Rules for Green Energy Option Program

Legal basis, invoked statutes, framework

Republic Act No. 7638 (DOE Act of 1992) is invoked to reflect the State policy to ensure a continuous, adequate and economic energy supply through indigenous energy resources.
Republic Act No. 9136 (Electric Power Industry Reform Act of 2001 or EPIRA) is invoked for State policy to assure socially and environmentally compatible energy sources and to promote indigenous and renewable resources, including Section 37(e)(i) directing DOE to encourage private sector investments and promote indigenous and renewable development.
Republic Act No. 9513 (Renewable Energy Act of 2008 or RE Act) is invoked for the policy to increase renewable energy utilization and institutionalize development of national and local capabilities through fiscal and non-fiscal incentives.
The GEOP is mandated by Section 9, Chapter III of the RE Act, requiring DOE—in consultation with the National Renewable Energy Board (NREB)—to promulgate implementing rules and regulations for the GEOP.
Section 32 of the RE Act is invoked for DOE’s evaluation and recommendation of operating permits for RE Suppliers providing RE resources to GEOP End-Users.
The circular adopts by reference the terms defined in the EPIRA and the RE Act, and their implementing rules and regulations.

Policy, purpose, and guiding principles

The GEOP Rules establish general rules and procedures to guide End-Users, RE Suppliers, and Network Service Providers (NSP) in facilitating the option of End-Users to choose RE Resources as energy sources.
The GEOP Rules operationalize participation in renewable supply in a least-cost and sustainable manner.
Participation in GEOP is guided by a presumption that an informed decision is made when an End-User opts to source energy requirements from a RE Supplier under the GEOP, after the DU and RE Supplier fully inform the End-User of attendant technical, commercial and legal arrangements (Section 3(a)).
NSPs must adhere to open and non-discriminatory access to transmission and distribution facilities (Section 3(b)).
NSPs must ensure reliable and efficient wire or wheeling services and agree attendant commercial and technical arrangements with RE Suppliers and End-Users (Section 3(c)).
If a GEOP Supply Contract is canceled, revoked, or terminated, NSPs must continue wheeling services, subject to settlement/payment of any unpaid obligations of the End-User or RE Supplier (Section 3(c)).
The circular requires unbundling: rates and charges to End-Users must be unbundled, segregated, and itemized for generation components, transmission charges, distribution charges, supply charges, and other applicable charges (Section 3(d)).
The GEOP is treated as a non-regulated activity intended to develop and promote increased utilization of indigenous and environmentally-friendly energy sources through End-User empowerment, and therefore the GEOP Supply Contract need not be approved by the Energy Regulatory Commission (ERC) (Section 3(e)).

Definitions and key covered stakeholders

Distribution Utilities (DU) means electric cooperatives, private corporations, government-owned utilities, or existing local government units with exclusive distribution system franchises under the EPIRA, including DUs and entities licensed to operate in economic zones (Section 5(a)).
End-User means any person or entity requiring supply and delivery of electricity for its own use; under the GEOP, it is any person or entity that chooses RE Resources as energy sources (Section 5(b)).
Generation Facility means a facility where electric energy is produced from some other form of energy by a suitable apparatus (Section 5(c)).
GEOP Supply Contract means the agreement between an End-User and an RE Supplier for supply of electricity generated from RE by a duly authorized RE Supplier, containing at minimum: (i) Contract Period; (ii) Name of Electricity End-User and Location; (iii) Name of RE Supplier and Source of RE Supply; (iv) Guaranteed Demand (in kW or MW) and Energy (in kWh or MWh); (v) Contract Price; (vi) Payment Terms; (vii) Replacement Power Provision; (viii) Default Provision; (ix) Other Charges, if any, segregated and itemized (Section 5(d)).
Mandated Entities are electric power industry participants mandated to carry out responsibilities under the GEOP (Section 5(e)).
National Grid Corporation of the Philippines (NGCP) refers to the franchise holder under Republic Act No. 9511 to operate and maintain the transmission network under its concession agreement (Section 5(f)).
Net Electricity Sales means energy supply less system losses and own use reckoned from 26 December of the preceding year to 25 December of the current year (Section 5(g)).
Network Service Provider (NSP) means a person or entity owning, controlling, or operating a transmission or distribution system for conveyance of electric power from the Generating Facility to the End-User (Section 5(h)).
RE Certificate (REC) represents all renewable and environmental attributes from one megawatt-hour (1MWh) of electricity generation sourced from duly registered and eligible RE generation facilities (Section 5(i)).
Renewable Energy Market (REM) is the market developed and operated by PEMC or the independent market operator where RE Certificates are traded pursuant to Section 8 of the RE Act (Section 5(j)).
RE Suppliers are individuals or juridical entities created, registered, or authorized in the Philippines under existing laws and engaged in provision or supply of electric power from RE resources to End-Users, with operating permits issued by DOE (Section 5(k)).
RE Registrar (RER) refers to a unit within EMC, a non-stock, non-profit private corporation designated in accordance with the RE Act that administers and operates the REM (Section 5(l)).
RE Resources are renewable energy resources renewable on a regular basis with relatively rapid renewal rates supporting availability over an indefinite period, including biomass, solar, wind, geothermal, ocean energy, hydropower that conform with internationally accepted dam norms and standards, and other emerging renewable energy technologies (Section 5(m)).
Replacement Power is supply of electricity to a GEOP-enrolled End-User delivered when the RE Resource contracted by the RE Supplier is unavailable for any cause (Section 5(n)).
Wholesale Electricity Spot Market (WESM) is the wholesale electricity spot market established by DOE under Section 30 of the EPIRA (Section 5(o)).
The circular’s scope applies to: End-Users, RE Suppliers, Distribution Utilities, Economic Zone Developers, Economic Zone Utility Enterprises, TRANSCO (or successors), PEMC and/or IMO, Supplier of Last Resort (SOLR), Central Registration Body (CRB), and RE Registrar (Section 4).

GEOP eligible End-Users and participation mechanics

End-Users with monthly average peak demand of 100 kW and above may opt to participate in the GEOP, using the past twelve (12) months monthly average peak demand threshold, upon effectivity of the circular (Section 6(a)).
For new connections, participation rules apply based on estimated average monthly peak demand for the next twelve (12) months:
- End-Users with estimated average monthly peak demand of 300 kW or above may participate (Section 6(b)(i)).
- End-Users with estimated average monthly peak demand from 100 kW to below 300 kW must have registered historical monthly peak demand of at least 100 kW for three (3) consecutive months to participate (Section 6(b)(ii)).
- An End-User operating for less than twelve (12) months from effectivity of the GEOP Rules is treated as a newly connected End-User for the circular’s purposes (Section 6(b)(iii)).
GEOP participation is governed by a GEOP Supply Contract between the End-User and RE Supplier and the Supply Contract shall not require ERC approval under Section 3(e) of Rule 1 (Section 6(c)).
GEOP participation covers the desired supply of RE generation for the End-User’s demand and energy requirements (Section 6(d)).
End-Users with average peak demand below 100 kW may participate in the GEOP after DOE, in consultation with NREB and industry stakeholders, determines that technical requirements and standards are met (Section 7).
Eligible End-Users may voluntarily contract directly with a RE Supplier (Section 8).
If an End-User contracts with an RE Supplier and then reverts to being a DU customer, reversion is subject to: (1) fulfillment of all contractual obligations to the RE Supplier, and (2) execution of relevant DU supply agreement including a definite contract period, consistent with ERC rules (Section 8(a)).
An End-User that reverted to the DU may again participate in the GEOP, subject to fulfillment of contractual obligations with the DU (Section 8(b)).
GEOP availability is limited until DOE, in consultation with NREB and industry stakeholders, determines Mindanao market readiness, including commercial operation of WESM in Mindanao and declaration of retail competition in Mindanao; GEOP may be available only to End-Users in Luzon and Visayas until that determination, subject to Sections 6 and 7 (Section 8(c)).
The circular requires End-Users enrolling under GEOP to:
- Receive monthly bill information from its DU of monthly energy consumption and generation charge for RE Facilities (Section 10(b)(i)).
- Receive monthly bill information from the NSP or DU of transmission, distribution services, and other charges, segregated and unbundled, by monthly electric bill (Section 10(b)(ii)).
- Notify the DU of intention to participate three (3) months prior to signing the GEOP Supply Contract through registered mail or personal service (Section 10(b)(iii)).
- Notify the DU of its signed contract with the RE Supplier at least one (1) month prior to effectivity through registered mail or personal service (Section 10(b)(iv)).
- Pay and/or settle financial obligations to the DU and/or RE Supplier (Section 10(b)(v)).
Failure to comply subjects the End-User to DU disconnection policies and/or sanctions under wheeling agreement and GEOP Supply Contract (Section 10(b)).

GEOP mandated activities and roles

TRANSCO (or successors-in-interest), DUs, PEMC (or IMO), and RE Suppliers must provide individually and/or collectively the mechanisms for physical connection and commercial arrangements needed for GEOP success, and DOE must initiate and coordinate the undertaking (Section 10(a)).
RE Suppliers must:
- Apply for an operating permit with DOE through the Renewable Energy Management Bureau (REMB) as a RE Supplier and correspondingly register in the CRB and RE Registrar to provide electric power supply under GEOP, following DOE guidelines and procedures (Section 11(a)(i)).
- Operate under DOE permit issuance guidelines: within six (6) months from effectivity, DOE must issue guidelines and procedures for permit issuance after public consultations (Section 11(a)(i)).
- Receive automatic qualification as RE Supplier for certain entities: entities already demonstrated ability to contract and bill Contestable Customers under Retail Competition and Open Access (RCOA), including entities licensed as Retail Electricity Suppliers (RES) and local RES, are automatically qualified provided the RES owns or operates the RE Facility, or procures competitively-priced RE generation as part of compliance with Renewable Portfolio Standards (RPS) On-Grid Rules promulgated by DOE (Section 11(a)(i)).
- Incorporate into the GEOP Supply Contract mechanisms addressing RE Facility intermittency/availability, ensure continuous service via Replacement Power, and include applicable transmission/distribution wheeling charges (Section 11(a)(ii)).
- Ensure transparency in the monthly electric bill of GEOP as End-User billing (Section 11(a)(iii)).
- Comply with reportorial requirements of DOE, ERC, CRB, and the RE Registrar (Section 11(a)(iv)).
The DU as SOLR must:
- Impose rates and/or charges under GEOP only if approved by ERC; pending ERC approval, default rates and/or charges are WESM nodal price rate plus the premium to cover administrative and overhead expenses in accordance with ERC Rules (Section 11(b)(i)).
- Provide electricity supply to the End-User if the RE Supplier cannot perform obligations under the GEOP Supply Contract; alternatively, the RE Supplier may enter into an agreement with the DU on payment of Replacement Power (Section 11(b)(ii)).
TRANSCO (or its successor-in-interest) must:
- Provide open and non-discriminatory access to transmission facilities (Section 11(c)(i)).
- Ensure reliability and efficiency of transmission system, including provision of needed ancillary services (Section 11(c)(ii)).
- Segregate and itemize charges to the End-User or RE Supplier (Section 11(c)(iii)).
- Ensure dispatch of generating facilities per WESM Rules and the Philippine Grid Code (Section 11(c)(iv)).
- Prepare and update its Transmission Development Plan (TDP) annually (Section 11(c)(v)).
- Serve as default Metering Service Provider (MSP) for End-Users directly connected to transmission facilities (Section 11(c)(vi)).
DUs as NSPs must:
- Provide open and non-discriminatory access to distribution system (Section 11(d)(i)).
- Maintain reliability and efficiency of distribution facilities (Section 11(d)(ii)).
- Prepare and update its Distribution Development Plan (DDP) annually to consider infrastructures needed to operationalize GEOP within its franchise area (Section 11(d)(iii)).
- Serve as default retail MSP within franchise and ensure compliance with installation and maintenance of all revenue metering facilities of the End-User (Section 11(d)(iv)).
CRB and RE Registrar must:
- Register GEOP End-Users with their RE Suppliers (Section 11(e)(i)).
- Facilitate amendments to WESM Rules if necessary (Section 11(e)(ii)).
RE Suppliers must provide a transparent and simplified offer sheet to GEOP End-Users containing at least: itemized and unbundled all-in fees and charges; Replacement Power sourced from a RE facility; and facilitation of registration and switching with the CRB (Section 12).
DOE through REMB must evaluate applications and recommend issuance of operating permits consistent with Section 32 of the RE Act (Section 13).
The DOE Secretary may create an Oversight Committee through a separate issuance to set guidelines and eligibility criteria for RE Suppliers consistent with the circular’s Section 9 (Section 13).

Oversight committee and regulatory coordination

An Oversight Committee is created for GEOP implementation, chaired by the DOE Undersecretary for REMB (Section 14).
The Oversight Committee includes:
- DOE REMB Director or designated representative (Section 14(a)).
- DOE Electric Power Industry Management Bureau Director or designated representative (Section 14(b)).
- DOE Legal Services Director or designated representative (Section 14(c)).
- Representative from the CRB (Section 14(d)).
REMB (or another bureau/unit designated by the Secretary) must provide technical and administrative support to the Oversight Committee (Section 14).
DOE must conduct regular review and assessment of the GEOP Rules in consultation with ERC, NREB, and other stakeholders (Section 15(a)).

Billing, RECs ownership, information campaign

RECs derived from energy supplied to GEOP End-Users are for the account of the DUs, and GEOP energy sales form part of the DU’s Net Electricity Sales for RPS compliance (Section 15(b)).
For RE facilities installed within an End-User’s premises, the DU may install a third kilowatt-hour meter or use the RE Facility’s built-in meter to monitor total RE generation supplied to the End-User, provided meters are tested and calibrated by ERC under ERC Rules (Section 15(b)).
Only generation from RE Facilities eligible under Sections 10 and 11 of the RPS Rules for On-Grid Areas issues the corresponding RECs for purposes of GEOP; RECs are issued to the account of the DUs (Section 15(c)).
DOE, coordinating with the ERC, must conduct an Information, Education and Communication (IEC) campaign to inform End-Users and other affected entities on the GEOP (Section 15(d)).
The ERC must issue the necessary regulatory framework, including technical and interconnection standards and wheeling fees, to effect and achieve GEOP objectives (Section 15(e)).
A dual billing system may be adopted: the End-User is billed separately by the RE Supplier for electricity supply including Replacement Power, and by the DU or TRANSCO (for directly-connected End-Users) for wires services and charges (Section 15(f)).
Under dual billing, bills must reflect itemized and unbundled all-in charges under the GEOP Supply Contract including monthly energy consumption, while the DU/TRANSCO bill reflects other wires and service charges including transmission/distribution charges and other pass-through charges (Section 15(f)).
DUs must not be financially liable for any excess power provided by the RE Supplier to the End-User under the GEOP Supply Contract (Section 15(g)).

Prohibited acts and sanctions regime

Non-compliance with or violation of the GEOP Rules subjects covered persons to administrative and/or criminal penalties under the RE Act framework (Section 16).
Administrative liability: DOE may impose a penalty ranging from PHP 100,000.00 to PHP 500,000.00, or may recommend revocation of the DU’s or Generation Facility’s license, franchise or authority to operate at DOE discretion (Section 17(a)).
Criminal liability:
- Any person who willfully fails to comply with or violates GEOP Rules is penalized under the RE Act (Section 17(b)).
- Persons who willfully aid or abet, or cause another’s commission, are liable in the same manner as principals (Section 17(b)).
- For associations, partnerships, or corporations, the penalty is imposed on the partner, president, chief operating officer, chief executive officer, directors or officers responsible for the violation (Section 17(b)).
- Upon conviction, the penalties include imprisonment of one (1) year to five (5) years, or a fine ranging from PHP 100,000.00 to PHP 100,000,000.00, or twice the amount of damages caused or costs avoided for non-compliance, whichever is higher, or both at court discretion (Section 17(b)).
- Criminal penalties do not prejudice penalties under existing environmental regulations of the DENR or any other concerned government agency (Section 17(b)).
DOE Rules of Practice and Procedure apply to cases for imposition of the administrative/criminal penalties (Section 17(c)).
No fine or penalty imposed on a DU or RE Provider/Generation Facility may be charged to any End-User or considered as a substitute for compliance (Section 17(d)).

Transitory, reportorial, separability, repeal

Non-diminution: no provision of the circular diminishes any right vested under existing laws, contracts, or agreements (Section 18).
Annual reporting:
- All DUs and RE Suppliers must submit to DOE an annual report on GEOP implementation; DUs must include such report in their respective DDPs (Section 19).
- DUs and TRANSCO (or successors-in-interest) must submit the list of End-Users intending to participate in GEOP and the End-Users who signed GEOP Supply Contracts (Section 19).
- RE Suppliers must submit data on sales to their End-Users (Section 19).
- DOE, ERC, CRB, and RER must establish the database required for implementation of the GEOP Rules (Section 19).
Separability: if any provision is declared invalid or unconstitutional, the other provisions remain valid and subsisting (Section 20).
Repealing clause: all previous issuances, rules, and regulations inconsistent with the circular are repealed, amended, or modified accordingly (Section 21).