1. Philippine Feed-In Tariff System Implementation Sharon O. Montañer Chief- Office of the Executive Director Member – RE Technical Working Group

2. 2 Chapter IV - Regulation of the Electric Power Industry Section 38. Creation of the Energy Regulatory Commission. There is hereby created an independent, quasi-judicial regulatory body to be named the Energy Regulatory Commission (ERC). xxx Section 41. Promotion of Consumer Interests. xxx and ensure the adequate protection of consumer interests. Xxx Section 43. Functions of the ERC. The ERC shall promote competition, encourage market development, ensure customer choice and discourage/penalize abuse of market power in the restructured electricity industry. xxx Energy Regulatory Commission

3. Renewable Energy Act of 2008 Republic Act No. 9513 An Act Promoting the Development, Utilization and Commercialization of Renewable Energy Resources and For Other Purposes December 16, 2008

4. Renewable Energy Act of 2008  On-Grid Renewable Energy Development  Renewable Portfolio Standards  Feed-In Tariff System  Renewable Energy Market  Green Energy Option  Net-metering for Renewable Energy  Off-Grid Renewable Energy Development  Minimum RE generation capacities 4 R.A. 9513

5. * Section 6 of the RE Law 5  Defined as “a market-based policy that requires electricity suppliers to source an agreed portion of their energy supply from eligible RE resources”  The NREB shall set:  Minimum percentage of generation from eligible renewable energy resources  Which sector RPS shall be imposed on a per grid basis Renewable Portfolio Standards

6. * Section 8 of the RE Law 6  The DOE shall establish the REM  Direct PEMC to implement changes to the WESM rules in order to incorporate the rules specific to the operation of the REM under the WESM  PEMC, under DOE supervision, establish a Renewable Energy Registrar  Issue, keep and verify RE Certificates Renewable Energy Market (REM)

7. * Section 9 of the RE Law 7  The DOE shall establish a Green Energy Option program which provides end-users the option to choose RE resources as their sources of energy  End-users may directly contract from RE facilities their energy requirements  TRANSCO, DUs, PEMC and all relevant parties are hereby mandated to provide the mechanisms for the physical connection and commercial arrangements necessary to ensure the success of the Green Energy Option  ERC to develop regulatory framework Green Energy Option

8. * Section 10 of the RE Law 8 Net Metering for RE  DUs may enter into Net-Metering agreements with qualified end-users  The ERC, in consultation with the NREB shall develop Net-metering interconnection standards and pricing methodology and other commercial arrangements  The DOE, ERC, Transco, DUs, PEMC and all relevant parties are mandated to provide mechanisms for physical connection and commercial arrangements

9. Section 7: Feed In Tariff System Mandate  ERC, in consultation with the NREB  For emerging renewable energy resources to be used in compliance with the renewable portfolio standard Wind Solar Ocean Run-of-river Hydro Biomass  Priority connection to the grid  Priority purchase and transmission of, and payment for, such electricity by the grid system operators  Fixed tariff by technology  Mandated number of years, not less than 12

10. Feed-In Tariff Rules Republic Act No. 9513 Renewable Energy Act of 2008 Section 7 ERC Resolution No. 16, Series of 2010 (July 12, 2010) Resolution Adopting the Feed-in Tariff Rules ERC Resolution No. 15, Series of 2012 (November 19, 2012) Resolution Adopting the Position of the Commission on the Issues Paper Published on 02 April 2012 and the Corresponding Amendments to the Feed-in Tariff Rules

11. END USERS The Overall FIT Framework TransCo FIT-ALL END-USERS

12. The FIT to be Paid to RE Developers  Based on cost of a representative project  Technology-specific  20 years duration  Subject to degression and adjustments  Subject to review NREBERCFIT

13. ERC-Approved FITs NREB (in PhP/kWh) ERC-Approved (in PhP/kWh) ROR Hydro6.155.90 Solar17.959.68 Wind10.378.53 Biomass7.006.63 Note: Decision on OTEC FIT deferred ERC Case No. 2011-006 RM Effectivity “Payment of the approved FIT rates to the eligible RE Developers shall commence upon the effectivity of the Feed- in Tariff Allowance (FIT-All), which shall be determined by the Commission at a later date after due proceedings thereon.”

14. ERC-Approved Degression Rates ERC-Approved (in PhP/kWh) ROR Hydro0.5% after year 2 from effectivity of FIT Solar6% after year 1 from effectivity of FIT Wind0.5% after year 2 from effectivity of FIT Biomass0.5% after year 2 from effectivity of FIT

15. Section 2.5: FIT Rules  Uniform ₱/kwh charge  Payable by all electricity users  Periodically calculated and set  Based on forecasted RE deliveries  Proceeds go to a fund administered by Transco from where the RE payments will be sourced TRANSCOERCFIT-ALL Feed-In Tariff Allowance (FIT-All)

16. Other Provisions: FIT Rules  Sec. 2.6 of the FIT Rules provides that NREB shall establish more detailed guidelines for the collection & disbursement of the FIT-All Fund.  Sec. 2.9 of the FIT Rules provides that ERC may consider the issuance of additional guidelines governing the dispatch and settlement of the FIT.

17. RULES ENABLING THE NET- METERING PROGRAM FOR RENEWABLE ENERGY Renewable Energy – Technical Working Group

18. Introduction  Resolution No. 9, Series of 2013 - A Resolution Adopting the Rules Enabling the Net-Metering Program for Renewable Energy  Components:  Rules Enabling the Net-Metering Program (Annex A)  Net-Metering Interconnection Standards (Annex A-1)  Net-Metering Agreement Template (Annex A-2)  Approved on May 27, 2013  Effectivity on July 24, 2013 18

19. Legal Basis Section 10 of R.A. 9513 and Section 7 of its IRR provides that the ERC, in consultation with NREB, shall establish the net-metering interconnection standards and pricing methodology. 19

20. Scope, Applicability & Qualification  Applicable to on-grid systems.  Only for installation of < 100kW.  For eligible RE Technologies such as wind, solar, biomass or biogas or other RE systems capable of being installed in the QE’s premises.  End-user should be in good credit standing in the payment of electric bills to the DU.  The RE System must be compliant with the standards set in the PEC, PDC, DSOAR and the Net- Metering Interconnection Standards. 20

21. Interconnection Set-Up Either 2 uni-directional meters or one bi- directional meter. Third meter may also be installed to measure total RE generation. 21 Import Meter (delivered energy) Export Meter (received energy) REC Meter

22. Pricing Methodology  Interim pricing for export energy is the DU’s monthly charge based on its blended generation cost.  This cost shall be automatically included in the DU’s total generation cost to be recovered from all its customers. 22

23. Pricing Methodology 23 P5.6580 GenerationTransmissionDistribution End-User P5.6580P1.1839 SL: P0.4723 DSM: P1.9112 Subs: P0.1093 Tax: P0.9046 UC: P0.1188 P11.1106/kWh + = +

24. Net-Metering Charge  Net-metering charge is equivalent to PhP/customer/month supply and metering rates; plus the ERC-approved PhP/kWh metering rate based on export energy.  DUs may file for a different net-metering charge, if necessary. 24

25. Billing Charge Billing Charge: PhP for import energy Less: PhP export energy PhP credited in previous month TOTAL If positive: QE shall pay this amount to DU If negative: DU shall credit this amount to QE’s next bill 25

26. Net-Metering Interconnection Standards Annex A-1

27. Interconnection Standards General Guidelines Application for Interconnection System Parameters System Protection Operations & Maintenance Metering Testing & Commissioning 27

28. General Guidelines  Design, installation, operations and maintenance shall be in consultation with the DU, since all specifications shall be of DU’s standards.  System requirements shall be met at the Connection Point.  The DU shall only allow interconnection of RE facilities with up to 100kW capacity per QE account.  The DU shall conduct inspections and shall remove the generation from DU system at any time due to maintenance, test, repair and emergency conditions.  QE to be liable for any damages of the DU should the QE execute changes to the RE facilities without first informing the DU. 28

29. Application for Interconnection QE and DU to enter into a Net-Metering Agreement. QE to send a letter requesting DU for interconnection. DU to provide information to QE. QE to complete and file an application. DU to acknowledge within 10 business days from receipt. ACKNOWLEDGE DU to determine whether DIS and/or DAS is necessary. If yes: DU shall provide results of study. DU, with QE to conduct on-site inspection. 29

30. Application for Interconnection QE and DU to enter into a Net-Metering Agreement. QE to send a letter requesting DU for interconnection. DU to provide information to QE. QE to complete and file an application. DU to acknowledge within 10 business days from receipt. ACKNOWLEDGE DU to determine whether DIS and/or DAS is necessary. If yes: DU shall provide results of study. DU, with QE to conduct on-site inspection. Pro forma agreements Application form Description of proposed connection Relevant Standard Planning Data Other data required by DU Completion date Technical requirements Specifications Listing of certified equipment Application fee information Applicable rate schedules Metering requirements 30

31. System Parameters Voltage Level - should be the same level as the DU with automatic method of disconnecting. Frequency – 60 Hz with automatic method of disconnecting. Power Quality  Limitation of DC injection – not to inject current greater than 0.5% of the full load rated output current at connection point.  Flicker severity – not to exceed 1.0 unit for ST and 0.8 units for LT.  Harmonics – within limits in Sec. 3.2.4 of PDC Power Factor – not less than 85% lagging measured at the Connection Point. 31

32. System Protection Synchronization – QE to provide synchronizing devices with typical limits in the NM Standards. Islanding – QE system should detect islanding and disconnect within 2 seconds from formation. Integration with DU’s Distribution System Grounding – shall be grounded in accordance to PEC. Protective Control Devices  Disconnect device – visible for use by the DU within 10 feet from connection point.  Protective relays – protective relays provided in NM Standards  Reclosing – immediate disconnection from the DU system when the system is down. 32

33. Operations & Maintenance  Facility should operate in parallel with the DU.  QE must inform the DU if it is going to synchronize.  If the DU system is down, the facility should automatically disconnect.  QE to provide DU with contact numbers.  QE shall maintain the facility in a safe manner as approved by the DU. 33

34. Metering  MSP shall own and shall be responsible for the operations and maintenance of the meter in accordance with Sec. 2.11 of DSOAR.  QE to provide space for the metering facilities.  Metering facilities shall be installed in an accessible and visible area for reading and testing of both QE and DU. 34

35. Commissioning Test shall include the following: Verification and inspections Production Test  Response to abnormal voltage  Response to abnormal frequency  Synchronization Unintentional islanding functionality test Cease-to-energize functionality test Testing and Commissioning  Commissioning test shall be conducted after the interconnection system is installed.  DU has the right to witness the testing and commissioning.  RE facility shall be equipped with whatever equipment is required to perform the test. 35

36. Net-Metering Agreement Annex A-2

37. Net-Metering Agreement  Parties: DU and Qualified End-user  Mirrors the provision in the Rules Enabling the Net- Metering Program (i.e. Compliance Standards, Interconnection Set-Up, DU Inspection, Meter Readings, Pricing and Other Charges).  To be submitted to ERC, DOE & NREB within 5 days from execution.  Deemed approved and effective upon submission to ERC. 37

38. ISSUES

39. 1. DUs are not precluded under the Rules from paying out in cash its accumulated peso credit at the end of each calendar year. 2. QE is an entity distinct from that of an SGF and IPP, thus: – It is not covered by the imposition of the universal charge required of SGF. – It shall apply for COC as QE. 3. Customer who intends to install beyond 100kW: – Must comply with the PDC and DU Standards – Must apply for COC as SGF, if generation is for own use – Must enter into PSA with a DU for ERC’s approval, if it will sell to a DU 39

40. UPDATES 1. The ERC already received two (2) Net-Metering Agreements submitted by MERALCO. – 5.4 kWp installation in Manila – 2.5 kWp installation in Rizal 2. The ERC has conducted a public consultation on 28 January 2014 on the Amended Certificate of Compliance Guidelines covering the COC compliance of Qualified Net- Metering Customers. 40

41. THANK YOU 41 www.erc.gov.ph