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Republic of the Philippines NEL 12 2011
DEPARTMENT OF ENERGY

DEPARTMENT CIRCULARNO. DE QOII -(Q-€€ Me

ADOPTING FURTHER AMENDMENTS TO THE WESM RULES
(WESM RULES SECTION 3.14.9 SETTLEMENT REVISIONS)

WHEREAS, Rule 8.6 of the Wholesale Electricity Spot Market (WESM) Rules provides for
the approval by the Department of Energy (DOE) of proposals for any WESM Rules
changes upon endorsement by the Philippine Electricity Market (PEM) Board;

WHEREAS, on 24 February 2011, proposed changes to the WESM Rules and Billing
and Settlement Manual were submitted to the Rules Change Committee (RCC);

WHEREAS, the proposed changes will provide for the Market Operator's deadline on the
issuance of final statement adjustments;

WHEREAS, on its various meetings, the RCC deliberated the proposed changes to
the WESM Rules incorporating comments from various stakeholders;

WHEREAS, on 04 May 2011, the RCC approved for submission to the PEM Board changes
in the WESM Rules concerning provisions on settlement revisions; and

WHEREAS, on 25 May 2011, the PEM Board approved the proposed changes to
the WESM Rules for endorsement to the DOE.

NOW, THEREFORE, pursuant to its authority under the WESM Rules, the DOE hereby
issues, adopts and promulgates the following amendments to the WESM Rules.

Section 1. Amendments to the WESM Rules.

1.1 Clause 3.14.9.1 is amended to read -

3.14.91 If anamount ina final statement issued under clause 3.14.15:

(a) Has been the subject of a dispute and the dispute has been
resolved; or

b) Was subject of a pending case before a Court of competent
] P 8 P
jurisdiction and that said Court has already rendered a final and
executor Decision;

If any of the abovementioned cases has caused a different amount
payable as set out in the final statement, the Market Operator shall
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issue to each WESM Mentber affected, an adjustment to the final
statement for the relevant billing period setting out:

(a) The amount payable by the WESM Member to the Market
Operator or the amount payable by the Market Operator to the
WESM Menurber, and

(b) Interest calculated on a daily basis at the interest rate for the
final statement to which the adjustment relates to the payment
date applicable to the revised statement issued under this
clause 3.14.9.1.

The Market Operator shall issue the adjustment to the final
statement not later than twelve (12) calendar months after the
resolution of the dispute or receipt of the relevant final and executor
Order unless parties to be billed agrees that the issuance of the
particular WESM bill adjustment shall be at a later time.

1.2 Clause 3.14.9.2 is amended to read -

3.14.9.2 If the Market Operator becomes aware of an error in an amount
stated in a fina] statement issued under clause 3.14.5 and, in the
Market Operator’s reasonable opinion, a WESM Member would be
materially affected if a revision to the final statement was not made
to correct the error, then the Market Operator shall issue the Revised
Statement not later than six (6) calendar months from receipt of the
Market Operator of written notice of error from the participant, or
from the Market Operator’s discovery of the same.

Section 2. Separability Clause. If for any reason, any section or provision of this
Circular is declared unconstitutional or invalid, such parts not affected shall remain in
full force and effect.

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Section 3. Effectivity. This Circular shall take into effect fifteen (15) days following its
publication in at least two (2) newspapers of general circulation and shall remain in effect
until otherwise revoked.

Issued this in Fort Bonifacio, Taguig City, Metro Manila.

JOSE RENE D. ALMENDRAS

Republic of the Philippines
Secretary DEPARTMENT OF ENERGY.

IN REPLYING PLS CITE:

SDOE1
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OE11-004556
WA