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Republic of the Philippines
DEPARTMENT OF ENERGY

DEPARTMENT CIRCULAR NO. EO

CREATION OF A TASK FORCE TO COORDINATE EFFORTS IN
RELATION TO THE WESM COMMERCIAL OPERATION AND DIRECTING
ALL ELECTRIC INDUSTRY STAKEHOLDERS TO ACCOMPLISH THE
SELF-ASSESSMENT AND CERTIFICATION FOR READINESS TO
PARTICIPATE IN THE WESM

WHEREAS, Section 30 of Republic Act No. 9136, otherwise known as the “Electric
Power Industry Reform Act of 2001” or "EPIRA", enjoined the Department of Energy
(DOE) to establish the Wholesale Electricity Spot Market (WESM) that would
facilitate a transparent, competitive and reliable market for electricity;

WHEREAS, pursuant to said mandate, the DOE constituted, among others, the
WESM Steering Committee on 31 May 2004, through Department Order No. 2004-
06-007, to monitor the timeline, action plans and the overall target implementation of
the WESM, and ensure the effective coordination of various activities amongst
government agencies or functional units, industry participants and such other entities
involved in the WESM;

WHEREAS, significant progress has been made towards the commencement of
WESM commercial operation and the fundamental components of the market are
expected to be completed or finalized, including: the Market Management System
(MMS), formation of the respective committees, the processing of its filing with the
Energy Regulatory Commission (ERC) for the approval of the Price Determination
Methodology;

WHEREAS, considering this progress made and to assist the Philippine Electricity
Market Corporation (PEMC), currently chaired by the DOE, in putting in place all the
necessary components for the successful implementation of the WESM and in the
interest of a transparent and level playing field for all industry participants, there is a
need for a direct feedback mechanism to assess the overall readiness of various
industry participants as would enable them to participate in the market as well as
allow future market participants and service providers to assess and certify their own
readiness to participate after WESM commences commercial operation;

NOW, THEREFORE, premises considered, the DOE hereby constitutes the Task
Force on WESM Commercial Operation Readiness (TF-COR) and directs all industry
participants to accomplish the initial self-assessment and certification forms in
accordance with this Department Circular.

Energy Center, Merritt Rd., Fort Bonifacio, Teguig, Metro Manila, Philippines
Tels.: (Trunks) 840-1404 10 40; Fax 840-2067, 840-2236; 840-2087 (Domestic); 632-840-2173; 632-840-2236; 632-
840-2067 (International)
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Section 1. Creation of the TASK FORCE on WESM COMMERCIAL OPERATION
READINESS (TF-COR). To facilitate the regular monitoring and institute a feedback
mechanism amongst responsible parties to facilitate the commercial operation of the
WESM, a task force is hereby created to coordinate and report to the WESM
Steering Committee issues or recommendation affecting the readiness of individual
participants/their respective sectors for the commencement of WESM commercial
operation,

Section 1.1. Composition of the Task Force. The TF-COR shall be composed
of one representative and one alternate representative from each of the following

agencies/entities:

Chairman ; Department of Energy

Co-Chairman ; Philippine Electricity Market Corporation-
Market Operator (PEMC)

Members : National Transmission Corporation (TransCo)

Power Sector Assets and Liabilities Management
Corporation (PSALM)

National Power Corporation (NPC)

National Electrification Administration (NEA)

PEPOA

PHILRECA

MERALCO

PIPPA

Section 1.2. Functions of the Task Force. The TF-COR shall exercise the
following functions:

a.

Provide regular updates every two (2) weeks to the WESM Steering
Committee on the progress and status of the industry participants’
respective readiness for the commercial operation of the WESM;

Coordinate efforts amongst industry participants and their respective
sectors, convene and organize meetings for this purpose and implement a
regular, efficient and direct feedback mechanism amongst responsible
parties;

Facilitate mutual cooperation and sharing of information amongst the
individual participants and provide the DOE necessary access to
information on matters relevant to the determination of the basis for the
declaration of the commencement of WESM commercial operation;

\dentify issues in relation to the preparation of the industry for WESM
commercial operation and provide recommendations for DOE Secretary's
consideration towards the resolution of these issues;

Perform such other functions as may be necessary and delegated to it by
the DOE for the successful to commencement of WESM commercial
operation.

Section 1.3. Responsibilities of Each Functional Unit. In addition to the
respective responsibilities that may be assigned to each member of the TF-COR,

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each agency/entity shall provide, subject fo availability and internal approval
processes, the necessary personnel and resources to lend administrative support
to the TF-COR as may be necessary.

Section 1.4. Meetings. The TF-COR shall meet twice a month or more often at
such other time as the DOE directs in order to assess the status of each sectors
readiness. Within 15 calendar days from the effectivity of this Department
Circular, each member of the TF-COR shall submit the list of its
representative/alternate representative to the DOE. Within 10 calendar days
thereafter, the DOE shall convene the first meeting of the TF-COR.

Section 2. Categories of WESM Participants. The following are the parties
required to conduct their respective readiness assessment.

Generation Companies;

Network Service Providers —

a. Electric Cooperatives;

b. Distribution Utilities;

Distribution Utilities;

Customers;

Philippine Electricity Market Corporation;
National Transmission Corporation, as —
a. System Operator,

b. Metering Service Provider;

c. Grid Operator; and

7. Suppliers/Aggregators.

Np —-

ign

Section 3. Compliance. All industry participants are each required to submit their
respective initial self-assessment to the DOE, as Chair of the TF-COR, within 10
calendar days from the effectivity of this Circular. Every two weeks thereafter, unless
the TF-COR provide otherwise, all industry participants shall submit to the TF-COR
an update on their initial assessments, indicating any problem and/or actions taken
thereon.

Section 5. Readiness of ECs. In the case of Electric Cooperatives (ECs), the
National Electrification Administration (NEA), as member of the TF-COR, must
henceforth assume primary responsibility to monitor the readiness of ECs and
provide training programs and other necessary activities to encourage the ECs’
effective participation in the WESM, Towards this end, NEA shall be primarily
responsible for the preparation and submission by the ECs of the regular updates
provided in Section 3 and NEA shall also provide the TF-COR with its
recommendations and/or actions taken to address any problem indicated by the ECs
in their updated assessments.

Section 6. Confidentiality. Any confidential information obtained by the TF-COR in
the course of its reviewlassessment shall be maintained in full confidentiality and will
be used solely for the purposes expressed in this Department Circular.

Section 7. No amendment or repeal of existing laws. Nothing in this Department
Circular shall be construed as to amend, supplant, or repeal any of the mechanisms

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or institutions already existing or responsibilities already allocated and provided for
under any existing law, rule or contract. However, to the extent necessary, previous
issuances by this Department in relation to the subject matter herein shall be deemed
amended accordingly.

This Department Circular shail take effect immediately after its publication in two (2)
newspapers of general circulation and shall remain in effect until otherwise revoked.

Fort Bonifacio, Taguig, Metro Manila, _!/ November 2000.

RAPHAEL P. M. LOTILLA
Secretary