Philippine Energy Policy Wiki

DC2006-06-0009 — Default Wholesale Suppliers (NPC/PSALM) at WESM Launch

Status
superseded
Confidence
high
Effective date
2006-06-22

Department Circular No. DC2006-06-0009, issued 22 June 2006 by DOE Secretary Raphael P. M. Lotilla. Circular designating the National Power Corporation (NPC) and the Power Sector Assets and Liabilities Management Corporation (PSALM) as the default wholesale suppliers for the Philippine Wholesale Electricity Spot Market (WESM) upon commencement of WESM commercial operations.

Implements EPIRA (RA 9136) Section 30 mandate to DOE to establish WESM as transparent, competitive, reliable electricity market [DC2006-06-0009, Whereas, 2006-06]. EPIRA Section 9 (in relation to Section 30) requires National Transmission Corporation (NTCO) to implement central dispatch per Market Operator dispatch schedule [DC2006-06-0009, Whereas, 2006-06]. DOE jointly with industry participants tasked to formulate WESM detailed rules including merit order dispatch procedures for each time period [DC2006-06-0009, Whereas, 2006-06].

WESM Rules (DC-2002-06-003, promulgated 28 June 2002) implement gross pool market whereby all energy transactions scheduled through market by Market Operator; all persons/entities injecting/withdrawing electricity into national grid must become WESM members [DC2006-06-0009, Whereas, 2006-06]. PEMC incorporated 18 November 2003 as non-profit, non-stock corporation with equitable representation of industry participants, chaired by DOE, serving as AGMO and WESM governing arm; tasked to undertake WESM preparatory work and initial operations [DC2006-06-0009, Whereas, 2006-06].

WESM trading requires compliance with technical and commercial requirements: creditworthiness/prudential requirements, communication facilities for Market Operator-participant information exchange, revenue metering facilities enabling energy measurement into/out of grid, remote telemetering facilities for real-time demand/connection/generation status monitoring [DC2006-06-0009, Whereas, 2006-06]. Not all industry participants able to meet these requirements at WESM start and unable to qualify for direct WESM membership [DC2006-06-0009, Whereas, 2006-06]. WESM Rules allow qualified entities to become indirect WESM members trading through direct members [DC2006-06-0009, Whereas, 2006-06].

Default wholesale supply definition and scope

Default wholesale supply in WESM refers to supply of electricity covering supply imbalances of WESM customers [DC2006-06-0009, §1, 2006-06]. Supply imbalances are either contractual or schedule imbalances [DC2006-06-0009, §1, 2006-06].

Contractual imbalances refer to difference between quantity of electricity covered by bilateral power supply contract/s of customer and actual metered quantity [DC2006-06-0009, §1.01, 2006-06].

Schedule imbalances occur where customer has fully contracted for requirements but actual metered withdrawal is greater or lesser than contracted quantity; difference is schedule imbalance [DC2006-06-0009, §1.02, 2006-06].

Customer coverage and designation

Default wholesale supply arrangement applies to following customers in Luzon and Visayas grid [DC2006-06-0009, §2, 2006-06]:

  • Distribution utilities: Electric cooperatives, private distribution utilities, local government utilities [DC2006-06-0009, §2.01, 2006-06]

  • End users: Other than distribution utilities, having permission from NPC or competent government agency to connect directly to national grid [DC2006-06-0009, §2.02, 2006-06]

Existing bilateral power supply contracts of covered customers not superseded by WESM implementation [DC2006-06-0009, Whereas, 2006-06].

Period of effectivity and designation

Default wholesale supply arrangement implemented for period not longer than one (1) year from WESM commercial operations start in respective grid: Luzon customers from Luzon WESM start; Visayas customers from Visayas WESM start [DC2006-06-0009, §3, 2006-06].

National Power Corporation and Power Sector Assets and Liabilities Management Corporation designated default wholesale suppliers upon WESM commercial operations commencement as interim measure ensuring smooth transition from current supply arrangements to WESM implementation [DC2006-06-0009, §4, 2006-06]. This designation does not preclude subsequent designation of other default wholesale suppliers [DC2006-06-0009, §4, 2006-06].

NPC and PSALM separately registered as direct WESM members and will allocate between themselves the bilateral power supply contracts of NPC [DC2006-06-0009, Whereas, 2006-06].

Implementation and governance

NPC, PSALM and PEMC directed to develop pertinent arrangements and procedures to carry out default wholesale supply arrangement consistent with applicable laws, rules and regulations [DC2006-06-0009, §5, 2006-06].

Nothing in this Circular shall amend, supplant, or repeal any mechanisms or institutions already existing or responsibilities already allocated under existing law, rule or contract [DC2006-06-0009, §6, 2006-06].

Circular effective immediately upon publication in a newspaper of general circulation [DC2006-06-0009, §7, 2006-06]. PEMC directed to publish this Circular in Market Information website [DC2006-06-0009, §7, 2006-06]. Remains in effect until otherwise revoked [DC2006-06-0009, §7, 2006-06] — but the DWS designation itself is capped at one year from the start of WESM Luzon commercial operations [DC2006-06-0009, §3, 2006-06] and is described as an interim transition measure [DC2006-06-0009, §4, 2006-06]. Commercial operations began 26 June 2006, so the arrangement lapsed 26 June 2007 by its own terms; Digest: DC2010-05-0006: Terminating the Default Wholesale Supplier Arrangement for WESM and Declaring a Disconnection Policy later terminated it outright, reciting both sections [DC2010-05-0006, Whereas clauses, 2010-05].

Full text: Cleaned copy