President Rodrigo Duterte signed Republic Act No. 11646 on January 21, 2022. The Act particularly encourages the establishment of microgrids that prioritize the use of low-cost, indigenous and renewable sources of energy.
Under the law, microgrid system providers (MGSPs) may provide integrated power generation and distribution services in an unserved or underserved area for the duration of its service contract.
MGSPs will not be considered a public utility and as a result, will not be required to secure a franchise from Congress. They need only obtain an Authority to Operate (ATO) from the Energy Regulatory Commission prior to their operation.
Notably, any cooperative, local government unit, non-governmental organization, private corporation, power generation company and distribution utility that can comply with the technical, financial and other relevant requirements may be considered an MGSP.
In coordination with the National Electrification Administration, the Department of Energy is mandated under the Act to identify and declare an annual list of unserved and underserved areas.
The Act also mandates the ERC to provide a simplified application process for MGSPs. It further directs the Commission to 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. The ERC shall also be responsible for monitoring the compliance of all MGSPs with their obligations under their respective ATOs.
“Dahil archipelago ang Pilipinas, maraming remote areas ang hindi pa naaabot ng kuryente. Kaya mabuti at inaprubahan ni Pangulong Duterte ang batas na ito para ma-achieve natin ang 100 percent household electrification rate sa lalong madaling panahon,” said Senator Christopher “Bong” Go.
President Duterte also signed Executive Order 156 last December 11, 2021, to ensure the provision of consistent and reliable electricity service in inadequately served areas, improve the performance of ineffective distribution utilities, and achieve the total electrification of the country.