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DEPARTMENT CIRCULAR NO. DC2019-01-0001

PRESCRIBING THE OMNIBUS GUIDELINES
ON ENHANCING OFF-GRID POWER DEVELOPMENT AND OPERATION

[Note: Issued January 25, 2019, Secretary Alfonso G. Cusi. 16 pages, 15 Rules. Repeals DC2004-01-001. Rule 7.1 sub-numbering has a gap in OCR (jumps 7.1.1 to 7.1.6); intermediate sub-rules may be missing from OCR capture. Rule 8.3 contains an unresolved placeholder "[identify the reference standards to be followed]" in the original document.]

WHEREAS, Section 2 of Republic Act No. 9136, otherwise known as the Electric Power
Industry Reform Act of 2001 (EPIRA), declares the policy of the State to: (i) ensure and
accelerate the total electrification of the country; (ii) ensure the quality, reliability, security,
and affordability of the supply of electric power; (iii) enhance the inflow of private capital and
broaden the ownership base of the power generation, transmission and distribution sectors;
and (iv) encourage the efficient use of energy and other modalities of demand-side
management;

WHEREAS, Section 23 of the EPIRA recognizes the importance of sustaining the economic
viability of distribution utilities (DUs) in the performance of the social obligation in their
franchise to supply electricity in the least-cost manner to their captive market and to provide
universal service to all areas within their franchise territory, including unviable areas;

WHEREAS, Section 70 of the EPIRA mandates the National Power Corporation through the
Small Power Utilities Group (NPC-SPUG) to perform the missionary electrification function
with the responsibility of providing power generation and its associated power delivery
systems in areas not connected to the transmission system and with funding from the
revenues from sales in missionary areas and from the Universal Charge for Missionary
Electrification (UC-ME) fund;

WHEREAS, Rule 13 of the Implementing Rules and Regulations of EPIRA (EPIRA-IRR)
provides that NPC-SPUG may draw on other funding sources such as appropriations from
Congress, the utilization of private capital, multilateral aids and grants, Official Development
Assistance Funds, and others;

WHEREAS, Rule 13 of the EPIRA-IRR provides that the NPC-SPUG shall source all the
cost differentials between the sales revenues and operating expense and capital expense for
expansion, rehabilitation and facilities for new areas of development based on the approved
Missionary Electrification Development Plan (MEDP), from its share from the UC-ME and/or
other sources as it may obtain;

WHEREAS, Rules 13 and 14 of the EPIRA-IRR articulate the guiding principles of
missionary electrification and provision of electric services in remote and unviable areas
through the following: (i) formulation of the MEDP; (ii) establishment of specific guidelines
on how to encourage the inflow of private capital and the manner whereby other parties,
including DUs and other qualified third parties, can participate in missionary electrification;
(iii) additional responsibilities of the NPC-SPUG such as the provision of transmission lines
in off-grid areas; (iv) privatization of the generation assets and other associated facilities of
the NPC-SPUG; and (v) cessation of UC-ME subsidy to SPUG-serviced areas upon their
interconnection to the Grid;

WHEREAS, the Department of Energy (DOE) issued Department Circular No. DC2004-01-
001 entitled "Prescribing the Rules and Procedures for Private Sector Participation in
Existing NPC-SPUG Areas Pursuant to Rule 13 of the EPIRA-IRR," which prescribes the
procedures on the privatization of electric power generation in areas served by the NPC-
SPUG through a competitive process, disposal of generation and sub-transmission assets
of the NPC-SPUG, and graduation from missionary electrification;

WHEREAS, Republic Act No. 9513, otherwise known as the Renewable Energy (RE) Act
of 2008, has promulgated the implementation of minimum percentage of RE generation for
off-grid areas and the provision of RE Developers' Cash Incentives (REDCI) to be charged
against the UC-ME subsidy as additional fiscal incentives to RE project developers utilizing
eligible renewable energy resources;

WHEREAS, Republic Act No. 10531, otherwise known as the National Electrification
Administration (NEA) Reform Act of 2013, bestows upon electric cooperatives (ECs) the
power to construct, acquire, own, operate and maintain generating facilities and allows an
EC to bid on existing generating facilities of the NPC-SPUG within its franchise area;

WHEREAS, the DOE issued Department Circular Nos. DC2015-06-008 and DC2018-02-
0003 which provide for specific guidelines for the conduct of a Competitive Selection Process
by DUs in order to procure their power supply agreements for their captive market in the
least cost manner;

WHEREAS, the DOE issued Department Circular Nos. DC2017-05-0008 and DC2017-12-
0016 which provide for the conduct of performance assessment and audit of power
generation, transmission and distribution system facilities to ensure the security, reliability
and quality of electric power services in the country, including off-grid areas;

WHEREAS, the DOE issued Department Circular No. DC2018-08-0024 entitled
"Promulgating the Rules and Guidelines Governing the Establishment of the Renewable
Portfolio Standards for Off-Grid Areas" which mandates generation companies to source a
portion of the electricity from eligible RE resources;

WHEREAS, there is a need to amend existing issuances of the DOE and prescribe an
omnibus set of guidelines that incorporate and interrelate all existing and new policies and
strategies for achieving quality, reliability, affordability, security, stability, efficiency and
accountability of electric power services in off-grid areas;

NOW THEREFORE, FOR AND IN CONSIDERATION OF THE FOREGOING PREMISES,
the DOE hereby issues the following omnibus guidelines on off-grid power development and
operation:

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RULE 1. COVERAGE

1.1. These guidelines shall apply to the following entities engaged in the provision of
electricity services in off-grid areas:
1.1.1. National Power Corporation (NPC);
1.1.2. Distribution Utilities (DUs);
1.1.3. New Power Providers (NPPs) and other generators;
1.1.4. Qualified Third Parties (QTPs);
1.1.5. Renewable Energy Developers; and
1.1.6. Other service providers, government or private entities.

1.2. Off-grid areas and systems covered shall include:
1.2.1. Small Grids and isolated low-voltage distribution systems;
1.2.2. Unviable areas;
1.2.3. New areas, whether or not covered by a franchise, that are planned to be served
by the NPC or other service providers; and
1.2.4. New areas as may be identified in the total electrification program of the
Government and included in the MEDP.

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RULE 2. DEFINITION OF TERMS

2.1. "Commercially Viable" — an area or electricity service where the resultant True Cost
of Generation Rate is equal to or less than the Subsidized Approved Generation Rate.

2.2. "Department of Energy" or "DOE" — the Government agency created by virtue of RA
No. 7638 and mandated by the EPIRA to supervise the restructuring of the electric power
industry.

2.3. "Emergency Power" — power required by a DU when its actual supply falls below load
demand due to force majeure or fortuitous events that cannot be addressed through
reasonable means within a month, subject to DOE determination.

2.4. "Energy Regulatory Commission" or "ERC" — the quasi-judicial regulatory agency
created pursuant to the EPIRA.

2.5. "Full Cost Recovery Rate" or "FCRR" — the rate, in Peso per kWh, that recovers the
full efficient costs of generating, distributing and supplying electricity in unviable areas.

2.6. "Graduation" — the cessation of UC-ME subsidy in an area, because the area or
electricity service is deemed commercially viable or the area is interconnected into the Grid.

2.7. "Grid" — the high voltage backbone system of interconnected transmission lines,
substations and related facilities, located each in Luzon, Visayas and Mindanao.

2.8. "Missionary Area" — an off-grid area deemed eligible for missionary electrification
subsidy by the DOE because basic electricity services are not commercially viable.

2.9. "Missionary Electrification" — the provision of basic electricity services in unviable
areas with the ultimate aim of bringing operations to viability levels; pursuant to Section 70
of the EPIRA, the provision of power generation and associated power delivery systems in
small islands and isolated areas not connected to the Grid.

2.10. "Missionary Electrification Development Plan" or "MEDP" — the development plan
of the DOE, updated annually, detailing policies, strategies, plans and programs for
missionary electrification, including capital investment and operation in off-grid areas.

2.11. [Definition 2.11 not captured in OCR; likely "National Electrification Administration"
or "NEA" — see 2.12 for subsequent term.]

2.12. "National Electrification Administration" or "NEA" — the Government agency created
under Presidential Decree No. 269, as amended, to supervise the electric cooperatives,
among others.

2.13. "New Power Provider" or "NPP" — a private entity duly selected through a competitive
selection to provide power generation services in a missionary area.

2.14. "National Power Corporation — Small Power Utilities Group" or "NPC-SPUG" — the
unit of NPC mandated to perform missionary electrification.

2.15. "Off-Grid Area" — an area or system that is not connected to the Grid.

2.16. "Power Sector Assets and Liabilities Management Corporation" or "PSALM" — the
government-owned and controlled corporation created pursuant to the EPIRA.

2.17. "Power Supply Agreement" or "PSA" — an agreement between a power producer and
a DU for supply of power.

2.18. "Private Sector Participation" — the involvement of the private sector in power
generation facilities and associated delivery systems in off-grid areas, thus performing the
functions of the NPC-SPUG as defined in Section 70 of the EPIRA.

2.19. "Qualified Third Party" or "QTP" — the alternative service provider duly qualified and
authorized by the ERC to provide integrated power generation and distribution service to
unviable area/s.

2.20. "Small Grid" — an interconnected high voltage or medium voltage Off-Grid system.

2.21. "Subsidized Approved Generation Rate" or "SAGR" — the rate, in peso per kWh,
which the ERC has determined to be socially acceptable for a DU to pay for generation
service; further modified by this Circular as the generation rates approved by the ERC per
area and customer class basis. SAGR combined with UC-ME subsidy should equal TCGR.

2.22. "Subsidized Approved Retail Rate" or "SARR" — the rate, in peso per kWh, which
the ERC has determined to be the maximum cost an end-user should pay for integrated
power generation and distribution service by a QTP; further modified by this Circular as
actual retail rates approved by ERC per customer class basis in a QTP area. SARR
combined with UC-ME subsidy should equal FCRR.

2.23. "System Operator" or "SO" — the party responsible for generation dispatch based on
DU nominations from its PSAs, provision of ancillary services, and ensuring safety, power
quality, stability, reliability and security of the Small Grid.

2.24. "True Cost of Generation Rate" or "TCGR" — the full efficient cost of generating power
in an area.

2.25. "Universal Charge for Missionary Electrification" or "UC-ME" — the portion of the
Universal Charge designated for Missionary Electrification.

2.26. "Unviable Area" — a geographical area within the franchise area of a DU where
immediate extension of a distribution line is not feasible.

Other words and phrases have the same meanings as in the EPIRA and its IRR.

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RULE 3. MISSIONARY ELECTRIFICATION DEVELOPMENT PLAN

3.1. Policy Objectives of the MEDP:
3.1.1. Ensure quality, reliability, security and affordability of electricity service in off-grid
areas;
3.1.2. Contribute to integrated and inclusive development within the limits of carrying
capacity, including sustainable tourism;
3.1.3. Encourage entry of advanced and efficient power technologies;
3.1.4. Rationalize operations and plan for eventual phase-out of subsidies in missionary
areas;
3.1.5. Assess economic feasibility and timeline for eventual interconnection into the Grid;
and
3.1.6. Strengthen capacity of all stakeholders through training, workshops and capacity
building.

3.2. Scope of the MEDP shall integrate:

3.2.1. Updated Policies and Strategies by the DOE.

3.2.2. NPC Corporate Plans and Programs (submitted to DOE annually), including:
- Annual capacity addition per area;
- Increase of service level;
- Efficiency improvement, including fuel management and replacement of diesel
generating units beyond economic life;
- RE development program, including hybridization of diesel generating facilities;
- Optimized disposal/divestment of NPC-SPUG assets upon private sector entry;
- Installation of backbone power lines;
- Interconnection and intra-connection plans;
- Activities supporting unviable area electrification; and
- Forecasts of effective SAGRs, SARRs, TCGRs and FCRRs with methodology and
assumptions.

3.2.3. Plans and Programs of DUs Serving Off-Grid Areas (from Distribution Development
Plans), including:
- Historical and projected supply and demand per off-grid area;
- Power Supply Procurement Plan, including transition from diesel to optimal supply mix;
- Capital expenditure projects (expansion, rehabilitation, automation, modernization);
- System loss reduction and other efficiency programs; and
- Projects supporting total electrification, including unviable areas.

3.2.4. Program for Interconnection of Small Grids — submitted by TRANSCO or successor,
including all proposed interconnection projects with details and schedules.

3.2.5. Power Development Plan (PDP) for Island Provinces — 10-year plan incorporated
in MEDP.

3.2.6. Unviable Area Electrification by QTPs and other eligible entities.

3.2.7. Subsidy Requirements — 5-year UC-ME allotments for NPC-SPUG, NPPs, QTPs,
DUs and RE developers, consolidated annually.

3.3. Preparation Timelines:
- NPC submits corporate plans and programs specific to off-grid areas: **no later than January** of the current year;
- All DUs submit individual DDPs: **no later than March** of the current year; other DU information under Rule 3.2.3: **no later than June** of the current year;
- DOE conducts consultations with stakeholders to update policies and finalize the MEDP.

3.4. Annual Preparation. DOE shall annually prepare the MEDP incorporating relevant submissions.

3.5. Publication. DOE shall publish the MEDP **every three years**. The DOE may publish an abridged version of the annual MEDP or update only relevant sections of the previous year's publication.

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RULE 4. PRIVATE SECTOR PARTICIPATION

4.1. Role of the NPC. Pursuant to Section 70 of the EPIRA, the NPC has the mandate to
provide missionary electrification prior to the entry of the private sector.

4.2. All off-grid areas are declared **open for private sector participation** with objectives to:
4.2.1. Provide consumers with opportunities for reliable, environmentally-benign, efficient
and least-cost power supply;
4.2.2. Reduce public funding by allowing inflow of private capital; and
4.2.3. Rationalize and ultimately remove the UC-ME subsidy.

4.3. Options for Private Sector Participation:
4.3.1. Full take-over of NPC-SPUG generation function in a missionary area by NPP/s;
4.3.2. Provision of new or additional generation capacity by existing NPP/s; and
4.3.3. Provision of power generation and/or distribution system services in existing or new
off-grid areas.

4.4. Procurement of PSAs. DUs currently sourcing from NPC-SPUG are enjoined to
procure PSAs from NPPs through a **competitive selection process** in accordance with
Section 23 of the EPIRA and relevant DOE issuances.

4.5. Selection and Authorization of QTPs. Process of authorizing QTPs shall be in
accordance with guidelines and regulations issued by the DOE and ERC.

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RULE 5. PRIVATIZATION AND OPTIMIZED DISPOSAL OF NPC-SPUG ASSETS

5.1. Program for Privatization. NPC shall prepare an **annual program and schedule** for
privatization and optimized disposal of its assets utilized for missionary electrification.

5.2. Treatment of Assets in Good Working Conditions. Displaced assets in good working
condition may be sold through **competitive bidding** or redeployed to serve other off-grid
areas.

5.3. Procedure for Sale and Disposal. NPC shall formulate procedures for valuation and
methods for sale and disposal of its assets in off-grid areas, to be approved by the National
Power Board.

5.4. Disposal of Generation Assets Displaced by Private Sector Participation:
5.4.1. NPP shall have option to bid on NPC-SPUG assets displaced by PSP program.
5.4.2. NPP shall specify intent to use NPC assets in its bid proposal and state them in the
PSA.
5.4.3. DU/s shall also have option to bid on the asset for same purposes.
5.4.4. In case of a tie between DU and NPP bids, the **qualified bid of a DU shall have
preference** over the other bids.

5.5. Sale of Other Assets:
5.5.1. In the event of interconnection or other justifiable reasons, NPC shall sell other
associated facilities in accordance with existing laws and regulations.
5.5.2. The DU or the SO (on behalf of the DU) shall have the option to acquire NPC's
power lines and associated assets within its franchise area.

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RULE 6. ENSURING CAPACITY ADEQUACY

6.1. Declaration and Reporting of Net Capability:
6.1.1. ERC shall assess and determine actual capability of existing power plants per its
guidelines.
6.1.2. DOE and NEA shall conduct assessment and audit of electric power systems in off-
grid areas as necessary.

6.2. Quarterly Supply Adequacy Assessment Reports:

6.2.1. DU (in coordination with its SO) shall submit **quarterly report** to DOE, ERC, and
(for ECs) NEA, containing:
- Historical supply-demand balance in the last 3 months; and
- Projected supply-demand balance for the next 12 months per off-grid area.

6.2.2. NPC shall submit **monthly status** of operation of generation facilities in off-grid
areas, including: installed and dependable capacity; heat rate; generation and sales;
operating hours; fuel and lube oil consumption and prices; scheduled and unscheduled
outages; and efficiency parameters.

6.2.3. NPPs/QTPs and other generators shall submit **quarterly updates** on: declaration
of net plant capability per ERC guidelines; corrective maintenance conducted; and
schedule of preventive maintenance plans for the next 12 months.

6.3. Load Forecasting. DUs shall diligently forecast load in accordance with prescribed
guidelines, using accurate data and appropriate forecasting tools.

6.4. Treatment of Power Shortage. A DU experiencing or expecting capacity shortage in
the next 12 months shall immediately inform DOE and ERC through:
6.4.1. Updated Power Supply Procurement Plan;
6.4.2. Joint declaration with NPP/s, QTP/s or NPC-SPUG of net capability of all existing
generation facilities;
6.4.3. Capacities of incoming generation plants in the next 12 months; and
6.4.4. Six-month historical and 12-month projected supply-demand balance indicating
power shortage.

6.5. Generation Planning for Island Provinces. When deemed necessary, the DOE may
formulate a long-term power development plan for off-grid island provinces, with objectives
to: formulate least-cost capacity expansion plan; determine optimal energy mix including
indigenous and RE resources; formulate least-cost compliance with minimum RE
requirement under the RE Act; assess interconnection scenarios; and develop a program
for adoption of advanced power technologies replacing high-speed diesel generator sets.

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RULE 7. SYSTEM OPERATION FOR SMALL GRIDS

7.1. General Provisions:

7.1.1. The System Operator (SO) for a particular Small Grid shall be responsible to
operate and manage the system in accordance with standards set under relevant issuances
from competent Government agencies.

7.1.2. In a Small Grid with one distribution entity and one generator, the distribution entity
shall be the **Default SO**. Otherwise, a competent **Third Party SO** shall be engaged.

7.1.3. The SO shall formulate its own area-specific **Dispatch Protocol** based on the actual
configuration of the Small Grid, to be prepared within **one (1) year** upon its initial
operation.

7.1.4. Such Dispatch Protocol shall be developed in coordination with distribution entities,
NPC, NPPs and other generators, and shall be approved by the ERC.

7.1.5. NEA shall be responsible to provide technical assistance and financing support to ECs
serving off-grid areas to enhance capability as Default SO, including capital expenditure for
control and communication facilities, software tools, and monitoring systems.

7.1.6. TRANSCO (or its buyer, concessionaire or successor-in-interest) shall conduct
capacity-building activities for prospective SOs.

7.2. Engagement of Third Party SO (ERC to issue guidelines):
7.2.1. ERC shall review capability of distribution entity as Default SO.
7.2.2. When distribution entity is deemed not capable for any reason, ERC shall direct
engagement of a third party to perform SO responsibilities.
7.2.3. Third Party SO may be the NPC-SPUG or any Independent System Operator (ISO)
duly accredited by the ERC.

7.3. Minimum Qualifications of a Third Party SO:
7.3.1. No conflict of interest — no equity interest with DU and generation companies in
the area;
7.3.2. Technical Capacity — sufficient experience and qualified technical manpower; and
7.3.3. Financial Capacity — sufficient wherewithal for capital investment and working capital.

7.4. Role of the NPC as Third Party SO. NPC shall develop a **Standard SO Contract with
TOR**, to be approved by ERC and published for reference by stakeholders.

7.5. TOR for Third Party SO (minimum requirements):
7.5.1. Minimum qualifications per Rule 7.3;
7.5.2. Scope of work per relevant government agency issuances;
7.5.3. Access to vital facilities, meters, equipment and operational information of DU and
generators in the Small Grid;
7.5.4. Dedicated office near or within DU premises;
7.5.5. Reportorial requirements as necessary;
7.5.6. Funds or capital that may be infused, including facility improvements compatible for
Grid interconnection; and
7.5.7. Payment mechanism for cost recovery of SO services.

7.6. Dedicated SO Office. Each SO of the Small Grid shall set up a dedicated SO office.

7.7. Reportorial Requirements. Each SO shall submit a **quarterly operational report** to
DOE and ERC for assessment and audit.

7.8. Regulatory Guidelines. ERC shall issue guidelines for regulation of Third Party SOs,
including review and approval of SO contracts and rate-making for cost recovery.

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RULE 8. PROMOTING RELIABILITY AND EFFICIENCY OF OFF-GRID POWER SYSTEMS

8.1. Monitoring and Analysis of Reliability Data. DOE and ERC shall monitor and analyze
all operational data and information to facilitate accurate assessment and audit of all utilities,
plant owners and their facilities according to applicable standards and best practices.

8.2. Modernization of Off-Grid Systems. Each DU in off-grid areas shall prepare a
long-term system development and modernization program for resiliency, reliability and
quality of electric power services, to be integrated into the Distribution Development Plan
(DDP).

8.3. Efficiency Improvement of NPC-SPUG Power Plants. NPC-SPUG shall develop its
own efficiency and reliability improvement program [reference standards to be identified
per original circular] for its power plants and systems in off-grid areas, to form part of the
Missionary Electrification Plan integrated in the MEDP.

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RULE 9. INTERCONNECTION AND INTRA-CONNECTION OF OFF-GRID AREAS

9.1. Definition and Scope. "Interconnection of an Off-Grid Area into the Grid" is limited to
construction of transmission line and associated facilities to connect a particular off-grid
area into the Grid for the purpose of serving all captive customers. It **excludes** point-to-
point connection of a particular generation facility into the Grid.

9.2. Objectives of Interconnection:
9.2.1. Improve reliability and adequacy of power supply;
9.2.2. Reduce power rates; and
9.2.3. Lead to graduation from UC-ME subsidy.

9.3. Program for Interconnection:
9.3.1. TRANSCO (or successor) shall submit to DOE its **annual program for
interconnection** of off-grid areas; all projects shall be incorporated into the annual TDP
update.
9.3.2. TRANSCO (or successor) shall be responsible for engineering design, financing and
implementation of interconnection projects, supported by **techno-economic feasibility
studies**.
9.3.3. TRANSCO (or successor) shall undertake necessary programs to seek support of
local stakeholders and prepare all concerned parties.
9.3.4. TRANSCO (or successor), in coordination with NPC, shall prepare and facilitate
transition from off-grid to grid-connected status; shall provide transmission services in
areas identified by DOE for interconnection; system operation function and ownership of
transmission assets shall be transferred to TRANSCO subject to **fair market value
payment**.
9.3.5. ERC shall issue necessary guidelines for interconnection.

9.4. Sources of Funds for Interconnection:
9.4.1. Corporate financing by TRANSCO (or successor);
9.4.2. Appropriations from the National Government through TRANSCO;
9.4.3. Grant contributions from concerned local government units; and
9.4.4. Grants, donations and other similar sources.

9.5. Cost Recovery. ERC shall be responsible for adjustments to transmission charges or
other mechanisms to allow recovery of costs of interconnection projects.

9.6. Intra-connection of Off-Grid Systems. NPC, in coordination with TRANSCO (or
successor), shall undertake studies, financing and implementation of connecting two or
more existing off-grid areas into a larger power system. Each intra-connection project must
be supported by detailed techno-economic feasibility studies and **requires DOE Secretary
approval** prior to implementation.

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RULE 10. RATIONALIZATION OF TARIFFS AND PHASE OUT OF UC-ME SUBSIDY
IN MISSIONARY AREAS

10.1. DOE shall study and formulate new policies to rationalize existing tariffs in off-grid
areas, including removal of UC-ME subsidy, **not later than six (6) months** upon the
issuance of this Circular.

10.2. DOE shall explore other sources of funding for subsidies, including annual
appropriations as defined in Rule 11.

10.3. DOE, in coordination with NPC and NEA, shall constitute an advisory group to assist
DUs in review of their existing power supply contracts.

10.4. **Effective immediately** upon issuance of this Circular: all system losses incurred by
DUs in serving off-grid areas shall **no longer receive the UC-ME subsidy**.

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RULE 11. GOVERNMENT SUBSIDIES

The Government shall allocate annual appropriation to the NPC to fund all NPC activities
related to missionary electrification and all eligible customers in off-grid areas.

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RULE 12. REGULATORY SUPPORT AND OTHER PROVISIONS

Within **90 days** upon the effectivity of this Circular, the ERC shall immediately act upon
the following pending applications of the NPC:
- UC-ME requirement, including the Renewable Energy Cash Incentive, for one (1)
calendar year;
- UC-ME true-up adjustments for the previous year(s); and
- Incremental currency exchange rate adjustment and generation rate adjustment
mechanism over and above the SAGR.

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RULE 13. SEPARABILITY CLAUSE

If, for any reason, any provision of this Circular is declared unconstitutional or invalid, the
other parts or provisions hereof which are not affected thereby shall continue to be in full
force and effect.

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RULE 14. REPEALING CLAUSE

14.1. **Department Circular No. DC2004-01-001 is hereby repealed.**

14.2. Any department circular or issuance, contrary or inconsistent with these Rules is
hereby repealed, modified or amended accordingly.

14.3. Nothing in this Circular shall be construed to affect any vested rights acquired from
institutions or mechanisms existing prior to this Circular.

14.4. This Circular shall be applied **prospectively**.

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RULE 15. EFFECTIVITY

This Circular shall take effect fifteen (15) days after its publication in at least two (2)
newspapers of general circulation. Copies of this Circular shall be filed with the University
of the Philippines Law Center — Office of the National Administrative Register (UPLC-
ONAR). This Circular shall remain in effect until otherwise revoked.

Signed January 25, 2019, at the Department of Energy, Energy Center, Bonifacio Global
City, Taguig City, Metro Manila.

ALFONSO G. CUSI
Secretary