ERC adopts microgrid rules to speed electrification

The Energy Regulatory Commission has formally adopted the Rules Governing Microgrid Systems under Resolution No. 11, Series of 2026, in a move aimed at accelerating total electrification and strengthening consumer protection in unserved and underserved areas nationwide.

The new rules put into effect the Microgrid Systems Act by establishing a regulatory framework for isolated microgrid systems and grid-tied microgrid systems operating in island mode.

The framework defines how these systems will be developed, operated and regulated in unserved and underserved areas.

The ERC said the rules are designed to encourage private sector participation while ensuring that off-grid communities receive reliable, sustainable and high-quality electricity service.

Under the new framework, Microgrid System Providers are required to deliver 24/7 electricity service in their service areas.

They are also required to achieve 100% household electrification within those areas.

The rules further require compliance with technical, operational and service performance standards meant to ensure efficiency, power quality, reliability and safety.

The guidelines establish a transparent tariff mechanism that seeks to balance consumer protection with provider viability.

Through the Full Cost Recovery Rate, subject to ERC approval, providers may recover prudent investments while keeping rates under regulatory oversight.

The ERC also strengthened oversight by standardizing Microgrid Service Contracts, streamlining licensing through Authorities to Operate and imposing rigorous compliance monitoring.

ERC Chairperson and CEO Atty. Francis Saturnino C. Juan said the rules are a major policy step for communities that still lack adequate access to electricity.

“These Rules Governing Microgrid Systems are a crucial step in ensuring that no Filipino community is left behind in our electrification efforts. By establishing a clear, transparent, and investor-friendly regulatory framework, we are enabling the delivery of reliable and affordable electricity to unserved and underserved areas while upholding the highest standards of consumer protection.”

For remote and underserved communities, the adoption of the microgrid rules is expected to provide more reliable, continuous and accessible electricity service.

The ERC said this could significantly improve quality of life and create economic opportunities in areas that remain beyond the reach of conventional power systems.

The rules also prioritize the use of renewable and indigenous energy sources, a policy direction meant to help stabilize electricity costs and reduce dependence on expensive fuel-based generation.

The framework includes Subsidized Approved Retail Rates and access to the Universal Charge for Missionary Electrification to help keep electricity affordable for consumers.

These mechanisms are intended to bridge the gap between actual service costs and the rates paid by end users.

For distribution utilities, the rules provide clearer pathways for collaboration with microgrid service providers.

They also include the option for distribution utilities to undertake microgrid operations themselves.

In addition, the rules set out a streamlined permitting process for service providers, defined technical standards and a transparent cost recovery mechanism.

The ERC said these measures are intended to create a more predictable and supportive investment environment and encourage greater private sector participation in rural electrification efforts.