New ERC Rules Expand Private Participation in Transmission Projects

The Energy Regulatory Commission (ERC) has issued Resolution No. 18, Series of 2026, adopting the Implementing Rules for the development of transmission facilities by entities other than the primary Transmission Network Provider (TNP). Rooted in Section 9 of the Electric Power Industry Reform Act of 2001 (EPIRA), this Resolution responds to the inability of the National Grid Corporation of the Philippines (NGCP), as the sole TNP, to build grid infrastructure at a pace sufficient to accommodate committed generation projects. The framework is designed to mobilize private capital and government resources to bridge the existing transmission gap while ensuring that ultimate ownership of all transmission assets remains within the public sector through National Transmission Corporation (TRANSCO).

The Resolution authorizes Generation Companies (GenCos) to own point-to-point limited transmission facilities used exclusively to connect their generating facilities to the transmission grid. However, where such facilities become necessary to serve additional users or are required to promote competition, ownership must be transferred to TRANSCO, while the TNP assumes possession and operational control. In these instances, the GenCo is entitled to reimbursement based on the fair market value of the facilities, subject to ERC optimization and final approval during the TNP’s subsequent rate reset application under the Rules for Setting Transmission and Wheeling Rates (RTWR).

The Resolution also include Associated Transmission Projects (ATPs), consisting of new transmission facilities, beyond a GenCo’s dedicated point-to-point limited transmission facility, required to reinforce the reliably and securely accommodate additional generation capacity into the grid. A Qualified GenCo may finance and construct an ATP under three (3) analogous cases: 1) where the construction of the ATP that is part of the DOE-approved Transmission Development Plan (TDP) has not yet commenced because the TNP has not awarded it to any third-party, 2) where construction of the ATP that is part of the DOE-approved TDP has already begun but there is a timeline mismatch between the target completion date and the GenCo’s generation project, or 3) where the ATP is not part of the DOE-approved TDP but is crucial to meet the energy transition targets declared in the Philippine Energy Plan (PEP). Partnerships between GenCos for ATPs require prior certification from the Philippine Competition Commission.

The Resolution further provides for Priority Projects (PPs) identified by the DOE, which are to be constructed by or at the instance of TRANSCO following the Commission’s approval. Upon approval, TRANSCO shall execute a Memorandum of Agreement (MOA) with the TNP to govern the TNP’s assumption and takeover of the PP, with costs eventually integrated into the TNP’s capital expenditure (CAPEX) program. 

Finally, the resolution provides a transitory provision that allow existing point-to-point facilities or pending applications currently performing transmission functions to be considered as ATPs, provided that the Generation Compony shall execute the MOA with the TNP. Fines and penalties shall apply to violations committed by any Generation Company, Qualified Generation Company, TRANSCO, the TNP, or any other entity subject to these Implementing Rules, with regard to mandatory requirements and responsibilities under the Implementing Rules and the MOA.