ERC Resolution No. 11, Series of 2026 – Rules Governing Microgrid Systems Adopted
ERC adopted comprehensive rules for microgrid systems, streamlining permitting, tariff setting, and technical standards to accelerate electrification and ensure reliable, affordable power in unserved and underserved areas.
4/14/20263 min read
SUMMARY
WHAT IT IS
This Resolution adopts comprehensive rules for the regulation, operation, and technical standards of microgrid systems in the Philippines, implementing the Microgrid Systems Act and its revised IRR.
MGSPs
Distribution Utilities (DUs)
National Power Corporation (NPC)
WHO IS AFFECTED
KEY DEADLINES
Existing MGSPs with COCs/PAOs must apply for ATO/P-ATO within 60 days from effectivity.
MSC application pre-filing must occur within 30 days of contract execution; ERC to decide within 135 days of complete application.
Annual and periodic reporting deadlines specified for compliance documents.
TAKEAWAY
MGSPs and DUs must comply with new technical, service, and reporting standards, and secure ATO/P-ATO for legal operation.
Stakeholders should review new tariff, subsidy, and contract approval processes to align ongoing and future projects with the updated regulatory framework.
KEY POINTS
Scope: Rules apply to Microgrid System Providers (MGSPs) and Distribution Utility-Operated Microgrid System Providers (DU-MGSPs) operating isolated or grid-tied microgrid systems in island mode in unserved and underserved areas.
Covered Entities: MGSPs, DU-MGSPs, National Power Corporation (NPC), and Distribution Utilities (DUs) in relation to microgrid operations.
Licensing Requirement: No entity may operate a microgrid system without an Authority to Operate (ATO) or Provisional Authority to Operate (P-ATO) issued by the ERC.
Service Obligations: MGSPs must provide continuous 24/7 electricity service and achieve 100% household electrification in awarded areas, in accordance with approved Microgrid System Provider Service Contracts (MSC).
Tariff and Subsidy: MGSPs may only impose rates (Full Cost Recovery Rate [FCRR] and Subsidized Approved Retail Rate [SARR]) upon ERC approval; if FCRR exceeds SARR, the difference is recoverable via the Universal Charge for Missionary Electrification (UC-ME) Subsidy, subject to ERC validation.
Thresholds and Deadlines:
MSC application pre-filing must be initiated within 30 days of MSC execution.
ERC to decide on MSC applications within 135 days of complete filing.
ATO/P-ATO applications must be filed within 30 days from test and commissioning; extensions for P-ATO must be filed 60 days before expiration.
NPC must file annual UC-ME subsidy petitions by March 15; MGSPs must submit subsidy forecasts by May 15.
Compliance Obligations: MGSPs must comply with technical and service standards (Annex A, PGC, PDC, PSGG), submit periodic technical, operational, and financial reports, and allow ERC inspections.
Mechanisms Introduced/Amended:
Streamlined permitting and licensing for MGSPs.
Provisional authority to collect awarded rates upon MSC application filing.
Conversion of previously issued Certificates of Compliance (COCs) to ATOs.
Specific procedures for force majeure/fortuitous event CAPEX recovery.
Exemption of end-users in unserved/underserved areas from FIT allowance, universal charges, and GEA-All.
Administrative Sanctions: Non-compliance with these Rules, approved rates, or service obligations is subject to fines, penalties, and possible blacklisting or disqualification from future awards.
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ERC Resolution No. 11, Series of 2026
Detailed policy analysis
Operational and compliance implications
Stakeholder impact assessment
Risk flags and ambiguities
Suggested next actions
PREMIUM REGULATORY ANALYSIS
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Tags: Microgrid Systems, Authority to Operate, Tariff Approval, UC-ME Subsidy, Technical Standards, Unserved Areas