Drive cor. 34th Street, Bonifacio Global City, Taguig City, Philippines 1632
Tel. No. (Trunkline) (632) 8479-2900
Website: http://www.doe.gov.ph; E-mail: infocenter@doe.gov.ph

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WHEREAS, RA No. 12305, otherwise known as the “Philippine Nuclear Energy Safety
Act,” declared it the policy of the State to harness the peaceful, safe and secure use
of atomic energy to provide benefits to the Philippines in the fields of energy
production, health and medicine, scientific research, agriculture, industry, education
and others;

WHEREAS, the Philippines, as a Member State of the International Atomic Energy
Agency (IAEA), is committed in ensuring the peaceful use of nuclear technology in the
country, adhering to the principles of safety, security, and safeguards;

WHEREAS, Executive Order (EO) No. 116, series of 2020, created the Nuclear
Energy Program Inter-Agency Committee (NEP-IAC) to study the adoption of a
National Position on a Nuclear Energy Program, in accordance with pertinent IAEA
guidelines and relevant laws, rules, and regulations;

WHEREAS, EO No. 164, series of 2022, entitled “Adopting a National Position for a
Nuclear Energy Program, and for Other Purposes,” provides that the State envisions
nuclear power as a viable component to bridge the gap between rising energy
demands and supply, taking into account learnings from the past, national, social and
economic development pathways, as well as international legal and regulatory
frameworks, and best practices;

WHEREAS, building upon the foregoing national position, the DOE published the PEP
2023-2050, incorporating a Clean Energy Scenario (CES), which envisions a more
diverse energy mix and a phased entry of nuclear energy in the couniry’s power
generation mix, beginning with 1,200 MW of capacity, with operations targeted to
commence by 2032, increasing to 2,400 MW by 2035, and 4,800 MW by 2050;

WHEREAS, the integration of nuclear energy into the power generation mix as a long-
term, clean, and reliable baseload energy source is a strategic decision anchored on
energy security, affordability, and inclusivity to support national development and
societal advancement;

WHEREAS, ihe integration of nuclear energy into the power generation mix
represents an innovative initiative which promotes diversification of energy sources,
poised to stimulate local economies, creates significant employment opportunities,
attracts investment, and leads to the creation of new economic opportunities and
economic growth;

WHEREAS, the commercial development of the first or pioneer nuclear power plant in
the Philippines represents a significant milestone in the Philippine energy landscape,
resulting in anticipated lowering of electricity costs, and a positive major environmental
impact, making it a key player in the country’s commitment to achieving a low-carbon
economy;

WHEREAS, there is a need to establish a well-defined framework to attract potential
investor interest for the first nuclear power generation facility in the Philippines, while,
at the same time, ensuring a seamless and efficient integration of nuclear energy in
the power generation mix; and

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WHEREAS, the draft Circular was presented, and comments were solicited from
stakeholders on 15 July 2025.

NOW, THEREFORE, in consideration of the foregoing premises, the DOE hereby
issues, adopts, and promulgates the following policy framework for the integration of
nuclear energy in the country’s generation mix:

RULE |
GENERAL PRINCIPLES

Section 1. Title. — This Circular shall be known and referred to as the “POLICY
FRAMEWORK FOR THE INTEGRATION OF NUCLEAR ENERGY IN THE
COUNTRY’S GENERATION MIX.”

Section 2. Guiding Principles. -— The government shall endeavor to provide a
conducive industry environment for the commercial development of a nuclear power
plant (NPP) in the country, guided by the following principles:

2.1 Energy Security. The commercial development and operation of an NPP.
including, but not limited to, large-scale conventional reactors, Small Modular
Reactors (SMRs), Microreactors, and Floating NPPs, shall contribute to a
diversified and stable power supply for distribution utilities (DUs), retail
electricity suppliers, and other bulk users. Power generated from NPPs shall
be designed to complement variable renewable energy sources by providing
reliable, dispatchable baseload power that supports overall grid stability and
energy system resilience.

2.2 Environmental Sustainability. The country's commercial development and
operation of an NPP is a step towards mitigating Greenhouse Gas (GHG)
emissions and achieving the country’s nationally determined contributions
under the Paris Agreement, driven by policy studies and project proposals
which incorporate fuil life cycle assessments to evaluate environmental
impacts, including those from uranium mining, plant decommissioning; and
radioactive waste management.

2.3 Grid Harmonization and Integration. The entry of nuclear energy in the
power generation mix of the country shall require the construction,
enhancement, and advanced planning of the current transmission lines and
facilities, and the procurement of appropriate ancillary services integrated into
the Transmission Development Plan (TDP) and supported by grid impact
studies to accommodate the power produced from these plants to achieve the
PEP targets and the objectives of this Circular.

2.4 Competitive Pricing. The commercial development and operation of an NPP,
once optimally blended with the generation cost of DUs, can effectively lower
electricity rates. Thus, DUs shall ensure a ready market for available
capacities from the first commercially developed NPP, which shall be exempt
from the conduct of Competitive Selection Process (CSP): Provided, that DUs
are compliant with the provisions of the EPIRA and this Circular: Provided,

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further, that DUs that meet any of these qualifications may apply for
prioritization for the supply of capacity from such NPP:

a. Demonstrate the technical and financial capability to enter into long-term
power purchase agreements with an NPP;

b. Serve a sufficiently large consumer base; or

c. Show documented supply deficiencies that may be alleviated by new
baseload generation.

Nothing in this Circular shall be interpreted to preclude other DUs from availing
of NPP capacity once the prioritized allocations have been met.

2.5 Public Health Protection. The integration of nuclear energy into the country’s
power generation mix shall be pursued with due consideration to public health
and safety, which aligns with national health policies and standards. The
government shall ensure inter-agency coordination to support health
emergency preparedness, promote environmental health safeguards, and
strengthen community health resilience in areas affected by nuclear energy
projects.

RULE Il
POLICY FRAMEWORK FOR THE PIONEER NPP PROJECT

Section 3. Pioneer NPP Project. — The first commercially developed and operated
NPP in the Philippines shall be considered a Pioneer project, hence, must be provided
with a conducive and competitive environment to stir further development in the
Philippine energy landscape.

The Pioneer NPP shall be considered a baseload plant and shall be granted priority
dispatch, in coordination with the DOE, the Independent Market Operator (IMO), and
the System Operator (SO), regardless of the nuclear technology to be considered for
development.

Section 4. Role and Responsibilities of Government Agencies. — To provide the
most conducive environment for the first commercial development of an NPP and lay
the policy foundations for succeeding NPPs, the following agencies and entities shall
have the following roles and responsibilities:

A. DOE. Within ninety (90) days from the issuance of this Circular, the DOE shall:
1. Explore alternatives for the role of the Government in the Pioneer NPP;

2. Study the options for financing and funding, in coordination with the NEP-

IAC, Department of Finance (DOF), Department of Economy, Planning,

and Development (DEPDev), Maharlika Investment Corporation, and any
other relevant government agencies;

3. Plan, together with Transmission Network Provider (TNP) and SO, in
coordination with relevant electric power industry stakeholders, to ensure

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the availability of transmission capacity and facilities within the target
delivery date for the country’s first commercial NPP;

4. Design appropriate mechanisms and arrangements to accommodate the
integration of the Pioneer NPP and ensure that available capacities from
such power plant are fully contracted or assured with an ofitake to be
financially viable for operation, including the possibility of auction, direct
contracting, or aggregation for own use fi.e., industrial parks, special
economic zones, contestable market] or other mechanisms. Such
mechanisms shall be evaluated in view of the plant’s expected cost
structure and long investment horizon;

5. Evaluate possible policies, together with Energy Regulatory Commission
(ERC) and the National Electrification Administration (NEA), for the
integration of nuclear energy in the Power Supply Procurement Plans
(PSPP) of private DUs and electric cooperatives (ECs);

6. Evaluate and formulate policies to enhance benefits for host communities
of the Pioneer NPP, including opportunities in labor and livelihood, and
measures to lower consumer electricity costs;

7. Identify and/or formulate additional policy measures to address issues
and concerns involving nuclear energy development, including permitting
and licensing procedures, in consultation with relevant private sector
stakeholders and potential developers; social awareness and
acceptability; and other matter necessary to achieve the objectives of this
Circular;

8. Identify and propose fiscal and non-fiscal incentives for Pioneer NPP and
succeeding NPPs, considering the economic benefits, employment
opportunities, and social impacts of the project;

9. Coordinate with the Energy Virtual One-Stop Shop (EVOSS) Steering
Committee, other relevant government agencies, and local government
units (LGUs) to evaluate the integration of the permitting process into the
EVOSS System; and

10. Coordinate with the Philippine Atomic Energy Regulatory Authority
(PhiiATOM), other government agencies, and relevant stakeholders to
pursue the policies set forth in this Circular.

B. ERC. Within ninety (90) days from the issuance of this Circular, and subject
to public consultation, the ERC shall:

1. Formulate rules and guidelines for the determination of the appropriate
price-setting methodology applicable for the operation of the Pioneer
NPP. This includes, among others, setting the reserved price or tariff
range for nuclear energy.

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To this end, the ERC shall, in consultation with relevant stakeholders,
adopt a pricing regime similar to the Regulatory Asset Base (RAB) Model
or a similar long-term capital recovery mechanism which considers the
high upfront cost of construction and initial phase of the Pioneer NPP and
its long operational period, e.g., sixty (60) to eighty (80) years, depending
on the technology and the license issued by the PhilATOM.

In case of power supply contracts, the ERC shall adopt a policy for a
minimum contract period of the Pioneer NPP of twenty-five (25) years
which shall commence from the project's commercial operation date,
which may be extended for another twenty-five (25) years, or such other
periods that the ERC may determine based on the plant's estimated
lifespan and the license issued by the PhiiATOM;

2. Issue the necessary rules to incorporate costs for refurbisnment and
maintenance during commercial operations of the Pioneer NPP,
consistent with the principles of cost-of-service regulation, and subject to
the license issued by the PhilATOM;

3. Issue the necessary rules and requirements for the issuance of Certificate
of Compliance for nuclear energy facilities, in coordination with relevant
government agencies, to ensure regulatory alignment and safe integration
into the power system;

4. Issue the necessary rules and requirements for grid enhancements to
incorporate and harmonize generation from nuclear power, i.e.,
amendments to the Philippine Grid Code, Philippine Distribution Code,
and the Open Access Transmission Service;

5. Conduct capacity building for regulatory personnel, in partnership with the
Nuclear Energy Program Implementing Organization (NEPIO) and
international institutions, including training on long-term economic
modeling, risk-based rate setting, and nuclear-specific consumer impact
analysis; and

6. Provide other regulatory support necessary to achieve the objectives of
this Circular.

C. TNP and SO. The TNP and SO shall:

1. Maintain close and regular communication with the developer of Pioneer
NPP from the start of the project through construction and transmission to
ensure timely exchange of information about the plant's safety, security,
and operations and to keep the power system reliable and safe.

The DOE and its attached agencies, such as the National Transmission
Corporation (TransCo), shall be included in such communications to
ensure policies are followed and the transmission system is properly
managed;

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Build the necessary transmission infrastructure in time to support the
effective integration and distribution of nuclear energy from the Pioneer
NPP to the grid.

The transmission network must be able of accommodating the entry of a
1,200MW NPP by 2032, or such capacity declared in the PEP;

Issue the necessary System Impact Study and Facility Study, as the case
may be, within four (4) months from submission of complete application,
and enter into the relevant agreements with the Pioneer NPP, such as the
Connection Agreement, Metering Services Agreement and Transmission
Services Agreement, each in a timely manner;

Include nuclear energy in the expansion and enhancement of the national
grid in the next TDP after the issuance of this Circular, in line with IAEA
Standards for such projects;

Conduct and publish a grid readiness assessment for the integration of
the Pioneer NPP, which shall be reflected in the TDP. This assessment
shall identify key transmission requirements, system impacts, and timeline
alignment needs;

Ensure the dispatch of generation by the Pioneer NPP as baseload and
procure the necessary ancillary services (AS);

Build internal manpower capacity for the entry and operation of the
Pioneer NPP, in partnership with the NEPIO or with other development
partners; and

Perform other acts necessary for the integration and harmonization of the
Pioneer NPP in the grid.

Section 5. Mandate of Other Concerned Unit(s). - The NEPIO and the Nuclear
Energy Division (NED), under the Energy Utilization Management Bureau (EUMB) of
tne DOE, or any subsequent or successor entities or bodies, in addition to their
respective mandates under existing guidelines and regulations, shall have the
following responsibilities:

5.1 Together with the Electric Power Industry Management Bureau (EPIMB) and
other relevant bureaus of the DOE, provide technical assistance to the
developer/owner/operaior of the Pioneer NPP;

5.2 Assist in and monitor the compliance of the concerned agencies and entities
with their responsibilities under this Circular;

5.3 Consolidate the developments made by concerned entities and update them
of such actions under this Circular;

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5.4 Coordinate with and seek the assistance of relevant government agencies and
instrumentalities, other than those mentioned in this Circular, as well as
private entities, to implement the policies and achieve the purposes of this
Circular;

5.5 Lead or partner with development partners in the conduct of capacity building
with relevant agencies and entities on nuclear energy; and

5.6 Perform other duties as may be assigned or delegated by the Secretary.

Section 6. Incentives in Support of the Pioneer NPP in the Energy Sector. — The
Pioneer NPP shall be entitled to the following incentives:

6.1 The Pioneer NPP shall be automatically certified as an Energy Project of
National Significance (EPNS), which will entitle it to all the rights and
incentives under EO No. 30 and other related issuances of the DOE. The
CEPNS of the Pioneer NPP may be issued prior to the filing of any applications
for permits and licenses, subject to evaluation by the DOE of the proponent’s
plans and programs. Within ninety (90) days from the issuance of this Circular,
the DOE shall issue the corresponding policies to facilitate an accelerated but
efficient processing of NPP permits and authorizations, including processes
for documents required prior to actual application.

6.2 Subject to other applicable laws and regulations, the Pioneer NPP may avail
of existing fiscal and non-fiscal incentives.

RULE Ill
POLICY FRAMEWORK FOR SUCCEEDING NPPs

Section 7. Role and Responsibilities of Government Agencies. — After
assessment of the initial phase and operations of the Pioneer NPPs and to sustain the
implementation of the principles under this Circular, the following agencies and entities
shall have the following roles and responsibilities:

A. DOE. In addition to its functions under Section 4(A) of Rule II of this Circular,
the DOE shall:

1. Assess the appropriate mechanisms, arrangemenis, and platforms for the
further integration and full offtake of succeeding NPPs in the grid for the
financial and operational viability of all NPPs;

2. Ensure that the formulation of the PSPPs of DUs and ECs shall be in such
a manner as to accommodaie the integration of nuclear energy,
consistent with their respective optimal energy mix and EPIRA mandate
to ensure provision of least-cost power supply to its franchise area;

3. Conduct monitoring, coordination, and verification of compliance with the
rules and requirements issued pursuant to this Circular;

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4. Supervise and monitor any contracts for nuclear energy entered into by
DUs to ensure compliance with their least-cost mandate under the EPIRA;
and

5. Formulate policies, including the possible establishment of additional
electricity markets, such as a Capacity Market and a Futures Market, and
enhance the scheduling and settlement mechanism, as part of the
measures to address issues and concerns related to nuclear energy and
achieve the objectives of this Circular.

B. ERC. |n addition to its function under Section 4(B) of Rule II of this Circular,
the ERC shall:

1. Update, if necessary, the rules and guidelines for the determination of the
appropriate price-setting formula for nuclear power generation,
prospective contracting by DUs, and participation in other offtake
platforms, which includes, among others, the setting of the reserved price
or tariff range for nuclear;

2. Ensure the compliance of NPP owners/operators, DUs, and other
regulated entities with the provisions on Cross Ownership, Market Power
Abuse, and Anti-Competitive Behavior under Section 45 of the EPIRA;

3. Impose fines and penalties for any non-compliance or violations under this
Circular and other relevant laws, rules, and regulations; and

4. Provide other regulatory support necessary to achieve the objectives of
this Circular.

C. TNP and SO. In addition to its functions under Section 4(C) of Rule II of this
Circular, the TNP and SO shall:

1. Construct, enhance, or modify the necessary transmission infrastructure
ready to support the effective integration and distribution of nuclear
energy in the grid, including provisions for future multi-unit and multi-site
NPPs, and the harmonized transfer of such power generation to DUs and
ECs;

2. Formulate or amend protocols for the dispatch of generation by NPPs and
the provision of necessary AS; and

3. Perform other acts necessary for the smooth integration and
harmonization of NPPs in the grid.

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D. IMO. The IMO shall:

1. Conduct studies and assessments on mechanisms such as the use of
Contract for Difference Model or Zero Emission Credit (ZEC) for the
further integration of nuclear power generation in other energy platforms
and offtake arrangements;

2. Establish efficient market conditions that can facilitate the future trading
of nuclear-generated energy; and

3. Perform all acts consistent with the issuances of the DOE pursuant to this
Circular.

Section 8. Mandate of Other Concerned Unit(s). — The NEPIO and the NED, under
the EUMB of the DOE, or any subsequent or successor entities or bodies, shall
continue to perform its functions under Rule Il and ensure that policies remain aligned
with succeeding NPPs as well.

The DOE may seek the assistance of other government agencies and instrumentalities
or other private entities to achieve the purposes of this Circular relative to succeeding
NPPs.

RULE IV
MISCELLANEOUS PROVISIONS

Section 9. Applicability and Transition. — Uniess otherwise amended or subject to
subsequent issuances of the DOE, all rules applied to the Pioneer NPP shall likewise
govern the succeeding NPPs.

Section 10. Separability. — \f for any reason, any section or provision of this Circular
is declared invalid or unconstitutional, the other provisions not affected thereby shall
remain valid and subsisting.

Section 11. Repealing Clause. — All other previous issuances, rules, and regulations
inconsistent with the provisions of this Circular are likewise repealed or amended
accordingly.

Section 12. Effectivity. — This Circular shall take effect fifteen (15) days following its
publication in a newspaper of general circulation or in the Official Gazette. A copy of
this Circular be furnished to the University of the Philippines Law Center-Office of
National Administrative Register (UPLC-ONAR).

Issued at Energy Center, Rizal Drive, Bonifacio Global City, Taguig City on
j 2025.