Section 4Sec./Art. 4

Definition of Terms. For purposes of this Act, the following terms shall be defined as stated below:

(a) Authority to operate (ATO) refers to the document issued by the Energy Regulatory Commission (ERC) to the microgrid system provider, which shall constitute as the latters license to provide integrated power generation and distribution services to unserved and underserved areas;

(b) Competitive selection process for microgrid system provider (CSP) refers to the procedure wherein an entity is awarded the contract to provide integrated power generation and distribution services to an unserved or underserved area through a transparent and competitive procedure, such as, but not limited to, an auction, unsolicited proposal, or Swiss challenge, taking into consideration the requirements of this Act and other applicable laws;

(c) Decentralized power generation (DPG) refers to small-scale power generation facilities which operate locally and are connected to the distribution system of the microgrid or end-user that could be aggregated to provide electric power necessary to meet demand, including, but not limited to, mini-wind turbines connected to a microgrid, energy storage, and solar photovoltaic rooftop of an end-user;

(d) Distribution system refers to the system of wires and associated facilities extending between the delivery points on the transmission, subtransmission system, or power generation facility connection, and the point of connection to the premises of the end-user, which ever is applicable.;

(e) Distribution utility (DU) refers to any electric cooperative, private corporation, government-owned utility, or existing local government unit which has a franchise to operate a distribution system including those whose franchise covers economic zones;

(f) DU operated microgrid system refers to a microgrid system owned and operated by a DU in a DU identified unserved area in its local total electrification roadmap;

(g) Electric Cooperative (EC) refers to a DU organized pursuant to Presidential Decree No. 269, as amended, or as otherwise provided in this Act;

(h) End-user refers to any natural or juridical person requiring the supply and delivery of electricity for its own use;

(i) Grid refers to the high voltage backbone system of interconnected transmission lines, substations, and related facilities, located in each of Luzon, Visayas, and Mindanao;

(j) Grid-tied microgrid system refers to a microgrid system that is electrically connected to the distribution system of a DU and can operate in synchronized mode or in island mode;

(k) Island mode refers to a grid-tied microgrid system operating as an stand-alone system in supplying and delivering electric power to connected end-users;

(l) Isolated microgrid system refers to a microgrid system that is not electrically connected to a distribution system of a DU and is operating as a stand-alone system in supplying and delivering electric power to connected end-users;

(m) Local total electrification roadmap (LTER) refers to a DUs comprehensive strategic plan with an annual work plan to accelerate total electrification in its franchise area;

(n) Microgrid system refers to a group of interconnected loads and a generation facility or DPG with clearly defined electrical boundaries that acts as an integrated power generation and distribution system, whether or not connected to a distribution or transmission system;

(o) Microgrid system provided service contract (MSC) refers to the contract between the microgrid system provider and the National Power Corporation (NPC) whereby the microgrid system provider performs the missionary electrification function on behalf of the NPC and provides integrated power generation and distribution services in an unserved and underserved area, and to receive subsidy whenever applicable;

(p) Microgrid system provider (MGPS) refers to a natural or juridical person whose business includes the installation, operation, and maintenance of microgrid systems in unserved or underserved areas nationwide;

(q) National total electrification roadmap (NTER) refers to a comprehensive national strategic plan including a work plan to accelerate total electrification in the country taking into account the various LTERs and the Distribution Development Plan (DDPs). It shall be incorporated in the Philippine Energy Plan;

(r) NPC Graduation Plan refers to a comprehensive and detailed strategy of the NPC to attract private sector participation in areas served by the NPC;

(s) Synchronized mode refers to the operation of grid-tied microgrid systems whose generation facility or DPG is able to operate in the same frequency at its connection point to the distribution system of a DU, and allows the grid-tied microgrid system to supply to or draw power from the grid;

(t) Underserved area refers to an area currently served by home power systems, microgrid systems, or DUs whose supply of electricity is less than twenty-four (24) hours daily because of the non-implementation of approved capital expenditure projects, noncompliance with the service parameters of the Philippine Distribution Code (PDC), or any other reason resulting to an overall failing mark based on ERCs latest annual technical evaluation of performance of distribution systems;

(u) Universal charge for missionary electrification (UCME) refers to the portion of the non-bypassable charge passed on and collected from all end-users on a monthly basis by the DUs pursuant to Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001, a portion of which is allocated for the provision of integrated power generation and distribution services in unserved areas and underserved not connected to the grid or within a franchise area where the distribution system is not connected to the grid; and

(v) Unserved area refers to an area, upon the effectivity of this Act, with no electricity access, no distribution system lines, no home power systems, no connection to any microgrid system, or for which no distribution grid extension has been developed, or implemented by the DU.