Department of Energy issues guidelines on treatment of existing direct connection arrangements and their applications for renewal pursuant to DOE Department Circular No. DC2020-01-0001
The Department of Energy (“DOE”) issued on 26 April 2021 its Advisory on the Implementation of DOE Department Circular No. DC2020-01-0001 (“DC2020-01-0001”) and Other Concerns Relative to Direct Connection Arrangements of an Electricity End-User (the “Advisory’).
DC2020-01-0001 prescribes the rules governing the review and evaluation of direct connection applications of industrial, commercial and other electricity end-users and governs the DOE’s evaluation of applications filed by qualified end-users to be supplied with electricity through direct connection to the grid or sub-transmission assets that are still owned by the National Transmission Corporation.
In this regard, the Advisory provides guidance to Directly Connected Customers (“DCCs”) on how existing direct connection arrangements and their applications for renewal shall be treated in line with applicable guidelines of DC2020-01-0001, as follows:
“1) All existing arrangements for direct connection such as Power Supply Agreement (PSA) and Transmission Supply Agreement (TSA) of an electricity end-user that are in effect prior to the enforcement of the SC decision in the case of Mactan Electric Company, Inc. vs. National Power Corporation (MECO ruling for brevity) shall be recognized by the DOE until the expiration of their respective PSA and/or TSA.
2) All DCCs that have acquired direct connection status from 26 March 2010 (promulgation of the MECO ruling) until 28 September 2018 (effectivity of DOE DC2018-08-0025), shall continue to be recognized as such, with or without a corresponding ERC approval, until the expiration of their respective PSA and/or TSA. Provided, that concerned DCCs shall register with the Market Operator (MO) as either Direct or Indirect Wholesale Electricity Spot Market (WESM) Member for proper and transparent accounting of energy withdrawn from the grid.
3) All DCCs with PSA and/or TSA which became effective from 28 September 2018 to date, but was not able to seek prior approval from the Department, shall seek the DOE’s confirmation of their DCC status by filing an online application through the Energy Virtual One-Stop Shop (EVOSS) portal (evoss.ph). Upon confirmation by the DOE, all affected DCCs shall register with the MO as either Direct or Indirect WESM Member for proper and transparent accounting of energy withdrawn from the grid.”
Meanwhile, generation companies supplying an electricity end-user through direct connection arrangements are also directed to submit relevant information to the DOE with respect to DCCs within one (1) month of posting of the Advisory in the DOE website, or until 26 May 2021, and to advice DCCs to file for a renewal of their DCC status, not later than six (6) months from the expiration of their PSAs.