FURTHER AMENDING ENERGY REGULATIONS NO. 1-95 DATED JANUARY 2, 1995 ENTITLED “RULES AND REGULATIONS IMPLEMENTING EXECUTIVE ORDER NO. 215 ON PRIVATE SECTOR PARTICIPATION IN POWER …

WHEREAS, the Department of Energy (the DOE) encourages the
participation of the private sector in the power generation business
consistent with the said Executive Oder;

WHEREAS, the DOE recognizes the unique contribution to be made by
Renewable Resource Power Production Facilities (RRPPF) also known as the
New and Renewable Energy Facilities (NREF) in power generation in view
of the country’s growing electricity requirement;

NOW, THEREFORE, the DOE hereby adopts and promulgates the following
amendments to Energy Regulations No. 1-95 as amended by Department
Circular No. 97-01-001;

SECTION 1.       Part I, Article IV, Section I of Energy
Regulations No. 1-95 as amended by Department Circular No. 97-01-001 is
hereby amended to read as follows:

“Section 1.    Contents of the Application — The contents
of applications for accreditation as a qualified Private Sector
Generation Facility (PSGF) should generally contain the following
information:

a.            Name and address of the applicant and location of the proposed facility;
b.            Project organizational set-up;
c.            Names of cooperating/participating companies, equity
participation, incorporation documents, audited financial statements for
the last two fiscal years, and records of successful experience in
similar activities over the last five (5) years;
d.            Project -financing plans;
e.            Administrative and technical manpower complement;
f. Facility classification and general plant description;
g.            Sale of PSGF generation (whether generation is solely
for sale to the grid dedicated to an electric utility, or for internal
use with provision for sale of excess power to the grid)
h.            Projected mode of operation (baseload or peaking);
i. Power and annual energy production capacity (in kW and kWh, respectively) of the proposed facility;
j. Primary energy source (fuel) of the facility, heating value, and net plant heat rate;
k.            Projected forced outage rate, maintenance days, dependable capcity, and station energy use;
l. Projected economic life of project and proposed duration of interconnection/cooperation period;
m.          Interconnection plans with NAPOCOR or other electric utility;
n.            Detailed project timetable, including target periods for
financial closing, groundbreaking, installation of major plant
equipment, testing and commissioning of the facility;
o.            Any other information as may be required under the
specific provisions of Parts II, III, IV or as may be deemed necessary
by the EIAB for evaluation purposes.

However, records of successful experience in similar activities over
the last five (5) years as requisite in Item c. above shall not be
required for RRPPF/NREF projects provided that:

1.         the technology being proposed has already achieved
commercial status and can be demonstrated to be adaptable to local
conditions; or

2.         the project is being developed for purposes of
self-generation, and the developer demonstrates the capability to
provide or the financial capacity to retain the competent technical and
financial capabilities necessary to implement the proposed project; or

3.         if the project is being developed by a utility or
independent power producer, the developer demonstrates the capability to
provide or the financial capacity to retain the competent technical and
financial capabilities necessary to implement the proposed project.”

SECTION 2.       Part I, Article VI, Section 3 of the same
Energy Regulations as amended by Department Circular No. 97-01-001 is
hereby amended to read as follows

“SECTION 3.      Provision on Spinning Reserve — The owner
of the PSGF shall maintain a continuous spinning reserve at all times to
the extent possible and under terms to be agreed upon with NAPOCOR or
the concerned electric utility. However, this provision on spinning
reserve shall not apply to RRPPF/NREF projects if:

1.       the project is not connected to either the national backbone grid, or regional or island mini grids; or

2.       the project is connected to a regional or island
mini-grid powered by convention generation reasonably capable of  load
following, e.g., peaking or intermediate diesel generation plants.

Further, if the RRPPF/NREF project is proposed for connection to the
national backbone grid, the provision on spinning reserve shall be
subject to negotiation with the transmission system.

SECTION 3.       Part II, Article II, Section 3 of the same
Energy Regulations as amended by Department Circular No. 97-01-001 is
hereby amended to read as follows:

“SECTION 3.      Cogeneration Facilities Utilizing Renewable Energy Sources —
Cogeneration facilities utilizing renewable energy forms as its primary
energy source or utilizing renewable energy sources and fossil fuels,
either through a blend, combination, or alterating use of such fuels,
shall be classified as Renewable Resource Cogeneration Facilities for
purposes of accreditation as qualified PSGFs. Renewable Resource
Cogeneration Facilities shall not be subject to the minimum thermal
efficiency standards required for cogeneration facilities under Section 2
of this Article.”

SECTION 4.       Part I, Article III, Section 6 of the same
Energy Regulations as amended by Department Circular No. 97-01-001 is
hereby further amended to read as follows:

“SECTION 6.      Economic Criteria — Any proposed electric
generating facility should submit to EIAB at least a ten-year power
supply agreement for capacity and energy between NAPOCOR and/or the
electric utility that will be served by the facility to enable the EIAB
to determine that said facility satisfies incremental load/demand, and
should be able to demonstrate its potential for providing net foreign
exchange savings to the country, by virtue of:

a.       generating electric energy more efficiently or cheaper
than can otherwise be generated by existing or programmed generation
facilities under the power development plans of NAPOCOR and/or other
electric utilities; and/or

b.       accessing lower costs of capital, cheaper plant investment, and/or locally manufactured equipment.”

However, proposed RRPPF shall not be required to submit the above
power supply agreement to EIAB but should be able to demonstrate its
potential for providing net foreign exchange savings to the country, by
virtue of using indigenous and/or renewable energy sources.”

SECTION 5.       Part III, Article 1, Section 2 of the same
Energy Regulations as amended by Department Circular No. 97-01-001 is
hereby further amended to read as follows:

“Section 2.          Formulation and Submission of Power Development Plans of NAPOCOR and Other Electric Utilities
— Pursuant to Section 1 of Article 1 and Sections 1 and 2 of Article
II, Part I, the DOE shall require NAPOCOR and/or individual electric
utilities to submit power development programs covering a ten-year
period, for the DOE’s review and approval. NAPOCOR shall submit to the
DOE an annual update of its Power Development Program (PDP) on or before
the first day of June 1997 and every year thereafter.

Such submissions should include NAPOCOR’s system load forecasts
and generation requirements, resource and technology assessments and
evaluations, cost assumptions and other technical parameters, and the
resulting system expansion plans for NAPOCOR’s major and small-island
power grids. NAPOCOR submissions should identify power generation
projects to be undertaken through private sector participation, the
justification for such, and the indicative timetables for undertaking
prequalification of interested private sector entities, tendering of
bids, evaluation, and award of private power contracts for each of the
projects identified.

Individual electric utilities seeking to implement or contract the
implementation of generation projects shall be required to enter into
long-term power supply agreements for capacity activities. Such electric
utilities shall submit to the DOE their individual or combined
long-term power development plans which shall contain an efficient
portfolio or generation (including projected power purchases from
NAPOCOR and qualified PSGFs) and demand-site resources on or before 30
April 1997 and every yeat thereafter, for the DOE’s review and approval.

However, RRPPF/NREF projects intending to provide electricity to
an electric utility or for internal use or exclusive use by an
identified customer shall not be required to submit to the DOE its
long-term power supply agreement with NAPOCOR and its DOE-approved power
development plan.

Accordingly, with the exception of RRPF/NREF projects mentioned
above, no application for accreditation of any proposed electric
generating facility for an electric utility shall be entertained by the
DOE without the concerned utility’s long-term power supply agreement
with NAPOCOR and its DOE-approved power development plan.

NAPOCOR and/or other electric utilities shall inform and seek the
DOE’s prior approval to implement generation projects not included in
the approved development plans. “

SECTION 6.        This Circular shall take effect
immediately a day after its complete publication in at least two (2)
newspapers of general circulation.

Adopted: 17 March 2000