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[ DEPARTMENT CIRCULAR NO. DC2017-12-0015, January 09, 2018 ]


Adopted: 22 December 2017
Date Filed: 09 January 2018

WHEREAS,  Republic  Act  No.  7638,  otherwise  known  as  the  “Department  of Energy (DOE) Act of 1992,” declares as a policy of the State to, among others, ensure a continuous, adequate and economic supply of energy through the integrated and intensive exploration, production, management  and development of the country’s indigenous energy resources;

WHEREAS,  Republic  Act  No.  9136,  otherwise  known  as  the  “Electric  Power Industry Reform Act of 2001” or “EPIRA,” declared policy of the State to, among others: (a) assure socially and environmentally compatible energy sources and infrastructure;   and  (b)  promote   the  utilization   of  indigenous   and  new  and renewable energy resources in power generation in order to reduce dependence on imported energy;

WHEREAS,  Section  37,  Chapter  III  of  EPIRA  mandates  the  Department  of Energy  (DOE) to encourage  private sector investments  in the electricity  sector and promote the development of indigenous and RE resources;

WHEREAS, Republic Act No. 9513, otherwise known as the “Renewable Energy Act  of  2008”  or  the  “RE  Act,”  declared  policy  of  the  State  to  increase  the utilization  of  renewable  energy  (RE)  by  institutionalizing  the  development  of national  and  local  capabilities  in the  use  of RE  systems,  and  promoting  their efficient  and cost-effective  commercial  application  by providing  fiscal and non- fiscal incentives;

WHEREAS,  the share of RE in the national power generation  mix was 34% at the time of the passage of the RE Act;

WHEREAS, the subsequent increase in electricity demand after 2011 and the construction of more fossil fuel plants for base load requirements  of the country decreased  the share of RE in the national power generation  mix approximately 24%;

WHEREAS,   the  DOE   launched   the  National   Renewable   Energy   Program (NREP) on 15 June 2011 that institutionalizes a comprehensive approach to encourage greater private sector investments in RE development;

, Section 6, Chapter III of the RE Act provides that all stakeholders in the electric power industry shall contribute to the growth of the RE industry in the country;

WHEREAS, Section 4, Rule 2, Part II of the Implementing Rules and Regulations of the RE Act (RE Act IRR) provides that the RPS, as a policy mechanism, shall oblige electric power industry participants such as Generation Companies, Distribution Utilities (DUs) including Electric Cooperatives (ECs) and Suppliers of Electricity  to source  or produce  a fraction  of their electricity  requirements  from eligible RE resources; and determine to which sector the Renewable Portfolio Standards (RPS) shall be imposed on a per grid basis within one (1) year from effectivity of the RE Act;

WHEREAS, Section 4, Rule 2, Part II of the RE Act IRR provides that the DOE shall issue the RPS upon the recommendation of the NREB;

WHEREAS, the DOE conducted numerous public consultations and technical working  group  meetings  nationwide  from  2011-2017  on  the  proposed  rules governing the establishment of the RPS;

NOW THEREFORE, upon the recommendation of the NREB, the DOE hereby issues, adopts and promulgates the following rules and regulations:


Section 1. Short Title. This Circular shall be known as the “RPS Rules for On- Grid Areas” and shall hereinafter be referred to as the “RPS On-Grid Rules.”

Section  2.  Purpose.  The  RPS  On-Grid  Rules  are  hereby  adopted  to:  (a) Mandate the electric power industry participants to source or produce a specified portion  of their  electricity  requirements  from  eligible  RE  resources  in order  to develop indigenous and environmentally  friendly energy sources; (b) Establish a minimum annual RPS requirement and the minimum annual incremental RE percentage;  (c) Prescribe  the eligible  RE facilities  and the compliance mechanisms;  (d) Monitor the compliance  of the mandated  industry participants; and (e) Provide the penalties for non-compliance.

Section 3. Scope.
As provided Section 4(c), Rule 2, Part II of the RE Act IRR, the scope of this RPS On-Grid Rules includes:
(a)  Types  of  Eligible  RE  Facilities  and  the  identification  and  certification  of generation facilities using said RE resources;

(b)  Yearly minimum RPS requirements;

(c)  Annual   minimum   incremental   percentage   of   electricity   sold   by   each Mandated   Participant   that  is  required   to  be  sourced   from  eligible  RE resources and which shall, in no case, be less than one percent (1%) of its annual energy demand over the next 10 years;

(d) Means of compliance by the Mandated Participants with the minimum incremental percentage set by the DOE to meet the RPS requirements; and

(e)  General  principles  on the establishment  and operations  of the RE Market and the RE Registrar.
Section  4. Coverage.  This RPS Rules  shall apply  to on-grid  areas  only. The DOE shall promulgate  a separate  issuance  for the implementation  of RPS for Off-Grid Areas.

Section  5. Definition  of Terms.  As used  in this Circular,  the following  terms shall be defined as follows:
(a) “Composite   Team”  refers  to  the  team  established   and  whose responsibilities  are set out under Section 17 and Section 18 respectively, of Rule 5 of this Circular;

(b)  “Contestable  Market”  refers  to the  segment  of that  electricity  end-users who have a choice of a supplier of electricity;

(c)  “Direct Connection” refers to an arrangement for the supply of energy to an end-user or ecozone enterprise using the transmission or sub-transmission assets with voltage level requirement beyond the level that can be provided by the Distribution Utility or Ecozone Utility Enterprise where the end-use or ecozone enterprise is located; directly connecting  to the grid using facilities that  cannot  be  economically  and  technically  provided  by  the  Distribution Utility or Ecozone Utility Enterprise.

(d) “Distribution Utilities or DUs” refers to Electric Cooperatives, private corporations, government-owned utilities or existing local government units, which  have  exclusive  franchises  to operate  distribution  systems,  including but not limited to, ecozone developers or utility enterprises operating in the economic zones and/or export processing zones;

(e)  “Eligible  RE  Facility”  refers  to  a  generating  facility  that  utilizes  an  RE
resources or RE technology;

(f)   “Energy  Mix”  refers  to  the  total  national  Net  Electricity   Sales  of  the
Philippines from all sources of energy in MWh for a given year;

(g)  “Electricity  Supply”  refers  to  energy  in  kilowatt-hour  (kWh)  purchased and/or generated to meet the total energy requirement of the Mandated Participant;

(h)  “Feed-in Tariff or FIT” refers to the RE development  mechanism  provided under the RE Act that offers guaranteed payments on a fixed rate per kWh for emerging RE sources, excluding generation for own-use;

(i)   “FIT System” means the system mandated under Section 7 of the RE Act;

(j)   “Force  Majeure”  refers  to  a  typhoon,  storm,  tropical  depression,  flood, drought, volcanic eruption, earthquake,  tidal wave or landslide  or an act of public enemy, war (declared or undeclared), riot, insurrection, revolution, sabotage, blockade or any violent and threatening actions that resulted to extraordinary disruption of the operations of the electric power industry participant;

(k)  “Generation Facility” refers to a facility for the production of electricity;

(l)   “Local  Retail  Electricity   Supplier  or  Local  RES”  refers  to  the  non- regulated business segment of the DUs catering to the Contestable  Market only within its franchise area, or persons authorized by appropriate entities to supply electricity within their respective economic zones;

(m) “Mandated  Participant”  refers  to  electric  power  industry  participants mandated  to  comply  with  the  RPS  annual  requirement   which  includes entities enumerated in Rule 3, Section 11 of this RPS On-Grid Rules;

(n)  “Net Electricity Sales” refers to energy supply less system losses and own- use reckoned from 26 December  of the preceding  year to 25 December  of the current year;

(o) “National  Power  Corporation  or  NPC”  refers  to  the  government corporation created under Republic Act No. 6395, as amended;

(p) “National Renewable Energy Program” or “NREP” refers to the policy framework developed by DOE setting out among others the indicative targets for the increased installation of power plants using RE resources;

(q)  “Net Metering” refers to a system, appropriate for a distributed generation, in which a distribution grid user has a two-way connection to the grid and is only  charged  for  his  net  electricity  consumption  and  is  credited  for  any overall contribution to the electricity grid;

(r)   “Power  Supply  Agreement  or  PSA”  is  a  contract  for  sale  of  electricity between the seller and the buyer of electricity;

(s)  “RE Certificate” or “REC” refers to a certificate issued by the RE Registrar to electric  power  industry  participants  showing  the energy  sourced, produced, and sold or used. RE Certificates may be traded in the RE Market in complying with the RPS. For purposes of this Circular, the REC shall represents all renewable and environmental attributes from one (1) MWh of electricity generation sourced from a duly registered Eligible RE Facilities;

(t)   “RE  Market  or REM”  refers  to the market  where  the trading  of RECs  is made;

(u)  “REM Rules” refers to the rules established by the DOE for the operation of the RE Market and to govern the conduct of the RE Registrar for the purpose of implementing this RPS On-Grid Rules;

(v) “RE Registrar” refers to an entity that issues, keeps and verifies RECs corresponding to energy generated from Eligible RE Facilities and sold to or used by end-users;

(w) “Retail   Electricity   Supplier   or  RES”   refers   to  any  person   or  entity authorized by the ERC to sell, broker, market or aggregate electricity to the end-users;

(x)  “RPS”   refers   to   a   market-based   policy   that   requires   the   Mandated Participant  to  source  a  portion  of  their  energy  supply  from  Eligible  RE Facilities;

(y)  “RPS Account” refers to the account registered with the RE Registrar either by a Mandated Participant or the owner of an Eligible RE Facility to hold its RECs; and

(z) “Wholesale Electricity Spot Market or WESM” refers to the wholesale electricity spot market established by the DOE.
Furthermore, the terms defined under the Republic Act 9136, RA 9513 and their respective IRRs are hereby adopted by reference in this Rules.


Section  6. Implementation  of RPS On-Grid  Rules. 
The RPS On-Grid  Rules shall be implemented in Luzon, Visayas and Mindanao grids.

Section 7. Minimum Annual RPS Requirement. The RE Share of electricity coming from RE resources in the Energy Mix shall be based on the aspirational target  of  35%  in  the  generation  mix  expressed  in  MWh  by  2030,  subject  to regular review and assessment by the DOE.

The  minimum   annual  RPS  requirement   per  Mandated   Participant   shall  be computed by the Composite Team in coordination with the NREB; Provided, That the annual RPS requirement for each Mandated Participant shall be calculated in accordance with the following formula, all expressed in MWh:


Year 0 to n, exc l ud i ng t he T r ans iti on Pe ri o d
t he Year of t he RPS r equ ir e m ent s t a rti ng at Year 1 and exc l ud i ng t he Transition Pe ri o d
RPS (n)
RPS f or t he Year n f or each M anda t ed Pa rti c i pant s t a rti ng at Year 1 (i n MW h , r ounded down to t he nea r est MW h )
K 0
t he pe r cen t age of t o t al ene r gy sa l es fr om p l an ts under t he F IT Sys t em to t he t o t al ene r gy sa l es of a ll M anda t ed Pa rti c i pan ts at Year 0
K m
M i n i m um Annual I nc r e m en t al RE pe r cen t age, as per Sec ti on 8, f or a l l M anda t e d Pa rti c i pan ts at year m


I nc r e m en t al RPS pe r cen t age as set by NREB at one pe r cent ( 1 % ) i n iti a lly f or M anda t ed Pa rti c i pan ts in Luzon, V i sayas and M i ndanao , sub j ect to r ev i ew annua lly such t hat t he Ta r get RE Sha re w ill be ach i eved (K is not cons t an t )

ES (n-1)
Ne t E l ec tri c ity Sa l es in p r ev i ous Year f or each M anda t ed Pa rti c i pant (i n MW h, r ounded down to in t he nea r est MW h ). For avo i dance of doub t , ES (n-1) a t Year 1 shall be t he Net E l ec tri c ity Sa l es of Year 0

The following years shall be defined as follows:
(a)  Year 0 shall be the year that the RE Market becomes operational pursuant to
Section 15 of this Circular;
(b)  Transition Period shall be the year immediately following Year 0, pursuant to
Section 24 of this Circular;
(c)  Year  1  shall  be  the  year  following  the  Transition   Period  and  start  of compliance with the RPS obligation; and
(d)  Year 2 shall follow Year 1 and onwards.
Attached herewith, as Annex A*, is an illustration calculation of RPS requirements for the DUs.

The calculation of RPS requirements for each DU shall be included as an integral part of the Distribution Development Plan.

Section  8.  Minimum   Annual  Incremental   RE  Percentage.   The  minimum annual increment required under this RPS On-Grid Rules shall be initially set at one  percent  (1%)  to  be  applied  to  Net  Electricity  Sales  of  the  Mandated Participant for the previous year, and thereafter adjusted by the DOE as may be necessary  to ensure that the aspirational  target of RE Share will be achieved. The minimum annual incremental RE Percentage shall be used to determine the current year’s requirement for RECs of the Mandated Participant.

Section 9. Adjustment of the Minimum Annual Incremental Percentage. The minimum annual percentage shall be adjusted by DOE, in coordination with the NREB, when:

(a)  There are substantial changes in the relevant market in the grid; or
(b)  The  prevailing  percentage  is  deemed  insufficient  to  attain  the  Target  RE Share.


Section  10. Eligible RE Facilities.  For purposes  of compliance  with the RPS On-Grid Rules, the Eligible RE Facilities utilizing the following technologies and resources shall be:
(a)  Biomass;
(b)  Waste to energy technology; (c)  Wind energy;
(d)  Solar energy;
(e)  Run-of-river hydroelectric power systems; (f)   Impounding hydroelectric power systems; (g)  Ocean energy;
(h)  Hybrid systems as defined in the RE Act with respect to the RE component; (i)   Geothermal energy; and
(j)   Other RE technologies that may be later identified by the DOE.
Provided,  That,  for the RE Facilities  utilizing  these  technologies  to be eligible under the RPS compliance and attribution of RECs, they shall have been in commercial operations after the effectivity of the RE Act.

Section 11. Additional Generation from Eligible RE Facilities for RPS Compliance. In addition to the technologies defined in Section 10 hereof, the following additional generation from RE Facilities after the effectivity of RA 9513 shall be considered for RPS compliance:
(a)  Existing and New Generation Facilities under the FIT System;
(b)  Incremental capacity resulting from expansion of an existing RE Generation Facility;
(c)  Incremental   capacity   resulting   from   the   upgrading   of  an   existing   RE Generation Facility that includes retrofitting, refurbishing or re-powering;
(d)  New capacities resulting from a change in the technology (from a non-RE to RE Generation Facility); Provided, that co-firing of coal plants that is modified to  use  agricultural  wastes  as  fuel  shall  not  be  allowed  unless  the  DOE provides for a clear mechanism that measures with certainty the use of RE resources as fuel in such Generation Facility;
(e)  RE Generation Facilities installed in end-user’s premises participating under the Net Metering Program;
(f)   RE  Generation  Facilities  installed  in the  end-user’s  premises  for own-use and synchronized to the DU’s system; and
(g)  Mothballed RE Generation Facilities that are restored into operation.
Section 12. RPS Mandated Participant. The following entities are mandated to comply with the RPS On-Grid Rules:
(a)  All DUs for their Captive customers;
(b)  All  Suppliers  of  Electricity  for  the  Contestable  Market,  as  defined  in  the
EPIRA and pursuant to Retail Competition and Open Access (RCOA);
(c)  Generating  Companies  only  to  the  extent  of  their  actual  supply  to  their directly connected customers; and
(d)  Other entities as may be recommended by NREB and approved by the DOE.
All  Mandated   Participants,   in  complying   with   the   RPS   requirement,   shall undertake  Competitive   Selection  Process  (CSP)  in  sourcing  RE  generation supply   for  its  customers.   As  such,  any  additional   cost  arising   from  their compliance with the RPS should not result in higher electricity rates to their consumers.  Furthermore,  in  the  case  of  distribution  utilities,  it  shall  be  their obligation to look for optimal supply mix to ensure level playing field among the power developers.

Section 13. Responsibility of the DOE and the National Electrification Administration.  For compliance with the RPS, each Mandated Participant shall be   guided   by   the   DOE   and,   for   electric   cooperatives,   by   the   National Electrification Administration (NEA).

Section 14. Review of RPS. This Rules shall be subjected to an annual review by the DOE in coordination with the NREB, in consultation with the stakeholders, Provided, That the compliance percentage (Km) for each succeeding year (m+1) shall be set no later than September 30 of each year.

Such review shall consider, among others, prices of RE technologies,  existence of  service  contracts  and  change  in  criteria  of  Eligible  RE  Facilities;  Provided further,  that any change  in the criteria  for the Eligible  RE Facilities  should  not result to any additional obligation to the Mandated Participants.

The  RPS  policies  approved  and  the  aspirational  RPS  generation  targets  as approved by the DOE shall form part of the NREP, the Power Development Plan (PDP) and the PEP.


Section   15.  Compliance   Mechanisms.   In  complying   with  this  Rules,  the Mandated  Participant  shall use Renewable  Energy Certificate  (RECs) from any one, a combination, or all of the following:
(a)  Allocation from the RE Registrar pursuant to the relevant rules issued by the DOE. RE generation under the FIT System allocated by the RE Registrar;
(b)  Generation  from an Eligible RE Facility that has a PSA with the Mandated Participant;
(c)  Purchase or acquisition  of RECs from the RE Market where the ownership and value per unit shall be further defined by the DOE in the REM Rules;
(d) Any generation from Net Metering arrangements which have been properly measured; Provided, That the corresponding energy shall also be added into the Net Electricity Sales of the DU for the calculation of its RPS requirement; and
(e)  Any generation  from an RE Facility installed in the end-user’s  premises for
own-use and synchronized to the DU’s system, which have been properly measured; Provided, That the corresponding energy shall also be added into the Net Electricity Sales of the DU for the calculation of its RPS requirement.
Section 16. RE Market and the RE Registrar. The DOE shall establish the RE Market to facilitate the issuance  and commercialization  of the RECs and verify the compliance  of the Mandated  Participants  with the annual RPS requirement and  ensure  that  it  shall  be  operational  not  later  than  one  (1)  year  from  the effectivity of this Circular. As part of the RE Market, the Market Operator, under the supervision  of the DOE,  shall  establish  the RE Registrar  and  shall  issue, keep  and  verify  RECs  corresponding  to  energy  generated  from  Eligible  RE Facilities.

Section 17. General Principles on the Establishment  of the RE Market and the RE Registrar.  The following  principles  shall be considered  in the establishment of the rules and guidelines governing the RE Market and the RE Registrar:
(a)  All RECs shall be in scripless form and duly registered with the RE Registrar, which will act as the central clearing  house for all purchases  and sales of RECs as provided under the REM Rules pursuant to Section 8 of the RE Act;

(b)  The RE Registrar  will issue one certificate  per MWh (rounded  down to the nearest MWh) of generation produced from a registered Eligible RE Facility;

(c)  Only generation from Eligible RE Facilities shall be registered with the RE Registrar;

(d) All Mandated Participants and owners of Eligible RE Facilities shall have registered their individual RPS Accounts with the RE Registrar;

(e)  The REC issuance process shall be designed so a REC can be issued only once by the RE Registrar for the Eligible RE Facilities;

(f)   REC shall be issued based on the following:
i.     On the output  of Eligible  RE Facilities  not under  the FIT  System,  the RECs  shall be issued  to the Mandated  Participant  to the extent  of its PSA with the Eligible RE Facility; Provided, That if the generation of the

Eligible  RE  Facility  is not dispatched  under  any  PSA,  then  the  RECs shall be issued to the owner of the Eligible RE Facility;

ii.     On the output of Eligible RE Facilities under the FIT System, the RECs corresponding  to the total output of the Eligible RE Facilities  under the FIT System shall be shared pro-rata among the Mandatory Participants based on their payment to the FIT allowance, to be detailed by the DOE in a separate  issuance.  FIT-Eligible  RE plants shall, upon the lapse of the FIT entitlement, continue to be qualified for the issuance of RECs;

iii.   On the energy produced or generated by Eligible RE Facilities under Net Metering  programs,  the RECs shall belong to the DU to which system the Eligible RE Facility is connected; and

iv.  On the energy produced or generated by Eligible RE Facilities installed in the end-user’s premises for own-use and synchronized to the DU’s system, the RECs shall belong to the DU to which system the Eligible RE Facility is synchronized.
(g)  The issuance  of RECs  shall  commence  at Year  0 and correspond  to the dispatch  of  Eligible  RE  Facilities  at  Year  0.  The  issuance  of  RECs  shall continue thereafter;

(h) The RECs issued to Mandated Participants and Eligible RE Facilities in accordance with this Rules can be traded pursuant to Section 15 (c), Rule 4 herein and the REM Rules;

(i)   A REC shall be valid for three (3) years from date of issuance and shall have a certificate  identification  number which includes the retirement  date of the REC;

(j)   A  price  cap  on  the  REC  shall  be  formulated  under  the  REM  Rules  and approved by the ERC upon endorsement by the DOE, within 6 months from the promulgation of this Circular;

(k)  The Mandated Participant may be assessed periodically with corresponding penalties for non-compliance  with the RPS requirement  consistent  with the REC validity;

(l)   A Mandated  Participant  will prove compliance  with the RPS by having the proper quantity of RECs in its RPS Account with the RE Registrar, consistent with Section 8, Rule 2 of this Circular;

(m) Compliance  with  this Rules  shall  be on an annual  basis.  The compliance period shall be from 26 December of the current year to 25 December of the following year. Each Mandated Participant shall ensure that it shall submit sufficient RECs to the RE Registrar through its RPS Account on or before December 25 of each year; and

(n) During the first three (3) years of the RPS program and every other year thereafter, the DOE shall review the REM Rules for possible revisions based on the rate of compliance  of the Mandated  Participant,  RE market  activity and general success in meeting RPS goals.
Section 18. RPS Market Development Program. In order to encourage the compliance  of the Mandated  Participants  with their respective  RPS obligations, the  DOE,  in  coordination  with  NREB,  shall,  not  later  than  the  start  of  the Transition  Period  under  Rule  8,  Section  26,  establish  a  market  development program for RPS whereby the annual generation requirements  equivalent to the aggregate  national  RPS  compliance  obligations,  year  on year,  shall  be made public to guide the RE developers and the Mandated Participants. Under this program, Mandated Participants shall be encouraged to submit their compliance requirements on a voluntary basis.


Section 19. Creation of Composite Team. For the purpose of implementing the provisions of this Rules, a Composite Team, chaired by DOE Undersecretary  or Assistant Secretary duly designated by the Secretary, is hereby created with the following members:
(a)  DOE  Renewable   Energy  Management   Bureau  (REMB)   Director  or  his designated representative;

(b) DOE Electric Power Industry Management Bureau (EPIMB) Director or his designated representative;

(c)  NREB Chairman or his/her designated representative; and

(d)  Representative from the RE Registrar.
The  DOE  Legal  Services  shall  provide  legal  assistance  and  support  to  the Composite Team in cases of disputes arising from compliance under this Rules or such other legal issues that may be referred to Legal Services in connection with the interpretation of this Rules.

The Technical Services Management  Division of REMB shall provide support to the Composite Team.

Section  20. Responsibilities  of the Composite  Team. The Composite  Team shall:
(a)  Compute the minimum annual RPS requirement per Mandated Participant;
(b)  Submit a Compliance  Report of Mandated Participants after the review and validation  of the information  from the RE Registrar  to the DOE Secretary, ERC and NREB;
(c)  Establish the procedure and criteria for evaluating compliance by Mandated
Participants   including   any   requests   for   suspension   or   carry-over   of compliance by Mandated Participants;
(d)  Recommend the suspension of compliance or the carryover of compliance to the RPS of any Mandated Participant;
(e)  Review   annually   the   cost   implication   of   the   minimum   annual   RPS
requirement, nationally and per Mandated Participant annually; and
(f)   Perform such other responsibilities and roles as directed by the DOE through a separate issuance.

Section 21. Submission of Annual REC Report. The submission of the Annual REC Report by the RE Registrar to the Composite Team shall be within the first quarter of each calendar year after the establishment of the RE Registrar. The Annual REC Report shall serve as the basis for the Composite Team for the Compliance  Report.  The  DOE  shall  certify  the  level  of  compliance  of  each Mandated Participant.

Section  22. Contents  of the Compliance  Report. The Compliance  Report of the Composite  Team  based  on the Annual  REC  Report  shall  contain,  among others, the following information:
(a)  Compliance level of each Mandated Participant;
(b)  Total volume of RECs generated;
(c)  Total shortfall or excess in RECs, if any; and
(d)  Other information that may be required by the DOE.

Section   23.   Prohibited   Act.   Pursuant   to  Section   35(a)   of  the   RE   Act, noncompliance   or  violation   of  the  RPS  On-Grid   Rules   by  any  Mandated Participant  under  this  Circular  shall  be  subject  to  the  administrative  penalties herein provided.

Section  24. Penalties  for Non-Compliance.  Consistent  with  RE Act, its IRR and  this  Rules,  the  following  administrative   and  criminal  sanctions  may  be imposed:
a.     Administrative  Liability.  The DOE may impose  a penalty  ranging  from a minimum of One Hundred Thousand Pesos (P100,000.00) to Five Hundred Thousand  Pesos (P500,000.00)  or, upon its discretion,  may recommend  to the appropriate government agency for the revocation of the Mandated Participant’s license, franchise or authority to operate.

b.     Criminal  Liability.  In  accordance  with  Section  36  (Penalty  Clause)  and Section 35 (Prohibited Acts) of the RE Act, any person who willfully fails to comply with or violates the RPS On-Grid Rules shall be imposed with the penalties provided under the RE Act. Any person who willfully aids or abets the commission of such failure or violation or who causes the commission of any such act by another shall be liable in the same manner as the principal.
In the case of association, partnership or corporations, the penalty shall be imposed  on  the  partner,  president,  chief  operating  officer,  chief  executive officer, directors or officers responsible for the violation.

The  failure  to  comply  with  or  violation  of  the  RPS  On-Grid  Rules,  upon conviction thereof, shall suffer the penalty of imprisonment of one (1) year to five (5) years, or a fine ranging from a minimum of One Hundred Thousand Pesos (P100,000.00)  to One Hundred  Million Pesos (P100,000,000.00),  or twice the amount of damages caused or costs avoided for non-compliance, whichever is higher, or both upon the discretion of the court.

This is without prejudice to the penalties provided for under existing environmental regulations prescribed by the DENR or any other concerned government agency.

The DOE Rules of Practice and Procedure shall be applicable to cases for the imposition of the foregoing penalties.

In no case shall a fine or penalty imposed on a Mandated Participant be charged to any of its customers or be considered a substitute for compliance, unless such fines or penalties  are provided as a future form of compliance  and provide the least cost alternative to the Mandated Entity.

Section 25. Suspension or Carry-Over of Compliance. The DOE shall, in any given year, suspend or carry-over  compliance  of the Mandated  Participant  with the Annual RPS Requirement, as the case may be, under any of the following conditions:
a.     Inadequate   supply   of   the   Eligible   RE   Facilities   to   meet   the   annual requirement;
b.    Inadequate supply of RECs to meet the annual requirement;
c.     Unavailable   capacity  at  both  the  transmission   and  relevant  distribution network to transport the Eligible RE Facilities to the grid;
d.     Occurrence   or  existence   of  Force  Majeure  affecting   or  preventing   the Mandated  Participant  from complying  with the annual requirements,  as the case may be; or
e.     Such  other  consideration  or  condition,  economic  or  otherwise,  which  is outside the control of the Mandated Participant as may be determined by the Composite Team.
In all cases, the Mandated Participant seeking suspension of compliance must demonstrate  to the Composite  Team that the condition  was beyond  its control and that it exerted all reasonable efforts to comply, notwithstanding the condition, including, but not limited to, a statement from the RE Registrar of the actual conditions reflecting any of the above circumstances.  Such a statement shall be sufficient to prove that the situation is beyond the control of the Mandated Participant.

Upon  recommendation   of  the  Composite   Team,  the  DOE  may,  in  lieu  of suspending   compliance   of  the   Mandated   Participant,   allow   the   Mandated Participant  to carry  over the compliance  shortfall  for a period  of 3 years.  The request  for  suspension  of  compliance  of  the  Mandated  Participant  shall  be deemed  approved  by  the  DOE  after  the  lapse  of  60  days  from  date  of  its submission.

Failure of the Mandated Participants to comply with the shortfall by the end of the carry-over  period granted shall subject the Mandated  Participant  to the administrative liability under Section 24(a), Rule 7 of this Rules.


Section 26. Transition Period. A Transition Period of one (1) year from the commencement of operations of the RE Market or the effectivity of this Rules, whichever  is  earlier,  is  hereby  provided  to  ensure  an  orderly,  efficient  and effective imposition of the RPS On-Grid Rules. The said period will allow the Mandated Participants to prepare all the information and data required in the establishment  of  the  baseline  to  be  determined  by  the  DOE,  prepare  their respective  compliance  mechanisms,  as well as prepare  the consumers  for the impact of the RPS On-Grid Rules.

For such purposes, all Mandated Participants are hereby directed to commence planning for their respective RPS compliance requirements from effectivity of this Circular.

Upon  the lapse  of the Transition  Period,  mandatory  compliance  with the RPS
shall commence.

Section 27. Reportorial Requirements. The DOE shall establish a reliable database to serve as the baseline in calculating and monitoring the compliance of  the  Mandated  Participants.  To  this  end,  the  DUs,  the  Generators  and  the National Grid Corporation of the Philippines (NGCP) are mandated to submit the following documents within 6 months from the effectivity of this Circular:
(a)  For DUs within the period required by the DOE:
i.     Purchases   from   all   Generation   Facilities,   from   the   Power   Supply
Agreements or through the WESM;
ii.     For purchases from the NPC or the Power Sector Assets and Liabilities Management  Corporation  (PSALM),  all purchases  shall be segregated into RE and non-RE based resources on the proportionate  share of the non-value added tax allocation from NPC or PSALM; and
iii.   Such other reports that the DOE may require
(b) For Generation Companies in relation to their sales to directly connected customers,  all Generation  Companies  shall be required  to submit  data on sales to their directly connected customers for the period to be identified by the DOE;

(c)  The NGCP shall submit for approval of the DOE the following:
i.     A  committed   Transmission   Development   Plan  (TDP)   that  identifies network   expansion   or  rehabilitation   to  enable   delivery   of  new  RE resources to the grid that will include the total investments required to support the RE industry;
ii.     A   list   of   transmission    services    agreements    and    other    related transmission services signed between the RE developer and NGCP; and
iii.   A  technical  study  or  evaluation  on  the  required  incremental  ancillary services needed to provide to maintain a reliable power service delivery with the entry of new RE technologies;
(d)  Each Mandated Participant shall submit to the DOE a report containing total sales, Net Electricity Sales and eligible RECs thereof; and

(e)  Such  other  reports  from  any  person  or entity  as may  be required  by the
Section  28. Responsibilities  of NGCP. In accordance  with Section 27 of this Rules, NGCP shall implement the TDP approved by the DOE and procure the necessary  ancillary  services  to  maintain  a  reliable  transmission  network  and system operations.

Section 29. Information, Education and Communication  Activities. Pursuant to Section 31, Rule 10 of the RE Act IRR, the DOE, together with NREB, shall develop  and  implement  a  comprehensive  information,  education  and communication activities that are designed to increase the public awareness and appreciation of the RPS On-Grid Rules and the RE and electric power industry in general.

Section 30. Regulatory Support. The ERC shall provide regulatory support for the effective implementation of this Circular.

Section  31. Separability  Clause.  If any  provision  of this Circular  is declared invalid or unconstitutional,  the other provisions not affected thereby shall remain valid and subsisting.

Section 32. Repealing Clause. All previous issuances, rules and regulations inconsistent with this Circular are hereby repealed, amended or modified accordingly.

Section   31.   Effectivity.   This   Circular   shall   take   effect   immediately   after publication in at least two (2) newspapers of general circulation.


Issued  on  December  22,  2017,  at  Energy  Center,  Rizal  Drive  Bonifacio  Global  City, Taguig City.

[*] Text Available at the Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.
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