# DC2019-12-0016 — Renewable Energy Market Rules ## Department Circular No. DC2019-12-0016 **Promulgating the Renewable Energy Market Rules** Signed: 1 December 2019 by DOE Secretary Alfonso G. Cusi Effectivity: 15 days after publication in at least two newspapers of general circulation --- ## WHEREAS RECITALS 1. DOE Act of 1992 (RA 7638) declares State policy to ensure continuous, adequate, and economic energy supply through integrated exploration, production, management, and development of indigenous energy resources. 2. EPIRA (RA 9136) requires the State to, among others, promote the utilization of indigenous, new, and renewable energy resources in power generation. 3. RE Act (RA 9513) declares State policy to increase RE utilization by institutionalizing national and local capabilities in RE systems and promoting efficient and cost-effective commercial application through fiscal and non-fiscal incentives. 4. RE Act Section 6, Chapter III provides a Renewable Portfolio Standard (RPS) whereby all electric power industry stakeholders shall contribute to the growth of the RE industry; NREB to set minimum percentage of generation from eligible RE resources. 5. RPS Rules were promulgated through: DC2017-12-0015 (RPS for On-Grid Areas) and DC2018-08-0024 (RPS for Off-Grid Areas). 6. RE Act Section 8 mandates the establishment of a Renewable Energy Market (REM) by DOE to facilitate compliance of Mandated Participants with the RPS. 7. RE Act Section 8 further requires PEMC to establish a Renewable Energy Registrar (RER) within one year of RE Act effectivity to issue, keep, and verify RE Certificates (RECs). 8. DOE and NREB conducted public consultations on draft REM Rules on the following dates: 05 December 2017 (Davao City); 14 December 2017 (Makati City); 20 December 2017 (Cebu City); 18 January 2018 (Davao City); 08 November 2018 (Zamboanga City); 22 November 2018 (Iloilo City); and 27 November 2018 (Baguio City). --- ## SECTION 1. SHORT TITLE This Circular shall be known as the "Renewable Energy Market Rules" or "REM Rules." --- ## SECTION 2. SCOPE OF APPLICATION The REM Rules shall apply to all electric power industry participants in Luzon, Visayas, and Mindanao, both in On-Grid and Off-Grid Areas: **(a) Mandated Participants under the RPS Rules:** For On-Grid Areas: - All DUs for their Captive Customers - All Suppliers of Electricity for the Contestable Market (under RCOA) - Generating Companies to the extent of their actual supply to directly connected customers - Other entities as may be recommended by NREB and approved by DOE For Off-Grid Areas: - Generation Companies including NPC-SPUG, New Private Power Providers (NPPs), and Qualified Third Parties (QTPs) - DUs and Local Government-Operated Electric Systems with respect to their embedded generation facilities **(b)** RE Generation Companies registered in WESM. **(c)** Net Metering for RE Participants. **(d)** Green Energy Option Program (GEOP) Participants. PEMC shall perform RER functions for establishing the REM and developing the Philippine Renewable Energy Market System (PREMS); no later than one year from REM commercial operations start, RER functions shall be transferred to the entity performing market operations. --- ## SECTION 3. GOVERNANCE OF THE REM A REM Governance Committee (RGC) is hereby created under the supervision of the Philippine Electricity Market Board (PEM Board). The composition of the RGC is defined under the REM Rules. --- ## SECTION 4. RESPONSIBILITIES OF THE RGC The RGC shall oversee and monitor RER activities with regard to REM processes, ensure compliance by REM participants and Mandated Participants with the REM Rules, and regularly report to the PEM Board. Governance structure, responsibilities, and other activities are detailed in Chapters 1.2 and 1.3 of the REM Rules. --- ## SECTION 5. TRANSITORY PROVISIONS (a) PEMC is directed to submit for DOE approval: - Within 30 days: proposed Readiness Criteria (activities and scenarios needed for effective REM implementation); PEMC shall regularly report status until Readiness Criteria are met. - Within 6 months: Certification on level of compliance of all REM Participants and Mandated Participants with Readiness Criteria, including recommendation whether Readiness Criteria have been met. Once validated by DOE, REM shall start commercial operations. (b) Feed-In Tariff Allowance (FIT-All) Data Provision Requirements: prior to REM establishment, the FIT-All Fund Administrator shall commence providing DOE and PEMC all data necessary to facilitate RER's allocation of FIT electricity to Mandated Participants. (c) Prior to REM operationalization, RER shall ensure appropriate procedures, tools, and systems are in place. (d) Prior to REM operationalization, corresponding changes to WESM Rules shall have been implemented by PEMC. (e) Prior to Mindanao WESM commercial operations, the Meter Quantity Reconciliation Agent (per DC2017-05-0009) shall submit to RER monthly data for reconciliation of Nominations, Actual Schedules, Metered Quantities, System Losses, and Imbalances. (f) All REM Participants shall comply with registration requirements per the REM Rules and a REM Registration Manual to be issued by DOE. (g) PEMC may recommend to DOE other matters to ensure timely commencement of the REM. (h) All other transitory activities including those under Section 26 (Transitory and Other Provisions) of the RPS Rules shall apply. --- ## SECTION 6. SPECIFIC PROVISION FOR MINDANAO AND OFF-GRID AREAS Mandated Participants in Mindanao (absent WESM commercial operation) and in missionary areas served by NPC or its successors-in-interest, NPPs, and QTPs shall submit relevant data required by the RER to perform its mandate. --- ## SECTIONS 7–17. KEY PROVISIONS **Section 7. Authority to File Transaction Fees.** PEMC, with PEM Board endorsement, is authorized to file before ERC the structure and level of transaction fees in accordance with RE Act Section 8. **Section 8. RE Certificate Pricing.** PEMC shall develop the REC Price Cap, subject to ERC approval. **Section 9. Regulatory Support.** ERC shall provide necessary regulatory support for REM implementation, including RE price mitigation and resulting electricity prices from compliance with RPS Rules and REM Rules. **Section 10. Reportorial Requirements.** PEMC shall submit to DOE its annual reports on REM status and performance every end of June following the year being reviewed; DOE may require updates at any time. **Section 11. Prohibited Acts.** Non-compliance with the REM Rules shall be subject to administrative and/or criminal penalties per RE Act Section 35(e). **Section 12. Penalty Clause.** DOE may impose criminal and administrative liabilities per RE Act Sections 35–36. **Section 13. IEC Activities.** DOE, together with NREB and PEMC or successors-in-interest, shall develop and implement a comprehensive IEC campaign for Mandated Participants, electricity end-users, and other stakeholders. **Section 15. Separability Clause.** **Section 16. Repealing Clause.** All previous issuances, rules, and regulations inconsistent with this Circular are repealed. **Section 17. Effectivity.** 15 days after publication in at least two newspapers of general circulation; copies filed with UP Law Center-ONAR.