Philippine Energy Policy Wiki

DC2010-05-0006: Terminating the Default Wholesale Supplier Arrangement for WESM and Declaring a Disconnection Policy

Status
operative
Confidence
high
Effective date
2010-05
Parent law
ra-9136

Department Circular No. DC2010-05-0006, signed by DOE Acting Secretary Jose C. Ibazeta. Terminates the Default Wholesale Supplier (DWS) arrangement and declares a mandatory WESM registration / disconnection policy.

Background: DC2006-06-0009 had designated NPC and PSALM as DWS at WESM Luzon’s launch (26 June 2006) to supply imbalances for DUs not yet able to trade in WESM — originally limited to one year. By April 2010, PSALM had privatized 87.82% of its generating assets (3,318.23 MW) and 68.22% of NPC-IPP contracts (3,345.75 MW), making effective DWS performance impossible.

Key Provisions

Section 1 — DWS terminated [DC2010-05-0006, §1, 2010-05]:

  • NPC and PSALM relieved of DWS designation
  • All prior circulars relating to DWS arrangement repealed
  • Applies to all grids where WESM is operational

Section 2 — Disconnection policy [DC2010-05-0006, §2, 2010-05]:

  • Any person/entity failing to register with WESM within 90 days from effectivity shall be disconnected from the grid
  • Initially applies to Luzon only (where WESM operates)
  • NGCP authorized to disconnect non-compliant entities under OATS Rules

Section 3 — 90-day transition period [DC2010-05-0006, §3, 2010-05]:

  • All DUs, GenCos, and connected entities must register with WESM within 90 days
  • DUs with arrearages to NPC/PSALM: may still register but must settle arrearages or enter restructuring agreement within 90 days; settlement is condition for reconnection
  • Private entities: settlement of outstanding obligations governed by existing bilateral contracts

Section 4 — Agency roles [DC2010-05-0006, §4, 2010-05]:

  • DOE + NGCP/TransCo/NPC/PSALM/NEA/PEMC: issue disconnection guidelines within 90 days
  • NGCP: authorized to disconnect per OATS Rules
  • PEMC: monitor and report WESM registration status
  • PSALM/NPC: report on DWS arrangements and outstanding obligations
  • NEA: assist electric cooperatives in registration; conduct IEC campaign

Section 5 — Implementation Review Committee (IRC) [DC2010-05-0006, §5, 2010-05]:

  • Members: DOE (chair), PEMC, PSALM, NPC, TRANSCO, NEA, NGCP
  • Responsible for smooth DWS termination and disconnection policy implementation

Full text: Cleaned copy