DOE Department Circular No. DC2026-07-0014: Guidelines for Optimal Utilization of Kalayaan PSH and GEA-Winning Bidders
DOE issued supplemental guidelines for the scheduling, dispatch, and settlement of pumped-storage hydropower facilities, establishing market participation rules and tariff mechanisms to enhance grid reliability and support renewable energy integration.
7/9/20263 min read
SUMMARY
WHAT IT IS
This Circular establishes the framework for scheduling, dispatch, payment, and regulatory treatment of the KPSPP and GEA-winning pumped-storage hydropower (PSH) facilities to optimize their use for energy and ancillary services (AS) in the power system.
KPSPP operator
GEA-winning PSH bidders
System Operator
Market Operator
ERC
WESM Participants
WHO IS AFFECTED
KEY DEADLINES
Effective immediately after publication in the Official Gazette or two newspapers of general circulation.
KPSPP Transferee must request AS certificate re-test at least three months before current certificate expiry.
KPSPP Tariff effective upon ERC approval, with tariff term starting from approval date.
TAKEAWAY
PSH operators must comply with new nomination, scheduling, and settlement rules, and coordinate with SO/MO for protocol development and system integration.
MO and PSH facilities must complete all required regulatory filings for implementation.
KEY POINTS
Scope: Applies to the Kalayaan Pumped-Storage Power Plant Phases I and II (KPSPP) and Green Energy Auction (GEA) winning bidders for Pumped-Storage Hydropower (PSH); excludes non-GEA-winning PSH facilities.
Covered Entities: KPSPP and PSH facilities of GEA-winning bidders; System Operator (SO); Market Operator (MO); Energy Regulatory Commission (ERC).
Requirements: PSH Facilities must submit day-ahead nominations of Available Capacity to the MO, based on ERC-approved computation methodology and not exceeding Registered Capacity.
Compliance Obligations: PSH Facilities must register and participate in the WESM as both generator and Ancillary Services Provider (ASP), submit energy and reserve offers, and comply with SO redispatch instructions.
Thresholds: Available Capacity is limited to the Registered Capacity (Pmax) as indicated in the ERC-issued PAO or COC and registered in the WESM.
Deadlines: KPSPP Transferee must request AS capability certificate re-test at least three (3) months before certificate expiration; PSAs during the Transitory Period limited to six (6) months.
Payment and Settlement: KPSPP and GEA-winning PSH Facilities are paid based on day-ahead nominated Available Capacity; undelivered scheduled capacity is not paid; station use is excluded from pumping costs passed through to WESM participants.
Mechanisms Introduced/Amended: Establishes day-ahead nomination, optimal dispatch via WESM MDOM, separate settlement mechanisms for PSH, and protocols for SO and MO responsibilities; mandates ERC to standardize Available Capacity computation and review relevant rules.
Additional Provisions: SO and PSH Facilities must jointly develop operating protocols for grid reliability and price mitigation; MO must update systems and propose rule amendments; ERC to ensure only one PDS charge per PSH Facility regardless of operation mode.
Effectivity: Circular takes effect immediately after publication in the Official Gazette or two newspapers of general circulation.
DOWNLOAD FILE COPY
DOE Department Circular No. DC2026-07-0014
Detailed policy analysis
Operational and compliance implications
Stakeholder impact assessment
Risk flags and ambiguities
Suggested next actions
PREMIUM REGULATORY ANALYSIS
Get access to:
Tags: Pumped-Storage Hydropower, Kalayaan Plant, Day-Ahead Nomination, WESM Participation, Ancillary Services, Settlement Mechanism