1

2
3 Republic of the Philippines
4 ENERGY REGULATORY COMMISSION
5 San Miguel Avenue, Pasig City
6
7
8 2020 REVISED RULES FOR THE ISSUANCE OF CERTIFICATES
9 OF COMPLIANCE FOR GENERATION COMPANIES, QUALIFIED END-USERS AND
10 ENTITIES WITH SELF-GENERATION FACILITIES
11
12 Pursuant to Section 6 of Republic Act No. 9136 (R.A. 9136), its Implementing Rules and
13 Regulations (IRR), the Philippine Grid Code (PGC), the Philippine Distribution Code
14 (PDC) and the Wholesale Electricity Spot Market (WESM) Rules, the Energy Regulatory
15 Commission (ERC) hereby adopts and promulgates this 2020 Revised Rules for the
16 Issuance of Certificates of Compliance (COCs) for Generation Companies, Qualified End-
17 Users and Entities with Self-Generation Facility (“2020 Revised COC Rules”).
18
19 ARTICLE I
20 GENERAL PROVISIONS
21
22 Section 1. Objectives. – This 2020 Revised COC Rules have the following objectives: (a)
23 to facilitate the approval of applications for the issuance of Certificates of Compliance
24 (COCs); (b) to clarify the requirements and procedures for such applications, including
25 renewals and amendments thereof; (c) to reiterate and/or prescribe the qualifications,
26 disqualifications and the legal obligations applicable to grantees of COCs; and (d) to
27 monitor compliance with R.A. 9136, its Implementing Rules and Regulations, R.A. 9513,
28 its IRR; the PGC, the PDC, Philippines Small Grid Guidelines (PSGG), Philippine
29 Electrical Code (PEC) the WESM Rules and its Manuals, the Open Access Transmission
30 Service (OATS) Rules, the Distribution Service Open Access Rules (DSOAR) and any other
31 applicable rules and regulations of other government agencies.
32
33 Section 2. Guiding Principles.
34
35 General
36
37 i. No Person may engage in the Generation of Electricity as a Generation
38 Company, Qualified End User, entity with Self Generation Facility unless it
39 has secured a COC from the ERC to operate Generation Facilities used in the
40 Generation of Electricity.
41
42 ii. The application for a COC shall be in the name of the person or entity
43 owning/operating1 the Generation Facilities used in the Generation of
44 Electricity.
45

1EPIRA Section 4, Definition of Terms (x) “Generation Company” refers to any person or entity authorized
by the ERC to operate facilities used in the generation of electricity.” and Section 6, Generation Sector,
Upon the effectivity of this Act, any new generation company shall, before it operates, secure from the ERC
a Certificate of Compliance pursuant to the standards set forth in this Act”.
Page 1 of 29
46 For purposes of this Section, the person or entity owning/operating the
47 Generation Facility is understood to be the person or entity having legal title
48 to the same. In such case, the person or entity shall apply for, and the COC
49 shall be issued in its name, provided, that in case the Generation Facility is
50 operated by a person or entity other than the owner, to the extent that the
51 former controls the output of the facility, enters into supply agreements with
52 energy off-takers, or enters into such other similar arrangements, the ERC
53 reserves the authority to determine in whose name the application for the
54 issuance of a COC should be made. In which case, the operator shall
55 be obligated to perform and comply with the terms and
56 conditions of the COC. Further, that for any violation of the rules,
57 regulations and standards of the ERC, the operator and owner
58 shall be solidarily liable.
59
60 However, for Generation Facilities covered by the National Power
61 Corporation Independent Power Producer Contracts (NPC-IPP Contracts),
62 the ERC shall consider the COCs issued to the IPPs of the said Generation
63 Facilities as deemed issued also in favor of the respective IPP Administrators
64 (IPPAs), if any, for purposes of enforcement of, and compliance with, these
65 Revised Rules. Thus, the IPPAs shall comply with the provisions of the PGC,
66 PDC, WESM Rules and applicable rules and regulations of the ERC for the
67 duration of the COC.
68
69 iii. A COC shall be secured from the ERC before the actual Commercial
70 Operations of the Generation Facility/ies. For new and rehabilitated
71 Generation Facilities or generating units, the Generation Company,
72 upon synchronization to the grid/distribution system shall
73 conduct Test and Commissioning for a maximum period of two (2) months
74 or a maximum accumulated period of 1440 hours. The Generation
75 Company shall notify the ERC of the Test and Commissioning of the
76 Generation Facilities at least thirty (30) calendar days before the actual
77 date thereof.
78
79 iv. If the Generation Facility fails to complete the conduct of Test
80 and Commissioning within the prescribed period, the
81 Generation Facility shall apply for an extension from the ERC for
82 a period not more than seven hundred twenty (720) hours with
83 the following acceptable basis:2
84
85 a. The Generation Facility was not able to conduct Test and
86 Commissioning due to resource limitations of a Variable
87 Renewable Energy (VRE) resulting to non-completion of
88 test and commissioning procedures that require
89 generation facility to produce at full capacity, resulting
90 from:
91 i. Adverse impact of weather conditions for Solar and
92 Wind Resources; and
2 Adopted from the DOE Draft Department Circular for the Test and Commissioning
Page 2 of 29
 93 ii. Unavailability of water for Hydro Resources.3
94 b. Test and commissioning procedures cannot be done due to
95 various Grid conditions resulting from:
96 i. Alerts or emergency state; and
97 ii. Transmission line congestion or limitation4
98 c. Force Majeure events5
99
100 The application for extension shall be filed 2 weeks before the
101 end of the two (2) months or accumulated 1440 hours allowable
102 period for Test and Commissioning.
103
104 If the ERC will find merit to the explanation and basis for
105 extension of test and commissioning of the generation facility,
106 the ERC will accept such request. If not, the generation facility
107 must discontinue its supply of power to the grid/distribution
108 system.
109
110 v. Any sale of the generated output during Test and Commissioning shall not
111 be considered as transactions made during Commercial Operations. Beyond
112 this period, however, the sale of generated output shall already be deemed
113 as transactions made during Commercial Operations for which a COC shall
114 be required. Notwithstanding this provision, the recovery of the cost of
115 power purchased by a Distribution Utility during Test and Commissioning
116 shall be governed by the Guidelines for the Recovery of Costs for the
117 Generation Component of the Distribution Utilities’ Rates. The sale of the
118 generated output after the allowable period of Test and
119 Commissioning shall be free of charge.
120
121 vi. The COC shall stipulate all the obligations of a Generation Company or any
122 assignee thereof, consistent with the standards and operating guidelines
123 established herein; and which the ERC may require from time to time. The
124 terms and conditions of the COC and the technical description of the
125 Generation Facilities, including, but not limited to, the maximum load
126 (Pmax in MW), minimum stable loading (Pmin in MW), ramp up rate
127 (MW/min), ramp down rate (kW/min) and heat rate (BTU/kWh; kJ/kWh;
128 kCal/kWh) shall be submitted to and contained in a document which is made
129 an integral part of the issued COC.
130
131 vii. A COC issued in favor of the owner and/or operator of the Generation
132 Facilities shall include all the generating units situated in one contiguous
133 area, which are in operation at the time of issuance.
134
135 For Modular Generating Units, located in a contiguous area, one COC shall
136 be issued for each generating unit. Further, only a single COC shall be issued
137 in favor of a Generation Company owning a Solar PV Farm, Wind Farm
138 and Power Barge even if it consists of several generating units.

3 Ibid
4 Ibid
5 Ibid

Page 3 of 29
139
140 As to what constitutes a contiguous area, it shall be determined by the ERC
141 based on the physical contact (distance) or a touching of two solid masses of
142 matter along all or most of one side, near, next or adjacent from each other
143 or situated within the same barangay. such as those generation
144 facilities .
145
146 However, for Generation Facilities consisting of several generating units
147 which are installed and commissioned on different dates within a span of
148 twenty-four (24) months, individual COCs shall in the meantime be issued
149 for each generating unit or set of generating units. A consolidated COC
150 shall then be issued after inspection of the last generating unit of the said
151 Generation Facility.
152
153 viii. The capacity to be indicated on the face of the COCs shall be the
154 rated capacity of the generating unit, in three (3) decimal places
155 if in MW, and rounded to the nearest kW if in kW, in order to
156 ensure consistency of the capacity to be indicated in the DOE-
157 COE and ERC-COC;6
158
159 ix. Stand-by/Back-up generating unit(s) inside a generation
160 facility will be considered as a Self-Generation Facility and will
161 have a separate filing. However, the filing of the black start
162 resource connected to the generation facility system will be
163 integrated with the application of the main generating units.
164
165 x. There shall be such number of COCs as there are number of units to be
166 separately installed and commissioned for Renewable Energy (RE)
167 Generation Facilities availing of the Feed-In Tariff (FIT).
168
169 xi. A conversion, replacement or repowering that affects the technical
170 specification of the Generation Facilities; and any Stand-by/Back-up
171 facilities being operated thereby shall require an amendment of the COC
172 issued for such facilities. Accordingly, the Generation Company or licensee
173 shall apply for an amendment of its COC. The amended COC issued
174 pursuant to said conversion, replacement or repowering shall have a term
175 equivalent to the remaining life of the COC of the Generation Company.
176
177 xii. An addition to or expansion of the generating unit, turbine or
178 engine that will affect the capacity of the generation facility
179 shall require a new and separate COC application. Thereafter, a
180 consolidated COC shall be issued upon renewal of the existing
181 units, provided that said units are located in a contiguous area.
182
183 a. Renewable Energy (RE)
184

6 Nameplate or rated capacity is stable and constant all throughout the life of the power plant.
Page 4 of 29
185 xiii. A Generation Company owning or operating an RE Plant eligible to avail of
186 the FIT, shall indicate in its COC application its intention to operate under
187 the FIT. The Generation Company owning or operating an RE Plant eligible
188 to avail of the FIT shall be allowed to operate and be entitled to payment of
189 FIT only upon the issuance of a COC explicitly indicating its FIT Eligibility.
190 No COC which grants FIT Eligibility (FIT- Eligible COC) shall be issued in
191 favor of a Generation Company operating an RE plant unless it has been
192 issued the appropriate Certificate of Endorsement (COE) for FIT Eligibility
193 by the Department of Energy (DOE). The FIT-Eligible COC shall indicate
194 the period of entitlement to the FIT which shall commence on the date of
195 issuance indicated in the COC issued by the ERC.
196
197 The Generation Company shall be entitled to the FIT upon
198 issuance of the amended COC and for a period of twenty (20)
199 years less the number of years that the RE Plant has been in
200 operation, or any other period as may be determined by the ERC.
201
202 xiv. A Generation Company operating an RE Plant which has started commercial
203 operations after the effectivity of Republic Act No. 9513 (R.A. 9513) but
204 before the effectivity of the FIT System and is not bound under any contract
205 to supply the energy it generates to any DU or consumer, may be entitled to
206 the payment of the FIT through the filing of an application for the
207 amendment of the COC previously issued to it. The Generation Company
208 shall be entitled to the FIT upon issuance of the amended COC and for a
209 period of twenty (20) years less the number of years that the RE Plant has
210 been in operation, or any other period as may be determined by the
211 ERC.
212
213 xv. A Generation Company operating an RE Plant which started commercial
214 operations prior to the effectivity of R.A. 9513 may be granted a lower FIT
215 specific to it upon application and hearing, and after a showing of its
216 compliance with the requirements of Section 1.4 of the FIT Rules. Such
217 Generation Company shall be entitled to the lower FIT for a specified period,
218 upon amendment of the COC previously issued to it, in accordance with the
219 decision of the ERC.
220
221 Under the above circumstances, no COE for FIT Eligibility shall be required
222 from the DOE prior to the issuance by the ERC of a FIT-Eligible COC.
223
224 xvi. A Generation Company operating an RE plant which applies for the
225 amendment of its COC to avail of the FIT System and which previously
226 suffered from a legal impediment to avail of the FIT shall be entitled to the
227 FIT upon the curing of the impediment and will reckon on the date indicated
228 under its FIT-Eligible COC.
229
230 xvii. For purposes of these Rules, any reference to a COC shall be deemed to
231 include a FIT-Eligible COC, unless otherwise provided.
232

Page 5 of 29
233 xviii. A Qualified End-User that installs an on-site RE generation facility, and
234 enters into a Net-Metering Agreement with its Distribution Utility shall
235 secure a COC for such RE generation facility, in accordance with the
236 pertinent provisions of these 2020 Revised COC Rules.
237
238 b. Hybrid Power System7
239
240 xix. A Generation Company owning a hybrid power system shall file
241 a single COC application. However, a separate filing may be
242 considered depending on the accounting, legal concerns and
243 technicality of the system, which shall be determined by the ERC
244 during its initial evaluation.
245
246 Section 3. Scope. – This 2020 Revised COC Rules shall apply, unless otherwise
247 exempted by any law or statute, to all Generation Facilities used or to be used for the
248 Generation of Electricity, including but not limited to the following:
249
250 (a) Existing Generation Facilities:
251
252 (i) Spin-off Facilities of NPC or their Transferees, including Generation
253 Facilities or Generation Companies owned by NPC transferred to
254 PSALM and subsequently privatized pursuant to the Act;
255 (ii) Agus and Pulangui Complexes;
256 (iii) Facilities owned and operated by NPC-SPUG;
257 (iv) Facilities owned by entities which are leased to NPC-SPUG or other
258 entities;
259 (v) Accredited Facilities under BOT arrangement and other variants with
260 NPC, NPC-SPUG, NIA and other government agencies;
261 (vi) Accredited Facilities under BOT arrangement and other variant with
262 Distribution Utilities;
263 (vii) Facilities Owned or Operated by a Distribution Utility;
264 (viii) Generation Companies/Facilities under Contract with a Distribution
265 Utility;
266 (ix) Self-Generation Facilities
267 (x) Qualified End-User
268 (xi) Energy Storage System8
269 (xii) Facilities operating in Economic Zones;
270 (xiii) Facilities operating in isolated areas; and
271 (xiv) Facilities operating in unviable areas as certified by DOE.
272
273 (b) New Generation Facilities:
274
275 (i) Any newly-constructed or installed Facility connected to the Grid, or
276 Distribution System with appropriate health, safety and
277 environmental clearances;

7 Under Section 4, (ee), Definition of Terms in these 2020 Revised COC Rules
8 Inclusion of Classification of Energy Storage System stated in DOE Department Circular 2019-08-0012
Page 6 of 29
278 (ii) Any Facility currently under BOT arrangement and other variants
279 with NPC, NPC-SPUG and other government agencies and
280 government-owned and controlled corporations;
281 (iii) Any Facility that shall operate in an isolated area;
282 (iv) Any Facility that shall operate in an unviable area as certified by DOE;
283 and
284 (v) Energy Storage System.
285
286 (c) Generation Facilities Under Construction:
287
288 (i) DOE-Accredited Facility under BOT arrangement and other variants
289 with NPC, NPC-SPUG, NIA and other government agencies;
290 (ii) DOE-Accredited Facility under BOT arrangement and other variants
291 with Distribution Utilities;
292 (iii) Non-DOE-Accredited Facility under contract with Distribution
293 Utilities;
294 (iv) Self-Generation Facilities;
295 (v) Qualified End-user;
296 (vi) Energy Storage System9
297 (vii) Facility located in Economic Zones and Facility operating in isolated
298 areas; and,
299 (viii) Facility located in unviable areas as certified by DOE.
300
301 Section 4. Definition of Terms.
302
303 As used in these 2020 Revised COC Rules, the following terms shall have the following
304 respective meanings:
305
306 (a) “Affiliate” refers to any person which, alone or together with any other person,
307 directly or indirectly, through one or more intermediaries, controls, is
308 controlled by, or is under common control with another person. Affiliates shall
309 include a subsidiary company and parent company and subsidiaries, directly
310 or indirectly, of a common parent.
311
312 (b) “AC” refers to a form of electricity in which the current alternates in direction
313 (and the voltage alternates in polarity) at a frequency defined by the generator
314 (usually between 50 and 60 times per second, i.e., 50-60 hertz).
315
316 (c) “AC Systems” refers to alternating current system where the flow of electric
317 charge periodically reverses direction.
318
319 (d) “Black Start” refers to the process of recovery from total system blackout using
320 a generating unit with the capability to start and synchronize with the Power
321 System without an external power supply.
322

9 Ibid
Page 7 of 29
323 (e) “Black Start Resource” refers to generating unit(s) and its
324 associated set of equipment which has the ability to be started
325 without support from the System.10
326
327 (f) “Certificate of Compliance” or “COC” refers to a license issued by the ERC in
328 favor of a person or entity to operate a power plant or other facilities used in
329 the generation of electricity pursuant to Section 6 of R.A. 9136 and Section 4
330 of the Implementing Rules and Regulations of R.A. 9136.
331
332 (g) “Commercial Operations” refer to the generation of electricity for sale or
333 disposition upon achievement by the generation facility of certain operational
334 and capability criteria in accordance with standard engineering practice for
335 Generation Facilities.
336
337 (h) “Contestable Market” refers to the end-users who have a choice of a supplier
338 of electricity, as may be determined by the ERC in accordance with the
339 provisions of R.A. 9136 and its Implementing Rules and Regulations.
340
341 (i) “Control” refers to the power to direct or cause the direction of the
342 management policies of a person by contract, by agency, or otherwise.
343
344 (j) “Conversion” refers to the transformation of an existing technology to a
345 different technology in the generation of electricity.
346
347 (k) “Department of Energy” or “DOE” refers to the government agency created
348 pursuant to Republic Act No. 7638 and whose expanded functions are
349 provided in R.A. 9513.
350
351 (l) “Dependable Capacity” refers to the Maximum Capacity, modified
352 for ambient limitations for a specified period of time, such as
353 month or a season.11
354
355 (m) “Distribution System” refers to the system of wires and associated facilities
356 belonging to a franchised Distribution Utility, extending between the delivery
357 points on the transmission, sub-transmission system, or Generating Plant
358 connection and the point of connection to the premises of the End-User.
359
360 (n) “Distribution Utility” or “DU” refers to any electric cooperative, private
361 corporation, government-owned utility or existing local government unit
362 which has an exclusive franchise to operate a distribution system in
363 accordance with its franchise and R.A. 9136.
364
365 (o) “Economic Zones” or “EZs” refer to selected areas which are highly developed
366 or have the potential to be developed into agro-industrial, industrial, tourist,
367 recreational, commercial, banking, investment and financial centers,
368 including but not limited to the following: Industrial Estates (IEs), Export
369 Processing Zones (EPZs), Free Trade Zones, Information Technology Parks

10 North American Electric Reliability Corporation (NERC) Glossary of Terms

11 GC 1.7 2016 Philippine Grid Code (PGC)
Page 8 of 29
370 and Tourist/Recreational Centers, the “Bases Conversion Development
371 Authority” or “BCDA”, “Cagayan Economic Zone Authority” or “CEZA”, “Clark
372 Development Corporation” or “CDC”, “Philippine Economic Zone Authority”
373 or “PEZA”, “Phividec Industrial Authority” or “PIA”, and “Zamboanga City
374 Economic Zone Authority” or “ZCEZA”.
375
376 (p) “Embedded Generation Facilities” refer to generating units that are indirectly
377 connected to the grid through the Distribution Utilities’ lines or industrial
378 generation facilities that are synchronized with the grid.
379
380 (q) “End User” refers to any person or entity requiring the supply and delivery of
381 electricity for its own use, as defined under Section 4(t) of R.A. 9136.
382
383 (r) “Energy Regulatory Commission” or ERC refers to the regulatory agency
384 created under R.A. 9136.
385
386 (s) “Energy Storage System” or “ESS” refers to a facility acting as a
387 load and a generator, which is designed to receive, store and
388 convert such energy to electricity.12
389
390 (t) “Expansion” of a Generation Facility refers to the construction of a new
391 Generation Facility adjacent to the existing facility to increase its capacity.
392
393 (u) “Feed-in Tariff” or “FIT” refers to a renewable energy policy that offers
394 guaranteed payments on a fixed rate per kilowatt‐hour for emerging renewable
395 energy sources, excluding any generation for own use, or to the rate itself as
396 established pursuant to R.A. 9513.
397
398 (v) “FIT Rules” refers to the Feed-in Tariff Rules promulgated by the ERC.
399
400 (w) “Generation Company" refers to any person or entity authorized by ERC to
401 operate facilities used in the Generation of Electricity.
402
403 (x) “Generation Facility” refers to a facility for the production of electricity.
404
405 (y) “Generation of Electricity” refers to the production of electricity by a
406 Generation Company or co-generation facility pursuant to the provisions of
407 R.A. 9136.
408
409 (z) “Generating Unit” refers to the unit conversion apparatus
410 including auxiliaries and associated equipment, functioning as a
411 single unit, which is used to produce electric energy from some
412 other form of energy.13
413
414 (aa) “Grid” refers to the high voltage backbone system of interconnected
415 transmission lines, substations and related facilities.
416

12 Adopt ESS definition from DOE Department Circular 2019-08-0012

13 PGC GC 1.7 Definition of Terms
Page 9 of 29
417 (bb) “Grid Code” refers to the set of rules, requirements, procedures and standards
418 to ensure the safe, reliable, secured and efficient operation, maintenance, and
419 development of the high voltage backbone Transmission System and its
420 related facilities.
421
422 (cc) “Heat Rate” refers to the amount of heat input in British Thermal Unit (BTU),
423 Kilo Calories (kCal) or Kilo Joules (kJ) to generate one (1) Kilowatt-Hour
424 (kWh) of electricity.
425
426 (dd) “Holding Company” refers to a juridical person holding more than 25% of the
427 voting stocks of a generation company or distribution utility.
428
429
430 (ee) “Hybrid Power Systems” refer to a combination of two or more
431 different technologies to produce power.14
432
433 (ff) “Industry Participant” refers to any person or entity engaged in the generation,
434 transmission, distribution or supply of electricity.
435
436 (gg) “Installed Generating Capacity in a Grid” refers to the sum of the maximum
437 capacity of the generation facilities which are connected to a transmission
438 system or distribution system that forms part of a particular Grid.
439
440 (hh) “Installed Nameplate Capacity” refers to the full-load continuous gross
441 capacity of a unit under specified conditions, as calculated from the electric
442 generator nameplate based on the rated power factor. Nameplate capacity can
443 be calculated by multiplying the Megavolt-ampere (MVA) rating by its power
444 factor.
445
446 (ii) “IPP Administrators” refer to qualified independent entities appointed by
447 PSALM who shall administer, conserve and manage the contracted energy
448 output of NPC-IPP contracts, including selling the contracted energy output of
449 these contracts and offering ancillary services, where applicable.
450
451 (jj) “Isolated Area” refers to an area not connected to the high voltage
452 transmission system or Grid.
453
454 (kk) “Market Operator” or “MO” refers to the entity responsible for the
455 operation of the WESM in accordance with the WESM Rules.15
456
457 (ll) “Maximum Capacity” refers to the capacity that a unit can sustain over a
458 specified period of time. The maximum capacity can be expressed as gross
459 maximum capacity (GMC) or net maximum capacity (NMC). To establish this
460 capacity, formal demonstration/test is required. The test should be repeated
461 periodically. This demonstrated capacity level shall be corrected to generating
462 conditions for which there should be minimum ambient restriction. When a

14 Section 2.10 of DOE DC No. 2019-08-0012, Providing a framework for Energy Storage System in the
Electric Power Industry.
15 Section 2.11 of the DOE DC No. 2019-08-0012

Page 10 of 29
463 demonstration test has not been conducted, the estimated maximum capacity
464 of the unit shall be used.
465
466 (mm) “Maximum Ramp Up Rate” as defined in the Philippine Grid Code.
467
468 (nn) “Maximum Load” or “Pmax” refers to the maximum net output in kW that a
469 generating unit, or generating block or module in the case of a combined cycle
470 power plant, can reliably sustain for an indefinite period of time, based on the
471 generator capability tests.
472
473 (oo) “Minimum Stable Loading” or “Pmin” refers to the minimum net output
474 in kW that a generating unit, or generating block or module in the case of a
475 combined cycle power plant, can reliably sustain for an indefinite period of
476 time, based on the generator capability tests.
477
478 (pp) “Modular Unit” refers to a portable generating unit intended to be moved from
479 one site to another site for use.
480
481 (qq) “National Grid Corporation of the Philippines” or “NGCP” refers to the
482 corporate vehicle of the consortium which was awarded the concession to
483 assume the power transmission functions of the National Transmission
484 Corporation (“TRANSCO”).
485
486 (rr) “National Power Corporation” or “NPC” refers to the government corporation
487 created under Republic Act No. 6395, as amended.
488
489 (ss) “National Transmission Corporation” or “TRANSCO” refers to the corporation
490 organized pursuant to R.A. 9136 to acquire all the transmission assets of the
491 NPC.
492
493 (tt) “Net-Metering” refers to a system, appropriate for distributed generation, in
494 which a distribution grid user has a two-way connection to the grid and is only
495 charged or credited, as the case may be, the difference between its import
496 energy and export energy.
497
498 (uu) “Net-Metering Agreement” refers to the agreement between a Qualified End-
499 User (QE) and the Distribution Utility governing the commercial and
500 interconnection arrangements between the Distribution Utility and the QE.
501
502
503 (vv) “Philippine Electrical Code, Part II” refers to the basic safety rules for
504 safeguarding persons from the hazards arising from the installation, operation
505 and maintenance of electric supply and communication facilities.
506
507 (ww) “Philippine Electricity Market Corporation” or “PEMC” refers to
508 the corporation incorporated upon the initiative of the DOE

Page 11 of 29
509 composed of all WESM Members and whose Board of Directors
510 will be the PEM Board.16
511
512 (xx) “Philippine Stock Exchange” or “PSE” refers to the entity created under the
513 Revised Securities Act to manage the trading of shares of stocks of listed
514 corporations.
515
516 (yy) “Power Development Plan” or “PDP” refers to the indicative plan for
517 managing electricity demand through energy-efficient programs and for
518 the upgrading, expansion, rehabilitation, repair and maintenance of power
519 generation and transmission facilities, formulated and updated yearly by
520 the DOE in coordination with the Generation, Transmission and
521 Distribution Utility Companies.
522
523 (zz) “Power Sector Assets and Liabilities Management Corporation” or “PSALM
524 Corp.” or “PSALM” refers to the corporation created pursuant to Section 49
525 of R.A. 9136.
526
527 (aaa) “Public Offering” refers to the random or indiscriminate offering of securities
528 in general to anyone who will buy, whether solicited or unsolicited, made in
529 accordance with the modes of public offering, which is a requirement under
530 Section 43(t) of R.A. 9136.
531
532 (bbb) “Qualified End-User” or “QE” refers to an entity that generates electric power
533 from an eligible on-site RE generation facility, such as a photovoltaic system,
534 with the intent of entering into a Net-Metering Agreement with its
535 Distribution Utility.
536
537 (ccc) “Ramp Down Rate” refers to the normal rate that a generating unit reduces its
538 power output, expressed in MW per minute.
539
540 (ddd) “Ramp Rate” refers to both the Ramp Down Rate and the Ramp Up Rate.
541
542 (eee) “Ramp Up Rate” refers to the normal rate that a generating unit increases its
543 power output, expressed in MW per minute.
544
545 (fff) “Rated Capacity” the full-load continuous gross capacity of a unit
546 under the specified conditions, as calculated from the electric
547 generator nameplate based on the rated Power Factor.17
548
549 (ggg) “Related Group” refers to a person and any business entity controlled by that
550 person, along with the Affiliates of such business entity, and the directors and
551 officers of the business entity or its Affiliates, and relatives by consanguinity
552 or affinity, legitimate or common law, within the fourth civil degree, of the
553 person or any of the foregoing directors or officers.
554

16 Chapter 11 of the WESM Rules

17 GC 1.7 of the 2016 Philippine Grid Code
Page 12 of 29
555 (hhh) “Renewable Energy” or “RE” refers to renewable energy resources as defined
556 under Section 4 (uu) of Republic Act No. 9513.
557
558 (iii) “Repowering” refers to the replacement of a significant portion of the plant to
559 improve its performance and efficiency; a cost-effective way to extend unit
560 life while adding capacity, improving heat rate, reducing emissions, and
561 lowering heat rejection and water usage per kW generated.
562
563 (jjj) “Self-Generation Facility” or “SGF” refers to a power Generation Facility
564 owned and constructed by an end-user for such end-user’s own consumption
565 or internal use excluding Generation Facilities for use by households, clinics,
566 hospitals and other medical facilities.
567
568 (kkk) “Small Power Utilities Group” or “SPUG” refers to the functional unit of NPC
569 created to pursue Missionary Electrification function.
570
571 (lll) “Stand-by/Back-up” refers to a generating unit used for the main purpose of
572 providing in-house electricity source for the power plant’s lighting and
573 auxiliary equipment during total system shutdown.
574
575 (mmm) “Supervisory Control and Data Acquisition” or “SCADA” refers to a system
576 of remote control and telemetry used to monitor and control a power system.
577
578 (nnn) “Supplier” refers to any person or entity authorized by the ERC to sell, broker,
579 market or aggregate electricity to the end-users.
580
581 (ooo) “Supply” refers to the sale of electricity to an end-user by an Industry
582 Participant duly licensed by the ERC.
583
584 (ppp) “Synchronized” refers to the state when connected generating units and/or
585 interconnected AC Systems operate at the same frequency and where the
586 phase angle displacements between their voltages vary about a stable
587 operating unit.
588
589 (qqq) “System” refers to the Grid or Distribution System or any User System. Also
590 refers to a group of Components connected or associated in a fixed
591 configuration to perform a specified function.
592
593 (rrr) “System Operator” refers to the party responsible for generation dispatch, or
594 the implementation of the generation dispatch schedule of the Market
595 Operator, the provision of ancillary services, and operation to ensure safety,
596 power quality, stability, reliability and security of the Grid.
597
598 (sss) “Test and Commissioning” refers to putting into service a power system or
599 equipment that has passed all required tests to show that the power system
600 or equipment was erected and connected in the proper manner and can be
601 expected to work satisfactorily.
602

Page 13 of 29
603 (ttt) “Wholesale Electricity Spot Market” or “WESM” refers to the wholesale
604 electricity spot market created in accordance with R.A. 9136.
605
606 (uuu) “WESM Rules” refers to the rules that govern the administration and
607 operation of the Wholesale Electricity Spot Market.
608
609 ARTICLE II
610 QUALIFICATIONS OF GENERATION COMPANIES
611
612 Section 1. Ownership Limitations. –
613
614 (a) Transmission Cross-Ownership Prohibition
615
616 A Generation Company or its subsidiary or Affiliate or other entity engaged in
617 generating and supplying electricity specified by ERC or its stockholders, directors
618 or officers thereof, or any of their relatives within the fourth civil degree of
619 consanguinity or affinity, shall not be allowed to hold any shares of stock in the
620 TRANSCO or NGCP.
621
622 Likewise, the TRANSCO or NGCP or any of its stockholders, directors or officers
623 thereof, or any of their relatives within the fourth civil degree of consanguinity or
624 affinity, shall not be allowed to hold any shares of stock in any Generation Company
625 or Distribution Utility or its respective subsidiary or affiliate, or other entity
626 engaged in generating and supplying electricity specified by ERC. Provided, that
627 the cross-ownership prohibition under this provision shall not apply to a relative by
628 blood or marriage, if such relative of any stockholder, director or officer of the
629 TRANSCO or NGCP has no employment, consultancy, fiduciary, contractual,
630 commercial or other economic relationship or interest in the TRANSCO or NGCP,
631 or conversely, if such relative of any stockholder, director or officer of a Generation
632 Company, Distribution Utility or its respective subsidiary or affiliate, or other entity
633 engaged in generating and supplying electricity specified by ERC has no
634 employment, consultancy, fiduciary, contractual, commercial or other economic
635 relationship or interest in the Generation Company, Distribution Utility or its
636 respective subsidiary or affiliate, or other entity engaged in generating and
637 supplying electricity specified by ERC. Provided, further, that this prohibition on
638 cross-ownership shall not apply to: (a) ownership of shares of stock in a company
639 listed in the Philippine Stock Exchange (PSE) even if such listed company is a
640 Generation Company, Distribution Utility or its respective subsidiary or affiliate, or
641 other entity engaged in generating and supplying electricity specified by ERC, if
642 such share ownership is not more than one per centum (1%) of the total outstanding
643 shares of such listed Generation Company, Distribution Utility or its respective
644 subsidiary or affiliate, or other entity engaged in generating and supplying
645 electricity specified by ERC; or (b) ownership of shares of stock which is not more
646 than one per centum (1%) in a company listed in the PSE which owns or controls
647 shares of stock in the TRANSCO or NGCP. Provided, moreover, that such owner of
648 shares of stock in the listed corporate stockholder of the TRANSCO or NGCP shall
649 not own more than one per centum (1%) of the shares of stock or equity interest in
650 any Generation Company, Distribution Utility or its respective subsidiary or
651 affiliate, or other entity engaged in generating and supplying electricity specified by

Page 14 of 29
652 ERC. This provision shall not be applicable to PSALM during the period that its
653 generation assets are being privatized pursuant to Section 47 of R.A. 9136.
654
655 (b) Generation Market Restrictions
656
657 1. General Principle
658
659 No Generation Company, Related Group or IPP Administrator or any other
660 person may engage in any anti-competitive behavior including, but not limited
661 to, cross-subsidization, price or market manipulation, false or deceptive
662 marketing, or other unfair trade practices detrimental to the encouragement
663 and protection of the WESM or the Contestable Market.
664
665 2. Limits on Concentration in Ownership of Generating Capacity
666
667 No company, Related Group or IPP Administrator, singly or in combination, can
668 own, operate or control more than thirty percent (30%) of the installed
669 generating capacity of a Grid and/or twenty-five percent (25%) of the national
670 installed generating capacity: provided, that such restrictions shall not apply to
671 PSALM or NPC during the time that its assets are being privatized pursuant to
672 Section 47 of R.A. 9136. This limitation shall not apply to a Generation
673 Company or an Entity with SGF located in the NPC-SPUG areas or in isolated
674 grids that are not connected to the high voltage transmission system. The ERC
675 shall determine the installed generating capacity in a Grid and the national
676 installed generating capacity on or before the 15th day of March of each year
677 and/or as often as may be necessary.
678
679 For purposes of calculating a particular Generation Company’s compliance with
680 the market share limitations as provided above, the capacity of such Generation
681 Facility shall be credited in accordance with ERC Resolution No. 26, Series of
682 2005 (Guidelines for the Determination of Installed Generating Capacity in a
683 Grid and the National Installed Generating Capacity and Enforcement of the
684 Limits on Concentration of Ownership, Operation or Control of Installed
685 Generating Capacity under Section 45 of Republic Act No. 9136), or as may be
686 amended.
687
688 3. Limits on Bilateral Contracts
689
690 A Generation Company shall not sell to an affiliate Distribution Utility through
691 bilateral power supply contracts more than fifty percent (50%) of said
692 Distribution Utility’s total demand. This limitation shall apply regardless of
693 whether demand is expressed in terms of capacity or energy. This limitation
694 shall not prejudice contracts entered into prior to the effectivity of R.A. 9136.
695
696
697 4. Penalties for Anti-Competitive or Discriminatory Act or Behavior
698
699 The ERC shall, motu proprio monitor and penalize any market power abuse or
700 anti-competitive or unduly discriminatory act or behavior, or any unfair trade

Page 15 of 29
701 practice that distorts competition or harms consumers, by any industry
702 participant, in accordance with the procedure laid down in the ERC issued
703 “Competition Rules and Complaint Procedures”18. Upon a finding of a prima
704 facie case that an industry participant has engaged in such act or behavior, the
705 ERC shall, after due notice and public hearing, stop and redress the same. Such
706 remedies shall, without limitation, include the separation of the business
707 activities of an industry participant into different juridical entities, imposition
708 of bid or price controls, issuance of injunctions in accordance with the Rules of
709 Court, divestment or disgorgement of excess profits, and imposition of fines and
710 penalties under Article III, Section 7 of the “Guidelines to Govern the Imposition
711 of Administrative Sanctions in the Form of Fines and Penalties Pursuant to
712 Section 46 of R.A. 9136, as Amended”19.
713
714 5. Public Listing Requirements
715
716 Generation Companies which are not publicly listed shall offer and sell to the
717 public a portion not less than fifteen percent (15%) of their common shares of
718 stocks, provided, however, that such Generation Companies, or their respective
719 holding companies that are already listed in the Philippine Stock Exchange are
720 deemed in compliance. For existing companies, such public offering shall be
721 implemented not later than five (5) years from the effectivity of Resolution No.
722 9, Series of 2011 issued by the ERC entitled Rules Requiring Generation
723 Companies and Distribution Utilities which are not Publicly Listed to Offer and
724 Sell to the Public a Portion of not less than Fifteen Percent (15%) of their
725 Common Shares of Stock pursuant to Section 43 (t) of Republic Act No. 9136
726 and Rule 3, Section 4 (m) of Its Implementing Rules and Regulations (IRR) of
727 June 29, 2011, or as amended. Henceforth, new companies shall implement
728 their respective public offerings not later than five (5) years from the issuance
729 of their COCs.
730
731 ARTICLE III
732 REQUIREMENTS AND PROCEDURES
733
734 Section 1. In General. – All entities owning or operating Generation Facilities, shall
735 apply for a COC with the ERC. The ERC shall Act on the application within sixty (60)
736 calendar days from receipt of the complete application, which includes the
737 submission of all documentary requirements and the conduct of the technical
738 inspection. In the event the ERC requires the submission of additional information, or
739 orders the postponement of final action on an application on reasonable grounds, the 60-
740 day period shall be reckoned from the date of complete submission of the required
741 information or the lifting of the suspension of the final action on the application. The ERC
742 shall deny all applications which fail to submit all the information and other requirements
743 within the period allowed, without prejudice to the re-filing of such application.
744
745 Section 2. Documents/Information Required for New Applications.20–

18 ERC Resolution No. 45, Series of 2006

19 ERC Resolution No. 03, Series of 2009
20
In cases where the submitted document is issued to a different entity, other than the Generation Company-
Applicant, a written explanation must be submitted explaining the relationship of that entity to the
Page 16 of 29
746
747 (a) The following documents/information shall be submitted by Generation
748 Company applicants issued in its name for new Generation Facilities at the
749 time of application:
750
751 (aa) General Requirements
752 (i) Application Form (COC Form No. 1); and
753 (ii) Company Profile (COC Form No. 2).
754
755 (bb) Technical Qualification
756 (i) General Plant Description (Form 7) with pictures of the
757 Nameplate (Generator, Engine or Turbine, etc.);
758 (ii) Plant Overview with technical details of the load to be
759 served (Write-Up);
760 (iii) Location Map;
761 (iv) PGC, PDC/PSGG and WESM Requirements
762 a. Electrical/Mechanical Plans and Diagrams and
763 Connection Point Drawing, including the
764 connection point to the grid/distribution
765 system;
766 b. Final Certificate of Approval to Connect
767 (FCATC) issued by NGCP or DU to Generation
768 Company or Certificate of Grid Code
769 Compliance/Clearance to Energize issued by
770 TNP for embedded Generation Facility/ies, if
771 applicable;
772 c. Test and Commissioning Report or Generator
773 Unit Capability Test Certificate and the
774 corresponding result, if applicable; and
775 d. Ancillary Service Capability Test Results, if
776 applicable.
777 (v) Management and/or lease contracts in force (in case the plant
778 is operated, leased and/or managed by an entity other than the
779 owner), if applicable;
780 (vi) For a dedicated point-to-point limited transmission
781 or distribution facilities, applicant shall secure
782 authorization to develop, own and operate from the
783 ERC; and,
784
785 (cc) Financial Capability
786 i. Certified True Copy of complete set of Audited Financial
787 Statements (AFS) covering the two (2) most recent twelve
788 (12) month periods (i.e., balance sheet, income statement,
789 statement of cash flows, notes, audit opinion and the
790 statement of management’s responsibility on the financial
791 statements), if available. For a Generation Company
792 which has been in operation for less than two (2) years, the

Generation Company/Applicant/Generation Facility, accompanied with supporting documents that would

substantiate the explanation.
Page 17 of 29
793 AFS of the parent company shall be required in lieu of the
794 above, covering the two (2) most recent twelve (12) month
795 period;
796 ii. Latest detailed project cost and sources of funds;
797 iii. Duly attested schedule of liabilities, to include the
798 following information: name of creditor, type of credit, loan
799 amortization schedule, credit terms and applicable
800 interest rates (s);
801 iv. Five (5) year financial plan (i.e forecast financial
802 statements, including assumptions/bases used for
803 revenue and cost projections, Debt Service
804 Capability Ratio “DSCR” calculation)21;
805 v. For Generation Company which owns or operates
806 more than one (1) Generation Facility, a separate
807 breakdown for the result of operations of each
808 Generation Facility must be submitted;
809 vi. For Generation Company which has other business
810 segments22, submission of financial statements
811 must be in accordance with the Business
812 Separation Guidelines (BSG); and,
813 vii. For Generation Company which has other
814 businesses aside from the power business
815 segments stated in the BSG, a separate accounting
816 allocation for its generation business must be
817 submitted.
818
819 (dd) Ownership/Control
820 (i) Articles of Incorporation/Limited Partnership (for
821 Corporation/ Partnership) and its amendment, if any,
822 whichever is applicable;
823 (ii) Certificate of Registration;
824 (iii) Business Name Registration Certificate (for Single
825 Proprietorship), if applicable;
826 (iv) Business Permit issued by the Local Government
827 Unit (LGU);
828 (v) Latest General Information Sheet (GIS) of the applicant and
829 its stockholders – Securities and Exchange Commission
830 (SEC) Form;
831 (vi) Duly attested comprehensive and complete listing of
832 Affiliates and Related Groups, including ownership and
833 management structure under oath; and
834 (vii) Proof of Compliance with Public Offering
835 Requirements: PSE Certificate to the effect that the
836 Generation Company is listed with PSE or compliance with
837 any other allowed mode of public offering; or
838

21 In accordance with the Financial Guidelines for the Financial Standards of Generation Companies.
22 Section 4.3 of the BSG (ERC Resolution No. 49, Series of 2006)
Page 18 of 29
839 (ee) Other Requirements
840
841 (i) Power Supply Agreement(s) (PSA) / Renewable Energy
842 Service Agreements (RESA) / Ancillary Service
843 Agreement / any NPC-IPP agreement, if applicable;
844
845 Department of Energy23
846
847 (ii) In the case of a Generation Company operating an RE plant
848 that intends to avail of the FIT, the DOE Certificate of
849 Endorsement for FIT Eligibility;
850 (iii) Department of Energy (DOE) Certificate of Endorsement
851 (COE) indicating that the power plant project is consistent
852 with the Power Development Plan (PDP) of the Government
853 or with the Missionary Electrification Development Plan
854 (MEDP) for power plant project located in isolated grids and
855 COE as QTP in case of Qualified Third Party; and
856 (iv) DOE issued Certificate of Energy Projects of
857 National Significance (CEPNS), if applicable;
858
859 Department of Environment and Natural Resources
860
861 (v) Environmental Compliance Certificate (ECC) duly approved
862 by the Department of Environment and Natural Resources
863 (DENR);
864 (vi) Permit to Operate (PTO), if applicable;
865 (vii) Wastewater Discharge Permit/Discharge
866 Permit issued by the DENR-EMB, if applicable;
867 (viii) Water Permit issued by the National Water
868 Resources Board (NWRB), if applicable; and,
869 (ix) Such other information or document that the ERC may require.
870 Any additional technical information may be required by the
871 ERC upon prior notice to the applicant.
872
873 (b) The following documents/information shall be submitted in connection with a
874 QE’s COC application, to be forwarded by the DU with which the QE has
875 entered into a Net-Metering Agreement:
876
877 (i) General Requirements
878 (i.a) Application Form (COC Form No. 1);
879 (i.b) Company Profile (COC Form No. 2).
880 (ii) DU Certification that the QE is technically compliant with the Net-
881 Metering Interconnection Standards issued by the ERC;
882 (iii) Net Metering Agreement with the concerned DU;
883 (iv) Other documents that the ERC may require.
884

23 Must be consistent with the capacity of the generator nameplate rating.

Page 19 of 29
885 The above set of documents shall be transmitted by the concerned DU to the ERC
886 prior to implementation of Net-Metering. Upon transmittal made by the DU on
887 behalf of the QE of all the required documents, the QE shall be allowed to operate
888 and implement its Net-Metering Agreement with the DU.
889
890 The QE shall issue a cashier’s or manager’s check payable to the ERC and transmit
891 it to the DU, together with the signed NMA and accomplished COC forms for
892 transmittal to the ERC. Thereafter, the COC and official receipt shall be issued
893 directly to the QE.
894
895 (c) The following documents/information are required to be submitted by
896 Entities with Self-Generation Facilities (SGFs) at the time of application:
897
898 (1) Self-Generation Facility (SGF) with aggregate installed capacity of
899 below 1 MW
900
901 (aa) General Requirements
902 (i) Application Form (COC Form No. 1);
903 (ii) Company Profile (COC Form No. 2);
904 (iii) Other Document/s that the ERC may require.
905
906 (2) Self-Generation Facility (SGF) with aggregate installed capacity of 1
907 MW and above
908
909 (aa) General Requirements
910 (i) Application Form (COC Form No. 1); and
911 (ii) Company Profile (COC Form No. 2).
912
913
914 (bb) Additional Requirements
915 (i) Securities and Exchange Commission (SEC) Registration;
916 (ii) Latest General Information Sheet (GIS) of the Company – SEC
917 Form;
918 (iii) Permit to Operate (PTO) duly issued by the Department of
919 Environment and Natural Resources (DENR), as
920 applicable;
921 (iv) Other Document/s that the ERC may require.
922
923 Section 3. Documents/Information Required for Applications for COC
924 Renewal24.
925
926 (a) For Generation Companies all documents that are enumerated in
927 Section 2 (a) hereof, in addition to the following:

24In cases where the submitted document is issued to a different entity, other than the Generation Company-
Applicant, a written explanation must be submitted explaining the relationship of that entity to the
Generation Company/Applicant/Generation Facility, accompanied with supporting documents that would
substantiate the explanation.

Page 20 of 29
928
929 (1) General Requirements
930 (aa) Five (5) year Operational History (Form No. 3), if applicable.
931
932 (2) Financial Capability
933 (aa) Duly attested updated schedule of liabilities, to include the
934 following information: name of creditor(s), type of credit,
935 credit terms, loan amortization schedule and applicable
936 interest rate(s);
937 (bb) Five (5) year financial plan (i.e forecast financial
938 statements, including assumptions/bases used for
939 revenue and cost projections, Debt Service
940 Capability Ratio “DSCR” calculation, if applicable;
941 (cc) Actual DSCR calculation for the period covered by
942 its existing COC; and
943 (dd) Program to Comply, if applicable.
944
945 (4) Ownership/Control
946 (aa) Articles of Incorporation/Limited Partnership (Corporation
947 /Partnership) with Certificate of Registration, if there are any
948 changes; and
949 (bb) Duly attested updated and comprehensive listing of Affiliates
950 and Related Groups, including ownership and management
951 structure under oath.
952
953 (5) Other Requirements
954 (aa) Rehabilitation conducted on the generation facilities
955 during the 5-year term of the COC, if applicable; and
956 (bb) Such other information or document that the ERC may require.
957
958 Provided, that those documents already submitted in accordance with
959 Section 2 (a) in its new application shall no longer be required for
960 submission unless: (1) there are any substantial amendments thereto;
961 and/or (2) documents where validity has already expired.
962
963 (b) The following documents/information shall be submitted in connection
964 with a QE’s COC application, to be forwarded by the DU with which the QE
965 has entered into a Net-Metering Agreement:
966
967 (1) General Requirements
968 (a) Application Form (COC Form No. 1); and
969 (b) Company Profile (COC Form No. 2).
970 (2) DU Certification that the QE is technically compliant with the Net-
971 Metering Interconnection Standards issued by the ERC;
972 (3) Net Metering Agreement with the concerned DU; and
973 (4) Other documents that the ERC may require.
974
975 (c) For Entities with Self-Generation Facility, the same requirements shall be
976 submitted as prescribed under Section 2(d), Article III hereof with the

Page 21 of 29
 977 additional requirement to submit the Five (5) Year Operational History
978 (Form No. 3); and such other documents that the ERC may require.
979
980 Section 4. When to File New Applications. – The application for COC of Generation
981 Facilities shall be filed not later than three (3) months before the targeted date of Test and
982 Commissioning of the said facilities. In the case of a COC for QEs, the procedure under
983 the ERC Resolution No. 06, Series of 2019 “2019 Amended Net Metering
984 Rules” shall be followed.
985
986 Section 5. Transfer of Ownership. – If a Generation Facility, including that of NPC,
987 whose owner has been previously issued a COC, is transferred or sold and the term of such
988 COC has not expired, the new owner shall not be required to secure an amended COC for
989 the remainder of the term of the existing COC: Provided, That the transfer of ownership is
990 reported to the ERC within seven (7) calendar days from transfer or sale of the
991 Generation Facility and the new owner conforms to and shall comply with all the
992 obligations imposed on a Generation Company, including the submission of reportorial
993 requirements under Section 10, Article IV hereof: Provided further, That if the new owner
994 desires to be the named licensee under the COC, an application for such amendment shall
995 be filed and approved by the ERC.
996
997 Section 6. Change of Status. – An entity with Self-Generation Facility/ies, which
998 intends to sell its generated electricity, shall file an application for the amendment of its
999 COC from a Self-Generation Facility to a Generation Company and submit and comply
1000 with all the pertinent requirements imposed on a Generation Company or under Section
1001 2, Article III of these Revised Rules. Pending evaluation and final action on the said
1002 application, the ERC may provisionally allow such Self-Generation Facility to sell its
1003 generated electricity on the basis of its existing COC, subject to its compliance with the
1004 applicable requirements for power supply to Distribution Utilities.
1005
1006 Subject to Section 5, Article III hereof, a Generation Company which intends to amend any
1007 information on the technical specifications of its Generation Facilities contained on the
1008 face of the COC and its annexes shall likewise file an application for the amendment of the
1009 COC.
1010
1011 Section 7. Ocular Technical Inspection. – No COC or renewal thereof shall be issued
1012 without a technical inspection having been conducted on the facilities.
1013
1014 For new Generation Companies, a technical inspection shall be conducted on the newly-
1015 constructed Generation Facilities by the designated ERC personnel after the Test and
1016 Commissioning of the Generation Facilities and in all cases prior to the Commercial
1017 Operations of the same.
1018
1019 All Generation Companies’ Generation Facilities shall likewise be subject to the actual
1020 ocular technical inspection to be conducted by the designated ERC personnel, during the
1021 five (5) year term of the COC.
1022
1023 The conduct of the technical inspection may be done thru videoconferencing or
1024 may be waived by the ERC due to the following reasons:
1025

Page 22 of 29
1026 1. Force majeure;
1027 2. Safety and security concerns of the ERC technical personnel; and
1028 3. Other conditions as the ERC may deem fit.
1029
1030 ARTICLE IV
1031 OBLIGATIONS OF A GENERATION COMPANY
1032
1033 Section 1. Compliance with Technical Standards. – A Generation Company shall
1034 ensure that all its Generation Facilities connected to the Grid or Distribution System meet
1035 the grid or distribution technical, design and operational criteria of the PGC and PDC
1036 promulgated by the ERC, PEC, and the system requirements of TRANSCO or NGCP and
1037 the DU, including, among others, standards for voltage fluctuation, frequency, harmonics,
1038 security, reliability, unplanned outages and provision for ancillary services and shall
1039 operate in accordance with such operational criteria.
1040
1041 A Generation Company which develops and owns or operates a dedicated point-to-point
1042 limited transmission or distribution facilities for the purpose of connecting to the
1043 transmission or distribution system, respectively, said Generation Company should secure
1044 prior authorization by the ERC.
1045
1046 Section 2. Compliance with Financial Standards. – A Generation Company with
1047 Generation Facilities connected to the Grid shall conform to the Guidelines for the
1048 Financial Standards of Generation Companies.
1049
1050 For Generation Facilities connected to the Grid which are administered by a PSALM
1051 appointed IPPA Administrators, such IPPAs shall likewise conform to the Guidelines for
1052 the Financial Standards of Generation Companies.
1053
1054 Section 3. Compliance with Environmental Standards. – A Generation
1055 Company shall ensure that its Generation Facilities comply with applicable environmental
1056 laws, rules and regulations.
1057
1058 Section 4. Generation Facilities Operating in Isolated Areas. – A Generation
1059 Company operating a Generation Facility in isolated areas shall meet the technical and
1060 financial standards to be issued by the ERC using applicable and practicable criteria within
1061 two (2) years, or such other period as may be specified by the ERC, from the issuance of
1062 such technical and financial standards. The generation rates to be charged by a Generation
1063 Company operating a Generation Facility in SPUG areas and isolated areas shall be fixed
1064 and determined by the ERC.
1065
1066 Section 5. Structural and Functional Unbundling of a Generation Company.
1067 – A Generation Company shall structurally and functionally unbundle its generation
1068 business activities and rates from its supply and/or related businesses in accordance with
1069 the Business Separation Guidelines (BSG), as amended.
1070
1071 Section 6. Self-Generator’s Contribution to the Universal Charge. – Upon
1072 expiration of the exemption of Self-Generation Facilities from the imposition of Universal
1073 Charge pursuant to Section 7, Rule 18 of the Implementing Rules and Regulations of R.A.
1074 9136, a Self-Generation Facility subject to the aforementioned provision shall remit

Page 23 of 29
1075 directly to TRANSCO or NGCP the corresponding Universal Charge set by the ERC. In
1076 relation to this, TRANSCO or NGCP shall be provided access to the customer side of the
1077 meter in order to determine the utilization of such Generation Facility for the purpose of
1078 assessing the corresponding Universal Charge.
1079
1080 The term “register” provided in the aforementioned rule shall be equivalent to the issuance
1081 of a COC to the concerned Facility.
1082
1083 Section 7. Benefits to Host Communities. – The obligations of Generation
1084 Companies and energy resource developers to communities hosting the energy Generation
1085 Facilities and/or energy resource developers as defined under Chapter II, Sections 289 to
1086 294 of the Local Government Code and Section 5 (i) of Republic Act No. 7638 and their
1087 Implementing Rules and Regulations shall continue, and the obligations mandated under
1088 Chapter II, Section 291 of Republic Act No. 7160 shall apply to privately-owned
1089 corporations or entities utilizing the national wealth of the locality.
1090
1091 Section 8. Generation Company’s Participation in the WESM. –A Generation
1092 Company with Generation Facility/ies connected to a transmission or distribution system
1093 shall comply with the membership criteria as prescribed under the WESM Rules and
1094 Manuals.
1095
1096 A Generation Company with Generation Facility/ies connected to a Grid or distribution
1097 system shall make information available to the Market Operator to enable it to implement
1098 the appropriate dispatch scheduling and shall comply with the said scheduling in
1099 accordance with the WESM Rules and Manuals.
1100
1101 A Generation Company shall, likewise, make information available to the TRANSCO or
1102 NGCP to facilitate its central dispatch. Subject to technical constraints, the grid operator
1103 of the TRANSCO or NGCP shall provide central dispatch to a Generation Facility
1104 connected, directly or indirectly, to the transmission or distribution system in accordance
1105 with the dispatch schedule submitted by the Market Operator, which schedule shall take
1106 into account outstanding bilateral contracts.
1107
1108 Section 9. DOE Reportorial Requirements. – A Generation Company shall submit to
1109 the DOE any information as may be required by it for the preparation of the Power
1110 Development Plan (PDP) and in determining the adequacy, reliability, security, and
1111 affordability of the supply of electric power, subject to appropriate measures to preserve
1112 the confidentiality of proprietary or commercially sensitive information.
1113
1114 Section 10. ERC Reportorial Requirements. –
1115
1116 (a) On or before the 30th day of January of each year, the Generation Company shall
1117 submit to the ERC a Generation Company Management Report (GCMR) which
1118 shall contain the following:
1119
1120 (i) Report on capacity utilization, electricity dispatch/sales volume,
1121 maintenance schedules, and unscheduled downtimes during the period;
1122 (ii) Report on Supply Agreements entered into during the period, including
1123 copies thereof;

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1124 (iii) Report on energy revenues during the period, detailing volumes, the
1125 identity/ies of the buyer/s and prices broken down as follows: fuel cost,
1126 fixed operating and maintenance expenses, variable operating and
1127 maintenance expenses, and capital recovery charge; and
1128 (iv) Information on individual units Rated Capacity, Maximum Load (Pmax),
1129 Minimum Stable Loading (Pmin), Ramp Up Rate, Ramp Down Rate and
1130 Heat Rate (BTU/kWh, kCal/kWh, kJ/kWh), if applicable.
1131 (v) Reportorial requirements under Resolution No. 9, Series of 2013 entitled “A
1132 Resolution Adopting the Rules Enabling the Net-Metering Program for
1133 Renewable Energy, if applicable
1134
1135 (b) Within thirty (30) calendar days from public offering, the Generation
1136 Company shall submit reports on the extent of its compliance, together with
1137 proofs showing the numbers of shares of stock listed, registered or offered for
1138 sale, names of the shareholders/purchasers presently owning said shares of
1139 stock and other relevant information for monitoring and verification purposes.
1140
1141 (c) Within seven (7) calendar days from the happening of an event which results
1142 in a material change concerning or potentially affecting the company’s
1143 ownership, management, operations, financial condition and performance, the
1144 Generation Company shall submit a written disclosure to the ERC of such fact
1145 or event and its impact on the company.
1146
1147 (d) A Generation Company shall inform the ERC in writing of any changes in the
1148 individual unit’s registered Pmax, Pmin, Ramp Up Rate and Ramp Down Rate
1149 as provided in Section 10 (a)(iv), Article IV hereof which should be supported by
1150 capacity and performance tests conducted by a third party acceptable to the
1151 ERC. Thereafter, the Generation Company shall apply for the amendment of
1152 the technical description of its Generation Facilities.
1153
1154 For Generation Facilities administered by a PSALM appointed IPPA, the foregoing
1155 reportorial requirements as applicable shall be submitted by the said IPPA relative
1156 to the said facilities.
1157
1158 (e) Within thirty (30) calendar days from the filing of its Income Tax Return with
1159 the Bureau of Internal Revenue (BIR), the Generation Company and IPPA shall
1160 submit a complete set of its Audited Financial Statements (i.e., balance sheet,
1161 income statement, statement of cash flows, notes), including the audit opinion,
1162 the statement of management’s responsibility on the financial statements. The
1163 income statement shall include a detailed schedule of operating expenses for the
1164 period.
1165
1166 ARTICLE V
1167 ISSUANCE, TERM, RENEWAL OF THE CERTIFICATE OF
1168 COMPLIANCE
1169
1170 Section 1. Issuance and Term. – Upon compliance with the requirements as provided
1171 in this Rules, the ERC shall issue a COC to the Generation Company or an entity with
1172 Self-Generation Facilities, subject to compliance with such other terms and conditions as

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1173 the ERC may require, which shall be valid for a period of five (5) years, unless sooner
1174 revoked by the ERC after due notice and hearing.
1175
1176 The term of the QE-COC shall be co-terminus with the Net-Metering Agreement of the QE
1177 with the DU.
1178
1179 Section 2. Form. - The COC including its annexes, to be issued by the ERC shall be
1180 substantially in the form attached as Annex 1 hereof.
1181
1182 Section 3. Provisional Authority to Operate (PAO). – Pending the approval of the
1183 COC application, no Generation Company shall operate its Generation Facility unless a
1184 PAO is issued by the ERC. The PAO shall be issued in the form of a notification to the
1185 applicant and shall be valid for a period of one (1) year from issuance thereof and can
1186 be subject for an extension depending upon the discretion of the ERC . The
1187 one (1) year validity period shall be included in the five (5) year term of the COC that
1188 may be issued by the ERC for such Generation Facility/ies.
1189
1190 No Generation Company shall be issued a PAO unless a formal request signed by the
1191 Company President or its duly authorized representative is made.
1192
1193 Issuance of a PAO may be made for failure to submit documentary requirements
1194 including, but not limited to, the following:
1195
1196 i. Final Certificate of Approval to Connect (FCATC), Certificate of
1197 Grid Code Compliance/Certificate to Energize for Embedded
1198 Generator;
1199
1200 ii. Permit to Operate from the DENR, if applicable;
1201
1202 iii. Water Permit from the NWRB, if applicable; and,
1203
1204 iv. Amendments in the DOE-COE, DENR-ECC and other documents
1205 submitted.
1206
1207 Provided that for the aforementioned documentary requirements, applicant shall at
1208 least submit a Provisional Certificate of Approval to Connect (PCATC),
1209 Temporary Permit to Operate (TPTO) and Conditional Water Permit; and
1210 any supporting document showing proof that, the applications for the said documents have
1211 been filed, and are pending approval with the DOE, DENR, NGCP and/or Distribution
1212 Utility.
1213
1214 For Generation Facilities with DOE-issued Certificate of Energy Project of
1215 National Significance (CEPNS), a PAO shall be issued within 30 calendar
1216 days from the submission of complete documentary requirements including
1217 the conduct of technical inspection.
1218
1219 Such other circumstances that the ERC may deem appropriate to issue a
1220 PAO.
1221

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1222 Section 4. Renewal. – A Generation Company or an entity with Self-Generation Facility
1223 intending to continue operating beyond the term of the issued COC shall apply with the
1224 ERC for its renewal at least six (6) months prior to its expiration. The application for
1225 renewal of the COC shall be accepted only if submitted together with all the relevant
1226 documents, which may include proof of timely application for renewal of
1227 permits and licenses with other agencies, required information disclosure and
1228 proof of conformity to the obligations set forth in these 2020 Revised COC Rules and after
1229 the required fees shall have been paid subject to Section 3, Article V hereof. The ERC shall
1230 endeavor to resolve the application for renewal within the six (6) month period prior to
1231 expiration of the COC’s term.
1232
1233 Notwithstanding the date of the final approval of the application for COC renewal, the new
1234 COC shall be deemed to have been issued on the day immediately following the expiration
1235 of the previously issued COC and the new (five) 5-year term shall be reckoned from such
1236 date.
1237
1238 ARTICLE VI
1239 REVOCATION/DENIAL OF THE CERTIFICATE OF COMPLIANCE
1240 AND IMPOSITION OF PENALTIES
1241
1242 Section 1. Procedure. – The ERC may, after due notice and hearing, impose appropriate
1243 penalties, if the Generation Company, its assignees or heirs, fail to comply with any of the
1244 requirements of these Revised Rules or any of the terms and conditions contained in the
1245 COC.
1246
1247 Section 2. Penalties. – A Generation Company that fails to comply with any of the
1248 obligations set forth herein and the terms and conditions contained in the COC, including
1249 operating the Generation Facilities without a valid COC, shall be subject to the imposition
1250 of fines and penalties imposed by the ERC. Penalties that may be imposed by the ERC
1251 include fines and penalties under Article III of the “Guidelines to Govern the Imposition
1252 of Administrative Sanctions in the Form of Fines and Penalties Pursuant to Section 46 of
1253 R.A. No. 9136, as Amended”, penalties imposed under the EPIRA and where the
1254 circumstances warrant, revocation of the COC.
1255
1256 Section 3. Denial – The ERC may, upon due evaluation of all the
1257 documentary requirements and conduct of technical inspection, deny an
1258 application for the issuance of COC, without prejudice to the refiling thereof
1259 upon full compliance with all the requirements for the issuance of a COC.
1260
1261 ARTICLE VII
1262 FEES AND CHARGES
1263
1264 Application fees, COC fees including the fees for any amendments to the COC or to its
1265 annexes shall be imposed on all applicants upon the filing of applications in accordance
1266 with Resolution No. 21, Series of 2007 (A Resolution Approving the Revised Schedule of
1267 ERC Fees & Charges) as may be amended.
1268
1269
1270

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1271 ARTICLE VIII
1272 MONITORING
1273
1274 The ERC shall monitor the compliance of Generation Companies and entities owning Self-
1275 Generation Facilities with the terms and conditions of their COCs and the provisions of
1276 these Revised Rules.
1277
1278 ARTICLE IX
1279 EXCEPTION CLAUSE
1280
1281 Where good cause appears, the ERC may allow an exception from any provision of these
1282 Rules, if such is found to be in the public interest and is not contrary to law or any other
1283 related rules and regulations.
1284
1285 ARTICLE X
1286 SEPARABILITY CLAUSE
1287
1288 If for any reason, any section of these Revised Rules is declared unconstitutional or invalid,
1289 the other parts or sections hereof which are not affected thereby shall continue to be in full
1290 force and effect.
1291
1292 ARTICLE XI
1293 APPLICABILITY AND REPEALING CLAUSE
1294
1295 The existing rules otherwise inconsistent herewith are hereby repealed or modified
1296 accordingly.
1297
1298
1299
1300
1301
1302
1303
1304
1305
1306
1307
1308
1309
1310
1311
1312
1313
1314
1315
1316
1317
1318
1319

Page 28 of 29
1320 ARTICLE XI
1321 EFFECTIVITY
1322
1323
1324 These Revised Rules shall take effect on the fifteenth (15th) day following its publication in
1325 a newspaper of general circulation in the Philippines.
1326
1327 Let copies of these Revised Rules be furnished the University of the Philippines Law
1328 Center-Office of the National Administrative Register (UPLC-ONAR).
1329
1330
1331 Pasig City, _______________ 2020
1332
1333
1334
1335
1336 AGNES VST DEVANADERA
1337 Chairperson and CEO
1338
1339
1340
1341 ALEXIS M. LUMBATAN CATHERINE P. MACEDA
1342 Commissioner Commissioner
1343
1344
1345
1346 FLORESINDA G. BALDO-DIGAL MARKO ROMEO L. FUENTES
1347 Commissioner Commissioner
1348
1349
1350
1351
1352
1353
1354
1355
1356 ASP/RVM/DGR/MACB/SOM_2020Revised Rules for the Issuance of COCs
1357
1358
1359

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