Section 1. Guiding Principle.

Pursuant to Section 6 of the Act, generation of electric power, a business affected with public interest, shall be competitive and open to all qualified Generation Companies. Generation shall not be considered a public utility operation. For this purpose, any Person engaged or intending to engage in Generation of Electricity shall not be required to secure a national franchise.

No Person may engage in the Generation of Electricity as a new Generation Company unless such Person has received a COC from the ERC to operate facilities used in the Generation of Electricity. A Person that demonstrates compliance with the standards and requirements of this Rule 5, and such other terms and conditions as determined by the ERC to be appropriate to ensure that Persons comply with all applicable legal and regulatory requirements, shall be issued a COC.

Section 2. Scope of Application.

This Rule shall apply to all facilities used or to be used for the Generation of Electricity, including but not limited to the following:

(a) Existing Generation Facilities.

Existing Generation Facilities shall include:

(i) Spin-off Facilities of NPC or their transferees, including Generation Facilities owned by NPC transferred to PSALM and subsequently privatized pursuant to the Act;

(ii) Agus and Pulangui Complexes;

(iii) Facilities owned and operated by SPUG;

(iv) Accredited facilities under BOT arrangement and other variants with NPC, SPUG, National Irrigation Administration (NIA), Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) and other government agencies;

(v) Accredited facilities under BOT arrangement and other variant with Distribution Utilities;

(vi) Facilities Owned or Operated by a Distribution Utility;

(vii) Facilities under Contract with a Distribution Utility;

(viii) Self-Generation Facilities;

(ix) Facility operating in EZs; and

(x) Facility operating in isolated areas.

(b) Generation Facilities Under Construction.

Generation Facilities under construction shall include:

(i) DOE-Accredited Facility under BOT arrangement and other variants with NPC, SPUG, PNOC-EDC, NIA and other government agencies;

(ii) DOE-Accredited Facility under BOT arrangement and other variants with Distribution Utilities;

(iii) Non DOE-Accredited Facility under contract with Distribution Utilities;

(iv) Self-Generation Facility;

(v) Facility locating in EZs; and

(vi) Facility operating in isolated areas.

(c) New Generation Facilities

New Generation Facilities shall include:

(i) Any newly-constructed facility with appropriate health, safety and environmental clearances connected to the Grid;

(ii) Any facility currently under BOT arrangement and other variants with NPC, SPUG, PNOC-EDC, other government agencies, and government- owned and- controlled corporations; and

(iii) Any facility that shall operate in an isolated area.

(d) This Rule shall also apply to the PSALM-appointed IPP Administrators.
 

Section 3. Ownership Limitation.

No Generation Company, Distribution Utility, or its respective subsidiary or Affiliate or stockholder or official of a Generation Company or Distribution Utility, or other entity engaged in generating and supplying electricity specified by ERC within the fourth civil degree of consanguinity or affinity, legitimate or common law, shall be allowed to hold any interest, directly or indirectly, in TRANSCO or its Buyer or Concessionaire. Likewise, the TRANSCO or its Buyer or Concessionaire or any of its stockholders or officials or any of their relatives within the fourth civil degree of consanguinity or affinity, legitimate or common law, shall not hold any interest, whether directly or indirectly, in any Generation Company or Distribution Utility. Except for ex officio government-appointed representatives, no Person who is an officer or director of the TRANSCO or its Buyer or Concessionaire shall be an officer or director of any Generation Company, Distribution Utility or Supplier. This section shall not apply to PSALM during the period that its generation assets are being privatized pursuant to Section 47 of the Act.
 

Section 4. Obligations of a Generation Company.

(a) A COC shall be secured from the ERC before commercial operation of a new Generation Facility. The COC shall stipulate all... Read more