MANILA, Philippines — The Department of Energy (DOE) is crafting the rules for the bidding of unserved and underserved areas to microgrid operators to help the country fast-track its total electrification.
The DOE is seeking comments from industry players for its draft department circular “Rules and Regulations Implementing Republic Act (RA) 11646 (Microgrid Systems Act)” until April 19.
A microgrid system is defined as an integrated power generation and distribution system whether or not connected to a distribution or transmission system.
The agency will also declare underserved areas, or those with less than 24 hours of electricity daily, and unserved areas, or those with no electricity access, no distribution lines, no home power system.
Under the proposed rules, the DOE will open the identified underserved and unserved areas for competitive selection process (CSP) to microgrid system proponents (MGSPs).
MGSPs can be a private corporation, local government unit (LGU), cooperative, non-government organization, generation company and its subsidiaries and distribution utility (DU) and its subsidiaries.
Since the ownership and operation of a microgrid system is not a public utility operation, they are not required to secure a franchise from Congress.
For the CSP, the DOE will authorize the National Power Corp. to conduct the bidding process. The state-run agency will form a five-member bids and awards committee to spearhead and manage the CSP, and technical working group composed of technical, legal and financial personnel.
The DOE will also open underserved and unserved areas for unsolicited proposals from MGSPs, subject to Swiss challenge as a an alternative mode.
However, unsolicited proposals are only open to areas that are not yet officially declared by the DOE as underserved and underserved, or if they are not included in a DU’s local total electrification roadmap or distribution development plan.
Once awarded with a MGSP service contract, the Energy Regulatory Commission (ERC) shall issue a provisional authority within 75 days upon receipt of application for authority to operate and issue a final decision within 135 days.
The MGSP shall also secure a certificate of commerciality from the power regulator prior to its commercial operation.
For the rates, the ERC will evaluate and determine the full cost, approved subsidy if applicable and retail rate imposed on end-users of unserved and underserved areas.
The draft rules also call for the establishment of technical and service performance standards to be developed by the ERC, in consultation with the DOE, Napocor, National Electrification Administration (NEA), other relevant government agencies and private stakeholders.
Approved last Jan. 21, the Microgrid Systems Act aims to promote the use of microgrid systems to accelerate the total electrification of unserved and underserved areas nationwide.