The Philippine Grid Code establishes and documents the basic rules, requirements, procedures

and standards that govern the operation, maintenance and development of the high-voltage
backbone transmission system in the Philippines. The Grid Code identifies and recognizes the
responsibilities and obligations of three (3) key independent functional groups, namely (a) Grid
Owner, (b) System Operator and (c) Market Operator. These functional groups and all Users of
the Grid must comply with all the provisions of the Grid Code. The Grid Code is intended to be
used along with the Market Rules of the Wholesale Electricity Spot Market to ensure the safe,
reliable and efficient operation of the Grid.

Republic Act No. 9136, also known as the Electric Power Industry Reform Act of 2001,
mandated the creation of the Energy Regulatory Commission (ERC). Section 43(b) of the Act
also provides that the ERC promulgate and enforce a National Grid Code and a Distribution
Code which shall include, but not limited to: (a) Performance Standards for TRANSCO O & M
Concessionaire, distribution utilities and suppliers, and (b) Financial Capability Standards for the
generating companies, the TRANSCO, distribution utilities and suppliers. The Act also mandates
the ERC to enforce compliance to the Grid Code, the Distribution Code and the Market Rules
and to impose fines and penalties for violations of their provisions.

The Grid Code was prepared using a functional rather than an organizational format so that it
will remain robust and require minimum changes as the Philippine electric power industry is
transformed to its new organizational structure.

The safe, reliable and efficient operation of the Grid requires the cooperation of all industry
participants. It is important that all Grid Users follow the instructions and orders of the System
Operator to ensure the reliable operation of the Grid. The System Operator will work closely
with the Market Operator to dispatch day-ahead pool schedules and provide the necessary
support in satisfying the technical and operational requirements of real time control of the Grid.

The policies and decisions of the Grid Owner, System Operator and Market Operator on matters
involving the operation, maintenance and development of the Grid will affect all industry
participants and end-users. It is important, therefore, that all affected parties have a voice in
making decisions and policies involving the operation, maintenance and development of the
Grid. The Grid Code provides this mechanism through the Grid Management Committee that
will relieve the Energy Regulatory Commission from the tedious task of monitoring day-to-day
operations of the Grid.

The Grid Code is organized into nine (9) Chapters. These are:

Chapter 1. Grid Code General Conditions

Chapter 2. Grid Management
Chapter 3. Grid Connection Requirements
Chapter 4. Grid Planning
Chapter 5. Grid Operations
Chapter 6. Scheduling and Dispatch
Chapter 7. Grid Revenue Metering Requirements
Chapter 8. Grid Code Transitory Provisions
Chapter 9. Performance Standards for TRANSCO

Chapter 1 of the PGC contains the general provisions that apply to all the other Chapters of the
Grid Code. It specifies the authority of the ERC to promulgate and enforce the Grid Code. It also
contains articles on definition of terms, abbreviations, and construction of references used in the
Grid Code.

Chapter 2 of the PGC specifies the guidelines for Grid Management, the procedure for dispute
resolution, the required Operational reports and the process for Grid Code enforcement and
revision.

Chapter 3 of the PGC specifies the minimum technical, design and operational criteria and the
procedures to be complied with by any User who is connected or seeking connection to the Grid
and the minimum technical, design and operational criteria of the Grid Owner at the Connection
Site with Users. It also presents a unified listing of all the data required by the System Operator
from Users and by Users from the Grid Owner.

Chapter 4 of the PGC specifies the technical and design criteria and procedures to be applied by
the System Operator and Grid Owner in planning the development or reinforcement of the Grid
and to be taken into account by Users in planning the expansion of their own Systems. Articles
on Demand Forecasts and required technical planning studies are also included in this Chapter.

Chapter 5 of the PGC establishes the rules and procedures to be followed by the Grid Owner,
System Operator and all Users to ensure the reliability and security of the Grid. Articles such as
Operating Principles, Authority and Responsibilities, Control, Protection, Testing, Safety
Procedures, Outage/ Maintenance Scheduling and Emergency Procedures are also included in
this chapter.

Chapter 6 of the PGC establishes the rules, procedures and requirements for real-time dispatch
in the Wholesale Electricity Spot Market in order to compensate for imbalances in active power
and to provide the ancillary services that are required to ensure power quality and the reliability
and security of the Grid. Articles on Operating Margins, Demand Forecasts and Control are also
included in this chapter.
Chapter 7 of the PGC specifies the technical and design criteria associated with the
measurement of electric energy. The provision of metering data for the operation of the
Philippine Electricity Market is also included in this Chapter.

Chapter 8 of the PGC specifies the rules and procedures pertaining to compliance with the
provisions of the Grid Code during the transition period from the existing industry structure to
the new industry structure. The procedures for the grant of exemption from specific requirements
of the Grid Code are also addressed in this Chapter.

Chapter 9 of the PGC specifies the standards to ensure the quality, reliability and efficiency of
the Transmission System, as well as safety standards for the protection of personnel in the power
transmission environment.