Republic of the Philippines

ENERGY REGULATORY COMMISSION

San Miguel Avenue, Pasig City

RULES TO GOVERN THE INTERRUPTIBLE LOAD PROGRAM

OF DISTRIBUTION UTILITIES, AS AMENDED

Pursuant to Section 43 of Republic Act No. 9136 and its

Implementing Rules and Regulations (IRR), the Energy Regulatory
Commission (ERC) hereby adopts and promulgates these Rules to
establish a process for the interruptible load program of distribution
utilities and the National Grid Corporation of the Philippines (NGCP)
for the Directly-Connected Customers.

ARTICLE I

GENERAL PROVISIONS

These Rules shall have the following objectives:

a) To address the imminent power shortage and augment the

limited power requirements of the Distribution Utilities of any
Grid in the country;

b) To ensure the timely compensation and recovery of allowable

expense related to the interruptible load program entered into
by Distribution Utilities and NGCP;

c) To ensure transparent and reasonable prices of electric power

service in a regime of free and fair competition and to achieve
greater operational and economic efficiency;

d) To protect the public interest as it is affected by the rates and

services of the Distribution Utilities and NGCP; and

e) To help maintain the security, reliability, and quality of the

supply of electric power.

ARTICLE II

SCOPE AND DEFINITION OF TERMS

Section 1. Scope. These Rules shall apply to all Distribution Utilities

and their respective Participating Captive Customer, within its their
franchise area, to all Distribution Utilities that entered into a tripartite
ILP Agreement with a Retail Electricity Supplier (RES) and its
Participating Contestable Customer; and the NGCP that entered into
an ILP Agreement with a Participating Directly-Connected Customer.

Section 2. Definition of Terms. As used in these Rules, the

following terms shall have the following respective meanings:

“Average Rate” shall refer to the average PhP/kWh paid by the

Customer, including Generation, Transmission, Distribution and non-
bypassable cost (Universal Charge, Lifeline, VAT, etc.).

“Billing Period” shall refer to the existing billing month.

“Contestable Customer” shall refer to an electricity end-user who

have a choice of supplier of electricity, as may be determined by the
ERC in accordance with Republic Act No. 9136.

“Customer” shall refer to any person or entity requiring the supply

and delivery of electricity for its own use.

“Distribution Utility or DU” shall refer to any electric cooperative,

private corporation, government-owned utility or existing local
government unit which has exclusive franchise to operate a
distribution system in accordance with its franchise and the Act.

“Energy Regulatory Commission” or “ERC” shall refer to the

independent quasi-judicial regulatory body created under Section 38
of the Republic Act No. 9136.

“Energy Sales” shall refer to the amount of electricity in kWh

consumed by the customers based on a valid contract for the sale of
electricity.

“ERC Rules of Practice and Procedure” shall refer to the Rules

promulgated by the ERC on June 22, 2006 governing the
proceedings before it.

“Generation Rate” shall refer to the average generation charge (on

a PhP/kWh) paid by all Customers of the franchised DU, computed
under the Automatic Generation Rate Adjustment (AGRA)
mechanism.

“Grid” shall refer to the high voltage backbone of interconnected

transmission lines, substations and related facilities for the purpose of
conveyance of bulk power.

“Heat Rate Caps” shall refer to the heat rate caps approved by the
ERC.
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“NGCP” shall refer to the corporation awarded the concession to
operate the transmission facilities of the National Transmission
Corporation pursuant to Republic Act No. 9136 and Republic Act No.
9511

“Participating Customers” shall refer to the either a Participating

Captive Customer of a Distribution Utility, a Participating Contestable
Customer of a Retail Electricity Supplier or a Participating Directly-
Connected Customer of the National Grid Corporation of the
Philippines.

“NGCP”

“Retail Electricity Supplier” shall refer to any person or entity

licensed by the ERC to sell, broker, market or aggregate electricity to
end-users.

ARTICLE III

DE-LOADING PROGRAM AND PROTOCOLS

Section 1. Request for De-Loading. Under the Interruptible Load

Program (ILP), the Distribution Utility and Participating Captive
Customer shall enter into an Agreement wherein the Participating
Captive Customer may be requested by the Distribution Utility (in
writing or verbally) to de-load, during which time a Participating
Captive Customer may either fully de-load, by disconnecting its
delivery point that receives electricity from the Distribution Utility, or
partially de-load by reducing its load from Distribution Utility, for a
period of time as determined by the Distribution Utility in its request.

The Distribution Utility shall agree with a Participating Captive

Customer for the number of cumulative hours in a month in which it
can be requested to de-load. The Participating Captive Customer
has the option whether or not to accommodate any request by the
Distribution Utility in excess of such agreed period of time.

The ILP shall also be implemented for the Contestable

Customers under a tripartite ILP Agreement to be executed among
the Distribution Utility, Retail Electricity Supplier, and Participating
Contestable Customer, following the substantially the terms of the
template tripartite ILP Agreement.
, which is hereto attached, and the procedures laid down in the ILP
Protocols annexed to said ILP Agreement.

For Directly-Connected Customers, the ILP shall be

administered by the NGCP through an ILP Agreement whereby it
shall perform the activities performed by the Distribution Utility in the
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ILP implementation for its Participating Captive Customer following
the procedures outlined in this Article III insofar as they are applicable
and collect the de-loading compensation from all its customers in the
affected Grid.

Section 2. Activation of ILP. As soon as the System Operator has

determined and/or a notice is received from the System Operator of
the Grid of an expected power shortage (red alert), the DU/NGCP
shall execute the following procedure:

1. The DU/NGCP sources the shortage from its various IPP's with
existing/ERC-approved contracts, as applicable.
2. If alternative source is not enough to cover the shortage, the
DU/NGCP shall activate its Interruptible Load Program through
the following procedure:
a) Match the expected time of the shortage with the time the
Interruptible LoadParticipating Customers prefer to be de-
loaded.
b) Sort the load of the PCcustomer at the time of expected
shortage based on customerits load profile. PCsCustomers
with larger loads are prioritized to be requested to de-load.
c) Check that PCcustomers have been de-loaded for less than
agreed number of hours in the current month.
d) Call the PCcustomer and request to de-load.
e) If the PCcustomer cannot de-load, customers the next in the
list are called to be requested to de-load.
3. If Interruptible Load is not sufficient to cover the shortage then
the Manual Load Dropping (MLD) is activatedaffected.

Section 3. Dispatch Protocol. The Distribution Utilities/NGCP shall

be guided by procedures in implementing its Interruptible Load
Program (ILP).

After the Distribution Utility/NGCPDU identifies the need of a required

load dropping, the ILP will enter the Preparatory Stage (45 minutes
before activation or as agreed upon) wherein the following
procedures shall be adhered to:
a) DU/NGCP to inquire/verify system condition.
b) DU/NGCP will assess amount of schedule load dropping.
c) DU/NGCP to inquire from Participating Customer (PC) present
loading and amount of load they can drop.
d) DU/NGCP to dispatch assigned DU/NGCP personnel to
participating interruptible customers.

During Activation Stage (5 minutes before activation up to during

activation):
a) DU/NGCP to get and evaluate the actual loading (kW) of PC.
 by communicating to the PC’s billing meter, or
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  by inquiring from PC’s assigned contact person together
with inquiring from on-site DU/NGCP personnel
b) DU/NGCP to monitor and record the feeder loading in SCADA
where PC’s are connected.
c) DU/NGCP to review/assess the system loading and power
requirements.
d) DU/NGCP to alert/call the PC to start load dropping, if
necessary and needed.
e) DU/NGCP to monitor and record the feeder loading if significant
kW drop equal the sum of loads drop of PCs connected on that
feeder/bay.
f) DU/NGCP to verify and evaluate the drop in loads (kW) of PC.
 by communicating to the PC’s billing meter, or
 by confirmation from PC’s contact person together with
corroboration from on-site DU/NGCP personnel.
g) DU/NGCP to monitor and record the feeder loading in SCADA
where PCs are connected.
h) DU/NGCP to assess the duration of such loading condition and
relaying it to the knowledge of PC involved.

During the Normalization Stage:

a) DU/NGCP to monitor and record the feeder loading in SCADA
where PCs are connected or thru communicating with PC’s
contact person together with corroboration from on-site
DU/NGCP personnel.
b) DU/NGCP to evaluate the system condition and alert the PC to
start loading back to normal.
c) DU/NGCP to monitor and record the feeder loading in SCADA
where PCs are connected or thru communicating with PC’s
contact person together with corroboration from on-site
DU/NGCP personnel.

Section 4. Documentation. After normalization, the DU/NGCP shall

document the cause, de-loaded kWh, date, time and duration of the
de-loading. Further, the DU/NGCP shall also secure from the System
Operator (SO) of the Grid a formal load dropping request indicating
the cause, load drop in kW, date, time and duration. These
information shall be disseminated to all PCs who participated on the
recent de-loading.

Section 5. Pre-schedule load dropping scheme. Upon advised

from the SO of the Grid, the DU/NGCP shall endeavor to relay a copy
of load dropping request to PCs for load drop information
dissemination.

Section 6. Manual Load Drop (MLD). Upon information from the SO

of the Grid, the DU/NGCP shall endeavor to inform in advance
affected PCs for sudden manual load drop by power system
requirement or systems operation. Automatic Load Dropping (ALD),
in any case, should not be part of the interruptible load program (ILP).
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 ARTICLE IV

BILLING AND COMPENSATION

Section 1. De-loading Compensation. The Distribution Utility/NGCP

shall pay the Participating Customer a compensation an amount
representing the incremental cost incurred due to the full or partial de-
loading, when it de-loads from the Distribution Utility as requested.

The De-Loading Compensation shall be computed by

multiplying the “de-loaded kWh” less registered kWh in the meter, if
any, during periods when the Distribution Utility/NGCP requests a
Participating Customer to de-load, multiplied by the incremental de-
loading cost per kWh, to wit:

De-loading Compensationpesos = (Incremental De-loading Rate x

Compensable kWh) + Maintenance
Cost

Where:

Incremental De-loading Rate = [Generation Cost of Fuel x Fuel

Consumption Rate] – PC Average
Rate
Generation Cost of Fuel = Average price of diesel fuel from
Petron, Shell and Caltex as of the
end of the previous calendar month
in the City or Municipality where the
Participating Customer is located

Fuel Consumption Rate = 0.34 liter/kWh

PC Average Rate = The Participating Customer’s

Average Rate for the current billing
period

Compensable kWh = Actual de-loaded kWh for the

current billing period

Maintenance Cost = PhP0.32/kWh x Compensable kWh

or PhP23,548.00/month, whichever
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 is lower

The Participating Contestable Customers compensation shall

be computed in accordance with the above formula except that the
Participating Contestable Customer’s Average Rate shall exclude the
generation charge component of the its bill.

For Participating Directly-Connected Customer, the Average

Rate shall be its effective retail rate for the previous month. Such bill
shall be submitted to NGCP for the purpose of calculation of
compensation and recovery.

For purposes of determining the Participating Customer’s actual

generation cost of fuel, the Distribution Utility shall file a verified
report thereon upon filing of its Automatic Generation Rate
Adjustment (AGRA) report requirements and for NGCP under the
monthly computation and submission of the ancillary services rates.

The “de-loaded kWh”, will depend on the Participating

Customer's actual real-time reading by the Distribution Utility/NGCP
or its agreed 24-hour load profile based on its latest average load
profile for previous month, if the DU has not installed real-time
metering for Participating Customer.

Section 2. Meter Reading. The Metering device shall be read at the

same time as the usual reading for billing, in addition to the
downloaded data. The Participating Customer shall have the right to
have a representative during any reading and inspection. For this
purpose, the Distribution Utility/NGCP shall notify the Participating
Customer two (2) days prior to the reading or inspection. If
notwithstanding such notification, the Participating Customer fails to
send its representative, the Distribution Utility/NGCP shall proceed
with the reading, and the Participating Customer shall accept the
same as final.

Section 3. Billing and Settlement. The Distribution Utility/NGCP

shall pay Participating Customer for the de-loading within thirty (30)
days from receipt of the invoice from Participating Customer.

Section 4. Disputes. The Distribution Utility/NGCP and Participating

Customer shall endeavor to resolve any dispute arising from the
implementation of the Interruptible Load Program, otherwise, the
same shall be elevated to the Commission ERC in accordance with
the ERC’s Rules of Practice and Procedures.

ARTICLE V

RECOVERY OF DE-LOAD COMPENSATION

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Section 1. Recovery for Distribution Utilities. The amount paid to
the Participating Captive and Contestable Customers shall be
recovered from all customers of the Distribution Utility as part of its
Total Cost of Power to be included in the Distribution Utility’s monthly
computation of Generation Rate, based on the following formula:

Total Payments to Suppliers + De-Loading Compensation =

Total Cost of Power

Section 2. Recovery for NGCP. The amount paid to the

Participating Directly-Connected Customer shall be recovered from
all customers of the NGCP as part of its ancillary services cost
calculated in accordance with the approved “Ancillary Services – Cost
Recovery Mechanism”

ARTICLE VI

REQUIREMENT FOR A PARTICIPATING CUSTOMER

Section 1. Qualification of a Participating Customer. Any

Customer or group of Customers under the DUs franchise area,
customers under contract with a RES, or directly-connected to the
transmission grid can be qualified as a Participating Customer subject
to the applicable ILPir mutual agreement. A Participating Customer
shall assign a contact person that shall be responsible in performing
the tasks under Article III Section 2 of these Rules.

Section 2. Offer of ILP. DUs experiencingDuring shortages of power

supply, DUs, RES and NGCP shall offer to their customers the ILP, .
Aavailment of which shall be on a voluntary basis on the part of the
customers.

Section 3. Metering Equipment and its accessories. Appropriate

metering shall be installed for the purpose of billing the Participating
Customer, to verify and reconcile the day and time during which the
Participating Customer de-loads. If not yet available, the intending
Participating Customer shall bear the costs of the metering
equipment and its accessories.

Such customer may ask the DUs/NGCP to provide for the

required metering equipment and its accessories including the cost of
installation, subject to the terms of payment agreed upon between
them.

The customer may opt to purchase his own metering equipment

and its accessories provided they meet the specifications required by
the DU and in accordance with Articles 2.11 and 4.5.2 of the DSOAR

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or NGCP under the Open Access Transmission Service (OATS)
Rules..

Expenses for the replacement of real-time meters shall be

borne by the customer unless the damage was caused by the
DU/NGCP.

ARTICLE VII

REPORTORIAL REQUIREMENT

Section 1. Prior to Implementation. The Distribution Utility/NGCP

shall, prior to its implementation, submit a manifestation in writing to
the Commission of its intent to offer the ILP to its customers, with
supporting documents, or to implement a tripartiate ILP Agreement
entered into with a RES and Participating Contestable Customer.
Thereafter, the Commission shall issue an Order authorizing the
Distribution Utility/NGCP to implement the program.

Section 2. Monthly Reporting Requirements for Distribution

Utilities. The implementing Distribution Utility shall submit the
following to the Commission, along with its submission in the
Automatic Generation Rate Adjustment (AGRA), with all calculations
related to Article III and Article IV, along with supporting documents,
for the De-loaded Compensation and Recovery of the preceding
month:

a. Load curve of the Participating Customers;

b. Determined Average Price of Fuel;
c. Schedule of contracted demand/ERC approved rates per
supplier;
d. Schedule of average power deliveries/purchases and
corresponding generation cost per supplier for each of the
consumption period;
e. Soft copy of all calculations; and
f. Other data deemed necessary by the Commission.

Section 3. Monthly Reporting Requirements for NGCP. The

NGCP shall submit to the Commission a monthly report on its ILP
implementation for the Directly-Connected Customers containing
details of its calculations of the de-loading compensation to the
Participating Directly-Connected Customers, with all supporting
documents.

ARTICLE VIII

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 FINAL PROVISIONS

Section 1. Fines and Penalties. Violation of any provisions of these

Rules shall be subject to the imposition of fines and penalties in
accordance with the “Guidelines to Govern the Imposition of
Administrative Sanctions in the Form of Fines and Penalties Pursuant
to Section 46 of the Act” promulgated by the ERC on May 17, 2002,
as amended by Resolution No. 03, Series of 2009 entitled
“Resolution Amending 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” dated February 23, 2009.

Section 2. Exception Clause. Where good cause appears, the

Commission may allow an exemption from any provisions of these
Rules, if such is found to be in the public interest and is not contrary
to law or any other related rules and regulations.

Section 3. Separability Clause. If for any reason, any part or section

of these Rules is declared unconstitutional or invalid, the other parts
or sections hereof which are not affected thereby shall continue to be
in full force and effect.

Section 4. Repealing Clause. All rules and guidelines, or portions

thereof, issued by the ERC that are inconsistent with these Rules are
hereby repealed or modified accordingly.

Section 5. Effectivity. These Rules shall take effect fifteen (15) days
following its publication in a newspaper of general circulation.

Pasig City, ______________.

ZENAIDA G. CRUZ-DUCUT
Chairperson

ALFREDO J. NON GLORIA VICTORIA C. YAP-

TARUC
Commissioner Commissioner

JOSEFINA PATRICIA A. MAGPALE-ASIRIT

Commissioner

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