President Duterte signed into law the Microgrid Systems Act which will provide continuous power supply that is low-cost, environment-friendly and renewable to remote communities and to unserved and underserved areas.
A microgrid is a limited network of electricity users with a local source of supply that can function even if it is not connected to the national grid.
The President on January 21, signed Republic Act (RA) No. 11646 which consolidates Senate bill 1928 and House Bill 8203 that were passed on November 9 and 17, 2021, respectively.
Under the law, microgrid system providers (MGSPs) may provide integrated power generation and distribution services in an unserved or underserved area – such as islands and places that have no access to power distribution lines, no electricity access and no home power systems, – for the duration of its service contract.
MGSPs can be a cooperative, a local government unit, a non-governmental organization, private corporation, power generation company or distribution utility that can comply with the technical, financial and other relevant requirements.
It will not be considered a public utility and thus will not be required to secure a franchise from Congress, but obtain an Authority to Operate (ATO) from the Energy Regulatory Commission (ERC) prior to r operation.
ERC shall also provide a simplified application process for MGSPs as well as establish the minimum technical and service performance standards which shall be compliant with the Philippine Distribution Code, Philippine Small Grid Code and other relevant rules and regulations.
ERC shall also be responsible for monitoring the compliance of all MGSPs with their obligations under their respective ATOs. A special division shall be formed Under ERC to oversee the implementation of the law and attend to the MGSPs’ applications.
Meanwhile, the law mandates the National Electrification Administration and the Department of Energy to identify and declare an annual list of unserved and underserved areas.
RA 11646 also states that administrative and criminal charges may be filed against those that would violate the new law such as those that would disallow the installation of microgrid systems or disallow a power distribution unit to acquire a microgrid system, and those that would refuse to turn over the provision of integrated power generation and distributions to an MGSP.
Penalties include imprisonment of six to eight years or a fine of P75 million of P100 million, among others.
The law takes effect 15 days after its publication in the Official Gazette or a national daily.
