DOE tightens accountability rules for power generation entities

The Department of Energy (DOE) has issued Department Circular (DC) No. DC2026-02-0006, establishing an accountability policy for entities engaged in power generation to reinforce energy security and protect electricity consumers through stricter operational standards and transparent performance reporting.

The circular sets out clear operational requirements, assessment criteria, and corresponding enforcement measures to help ensure sufficient, reliable, affordable, and secure electricity supply nationwide.

The DOE emphasized that reliable and dependable generation performance is essential to a stable power system—one that can meet growing demand, support economic activity, and sustain the country’s energy transition agenda without compromising system adequacy.

The policy applies to all entities operating generation facilities for the purpose of supplying electricity to end-users, including Generation Companies (GenCos), New Power Providers (NPPs), Microgrid Service Providers (MGSPs), National Power Corporation–Small Power Utilities Group (NPC-SPUG), distribution utilities and local government units (LGUs) operating generation facilities, and other stakeholders with generation operations.

Under the circular, covered entities are required to operate generation facilities only with valid certifications, permits, and clearances, and to maintain continuous compliance with the conditions of these authorizations. This includes keeping all required health, safety, environmental, and regulatory clearances current, and ensuring facility operations remain aligned with applicable laws, rules, and industry standards, in coordination with the Energy Regulatory Commission (ERC) and other competent authorities.

Covered entities are specifically accountable for maintaining valid certifications and clearances required for facility operation, such as a Certificate of Compliance (COC) or Provisional Authority to Operate, as applicable, and other necessary regulatory permits and licenses.

They must also comply with all terms and conditions of issued certificates, permits, and clearances, and keep facilities compliant with applicable laws, regulations, and industry best practices, with adequate documentation available for inspection and verification.

The circular further requires entities to allow periodic operational and technical assessments by the DOE or its authorized representatives, and to submit accurate, complete, and transparent data and reports to the DOE, the ERC, NPC, and other concerned agencies consistent with reporting requirements.

Entities must also promptly report significant incidents that may affect power security, reliability, or availability, including event details and a corrective workplan to restore maximum capacity within a defined timeframe.

The DOE noted that these requirements are intended to strengthen preventive compliance, ensuring operational risks are identified early, incidents are disclosed transparently, corrective actions are time-bound, and system impacts are mitigated promptly.

The circular provides the basis for enforcement actions in cases of non-compliance. A covered entity may be found non-compliant based on required reports and submissions, DOE assessments, and/or valid complaints concerning operational performance.

Depending on the nature, severity, and recurrence of non-compliance, enforcement measures may include administrative fines and penalties as provided under applicable rules; suspension or cancellation of applicable permits, licenses, approvals, or authorizations as allowed under existing laws and regulations; and disqualification or exclusion from participation in DOE-administered or DOE-authorized competitive selection processes, auctions, and other award mechanisms, including capacity-related programs, subject to applicable program rules.

Other enforcement measures include appropriate directives to compel compliance, including orders necessary to prevent harm to the power system and consumers, and other measures permitted under existing legal and regulatory frameworks to ensure corrective action and protect the public interest.

“Accountability in the generation sector is essential to safeguarding power supply and sustaining confidence in the industry,” Energy Secretary Sharon S. Garin said. “This Circular reinforces clear standards and transparent reporting, and it supports timely corrective action to keep the power system dependable for households and businesses.”

The issuance comes as regulators heighten focus on plant performance and outage management amid recurring supply tightness during peak demand periods. It also follows recent DOE measures aligning generation investments with grid needs, signaling closer scrutiny of both capacity development and operational discipline.

The Philippines has been grappling with intermittent power supply challenges, particularly during the dry season when demand peaks and several aging plants undergo maintenance or experience forced outages. The DOE’s latest circular is part of broader reform efforts to modernize the country’s power sector, strengthen regulatory oversight, and ensure that generation entities meet their obligations to both the grid and the consuming public.