# Department Circular No. DC2024-09-0028 **Title:** Prescribing Amendments to Department Circular No. DC2023-10-0029 Titled "Providing Specific Auction Policy and Guidelines for Non-FIT-Eligible Renewable Energy Technologies in the Green Energy Auction Program" **Issuing authority:** DOE Secretary Raphael P.M. Lotilla **Issued:** September 10, 2024 **Pages:** 9 (image-based; OCR output at raw/_ocr/regulations/dc2024-09-0028.txt) **Amends:** DC2023-10-0029 --- ## Whereas Clauses - DC2023-10-0029 was issued 12 December 2023 providing Non-FIT GEAP guidelines - On 25 March 2024, DOE issued amendments clarifying that ERC shall promulgate the PDM rules for Non-FIT-Eligible RE Technologies in the GEAP - DC2023-10-0029 §7 provides that Non-FIT GET settlement is through WESM by Market Operator - Pumped-Storage Hydropower (PSH) is distinct from Geothermal and Impounding Hydro due to its combined ability to inject and/or draw electricity and provide reliability services to the grid - There is a need to provide a separate settlement mechanism for PSH that takes into account its design and operational characteristics and its capability to support greater entry of variable REs and power system flexibility - RA 9136 §30 requires ERC approval of the PDM for WESM - DC2021-03-0009 §13 requires ERC approval of the PDM for Reserve Market transactions - The WESM Manual on Billing and Settlement provides the procedure for payment and settlement in the WESM and Reserve Market --- ## Section 1 — Amends §4 Definitions (subparagraphs b, c, and inserts e) **b. Non-FIT Green Energy Tariff (Non-FIT GET)** — the Price Offer, in PhP/kWh, approved by the ERC after the conduct of each GEA for Non-FIT-Eligible RE technology corresponding to each Winning Bidder on a pay-as-bid basis; **Provided, That the Non-FIT GET for PSH shall be the Price Offer in PhP/kW/h** [DC2024-09-0028, §1, 2024-09-10]. **c.1. Price Offer for Impounding Hydro and Geothermal** — the price in PhP/kWh that a Qualified Bidder offers for energy generated or to be generated by its Non-FIT-Eligible RE Facility [DC2024-09-0028, §1, 2024-09-10]. **c.2. Price Offer for Pumped-Storage Hydro** — the price in PhP/kW/h that a Qualified Bidder offers for the **Available Capacity** of the PSH Facility; Provided, That the price offer shall exclude pumping cost; Provided further, That the pumping cost shall be net of house load as measured from a separate metering facility [DC2024-09-0028, §1, 2024-09-10]. **e. PSH Available Capacity** — the capacity which can be utilized to inject and/or draw electricity and/or support and provide flexibility to the grid; Provided, That Available Capacity shall exclude non-operational units and shall not exceed total Pmax; Provided further, That in computing the Non-FIT GET, PSH Available Capacity shall be based on the nominated capacity in kW per trading interval without regard to mode of operation (injecting/drawing) or use (load following, peak shaving, load shifting) or sub-market where capacity is sold/sourced [DC2024-09-0028, §1, 2024-09-10]. --- ## Section 2 — Amends §7, 7.2, 7.3: Scoped to Geothermal and Impounding Hydro Only Section 7 of DC2023-10-0029 is amended to apply **only to Geothermal and Impounding Hydro** (PSH is removed and given its own section). Settlement for these technologies remains through WESM via the top-up/flowback mechanism on Energy Trading Amount [DC2024-09-0028, §2, 2024-09-10]. --- ## Section 3 — Inserts New §8: PSH Settlement Mechanism PSH Facilities of GEA Winning Bidders are settled through WESM by the Market Operator; must register in WESM and Reserve Market. **PSH is paid based on Available Capacity (not energy delivered):** Total GEA Amount (PSH) = Σ(ACi × Non-FIT GET × di) Where: - ACi = absolute value of Available Capacity in kW for trading interval i for settlement interval h - di = duration of trading interval in hours (T/60, where T = duration in minutes: 5, 15, 60, etc.) **Total Trading Amount for PSH** (basis for collection/flowback) includes both energy and reserve market revenues: TTApsh,h = ETApsh,h + RTApsh,h Where: - ETApsh,h = energy trading amount per WESM PDM and Billing and Settlement Manual - RTApsh,h = reserve trading amount per WESM PDM and Billing and Settlement Manual ### §8.1. Collection and Flowback Market Operator calculates difference between TTApsh and Total GEA Amountpsh during preliminary and final settlement. ### §8.2. TTApsh < Total GEA Amountpsh (shortfall — collect from market) Split between Energy Market customers and System Operator in Reserve Market: - Collection Allocationb,m (Energy) = GEASA_energy,m × (GESQb,m / GESQcustomer-total,m) - Collection Allocationso,m (Reserve) = (TTApsh,m − GEAApsh,m) × (SRQpsh,m / TTQpsh,m) Where: - GEASAenergy,m = energy share of shortfall = (TTApsh,m − GEAApsh,m) × (GESQpsh,m / TTQpsh,m) - TTQpsh,m = sum of GESQ and Scheduled Reserve Quantity (MWh) for the billing month - SRQpsh,m = total scheduled reserve quantity (MWh) for the billing month ### §8.3. TTApsh > Total GEA Amountpsh (surplus — flowback to market) - Flowback Allocationb,m (Energy) = GEAFAenergy,m × (GESQb,m / GESQcustomer-total,m) - Flowback Allocationso,m (Reserve) = (TTApsh,m − GEAApsh,m) × (SRQpsh,m / TTQpsh,m) Where: - GEAFAenergy,m = (TTApsh,m − GEAApsh,m) × (GESQpsh,m / TTQpsh,m) PSH provisions effective only upon WESM and Reserve Market registration and completion of DC2023-10-0029 §15 (as amended) transitory conditions. Pending completion, PSH settled under WESM PDM/Rules/Market Manuals [DC2024-09-0028, §3, 2024-09-10]. --- ## Section 4 — Inserts New §9: PSH Market Integration Rules DOE to issue specific rules for smooth integration of PSH in the market, including: 1. Scheduling of PSH in Reserve Market and Energy Market to ensure full utilization 2. PSH must undergo Testing and secure Certification of AS Capability from System Operator or accredited third-party testing entity 3. PSH not limited to current AS products; may use excess VRE energy for pumping 4. PSH subjected to a **single Power Delivery Service (PDS) Charge** regardless of whether injecting or drawing electricity — DOE and ERC to consider updating OATS Rules accordingly **Responsibilities (§9.2):** - System Operator and Market Operator: optimal dispatch of PSH energy and AS capacity - System Operator: include PSH in roster of Ancillary Service Providers as far as practicable - Market Operator: payment and settlement of GEA amount to PSH; scheduling of PSH - System Operator: dispatch PSH in grid; adhere to ERC-approved AS cost recovery mechanism **Pumping costs** collected from WESM trading participants pro rata by GESQ [DC2024-09-0028, §4, 2024-09-10]. --- ## Section 5 — Inserts New §10: Revenue Clarification For avoidance of doubt: regardless of Energy Trading Amount (geo/hydro) or Total Trading Amount (PSH), the **revenues attributable to GEA Winning Bidders = Total GEA Amount** only, based on Actual Energy Delivered (geo/hydro) or Available Capacity (PSH) and the corresponding Non-FIT GET [DC2024-09-0028, §5, 2024-09-10]. --- ## Section 6 Old §8–15 of DC2023-10-0029 renumbered as §11–18. --- ## Sections 7–9: Standard Clauses - Separability, Repealing, Effectivity (takes effect immediately after publication in two newspapers; filed with UPLC-ONAR) *Issued: September 10, 2024* *Signed: DOE Secretary Raphael P.M. Lotilla*