- The “opt-in policy” allows mandated participants to “have the option to procure from the GEAP pool of winning bidders under a particular auction round.” That capacity will be subsequently carved out from the capacities that shall be compensated with feed-in-tariff allowance, according to the DOE.
The Department of Energy (DOE) will be issuing guidelines for the “opt-in mechanism” of industry participants on procuring percentage of their required renewable energy-generated supply from the pool of government-awarded RE capacity under the green energy auction program or GEAP.
In a draft Circular disseminated by the DOE, it was explained that the “opt-in policy” allows mandated participants to “have the option to procure from the GEAP pool of winning bidders under a particular auction round.” The capacity will be subsequently carved out from the capacities that shall be compensated with feed-in-tariff allowance (FIT-All).
The mandated participants in this case will be the distribution utilities (DUs), retail electricity suppliers (RES) as well as generation companies (GenCos) with directly-connected customers, which are the entities sanctioned by policy to comply with the Renewable Portfolio Standards (RPS) or the rules prescribing that they shall source prescribed portion of their supply portfolio from RE generating facilities.
The process of RE-based supply sourcing from the GEAP pool of winning bidders has been classified as “opt-in” because the participating entities will just have to take a certain pie of the capacity that had already been successfully auctioned by the government via the energy department.
The pricing of the capacity off-take in the opt-in process, according to the DOE, shall be calculated on a peso per kilowatt-hour basis, as reckoned from the weighted average green energy tariff (GET). That may be done by “dividing the total amount to be paid to all the winning bidders for a particular auction round by their total energy generated.”
The DOE, thus, noted that “the weighted average GET corresponding to the opt-in capacity shall be charged, not against the FIT- All rate, but against the opt-in participants as part of the generation charge payable by and collected from the relevant captive,” or the class of customers who cannot exercise yet their power of choice in the retail market.
For the relevant entities to be accommodated in the opt-in mechanism, the DOE directed that a letter-request has to be submitted specifying the volume to be procured and that in turn, shall be correspondingly stipulated in the Opt-in Participation Agreement.
“The DOE through the GEAC (Green Energy Auction Committee) shall determine the opt-in participants for each auction round and subsequently provide the list of opt-in participants to TransCo (National Transmission Corporation) and market operator,” the department stressed.
TransCo is the designated administrator of the FIT-All fund, or the separate line item in the electric bills being passed on to all ratepayers; and the collections are being utilized to compensate the RE capacity being injected into the grid by the qualified RE players.
Additionally, the market operator acts as the central registration body of all industry participants trading their capacities in the Wholesale Electricity Spot Market (WESM) primarily the RE facilities which are being accorded priority and ‘must dispatch’ in the market.
The DOE further directed that “the RPS mandated participant shall submit the opt-in capacity, with an attached Board Resolution or Secretary’s Certificate showing the authority to opt-in, to TransCo and market operator.”
The department similarly stipulated that the mandated parties “shall file their intent to opt-in with DOE 60 days from posting of the notice of award,” to the winning bidders in the RE auction; stating further that the opt-in capacity shall be “included in the determination of GEAP capacity for the immediate auction round to be conducted by the DOE.”
It expounded that “the OPA shall take effect after the execution of the Renewable Energy Payment Agreement (REPA) by the winning bidder,” although the actual date of delivery of the opt-in capacity shall depend on the schedule agreed upon by the RE generator and its off-taker in the opt-in system of capacity sourcing.
The energy department similarly specified that the capacities sourced via opt-in process shall be exempted from the competitive selection process (CSP) or the bidding of capacity decreed to be carried out, primarily by the distribution utilities.
