Pursuant to Section 2.2.5 of the Grid Code and the Guidelines to Govern the Formation of the Grid Management Committee ("GMC") issued by the Energy Regulatory Commission, the GMC issues the following Rules and Procedures Relating to the Conduct of Business of the GMC (the "Rules").

RULE 1 - Purpose, Definitions and Interpretation

Rule 1.1 Purpose - These Rules are promulgated to provide guidance and to establish general operating procedures for the administration of the Grid Management Committee (GMC) and in accordance with the following objectives:

a)    To facilitate the monitoring of compliance with the Philippine Grid Code (PGC) at the operations level;
b)  To ensure representation of all Users of the Grid in reviewing and making recommendations pertaining to connection, operation, maintenance, and development of the Grid; and
c)    To specify the processes for the settlement of disputes, enforcement, and revision of the Grid Code.

Rule 1.2 Definitions. - The following words and phrases shall, unless more particularly defined, have the following meanings:

a) Department of Energy (DOE). The government agency created pursuant to Republic Act No. 7638 which is provided with the additional mandate under the Act of supervising the restructuring of the electricity industry, developing policies and procedures, formulating and implementing programs, and promoting a system of incentives that will encourage private sector investments and reforms in the electricity industry and ensuring an adequate and reliable supply of electricity.
b) Distribution Utility. An Electric Cooperative, private corporation, government-owned utility or existing local government unit that has an exclusive franchise to operate a Distribution System.
c) Distributor. Has the same meaning as Distribution Utility.
d) Dispute Resolution Panel. A panel appointed by the GMC to deal with specific disputes relating to violations of the provisions of the Grid Code.
e) Electric Cooperative. A cooperative or corporation authorized to provide electric services pursuant to Presidential Decree No. 269, as amended, and Republic Act No. 6938 within the framework of the national rural electrification plan.
f) Energy Regulatory Commission (ERC). The independent, quasi-judicial regulatory body created pursuant to Republic Act No. 9136, which is mandated to promote competition, encourage market development, ensure customer choice, and penalize abuse of market power in the restructured electricity industry and among other functions, to promulgate and enforce the Philippine Grid Code and the Philippine Distribution Code.
g) Grid Code. The set of rules, requirements, procedures, and standards to ensure the safe, reliable, secured and efficient operation, maintenance, and development of the high voltage backbone Transmission System and its related facilities.
h) Grid Owner. The party that owns the high voltage backbone Transmission System and is responsible for maintaining adequate Grid capacity in accordance with the provisions of the Grid Code.
i) Grid Management Committee (GMC). The committee established by the ERC to perform the functions mentioned in Section 2.2.1 of Chapter of the Philippine Grid Code and Article II of the Guidelines to Govern the Formation of the GMC.
j) Guidelines. The Guidelines to Govern the Formation of the Grid Management Committee issued by the Energy Regulatory Commission on May 15, 2002.
k) Large Customer. A Customer with a demand of at least one (1) MW, or the threshold value specified by the ERC.
l) Large Generator. A Generation Company whose generating facility at the Connection Point has an aggregate capacity in excess of 20 MW.
m) Market Operator. An independent group, with equitable representation from the electric power industry participants, whose task includes the operation and administration of the Wholesale Electricity Spot Market in accordance with the Market Rules.
n) National Electrification Administration (NEA). The government agency created under Presidential Decree No. 269, whose additional mandate includes preparing Electric Cooperatives in operating and competing under a deregulated electricity market, strengthening their technical capability, and enhancing their financial viability as electric utilities through improved regulatory policies.
o) National Transmission Corporation (TRANSCO). The corporation that assumed the authority and responsibility of planning, maintaining, constructing, and centrally operating the high-voltage Transmission System, including the construction of Grid interconnections and the provision of Ancillary Services.
p) Significant Incident. An Event on the Grid, a Distribution System, or the System of any User that has a serious or widespread effect on the Grid, the Distribution System, and/or the User System.
q) Significant Incident Notice. A notice issued by the System Operator or any User if a Significant Incident has transpired on the Grid or the System of the User, as the case may be.
r) Small Generator. A Generation Company whose generating facility at the Connection Point has an aggregate capacity of 20 MW or below.
s) Supplier. Any person or entity authorized by the ERC to sell, broker, market, or aggregate electricity to the End-users.
t) System Operator. The party responsible for generation Dispatch, the provision of Ancillary Services, and operation and control to ensure safety, Power Quality, Stability, Reliability, and the Security of the Grid.
u) User. A person or entity that uses the Grid or Distribution System and related facilities.  Also, a person or entity to whom the Grid Code or Distribution Code applies.

All other terms not otherwise defined shall have the meaning attached to them in the Grid Code.

Rule 1.3. Abbreviations

Any abbreviations used herein shall have the meaning attached to them in the Grid Code.

Rule 1.4. Interpretation and Construction.

These Rules shall be interpreted so as to accomplish the aim and purpose of the Grid Code in light of the functions of the GMC.  Nothing in these Rules shall be construed so as to amend or contravene any validly existing law, rule or government regulation.

RULE 2 - Administration and Operation of GMC

Rule 2.1 Functions of the GMC

The following are the GMC functions:

a) Monitor the implementation of the Grid Code;
b) Monitor, evaluate, and make recommendations on Grid operations;
c) Review and recommend standards, procedures, and requirements for Grid connection, operation, maintenance, and development;
d) Coordinate Grid Code dispute resolution and make appropriate recommendations to the ERC;
e) Coordinate Grid Code enforcement process and make recommendations to the ERC;
f) Coordinate revisions of the Grid Code and make recommendations to the ERC; and
g) Prepare regular and special reports for submission to the ERC, or as required by the appropriate government agency, or when requested by a Grid User.

Rule 2.2. Composition of the GMC. — Unless otherwise provided by law or appropriate rules and regulations issued by competent authority, the GMC is composed of the following members appointed by the ERC after due nomination:

a) One (1) member nominated by the System Operator;
b) One (1) member nominated by the Grid Owner;
c) One (1) member nominated by the Market Operator;
d) Three (3) members nominated by Large Generators;
e) One (1) member nominated by Small Generators;
f) Three (3) members nominated by private and local government Distributors;
g) Three (3) members nominated by Electric Cooperatives, one each from Luzon, Visayas, and Mindanao;
h) One (1) member nominated by Suppliers; and,
i)  One (1) member nominated by Large Customers.

The abovementioned composition of the GMC shall be valid and subsisting until and unless the appropriate amendment is made to the Philippine Grid Code relative thereto.

In addition to the foregoing members, the following government agencies shall have representatives to provide guidance on government policy and regulatory frameworks but who shall not be allowed to exercise decision-making functions and formulation of recommendations to the ERC.

a)    One (1) representative from the ERC;
b)    One (1) representative from the DOE; and,
c)    One (1) representative from the NEA.

The new Members and the representatives shall be admitted to the GMC upon submission to the GMC of their ERC appointment papers.

Rule 2.3. Term of Office — Except for the initial Members of the GMC whose term have been specified in their respective appointments, all subsequent Members of the GMC shall have a term of three (3) years and shall not be eligible for re-appointment.

However, the initial Members of the GMC whose specific appointments are less than the three (3) year term shall be available for re-appointment, but only once.

Rule 2.4. Removal for Cause — Subject to the approval by the ERC, the GMC may recommend removal of a Member for cause, if such Member is unwilling or unable to discharge his obligations and responsibilities in accordance with the function of his office.  The vote of two-thirds of the Members of the GMC present in a meeting called for such purpose shall be necessary to recommend removal of a Member for cause.

Rule 2.5. Vacancy — In cases of vacancy in the GMC or four (4) months prior to the end of the term of a Member, the GMC shall advise the ERC of said vacancy.  The ERC in return shall request nominations from the sector being represented by the Member.  Except for vacancies due to the expiration of the term of a Member, a new Member who occupies a seat vacated by a previous Member shall only serve for the remaining unexpired term of his predecessor.

Rule 2.6. Regular and Special Meetings — Unless otherwise agreed upon, the GMC shall meet regularly every second Thursday of every month at the principal office of the GMC or at such other time and place as specified in the notice of meeting.  Special meetings may be called for any purpose by the Chairman or by any eight (8) Members.  Special meetings shall be held at the principal office of the GMC or at such other place as specified in the notice of meeting.

In any emergency situation that requires urgent action or where time is of the essence, the Chairman or any eight (8) Members may call for action by referendum without a meeting of the Members.  The Members shall be furnished written notices of the results within ten (10) days of the action vote, and all written responses of the Members shall be filed with the minutes of proceedings of Members.

Rule 2.7. Mode of Meetings — Meetings may be held in person or through videoconference, teleconference, or other similar modes, provided that the rules and guidelines promulgated by the Securities and Exchange Commission (SEC) governing meetings conducted in these manners are observed.

Rule 2.8. Notices and Agenda. — Notices of meeting shall be faxed and/or e-mailed to all Members for all regular and special meetings at least seven (7) calendar days prior to the date of the meeting.  The notice of meeting shall specify the time and place of meeting as well as the agenda for such meeting.

Rule 2.9. Presiding Officer. — The Chairman of the GMC designated by the ERC shall preside over all meetings of the GMC. In the absence of the Chairman and Vice-Chairman, the GMC shall elect from among themselves the presiding officer of the GMC.

The Chairman, in consultation with the other Members, shall be responsible for the efficient operation of the GMC and its sub-committees.  The Chairman may delegate from time to time any or all of the aforesaid duties and authority to the Vice-Chairman or any other officer.

Rule 2.10. Quorum and Affirmative Vote. — A majority of the current membership of the GMC shall constitute a quorum for a meeting.  A quorum shall consist of at least fifty percent (50%) plus one (1) of the GMC Members being present.  An affirmative vote of majority of the Members constituting a quorum shall be necessary to approve internal GMC operations.  In resolving other contentious matters affecting the enforcement of the Grid Code or other third parties, the GMC shall endeavor to decide issues based on consensus rather than by simple majority voting.  However, should there be no consensus or is otherwise not possible, simple majority voting shall be used, provided that it is in the best interest of the Grid and in furtherance of the purpose of the Grid Code and the functions of the GMC.  The GMC shall document the fact of the failure to reach a consensus and the antecedents thereof, as well as any dissenting opinions, which shall be included in the records of the meeting to be submitted to the ERC.  In no case shall failure to reach a consensus be the basis of obstructing the GMC from performing its mandate under the Grid Code and the Guidelines.

Rule 2.11. Appointment of Other Officers and Employees. — The GMC may appoint such other officers and employees as it may deem necessary to accomplish its purpose and functions, consistent with applicable rules and procedures.

During its first regular meeting of the year, the members shall elect from among themselves a Vice Chairman, a Secretary, a Treasurer, and such other officers as it shall deem necessary.  The Chairman and the Vice Chairman must belong to different organizations represented in the GMC prior to their election to such offices.  The duties and authority of the officers shall be determined from time to time by the GMC.

The Vice Chairman shall have such duties and powers as may be delegated to him by the Chairman.  The Vice Chairman shall act as the Chairman at such times as the Chairman may request.  In the event the Chairman is unable to discharge the duties and powers of that office by reason of incapacity and during any vacancies in the office of the Chairman, the Vice Chairman shall act as Chairman until the cessation of such incapacity or vacancy.

The Secretary shall cause notices of all meetings to be served as prescribed in these Rules and Procedures and shall keep the minutes of all the meetings of the Members and shall perform such other duties and powers incidental to his office or as may be assigned to him by the GMC.

The Treasurer shall have custody of the funds and securities of the GMC and shall keep regular books of account for the Committee; and shall perform such other duties and other powers incidental to his office or as may be assigned to him by the GMC.

The GMC shall organize a Management Staff which shall be responsible for the day-to-day activities of the GMC and shall have such other duties as may be delegated or assigned to it.

Rule 2.12. Budget — The Members shall prepare or cause to be prepared an annual budget for the administrative and other expenses of the GMC and a special budget for any special projects undertaken by the GMC.  The annual budget and any special budget shall be approved by the Members at a regular meeting or a special meeting of the Members duly called for that purpose, subject to the approval by the ERC.  The GMC shall submit to the ERC the annual budget with working plan for the next calendar year on or before the end of September of the current year.

Budget proposal for the planned activities of the GMC shall be contingent to the presentation of actual results of preceding annual budget implementation.

Rule 2.13. Funding — The ERC shall direct TRANSCO to fund the operations of the GMC and its subcommittees, including a permanent support staff and recover the costs from appropriate Transmission charges.

Rule 2.14. Annual Review of Governance Structure — The Members shall conduct annual review of the governance structure of the GMC which shall include a statement of its conclusions and/or its recommendations for any modifications thereof in the Committee's annual report to the ERC.

RULE 3 — Establishment and Operation of Subcommittees

Rule 3.1. Subcommittees. — The following permanent subcommittees are hereby created to enable the GMC to perform its functions more efficiently:

a) Grid Planning Subcommittee — The Grid Planning Subcommittee shall have the following responsibilities:

i. Review and recommend revisions of Grid planning procedures and standards;
ii. Evaluate and make recommendations on the Transmission Development Plan; and
iii. Evaluate and make recommendations on proposed major Grid reinforcement and expansion projects.

b) Grid Operations Subcommittee — The Grid Operations Subcommittee shall have the following responsibilities:

i. Review and recommend revisions of Grid operations procedures and standards;
ii. Evaluate and make recommendations on Grid operations reports; and
iii. Evaluate and make recommendations on significant incidents, in accordance with Rule 5.2.

c) Reliability and Protection Subcommittee — The Grid Reliability and Protection Subcommittee shall have the following responsibilities:

i. Review and recommend revisions of Grid reliability and protection procedures and standards;
ii. Evaluate and make recommendations on Grid reliability reports; and
iii.Evaluate and make recommendations on significant Grid events or incidents caused by the failure of protection.

Rule 3.2. Qualifications — The Chairman and Members of the different subcommittees shall be appointed by the GMC and shall have sufficient technical background and experience in the management of their respective committees.

Rule 3.3. Subcommittee members — Unless otherwise determined by the GMC, each subcommittee shall have at least five (5) Members.  The GMC shall choose amongst themselves the membership in the different subcommittees.

Rule 3.4. Approval of GMC — Each subcommittee's authority shall be recommendatory in nature and shall not be independent of the authority of the GMC.  For this reason, a proposed action by a subcommittee shall require the approval of the GMC.

Rule 3.5. Other subcommittees — The GMC, with the approval of the ERC, may establish other subcommittees it may deem proper to enable it to accomplish its purpose and function.  The following ad hoc subcommittees may be created by the GMC as needed to perform its functions more efficiently:

a) Office Administration and Personnel Services Subcommittee — The Office Administration and Personnel Services Subcommittee shall have the following responsibilities:

i. Administer the general office of the GMC and its subcommittees, including the procurement and acquisition of necessary office facilities, equipment, supplies, furniture and services and conducting required biddings and awards;
ii.  Coordinate the recruitment, appointment, monitoring, training, discipline and termination of GMC and subcommittee personnel and staff.

b) Market Interface Subcommittee — The Market Interface Subcommittee shall have the following responsibilities:

i. Coordinate with the Philippine Electricity Management Board;
ii. Coordinate with other electric power industry participants and external relations management.

c) Rules Revision Subcommittee — The Rules Revision Subcommittee shall have the following responsibilities:

i. Review and make recommendations on amendments or revision to these Rules;
ii. Coordinate and document proposed revisions to the Grid Code, in accordance with Rule 5.5, and the Rules.
iii. Coordinate with the ERC in matters involving the promulgation, approval and revisions of the Grid Code and the Rules.

d) Enforcement and Monitoring Subcommittee — The Enforcement and Monitoring Subcommittee shall have the responsibilities:

i. Coordinate the enforcement and monitoring functions of the GMC;
ii. Implement the provisions of Rules 5, except Rule 5.5 and Rule 6, except Rule 6. 2, of these Rules, subject to GMC supervision and control.

e) Dispute Resolution Subcommittee — The Dispute Resolution Subcommittee shall have the following responsibilities:

i. Coordinate the dispute resolution functions of the GMC;
ii. Implement the provisions of Rule 4 of these Rules, subject to GMC supervision and control;
iii. Oversee the raffle for the creation of each ad hoc Dispute Resolution Panel under Rule 4.3 for each dispute.

RULE 4 — Grid Code Dispute Resolution

Rule 4.1. Grid Code Disputes — The Grid Code dispute resolution process shall apply to the System Operator, Grid Owner, Market Operator and all Users of the Grid with respect to the provisions of the Grid Code and shall not apply to disputes related to billing and commercial transactions that are resolved in accordance with the Market Rules of the Wholesale Electricity Spot Market (WESM).

Rule 4.2. Grid Code Dispute Resolution Process — The Grid Code dispute resolution process shall include the following steps:

1. When a dispute arises between parties which is not resolved informally, one of the parties shall, if he/she wishes, register the dispute in writing to the GMC and the other party or parties;
   
2. The parties shall meet to discuss and attempt to resolve the dispute within a period to be prescribed by the GMC.  If resolved, the resolution should be documented and a written record provided to all parties and to the GMC;
   
3. If the dispute is not resolved, a committee of representatives from both parties shall be formed by the GMC to discuss and attempt to resolve the dispute within a period to be prescribed by the GMC.  If resolved, the resolution should be documented and a written record provided to all parties and the GMC; and
   
4. If the dispute is not resolved at stage (c), the committee of representatives shall refer the dispute to the GMC for appropriate action.  The GMC shall either create an independent Grid Code Dispute Resolution Panel or refer the matter directly to the ERC for resolution.

Rule 4.3 Grid Code Dispute Resolution Panel — The Grid Code Dispute Resolution Panel shall consist of three (3) or five (5) persons.  The Panel shall include members who have the technical background to understand the technical merits and implications of the disputing parties' arguments.

For each dispute, a Grid Code Dispute Resolution Panel shall be formed, and the Members thereof shall be chosen from among the regular Members of the GMC by raffle to be conducted by the Dispute Resolution Subcommittee.  In no case shall any member of the Panel be a related party to any of the disputants.

Rule 4.4. Role of Dispute Resolution Panel — The Dispute Resolution Panel shall hold meetings, within a period to be prescribed by the GMC, to hear the contending parties and to receive documents supporting their positions.  The proceedings and recommendations of the Dispute Resolution Panel shall be documented and provided to both parties and the GMC.

Rule 4.5. Role of GMC — After it receives the report of the Dispute Resolution Panel, the GMC shall submit a report regarding the dispute, including any recommendations to the ERC who shall render the final ruling on the matter.

Rule 4.6. Cost of Dispute Resolution — The cost of the dispute resolution process shall be allocated in the following ways:

1. If the dispute is resolved, part of the resolution should include an allocation of costs of the process; and
   
2. If the dispute is not resolved (e.g., the dispute is dropped or becomes a legal action) the parties shall share equally the costs of the dispute resolution process.

Rule 4.7. Fees — The GMC shall impose reasonable fees on the parties to answer for the administrative costs of the Dispute Resolution Panel.

Rule 4.8. Bond — In the course of the dispute, the Dispute Resolution Panel may require a party to post a bond as security for its faithful performance of its obligations.  The Dispute Resolution Panel may also require a complainant to post a bond to answer for damages in case the complaint should be found to be malicious.

RULE 5 — Grid Code Enforcement and Revision 

Rule 5.1. Enforcement Process — Any party that has evidence that any other party has violated or is violating provisions of the Grid Code, may file a complaint with the ERC who shall initiate an enforcement process or may direct the GMC to initiate an enforcement process.  ERC may likewise direct the GMC to initiate the enforcement process even if no complaint has been filed but has information on possible Grid Code violations.

Rule 5.2. Steps — Upon direction of the ERC, the GMC shall take the following steps of the enforcement process:

1. The GMC shall send a written notice to the party subject of the enforcement process with the specifics of the alleged violation documented and the recommended course of action needed to correct the alleged violation;
   
2. The offending party shall submit in writing, within thirty (30) days from receipt of the notice from the GMC, its answer to the alleged violation and state whether or not he/she shall intend to comply with the course of action recommended by the GMC;
   
3.  If the GMC is satisfied with the answer, it shall submit a report, including the recommended course of action, to the ERC who shall render the final decision on the matter; and
   
4. If the GMC is not satisfied with the answer it shall document the charges against the offending party and submit a report, including the recommended course of action, fines, and penalties, to the ERC who shall render the final decision on the matter.

Rule 5.3. Fines and Penalties — To effectively enforce the Grid Code, the ERC shall impose the fines or penalties prescribed under the "Guidelines to Govern the Imposition of Administrative Sanctions in the Form of Fines and Penalties Pursuant to Section 46 of Republic Act No. 9136" for any non-compliance with or breach of any provision of the Grid Code.

Rule 5.4. Unforeseen Circumstances — If unforeseen circumstances arise which the provisions of the Grid Code have not considered, the System Operator shall, to the extent reasonably practicable, consult promptly all affected Users in an effort to reach an agreement as to the appropriate action to be taken.  If an agreement is reached, the System Operator shall promptly refer the matter, including the agreement, to the GMC for review and to make the appropriate recommendations to the ERC.  If an agreement is not reached, the System Operator shall decide on the appropriate action to be taken if the security of the Grid is at stake.  In such cases, all Users shall comply with all instructions issued by the System Operator to the extent that such instructions are consistent with the technical characteristics of the User's system as registered under the Grid Code.  The System Operator shall be answerable to the GMC and the ERC for unjustified unilateral actions or measures it has taken against any User.

Rule 5.5. Grid Code Revision Process — Any party who has a proposal to revise any provision of the Grid Code shall submit the proposed revision, including the supporting arguments and data, to the GMC and the GMC shall refer the same to the appropriate GMC subcommittee who shall evaluate said proposal.  If the GMC or the appropriate GMC subcommittee agrees with the proposed revision, it shall make the appropriate recommendations to the ERC.  If the GMC or the appropriate GMC subcommittee disagrees with the proposed revision, it shall submit to the ERC a report including the justifications why it disagrees with the proposed revision.  The ERC shall render the final decision on the matter

RULE 6 — Grid Management Reports

Rule 6.1. Quarterly and Annual Reports — The GMC shall submit to the ERC four (4) quarterly reports before the end of the month immediately following the quarter.  The GMC shall also submit to the ERC an annual report for the previous year by the end of March of the current year.

Rule 6.2. Significant Incident Reports — Within one (1) week following a Significant Incident in the Grid or a User System, the System Operator shall submit to the GMC and the ERC a report detailing the sequence of events and other relevant information pertaining to the incident.  However, this should not preclude the System Operator from providing the GMC and the ERC the relevant updates and status report as soon as this becomes available after the occurrence of the Significant Incident.  The prescribed one (1) week period shall be sufficient for the System Operator to gather, retrieve, and evaluate the necessary information from the different stations affected by the Significant Incident.  The report shall describe the cause of the Significant Incident and the amount and duration of the resulting power interruptions.  Within one (1) month following the receipt of the System Operator's report on the Significant Incident, the GMC shall validate the report and make recommendations to the ERC, if any.  In cases where any User has violated any provision of the Grid Code, the GMC may recommend appropriate sanctions to the ERC.

Rule 6.3. Special Reports — The GMC shall prepare special reports as ordered by the ERC or any appropriate government agency, or at the request of any User, or as it deems necessary.  Special Reports prepared at the request of any user shall be at the expense of the User.

RULE 7 — Amendments, Separability and Effectivity

Rule 7.1. Amendments — Any and all amendments to these Rules shall be subject to consensus of all the Members of the GMC and approval by the ERC.

Rule 7.2. Separability Clause. — If the effectivity of any provision of these Rules is suspended or disapproved by the ERC, the unaffected provisions shall remain in force.

Rule 7.3. Effectivity — These rules and procedures shall take effect on the fifteenth (15th) day following its publication in two (2) newspapers of general circulation in the country.

Adopted: 10 Mar. 2004

 

(SGD.) RODOLFO B. ALBANO, JR.
Chairman
(SGD.) OLIVER B. BUTALID	(SGD.) CARLOS R. ALINDADA
Commissioner	Commissioner
(SGD.) LETICIA V. IBAY	(SGD.) JESUS N. ALCORDO
Commissioner	Commissioner