# DC2018-07-0019 — Green Energy Option Program Rules ## Department Circular No. DC2018-07-0019 **Promulgating the Rules and Guidelines Governing the Establishment of the Green Energy Option Program Pursuant to the Renewable Energy Act of 2008** Signed: 18 July 2018 by DOE Secretary Alfonso G. Cusi Effectivity: 15 days after publication in at least two newspapers of general circulation --- ## RULE 1 — GENERAL PROVISIONS **Section 1. Title and Scope.** "Rules Governing the Establishment of the Green Energy Option Program (GEOP) in the Philippines" (GEOP Rules). **Section 2. Purpose.** Sets rules for End-Users, RE Suppliers and Network Service Providers (NSPs) in facilitating the option for End-Users to choose RE Resources as their energy sources. **Section 3. Guiding Principles.** (a) End-Users opting for GEOP must inform their host DU three months prior to signing a GEOP Supply Contract; DU and RE Supplier must fully inform the End-User of all technical, commercial, and legal arrangements. (b) NSPs shall adhere to open and non-discriminatory access to transmission and distribution facilities; shall continue to provide wheeling services even if GEOP Supply Contract is cancelled, provided unpaid obligations are settled. (c) All rates and charges shall be unbundled, segregated, and itemized. (d) GEOP is a non-regulated activity; GEOP Supply Contracts need not be approved by the ERC. **Section 4. Scope.** Applies to: End-Users; RE Suppliers; Distribution Utilities; Economic Zone Developers; Economic Zone Utility Enterprises; TRANSCO or its successors-in-interest; PEMC and/or Independent Market Operator; Supplier of Last Resort (SOLR); Central Registration Body (CRB); RE Registrar. **Section 5. Definition of Terms.** | Term | Definition | |------|-----------| | Distribution Utilities (DU) | Electric cooperatives, private corporations, government-owned utilities or LGUs with exclusive distribution franchises under EPIRA; includes entities licensed in economic zones | | End-User | Any person or entity choosing RE Resources as sources of energy | | Generation Facility | Facility producing electric energy from another energy form | | GEOP Supply Contract | Agreement between End-User and RE Supplier; minimum terms: contract period; names and location; RE source; guaranteed demand (kW/MW) and energy (kWh/MWh); contract price; payment terms; replacement power provision; default provision; other charges | | Mandated Entities | Electric power industry participants mandated to carry out GEOP responsibilities | | NGCP | Franchise holder under RA 9511 to operate and maintain transmission network | | Net Electricity Sales | Energy supply less system losses and own use, from 26 December (preceding year) to 25 December (current year) | | Network Service Provider (NSP) | Person or entity owning, controlling, or operating transmission or distribution system for conveyance of electric power | | RE Certificate (REC) | Certificate representing all renewable and environmental attributes from 1 MWh of electricity generated by a duly registered RE Generation Facility | | Renewable Energy Market (REM) | Market operated by PEMC or independent market operator for trading RE Certificates under Section 8 of RE Act | | RE Suppliers | Individuals or juridical entities authorized to operate in the Philippines and supply electric power from RE resources to End-Users, with DOE operating permit | | RE Registrar (RER) | Unit within PEMC administering and operating the REM | | RE Resources | Energy resources renewable on a regular basis with relatively rapid renewal rate: biomass, solar, wind, geothermal, ocean energy, hydropower, and emerging RE technologies | | Replacement Power | Supply of electricity to GEOP End-User when the contracted RE Resource is unavailable for any cause | | WESM | Wholesale electricity spot market established by DOE under Section 30 of EPIRA | --- ## RULE 2 — ELIGIBLE END-USERS FOR GEOP **Section 6. Voluntary Participation — Average Peak Demand of 100 kW and above.** (a) End-Users with monthly average peak demand of **100 kW and above** for the past 12 months may opt to participate. (b) New connections: - Estimated average monthly peak demand for next 12 months **≥300 kW** based on load profiling: may participate immediately. - Estimated demand **100–<300 kW**: must have registered historical monthly peak demand of at least 100 kW for **three (3) consecutive months**. - End-User in operation for less than 12 months: treated as newly connected. (c) GEOP Supply Contract does not require ERC approval. **Section 7. Voluntary Participation — Below 100 kW.** End-Users below 100 kW may participate after DOE, in consultation with NREB and industry stakeholders, determines that technical requirements and standards are met. **Section 8. End-User Choice.** - End-User may voluntarily contract directly with an RE Supplier. - Reversion to DU: allowed subject to (1) fulfillment of all contractual obligations to the RE Supplier, and (2) execution of a supply agreement with the DU including a definite contract period. - End-User who has reverted to DU may re-enter GEOP, subject to fulfillment of DU obligations. - **Initial geographic scope**: Luzon and Visayas only, until DOE determines Mindanao market readiness (WESM commercial operation and RCOA declaration). --- ## RULE 3 — GEOP MANDATE, SECTORS, ELIGIBLE RE RESOURCES **Section 9. RE Facilities Covered.** All RE Facilities are eligible for GEOP, subject to: - Entities must secure DOE operating permit as RE Suppliers. - RE Facilities must have Certificates of Compliance (COC) from ERC. - Distributed energy resources must conform with ERC-prescribed specifications and standards. **Section 10. GEOP Mandated Activities.** (a) TRANSCO/successors, DUs, PEMC/IMO, and RE Suppliers shall provide physical connection and commercial arrangement mechanisms collectively. (b) End-Users enrolled in GEOP shall: - Be informed monthly via electric bill of energy consumption and RE generation charges. - Be informed of transmission, distribution, and other charges, unbundled, via monthly bill. - Notify DU **3 months prior** to signing GEOP Supply Contract. - Notify DU of signed contract with RE Supplier at least **1 month prior** to effectivity. - Pay and settle all financial obligations to DU and/or RE Supplier. **Section 11. Responsibilities of Mandated Entities.** (a) RE Suppliers shall: - Apply for DOE operating permit through REMB; register with CRB and RE Registrar. - Within 6 months from effectivity, DOE shall issue guidelines for RE Supplier permits. - **Automatic qualification**: Entities already licensed as Retail Electricity Suppliers (RES) or Local RES under RCOA automatically qualify as RE Suppliers, provided they own/operate the RE Facility or procure competitively-priced RE generation for RPS compliance. - Incorporate Replacement Power provision in GEOP Supply Contracts. - Ensure transparency in monthly electric bill. - Comply with DOE, ERC, CRB, and RE Registrar reportorial requirements. (b) DU as SOLR shall: - Impose ERC-approved rates/charges; pending ERC approval, default rate = WESM nodal price + premium for administrative and overhead expenses. - Provide electricity supply if RE Supplier fails to perform; alternatively, RE Supplier may arrange Replacement Power payments to End-User through DU. (c) TRANSCO or successor-in-interest shall: - Provide open and non-discriminatory access to transmission facilities. - Ensure reliability and efficiency of transmission system including ancillary services. - Segregate and itemize all charges to End-User or RE Supplier. - Ensure dispatch per WESM Rules and Philippine Grid Code. - Annually prepare and update Transmission Development Plan (TDP). - Perform as default Metering Service Provider (MSP) for directly-connected End-Users. (d) DUs as NSPs shall: - Provide open and non-discriminatory access to distribution system. - Maintain reliability and efficiency of distribution facilities. - Annually prepare and update Distribution Development Plan (DDP) to include GEOP infrastructure needs. - Perform as default Retail MSP within franchise; ensure compliance with revenue metering installation and maintenance. (e) CRB and RE Registrar shall: - Register GEOP End-Users with their RE Suppliers. - Facilitate amendments to WESM Rules if necessary. **Section 12. RE Supplier Offer Sheet.** RE Supplier must provide a transparent, simplified offer sheet containing: itemized unbundled all-in fees and charges; Replacement Power (from RE Facility); and facilitate CRB registration and switching. **Section 13. DOE/REMB Responsibilities.** REMB evaluates applications and recommends issuance of operating permits to RE Suppliers. An Oversight Committee may be created through a separate issuance. **Section 14. GEOP Oversight Committee.** Created under the DOE Secretary; chaired by DOE Undersecretary for REMB. Members: REMB Director; Electric Power Industry Management Bureau Director; DOE Legal Services Director; CRB representative. **Section 15. Other Provisions.** (b) RECs derived from GEOP: RECs generated from energy supplied under GEOP are credited to the DU. Energy sales from GEOP are part of the DU's Net Electricity Sales for RPS compliance. (c) Metering for RE Facilities on End-User premises: DU has option to install a third kWh meter or use the RE Facility's built-in meter; all meters tested and calibrated by ERC. (d) REC Eligibility: All RE Facilities eligible for GEOP; only facilities eligible under Sections 10 and 11 of the RPS On-Grid Rules shall be issued RECs. RECs issued to DU's account. (e) IEC Campaign: DOE in coordination with ERC shall conduct Information, Education and Communication campaign. (f) ERC Regulatory Requirements: ERC shall issue regulatory framework for technical and interconnection standards and wheeling fees. (g) Billing Mechanism: Dual billing system — RE Supplier bills for RE generation + Replacement Power; DU/TRANSCO bills for wires services. All charges itemized and unbundled. DUs are not financially liable for excess power provided by RE Suppliers. --- ## RULE 4 — PROHIBITED ACTS AND SANCTIONS **Section 16.** Non-compliance with GEOP Rules is subject to administrative and/or criminal penalties under Section 35(e) of the RE Act. **Section 17. Penalties.** (a) Administrative: DOE may impose P100,000–P500,000; or recommend revocation of license, franchise, or authority to operate. (b) Criminal: Under RE Act Sections 35–36 — imprisonment of 1–5 years, or fine of P100,000–P100,000,000 (or twice the damages/costs avoided, whichever is higher), or both. Officers of associations, partnerships, or corporations responsible for violation are personally liable. (c) DOE Rules of Practice and Procedure govern penalty proceedings. (d) Fines on DUs or RE Providers/Generation Facilities cannot be charged to End-Users or treated as substitute for compliance. --- ## RULE 5 — TRANSITORY PROVISIONS **Section 18.** Non-diminution of vested rights under existing laws, contracts, or agreements. **Section 19. Reportorial Requirements.** - DUs and RE Suppliers: annual report to DOE on GEOP implementation; DUs include in DDP. - DUs and TRANSCO: submit list of End-Users intending to participate and those who signed GEOP Supply Contracts. - RE Suppliers: submit sales data to their End-Users. - DOE, ERC, CRB, and RER shall establish a GEOP database. **Section 20.** Separability Clause. **Section 21.** Repealing Clause — all previous inconsistent issuances repealed. **Section 22. Effectivity.** Fifteen (15) days after publication in at least two (2) newspapers of general circulation; copies filed with UP Law Center — ONAR.