=== dc2013-05-0008-pages-41.ppm === Chapter 5 - Settlement and Billing 5.1 SETTLEMENT TIMETABLE 5.1.1 5.1.2 Frequency of Settlement and Billing 5.1.1.1 5.1.1.2 The IMEM Operator shall calculate Settlement Quantities and Settlement Amounts for each IMEM Resource and each IMEM Customer in each IMEM Trading Interval. Calculation of Settlement Quantities and Settlement Amounts and billing of IMEM Members shall be performed monthly for the preceding Billing Period, which shall be a one month period starting on the 26" day of a calendar month and ending on the 25 day of the following month. Timetable for Settlement and Billing 5.1.2.1 5.1.2.2 5.1.2.3 5.1.2.4 5.1.2.5 5.1.2.6 Within five (5) days from the end of the Billing Period, the IMEM Operator shall make available to each IMEM Trading Participant the Metered Quantities and IMEM Adjusted Metered Quantities of that IMEM Trading Participant for all IMEM Intervals in that Billing Period. Subject to Section 5.2.2, IMEM Generators who hold contracts with IMEM Customers shall, in consultation with their contract counterparties, declare to the IMEM Operator Ex-Post Contract Quantities for each contract counterparty in each IMEM Trading Interval no later than three (3) days after Metered Quantities and IMEM Adjusted Metered Quantities for that IMEM Trading Interval are made available by the IMEM Operator. No later than the 7” day of the calendar month, the [MEM Operator shall issue a Preliminary Settlement Statement to each IMEM Trading Participant in accordance with Section 5.5.1. No later than the 15" day of the calendar month, the [MEM Operator shall issue a Final Settlement Statement to each IMEM Trading Participant in accordance with Section 5.5.2. IMEM Trading Participants shall pay the IMEM Operator and the IMEM Operator shall pay IMEM Trading Participants in accordance with Section 5.5.4. The IMEM Operator shall maintain and publish an IMEM Manual that defines: (a) The procedures which the IMEM Operator and IMEM Trading Participants must follow in relation to settlement, billing, collections and payment; (b) The methods and processes used by the JMEM Operator for calculating its net exposure to IMEM Trading Participants and enforcement measures to maintain compliance with the requirements of Section 5.6; and (c) Any other relevant procedures required to implement the provisions of this Chapter 4. 5.2 SETTLEMENT QUANTITIES 5.2.1 Metered Quantities 5.2.1.1 In each IMEM Trading Interval, the IMEM Operator shall determine the Metered Quantity for each IMEM Resource and each IMEM Customer. 36 === dc2013-05-0008-pages-42.ppm === 5.2.2 5.2.1.2 5.2.1.3 5.2.1.4 The Metered Quantity for an IMEM Customer which is not an IMEM Load Curtailment Resource is the net quantity of energy withdrawn from the Mindanao Grid by that IMEM Customer during an IMEM Trading Interval as measured in the Metering Data, where net withdrawal is a negative number. The Metered Quantity for an IMEM Load Curtailment Resource is the net quantity of energy sent out into or withdrawn from the Mindanao Grid or a Distribution Network by that IMEM Load Curtailment Resource during an IMEM Trading Interval as measured in the Metering Data, where net injection is a positive number and net withdrawal is a negative number. The Metered Quantity for an IMEM Generator is the net quantity of energy sent out into the Mindanao Grid or a Distribution Network by an IMEM Generator during an IMEM Interval as measured in the Metering Data, where net injection is a positive number. Ex-Post Contract Quantities 5.2.2.1 5.2.2.2 5.2.2.3 5.2.2.4 5.2.2.5 5.2.2.6 5.2.2.7 An IMEM Generator shall declare, for each IMEM Trading Interval, the Ex-Post Contract Quantities of the IMEM Customers which are its contract counterparties as both: (a) The MWh output of the /MEM Generator allocated for supplying the contracted energy, expressed as a positive number; and (b) The MWh energy withdrawal at the I MEM Customer's Connection Point that is covered by the contracted energy, expressed as a negative number. The difference between the absolute values of the quantities declared under Clauses 5.2.2.1(a) and 5.2.2.1(b) shall accurately reflect the losses between the Connection Point of the IMEM Generator and the Connection Point in the Mindanao Grid of the IMEM Customer. Subject to Clause 5.2.2.4, the absolute values of the quantities declared for a Grid IMEM Load Curtailment Resource and was scheduled in the relevant IMEM Trading Interval, shall equal the Ex-Ante Contract Allocations declared for that Grid IMEM Load Curtailment Resource as an IMEM Customer under Section 3.2.5. If the Metered Quantity of an IMEM Generator declaring Ex-Post Quantities to IMEM Customers who are also IMEM Load Curtailment Resources, is less than the sum of its Ex- Ante Contract Allocations declared under Section 3.2.5 or, if altered, under Section 3.2.6 then the absolute value of the quantities declared for its IMEM Customers who are also IMEM Load Curtailment Resources shall not be less than its Ex-Ante Contract Allocation to each IMEM Load Curtailment Resource multiplied by the ratio of its Metered Quantity and the sum of its Ex-Ante Contract Allocations declared under Section 3.2.5 or, if altered, under Section 3.2.6. The quantity declared under Clause 5.2.2.1(a) shall always be greater than the absolute value of the quantity declared under Clause 5.2.2.1(b), except where the IMEM Customer is also the IMEM Network Service Provider for the IMEM Generator’s Connection Point. The sum of all Ex-Post Contract Quantities declared under Clause 5.2.2.1(a) by an IMEM Generator for each IMEM Trading Interval shall be no more than the Metered Quantity of that IMEM Generator in that IMEM Trading Interval. Subject to Clause 5.2.2.3, the sum of all Ex-Post Contract Quantities declared under Clause 5.2.2.1(b) to an IMEM Customer for each IMEM Trading Interval shall be no less than the IMEM Adjusted Metered Quantity of that IMEM Customer in that IMEM Trading Interval. 5.2.3 Scheduled and Dispatched Quantities 37 === dc2013-05-0008-pages-43.ppm === 5.2.3.1 5.2.3.2 5.2.3.3 5.2.3.4 The IMEM Operator shall determine the Scheduled Quantity for each IMEM Resource as the average of its Day-Ahead Schedules at the beginning and end of the relevant [MEM Trading Interval. The IMEM Operator shall determine the Dispatched Quantity for each IMEM Resource as the average of the most recent Day-Ahead Schedules or Dispatch Targets, whichever is applicable, applying to that IMEM Resource at the beginning and end of the IMEM Trading Interval. For the purposes of calculating the Scheduled Quantity or Dispatched Quantity under this Section 5.2.3, if the previous [MEM Interval was not an IMEM Trading Interval then the Day-Ahead Schedule at the beginning of the IMEM Trading Interval shall be taken as: (a) For an IMEM Generator, the Actual Loading at the beginning of the MEM Trading Interval; and (b) For an /MEM Load Curtailment Resource, zero. For an IMEM Resource issued with an In-Day Dispatch Instruction under Clause 3.5.2.1, the IMEM Operator shall use the quantity estimated by the Mindanao System Operator for that IMEM Resources for that IMEM Interval in accordance with Clause 3.5.3.2 as the Dispatched Quantity of that IMEM Resource for the IMEM Interval. 5.2.4 Expected Demand Quantity 5.2.4.1 5.2.4.2 5.2.4.3 Subject to Clause 5.2.4.2, the Expected Demand of an IMEM Customer is the total Ex-Ante Contract Allocation for that IMEM Customer plus its Customer IMEM Demand. In any IMEM Trading Interval for which an Insufficient Supply Condition has been declared, the Expected Demand for an IMEM Customer is the Load-to-Maintain for that IMEM Customer determined in accordance with Section 3.6.2. The Expected Demand Quantity of an IMEM Customer or IMEM Load Curtailment Resource shall be determined as the average of its Expected Demands at the beginning and end of the IMEM Trading Interval, expressed as a negative number. 5.2.5 Variation Tolerance 5.2.5.1 5.2.5.2 5.2.5.3 For each IMEM Trading Interval, the IMEM Operator shall calculate a Variation Tolerance for each IMEM Resource and IMEM Customer. The IMEM Operator shall determine the Variation Tolerance as: (a) Foran /MEM Generator and IMEM Load Curtailment Resource, three percent (3%) of its Dispatched Quantity; or (b) For an IMEM Customer, three percent (3%) of its Expected Demand Quantity, expressed as a positive number. For clarity, if an IMEM Load Curtailment Resource has no Day-Ahead IMEM Schedule and has not received an /n-Day Dispatch Instruction then its Variation Tolerance shall be computed in accordance with Clause 5.2.5.2(b). In addition, if an IMEM Load Curtailment Resource has a Day-Ahead IMEM Schedule but receives an In-Day Dispatch Instruction not to curtail then its Variation Tolerance shall also be computed in accordance with Clause 5.2.5.2(b). 5.2.6 Trading Quantities of IMEM Customers 38 === dc2013-05-0008-pages-44.ppm === 5.2.6.1 5.2.6.2 5.2.6.3 The IMEM Operator shall determine the IMEM Trading Quantity of each IMEM Customer which is not an IMEM Load Curtailment Resource as its IMEM Adjusted Metered Quantity less its Ex-Post Contract Quantity. The IMEM Adjusted Metered Quantity of an IMEM Customer is determined as its Metered Quantity less: (a) The Metered Quantities of all IMEM Embedded Generators for which the IMEM Customer is the IMEM Network Service Provider; and (b) The differences between the Metered Quantity and the Expected Demand Quantity of all IMEM Load Curtailment Resources which have Day-Ahead Schedules or In-Day Dispatch Instructions in that IMEM Trading Interval and for which the [MEM Customer is the IMEM Network Service Provider. The Ex-Post Contract Quantity of an IMEM Customer, which is not an IMEM Load Curtailment Resource, is determined as the sum of all Ex-Post Contract Quantities declared by IMEM Generators for that IMEM Customer in accordance with Section 5.2.1. 5.2.7. Variation Quantities of IMEM Customers 5.2.7.1 5.2.7.2 5.2.7.3 For each IMEM Customer, the IMEM Operator shall determine the Upwards Customer Variation Quantity or Downwards Customer Variation Quantity. The Upwards Customer Variation Quantity of an IMEM Customer is determined as the greater of: (a) Zero; and (b) Its IMEM Adjusted Metered Quantity less its Expected Demand Quantity less its Variation Tolerance. The Downwards Customer Variation Quantity of an IMEM Customer is determined as the greater of: (a) Zero; and (b) Its Expected Demand Quantity less its IMEM Adjusted Metered Quantity less its Variation Tolerance. 5.2.8 Trading Quantities of IMEM Load Curtailment Resources 5.2.8.1 5.2.8.2 5.2.8.3 The IMEM Operator shall determine the IMEM Trading Quantity of each IMEM Load Curtailment Resource in each IMEM Trading Interval. For a Grid IMEM Load Curtailment Resource that has a Day-Ahead Schedule or an In-Day Dispatch Instruction for the relevant IMEM Trading Interval, its IMEM Trading Quantity for that IMEM Trading Interval is determined as its Metered Quantity less the sum of all Ex-Post Contract Quantities declared for that IMEM Customer in that IMEM Trading Interval under Clause 5.2.2.1(b). For a Grid IMEM Load Curtailment Resource that does not have a Day-Ahead Schedule or an In-Day Dispatch Instruction for the relevant IMEM Trading Interval, its IMEM Trading Quantity shall be determined in accordance with Section 5.2.6. For clarity, the IMEM Trading Participant shall not be treated as an IMEM Load Curtailment Resource but as an IMEM Customer for that IMEM Trading Interval in the absence of a Day-Ahead Schedule or an /In-Day Dispatch Instruction. 39 === dc2013-05-0008-pages-45.ppm === 5.2.8.4 5.2.8.5 For an IMEM Load Curtailment Resource which is not also an IMEM Customer, or Embedded IMEM Load Curtailment Resource, and has a Day-Ahead Schedule or an In-Day Dispatch Instruction for that IMEM Trading Interval, its IMEM Trading Quantity is determined as its Metered Quantity less its Expected Demand Quantity. For an Embedded IMEM Load Curtailment Resource that does not have a Day-Ahead Schedule or an In-Day Dispatch Instruction for that IMEM Trading Interval, its IMEM Trading Quantity shall be zero. 5.2.9 Variation Quantities of IMEM Load Curtailment Resources 5.2.9.1 5.2.9.2 5.2.9.3 5.2.9.4 5.2.9.5 5.2.9.6 5.2.9.7 The IMEM Operator shall determine the Upwards Dispatched Quantity or Downwards Dispatched Quantity of each IMEM Load Curtailment Resource with an In-Day Dispatch Instruction in each IMEM Trading Interval. The IMEM Operator shall determine the Upwards Resource Variation Quantity or Downwards Resource Variation Quantity of each IMEM Load Curtailment Resource with a Day-Ahead Schedule or an In-Day Dispatch Instruction in each IMEM Trading Interval. For a Grid IMEM Load Curtailment Resource that does not have a Day-Ahead Schedule or an In-Day Dispatch Instruction for the relevant IMEM Trading Interval, its variation quantities shall be determined in accordance with Section 5.2.7. For clarity, the IMEM Trading Participant shall not be treated as an IMEM Load Curtailment Resource but as an IMEM Customer for that IMEM Trading Interval in the absence of a Day-Ahead Schedule or an In- Day Dispatch Instruction. The Upwards Dispatched Quantity of an IMEM Load Curtailment Resource is determined as the greater of: (a) Zero; and (b) The lesser of its Dispatched Quantity and the difference of its Metered Quantity and its Expected Demand Quantity, less its Scheduled Quantity less its Variation Tolerance. The Downwards Dispatched Quantity of an IMEM Load Curtailment Resource is determined as the greater of: (a) Zero; and (b) Its Scheduled Quantity less the greater of its Dispatched Quantity and the difference of its Metered Quantity and its Expected Demand Quantity, less its Variation Tolerance. The Upwards Resource Variation Quantity of an IMEM Load Curtailment Resource is determined as the greater of: (a) Zero; and (b) Its Metered Quantity less its Dispatched Quantity less its Expected Demand Quantity less its Variation Tolerance. The Downwards Resource Variation Quantity of an IMEM Load Curtailment Resource is determined as the greater of: (a) Zero; and (b) Its Expected Demand Quantity plus its Dispatched Quantity less its Metered Quantity less its Variation Tolerance. 5.2.10 Trading Quantities of IMEM Generators 40 === dc2013-05-0008-pages-46.ppm === The IMEM Operator shall determine the IMEM Trading Quantity of each IMEM Generator in each IMEM Trading Interval as the Metered Quantity less the sum of all Ex-Post Contract Quantities declared by the /MEM Generator for that IMEM Trading Interval in accordance with Clause 5.2.2.1(a). 5.2.11 Variation Quantities of IMEM Generators 5.3 5.3.1 5.2.11.1 5.2.11.2 5.2.11.3 5.2.11.4 5.2.11.5 5.2.11.6 The IMEM Operator shall determine the Upwards Dispatched Quantity or Downwards Dispatched Quantity of each IMEM Generator with an In-Day Dispatch Instruction in each IMEM Trading Interval. The IMEM Operator shall determine the Upwards Resource Variation Quantity or Downwards Resource Variation Quantity of each IMEM Generator with a Day-Ahead Schedule or an In-Day Dispatch Instruction in each IMEM Trading Interval. The Upwards Dispatched Quantity of an IMEM Generator is determined as the greater of: (a) Zero; and (b) The lesser of its Dispatched Quantity and its Metered Quantity, less its Scheduled Quantity less its Variation Tolerance. The Downwards Dispatched Quantity of an IMEM Generator is determined as the greater of: (a) Zero; and (b) Its Scheduled Quantity less the greater of its Dispatched Quantity and its Metered Quantity, less its Variation Tolerance. The Upwards Resource Variation Quantity of an IMEM Generator is determined as the greater of: (a) Zero; and (b) Its Metered Quantity less its Dispatched Quantity less its Variation Tolerance. The Downwards Resource Variation Quantity of an IMEM Generator is determined as the greater of: (a) Zero; and (b) Its Dispatched Quantity less its Metered Quantity less its Variation Tolerance. SETTLEMENT PRICE AND ADJUSTMENT RATES Settlement Price 5.3.1.1 5.3.1.2 The price used for settlement purposes shall be the IMEM Day-Ahead Price for an IMEM Trading Interval determined under Section 3.4.4 for that IMEM Trading Interval. For IMEM Trading Intervals where no IMEM Day-Ahead Price was determined under Section 3.4.4, as can occur if In-Day Dispatch is required, the IMEM Day-Ahead Price shall be zero. 5.3.2 Settlement Adjustment Rates for Variation Quantities 5.3.2.1 For IMEM Trading Participants for which variation quantities have been determined in accordance with Sections 5.2.7, 5.2.9 and 5.2.11, the MEM Operator shall determine the applicable premium or penalty rate, for settlement purposes, by multiplying the MEM Base 41 === dc2013-05-0008-pages-47.ppm === 5.3.2.2 5.3.2.3 5.3.2.4 Variation Price for the relevant IMEM Trading Interval with the corresponding adjustment factor as set out in this Section 5.3.2. The IMEM Base Variation Price for an IMEM Trading Interval shall be the IMEM Day-Ahead Price for that IMEM Trading Interval, except that if no IMEM Day-Ahead Price was determined in accordance with Section 3.4.4, it shall be the average Day-Ahead IMEM Price over all MEM Trading Intervals in the thirty (30) days prior to the relevant IMEM Trading Interval. The Upwards In-Day Dispatch Premium Rate and Downwards In-Day Dispatch Premium Rate are ten percent (10%) of the /MEM Base Variation Price for the relevant IMEM Trading Interval, with the subsequent Upwards Dispatch Premium Amount and Downwards Compensation Amount calculated as a positive number. The Upwards Resource Variation Penalty Rate and Downwards Resource Variation Penalty Rate are one-hundred percent (100%) of the IMEM Base Variation Price for the relevant IMEM Trading Interval, with the subsequent Upwards or Downwards Resource Variation Penalty Amount calculated as a negative number. 5.4 SETTLEMENT AMOUNTS 5.4.1 Trading Interval Supply Amounts of IMEM Resources 5.4.1.1 5.4.1.2 5.4.1.3 5.4.1.4 The IMEM Operator shall determine the Resource Supply Amount of each IMEM Resource in each IMEM Trading Interval as the sum of its Resource Energy Settlement Amount, its Upwards Dispatch Compensation Amount and its Downwards Dispatch Compensation Amount determined in accordance with Clause 5.4.1.2, Clause 5.4.1.4 and Clause 5.4.1.5 of these IMEM Rules. The Resource Energy Settlement Amount of an IMEM Resource in an IMEM Trading Interval is determined as the sum of: (a) The Resource Energy Amount, which is the product of the IMEM Day-Ahead Price and its IMEM Trading Quantity; (b) The Upwards Resource Variation Penalty Amount, which is the product of the Upwards Variation Penalty Rate and the Upwards Resource Variation Quantity, expressed as a negative number; (c) Subject to Clause 5.4.1.3, the Downwards Resource Variation Penalty Amount, which is the product of the Downwards Variation Penalty Rate and the Downwards Resource Variation Quantity, expressed as a negative number; and (d) If its Upwards Resource Variation Penalty Amount or Downwards Resource Variation Penalty Amount is non-zero, the lesser of the absolute value of its Upwards Resource Variation Penalty Amount or Downwards Resource Variation Penalty Amount and its Resource Dispatch Compensation Recovery Amount. The Downwards Resource Variation Penalty Amount of an IMEM Resource for an IMEM Trading Interval where a Forced Outage Declaration from the IMEM Resource for that IMEM Trading Interval was reported by the Mindanao System Operator under Clause 3.5.5.2 shall be zero (0). The Upwards Dispatch Compensation Amount of an IMEM Resource is determined as the sum of: (a) Its Upwards Dispatch Premium Amount, which is the product of the Upwards In-Day Dispatch Premium Rate and its Upwards Dispatched Quantity; and 42 === dc2013-05-0008-pages-48.ppm === 5.4.1.5 5.4.1.6 (b) Its Upwards Dispatch Cost Recovery Amount, which shall be calculated for each IMEM Resource with an /In-Day Dispatch Instruction and an Offer Price exceeding the IMEM Day-Ahead Price and is the product of its Upward Dispatched Quantity plus its Variation Tolerance, and the difference between its Offer Price and the IMEM Day- Ahead Price. The Downwards Dispatch Compensation Amount of an IMEM Resource is determined as the product of the Downwards In-Day Dispatch Premium Rate and its Downwards Dispatched Quantity. For each IMEM Resource that has a non-zero Dispatch Compensation Amount in an IMEM Trading Interval, the IMEM Operator shall, based on the report of the Mindanao System Operator provided under Clause 3.5.5.2, determine whether the /n-Day Dispatch Instruction that resulted in the Dispatch Compensation Amount was issued under Section 3.5.1 or under Section 3.5.2 and shall associate the Dispatch Compensation Amount accordingly for the purpose of calculating the Dispatch Compensation Recovery Rates under Section 5.4.3. 5.4.2. Trading Interval Amounts of IMEM Customers 5.4.2.1 5.4.2.2 5.4.2.3 The IMEM Operator shall determine the Customer Supply Amount for each IMEM Customer in each IMEM Trading Interval as the product of the IMEM Customer Energy Price and the IMEM Trading Quantity, provided that the Customer Supply Amount shall be zero (0) for any IMEM Customer for which the IMEM Trading Quantity is greater than zero (0). The IMEM Customer Energy Price is determined as the ratio of: (a) The total Resource Energy Settlement Amounts of all IMEM Resources; and (b) The total IMEM Trading Quantities of all IMEM Customers with negative IMEM Trading Quantities. In an IMEM Trading Interval in which Resource Energy Settlement Amounts are calculated for IMEM Resources, but there are no IMEM Customers with negative IMEM Trading Quantities, the total Resource Energy Settlement Amounts for that IMEM Trading Interval shall be designated as the Unrecovered Resource Energy Settlement Amount for that IMEM Trading Interval, and shall be recovered from Settlement Amounts in proportion to each IMEM Customer’s share of the total /MEM consumption for the Billing Period. 5.4.3. Trading Interval Dispatch Compensation Recovery Rates 5.4.3.1 5.4.3.2 The Upwards Dispatch Compensation Recovery Rate associated with In-Day Dispatch Instructions issued under Section 3.5.1 is determined as the ratio of: (a) The total Upwards Dispatch Compensation Amounts associated with In-Day Dispatch Instructions issued under Section 3.5.1 of all IMEM Resources; and (b) The total Downwards Resource Variation Quantities and Downwards Customer Variation Quantities of all IMEM Resources and IMEM Customers. The Downwards Dispatch Compensation Recovery Rate associated with /n-Day Dispatch Instructions issued under Section 3.5.1 is determined as the ratio of: (a) The total Downwards Dispatch Compensation Amounts associated with /n-Day Dispatch Instructions issued under Section 3.5.1 of all IMEM Resources; and (b) The total Upwards Resource Variation Quantities and Upwards Customer Variation Quantities of all IMEM Resources and IMEM Customers. 43 === dc2013-05-0008-pages-49.ppm === 5.4.3.3. In an IMEM Trading Interval in which either: (a) Upwards Dispatch Compensation Amounts associated with In-Day Dispatch Instructions issued under Section 3.5.1 are calculated for MEM Resources but there are no IMEM Customers with Downwards Customer Variation Quantities or IMEM Resources with Downwards Resource Variation Quantities; or (b) Downwards Dispatch Compensation Amounts associated with In-Day Dispatch Instructions issued under Section 3.5.1 are calculated for MEM Resources but there are no IMEM Customers with Upwards Customer Variation Quantities or IMEM Resources with Upwards Resource Variation Quantities; The IMEM Operator shall recalculate, with no Variation Tolerance, the Upwards or Downwards (whichever is applicable) Customer and Resource Variation Quantities for all IMEM Resources and IMEM Customers, and use the recalculated quantities when determining Upwards and Downwards Dispatch Compensation Recovery Rates associated with /n-Day Dispatch Instructions issued under Section 3.5.1 as set out in this Section 5.4.3, and the Resource and Customer Dispatch Compensation Recovery Amounts associated with In-Day Dispatch Instructions issued under Section 3.5.1 for each IMEM Resource and IMEM Customer as set out in Section 5.4.4. 5.4.3.4 The Dispatch Compensation Recovery Rate associated with In-Day Dispatch Instructions issued under Section 3.5.2 is determined as the ratio of: (a) The sum of the Upwards Dispatch Compensation Amounts and Downwards Dispatch Compensation Amounts associated with In-Day Dispatch Instructions issued under Section 3.5.2 of all IMEM Resources; and (b) The total MEM Adjusted Metered Quantities of all IMEM Customers. 5.4.4 Trading Interval Dispatch Compensation Recovery Amounts 5.4.4.1. The /MEM Operator shall determine the Resource Dispatch Compensation Recovery Amount for each IMEM Resource in each IMEM Trading Interval as the sum of: (a) The product of the Downwards Dispatch Compensation Recovery Rate associated with In-Day Dispatch Instructions issued under Section 3.5.1 and its Upwards Resource Variation Quantity; and (b) The product of the Upwards Dispatch Compensation Recovery Rate associated with /n- Day Dispatch Instructions issued under Section 3.5.1 and its Downwards Resource Variation Quantity. 5.4.4.2. The IMEM Operator shall determine the Customer Dispatch Compensation Recovery Amount for each IMEM Customer in each IMEM Trading Interval as the sum of: (a) The product of the Downwards Dispatch Compensation Recovery Rate associated with In-Day Dispatch Instructions issued under Section 3.5.1 and its Upwards Customer Variation Quantity; (b) The product of the Upwards Dispatch Compensation Recovery Rate associated with /n- Day Dispatch Instructions issued under Section 3.5.1 and its Downwards Customer Variation Quantity; and (c) The product of the Dispatch Compensation Recovery Rate associated with /n-Day Dispatch Instructions issued under Section 3.5.2 and its IMEM Adjusted Metered Quantity. 5.4.5 Total Trading Interval Amounts 44 === dc2013-05-0008-pages-50.ppm === 5.4.6 5.5 5.5.1 5.5.2 5.4.5.1 5.4.5.2 The IMEM Operator shall determine the Customer Interval Settlement Amount for each IMEM Customer in each IMEM Trading Interval as its Customer Supply Amount less its Customer Dispatch Compensation Recovery Amount. The IMEM Operator shall determine the Resource Interval Settlement Amount for each IMEM Resource in each IMEM Trading Interval as its Resource Supply Amount less its Resource Dispatch Compensation Recovery Amount. Billing Period Settlement Amounts The IMEM Operator shall determine the Settlement Amount for each IMEM Trading Participant in each Billing Period as the sum of all Resource Interval Settlement Amounts and Customer Interval Settlement Amounts in the Billing Period, less: (a) Any Market Fees; and (b) Any allocation of Unrecovered Resource Energy Settlement Amounts. BILLING AND PAYMENT Preliminary Settlement Statements 5.5.1.1 5.5.1.2 5.5.1.3 5.5.1.4 A Preliminary Settlement Statement: (a) Shall set out the settlement calculations for an IMEM Trading Participant and the Settlement Amount payable by or to that IMEM Trading Participant for the relevant Billing Period; (b) Shall include supporting data for all amounts payable sufficient to enable each IMEM Trading Participant to audit the calculation of the amount payable by or to that IMEM Trading Participant ; and (c) Is issued for purposes of audit and review by the IMEM Trading Participant, and is not binding for invoicing, collection and payment purposes. If an IMEM Trading Participant determines that there is an error or discrepancy in the Preliminary Settlement Statement, it shall notify the IMEM Operator of the error or discrepancy. If notified by an IMEM Trading Participant under Clause 5.5.1.2, the IMEM Operator shall review the calculations used to produce the Preliminary Settlement Statement to verify the errors or discrepancies reported. If the IMEM Operator determines that there is an error or discrepancy in any Preliminary Settlement Statement that has already been issued, it shall ensure that the correction is reflected in the relevant Final Settlement Statement, provided that corrections requiring the input of an external party are received by the IMEM Operator at least two (2) Business Days before the deadline of the issuance of the Final Settlement Statements. If the IMEM Operator receives notice of an error, discrepancy or correction of an earlier identified error after their relevant deadlines, the correction will be reflected as an adjustment in the settlement statements of the succeeding Billing Period. Final Settlement Statements 5.5.2.1 A Final Settlement Statement: 45 === dc2013-05-0008-pages-51.ppm === 5.5.3 5.5.4 5.5.2.2 5.5.2.3 (a) Shall set out the settlement calculations for an IMEM Trading Participant and the Settlement Amount payable by or to that IMEM Trading Participant for the relevant Billing Period; (b) Shall include supporting data for all amounts payable sufficient to enable each IMEM Trading Participant to audit the calculation of the amount payable by or to that IMEM Trading Participant ; and (c) Shall be the basis for invoicing, collection and payment, and is binding for those purposes. Subject to Clause 5.5.2.3, if the IMEM Operator determines that there is an error or discrepancy in any Final Settlement Statement that has already been issued, it shall ensure that the correction is reflected in the next Final Settlement Statement to be issued to that IMEM Trading Participant. Subject to Clause 4.4.5.5, if the error or discrepancy in Clause 5.5.2.2 requires input data from an external party, then the relevant responsible party shall submit the correct data within two (2) Business Days of the issuance of the Final Settlement Statement in which the adjustment is to be included. Otherwise, the correction shall be reflected in the Final Settlement Statement for the following Billing Period. Disputes on Settlement Statements 5.5.3.1 5.5.3.2 5.5.3.3 If an IMEM Trading Participant determines that there is an error in a Final Settlement Statement or its supporting data, and, despite notice to the IMEM Operator, the same has not been corrected in accordance with Clause 5.5.2.2 or Clause 5.5.2.3, an IMEM Trading Participant may lodge a Dispute with the IMEM Operator in respect of any amount stated in the Final Settlement Statement or its supporting data. Disputes lodged under Clause 5.5.3.1 must be lodged within twelve (12) calendar months of the date of issuance of the relevant Final Settlement Statement. IMEM Trading Participants and the IMEM Operator shall settle settlement Disputes in accordance with Section 8.3. Payments 5.5.4.1 5.5.4.2 5.5.4.3 5.5.4.4 5.5.4.5 The IMEM Trading Participants are responsible to pay the Settlement Amounts to the IMEM Operator and the same shall be paid by the IMEM Operator to the IMEM Trading Participants to whom payments are due. Where the Settlement Amount for an IMEM Trading Participant is a negative amount, the IMEM Trading Participant shall pay that amount to the IMEM Operator. Where the Settlement Amount for an IMEM Trading Participant is a positive amount, the IMEM Operator shall pay that amount to the IMEM Trading Participant. Each IMEM Trading Participant shall pay to the IMEM Operator all amounts due under a Final Settlement Statement for a Billing Period in cleared funds, no later than 1500H of the twenty-fifth day of the month following the end of the Billing Period, without need of prior demand, whether or not the IMEM Trading Participant disputes the amount payable. Subject to Section 5.5.5, the IMEM Operator shall pay to each IMEM Trading Participant all amounts payable under a Final Settlement Statement not later than 1500H on the third Business Day after the date specified in Clause 5.5.4.4. 46 === dc2013-05-0008-pages-52.ppm === 5.5.5 5.5.6 5.5.4.6 Default 5.5.5.1 5.5.5.2 5.5.5.3 5.5.5.4 5.5.5.5 5.5.5.6 If any of the stated due dates in this Section 5.5.4 do not fall on a Business Day, the due date shall be the next Business Day. A Default event occurs when the amounts collected by the /MEM Operator under Clause 5.5.4.4, including all amounts drawn from the prudential security, is insufficient to pay for the aggregate settlement amounts due. When a Default event occurs, the IMEM Operator shall: (a) Collect the total amount of Market Fees due for the Billing Period from the amounts collected; and (b) Pay each IMEM Trading Participant from the remaining amounts collected in the proportion that the amount due to them for the Billing Period bears to the total amount due to all IMEM Trading Participants for that Billing Period; and (c) Pay the remainder of the monies due to affected IMEM Trading Participants not later than 1500H on the third Business Day after the collection of the shortfall from the defaulting [MEM Trading Participant. IMEM Operator shall issue a Notice of Default to the defaulting IMEM Trading Participant within one (1) Business Day of the Default event occurring. The Notice of Default shall specify the total amount due including the default interest calculated under Clause 5.5.6.5. The defaulting IMEM Trading Participant shall pay the total amount specified in the Notice of Default in cleared funds no later than one (1) Business Day after the receipt of the Notice of Default to avoid further default interest charges. If the defaulting IMEM Trading Participant fails to pay the total amount specified in the Notice of Default by the deadline specified in Clause 5.5.5.3, the MEM Operator shall issue a Suspension Notice as soon as practicable. The IMEM Operator shall not be liable for any delays in the remittances to IMEM Trading Participants due to shortfall or delay in the payments from the defaulting IMEM Trading Participants. The amount of the default interest shall be prioritized over the principal amount of the outstanding obligation in the distribution of payment. Conditions of Payment 5.5.6.1 5.5.6.2 5.5.6.3 5.5.6.4 5.5.6.5 All payments under Section 5.5.4 shall be made in cleared funds on or before the due date. The IMEM Operator shall ensure that an electronic funds transfer facility is provided and made available for all MEM Trading Participants for the purposes of facilitating collection and payment of the Settlement Amounts due for all IMEM transactions. Unless otherwise authorized by the IMEM Operator, all IMEM Trading Participants shall use the electronic funds transfer facility provided by the /MEM Operator under Clause 5.5.6.2 for the settlement of /MEM transactions and the payment of Market Fees. All relevant bank charges shall be to the account of the IMEM Trading Participant. If an IMEM Trading Participant fails to pay in full the amount due by the stated due date, the IMEM Trading Participant shall be charged default interest on the unpaid amount at the rate equivalent to the prevailing lending rate published by the Bangko Sentral ng Pilipinas (BSP) plus 300 basis points or a fixed rate of 8% per annum whichever is higher for each day of delay until fully paid. Where no interest rate is published or made available for a 47 === dc2013-05-0008-pages-53.ppm === 5.6 5.6.1 5.6.2 5.5.6.6 5.5.6.7 particular day, the most recent interest rate published or made available shall be used. The default interest shall be reckoned from the first day such amount is due and payable, up to and including the date on which payment is made, with interest computed based on a 360- day year. IMEM Trading Participants shall promptly pay all obligations whether or not the amounts payable are the subject of a Dispute. When the IMEM Operator believes that the IMEM participant is incapable to comply with the requirements under this Section 5.5 or the requirements of Section 5.6, the IMEM Operator may exercise its right to immediately demand payment for the settlement amounts, even prior to the deadline of payment by the /MEM participant under Clause 5.5.4.4. PRUDENTIAL SECURITY Overview 5.6.1.1 5.6.1.2 5.6.1.3 5.6.1.4 Prudential Security Requirements are imposed to ensure the effective operation of the IMEM by providing a level of comfort that IMEM Trading Participants will meet their obligations to make payments as required under the IMEM Rules. Subject to Clause 5.6.1.3, an IMEM Trading Participant shall provide and maintain a prudential security complying with the requirements of this Section 5.6. The [MEM Operator may exempt an IMEM Trading Participant from the requirement to provide a prudential security under Clause 5.6.1.1, if the IMEM Operator believes that: (a) It is likely that the amount payable by the /MEM Operator to that IMEM Trading Participant under the IMEM Rules will consistently exceed the amount payable to the IMEM Operator by that IMEM Trading Participant under the IMEM Rules in respect of that Billing Period; or (b) It is unlikely that the IMEM Trading Participant will be required to pay any amounts to the IMEM Operator. If, under Clause 5.6.1.3, the MEM Operator has exempted an IMEM Trading Participant from the requirement to provide a prudential security under Clause 5.6.1.1, then the MEM Operator may vary or cancel the exemption at any time by giving written notice of the variation or cancellation of the exemption to the IMEM Trading Participant. Amount and Form of Prudential Security 5.6.2.1 5.6.2.2 5.6.2.3 Subject to Clause 5.6.1.3, each Pending IMEM Member and Mandatory Participant shall provide its expected Average Exposure to the IMEM Operator in respect of the previous six (6) Billing Periods, or such other information in accordance with the relevant IMEM Manual, which shall be the basis of the Prudential Security Requirements of the IMEM Trading Participant or Pending IMEM Member. The IMEM Operator shall provide written confirmation of acceptance of the submission in Clause 5.6.2.1 to the IMEM Trading Participant or Pending IMEM Member. For Pending IMEM Members, the submission is a prerequisite to be registered as an IMEM Member. The IMEM Operator may review and change its determination of an IMEM Trading Participant's Average Exposure at any time, provided that any change to an IMEM Trading 48 === dc2013-05-0008-pages-54.ppm === 5.6.2.4 5.6.2.5 Participant's Average Exposure will apply no earlier than thirty (30) days from the date that the IMEM Operator notifies the IMEM Trading Participant of the change. Each IMEM Trading Participant shall ensure that at all times the aggregate undrawn and unclaimed amounts of current and valid prudential security held by the IMEM Operator in respect of that IMEM Trading Participant is not less than that IMEM Trading Participant’s Average Exposure. The prudential security provided by an [MEM Trading Participant under this Section 5.6 shall be in cash. 5.6.3. Exposure Monitoring and Margin Calls 5.6.3.1 5.6.3.2 5.6.3.3 5.6.3.4 5.6.3.5 5.6.3.6 5.6.3.7 5.6.3.8 5.6.3.9 Regularly, the IMEM Operator shall monitor its Actual Exposure to each IMEM Trading Participant in respect of previous Billing Periods under the IMEM Rules. Before the end of each calendar year, the IMEM Operator shall review the Average Exposure of the IMEM Trading Participant. \f the IMEM Operator reasonably considers that the amount of prudential security being maintained by any IMEM Trading Participant has become inadequate or exceeds the Average Exposure, considering the level of its transactions in the IMEM, it shall notify the [MEM Trading Participant of the discrepancy and shall require to post an additional prudential security in the event that amount of security is inadequate. The IMEM Trading Participant shall post the additional amount of prudential security determined under Clause 5.6.3.2 no later than the date required by the /MEM Operator. If the amount of the prudential security maintained by an IMEM Trading Participant has exceeded the Average Exposure in six (6) consecutive Billing Periods, the IMEM Trading Participant may opt to refund the excess amount from the MEM Operator; provided that no default incident occurred during same period. If, at any time, the IMEM Operator's Actual Exposure to an IMEM Trading Participant exceeds the amount of the prudential security maintained by that IMEM Trading Participant, the IMEM Operator shall make a Margin Call by giving notice to the IMEM Trading Participant. The IMEM Trading Participant must satisfy the Margin Call within the period determined under Clause 5.6.3.7 by providing additional prudential security sufficient to the required amount or prepaying the amount of payable sufficient to reduce the Actual Exposure. The prepayment under Clause 5.6.3.5 shall be applied to the settlement amount in the closest Billing Period until fully consumed. The IMEM Trading Participant shall satisfy the Margin Call under Clause 5.6.3.5 not later than the end of banking hours on the third Business Day to occur after receipt of the Margin Call. If an IMEM Trading Participant fails to satisfy a Margin Call under Clause 5.6.3.7, or fails to provide adequate prudential security under Clause 5.6.3.3, then the /MEM Operator shall give the [MEM Trading Participant a Suspension Notice. If, even without a Margin Call, the IMEM Trading Participant becomes aware that its prudential security has deteriorated and its aggregate value has become less than its Average Exposure, it shall immediately replace or replenish the same to the required amount. 5.6.4 Drawdown of Prudential Security 49 === dc2013-05-0008-pages-55.ppm === 5.6.4.1 5.6.4.2 5.6.4.3 5.6.4.4 In the event that an IMEM Trading Participant fails to pay its obligations by the due date, the IMEM Operator may immediately draw on the prudential security provided by the IMEM Trading Participant, without need of prior consent. If the [MEM Operator draws down on the prudential security provided by an [MEM Trading Participant, the IMEM Operator shall notify the IMEM Trading Participant of the date and amount of the drawdown within one (1) Business Day after the drawdown. The IMEM Trading Participant shall replenish its prudential security by the amount specified in the drawdown notice not later than the end of banking hours on the second Business Day after the IMEM Operator notified them under Clause 5.6.4.2. If an IMEM Trading Participant fails to replenish its prudential security deposit under Clause 5.6.4.3 then the IMEM Operator shall give the IMEM Trading Participant a Suspension Notice. 50 === dc2013-05-0008-pages-56.ppm === Chapter 6 Market Information 6.1 MARKET INFORMATION 6.1.1 6.1.2 Provision of Information 6.1.1.1 6.1.1.2 6.1.1.3 6.1.1.4 6.1.1.5 6.1.1.6 6.1.1.7 6.1.1.8 The IMEM Operator shall: (a) Disseminate information which it acquires pursuant to the IMEM Operator’s functions in accordance with its rights, powers and obligations in a manner which promotes ease of entry into and the orderly operation of the IMEM; and (b) Protect such information from any use or access contrary to the provisions of the IMEM Rules. Pursuant to Clause 6.1.1.1, the IMEM Operator shall specifically perform the following: (a) Maintain, adhere to and publish an IMEM Manual to disseminate and protect information; (b) Maintain and publish a data catalogue, listing each type of market information and document produced or exchanged in accordance with the [MEM Rules, and setting out the timing and frequency of publication or transfer for each type of information and document; and (c) Maintain and publish electronic communication procedures under which information shall be exchanged between the /IMEM Operator, the Mindanao System Operator and IMEM Members, as set out in Section 6.1.2. The IMEM Operator, the Mindanao System Operator and IMEM Members shall publish and transfer market information in accordance with the procedures and timetable described in Clause 6.1.1.2. In addition to any specific obligation of the MEM Operator under the IMEM Rules to provide information, the IMEM Operator shall, upon request, make available to IMEM Members any information concerning the operation of the IMEM provided that said information is not confidential or commercially sensitive. The MEM Operator may charge a fee reflecting the cost of providing such information. The IMEM Operator shall make available to the ERC all pertinent information which would help the latter effectively perform its regulatory function. The [MEM Operator shall make available to the DOE all pertinent information which would help the latter effectively perform its energy policy-making function. The IMEM Operator shall provide the ERC and DOE all necessary facilities to effectively monitor the operation of the /MEM, in real-time and for review purposes. The IMEM Operator shall retain all information provided to it under the IMEM Rules for at least five (5) years in a form it deems appropriate for reasonable access as may be required by the ERC or the DOE. Electronic Information Exchange 6.1.2.1 Where these IMEM Rules specify, require or otherwise contemplate the regular and frequent transfer of information between any of the IMEM Operator, the Mindanao System 51 === dc2013-05-0008-pages-57.ppm === 6.1.3 6.2 6.2.1 6.2.2 6.1.2.2 6.1.2.3 Operator and IMEM Members, such transfer shall be provided by means of an electronic communication system unless the IMEM Rules specify otherwise. Information transferred by means of an electronic communication system shall be in accordance with the templates included in the said electronic communication system and the electronic communication procedures published under Clause 6.1.1.2 (c). As far as practicable, the [MEM Operator shall incorporate a binding acknowledgement receipt in its electronic communication systems which would establish the time the pertinent information is actually received. Market Information Website 6.1.3.1 6.1.3.2 6.1.3.3 6.1.3.4 6.1.3.5 The IMEM Operator shall regularly maintain a Market Information Website in which it will publish information for access by [MEM Members or for the general public. Information is deemed to be published by the /MEM Operator when the information is posted on the Market Information Website and made available to the general public. The IMEM Operator shall publish information on the [MEM Demand and IMEM Prices on the Market Information Website. The IMEM Operator shall maintain and publish a list of all MEM Members that identifies: (a) Current, former and suspended IMEM Members; (b) Categories of IMEM Members; and (c) Dates of registration, de-registration and change of status. The IMEM Operator shall provide hard copies of any information published under this Section 6.1.3 upon request and reimbursement of cost to produce the same. The [MEM Operator may further evaluate the necessity of reimbursement of cost from the requesting entity. CONFIDENTIALITY OF INFORMATION Confidentiality 6.2.1.1 The IMEM Operator shall maintain and publish a record of the confidentiality status for each type of market information and document produced or exchanged in accordance with the IMEM Rules. 6.2.1.2 All IMEM Members, the IMEM Operator and the Mindanao System Operator: (a) Shall not disclose confidential information to any person or entity except as permitted by the IMEM Rules; (b) Shall only use or reproduce confidential information for the purpose for which it was disclosed or for a purpose consistent with the MEM Rules; (c) Shall only allow access to confidential information to those persons for whom access is necessary; (d) Shall use all reasonable endeavours to prevent unauthorized access to confidential information which is in its possession or control; and (e) Shall ensure that any person or entity to whom it discloses confidential information observes the provisions of this Section 6.2 in relation to that information. Exceptions 52 === dc2013-05-0008-pages-58.ppm === 6.2.2.1 This Section 6.2 does not prevent the disclosure of information (confidential or otherwise) 6.2.2.2 6.2.2.3 by any persons or entities: (a) If the relevant information is at that time generally and publicly available other than as a result of a breach of this Section 6.2; or (b) With the written consent of the person or persons who provided the relevant information under the IMEM Rules; or (c) To the ERC, DOE, NEA, MinDA or any other government authority having jurisdiction over an IMEM Member, pursuant to the IMEM Rules or otherwise; or (d) By or on behalf of an IMEM Member or the IMEM Operator for the purposes of or in connection with: (i) Complying with the IMEM Rules, or advising an IMEM Member or the IMEM Operator in relation to the IMEM Rules; or (ii) Legal proceedings, arbitration, expert determination or other dispute resolution mechanisms relating to the /MEM, or advising an entity in relation thereto; or (iii) Financing arrangements, investment or a disposal of assets; Provided that the person receiving the information undertakes in writing not to further disclose that information to any other person; or (e) For the purposes of: (i) The operation, security and planning of the Mindanao Power System in accordance with the Grid Code; or (ii) Protecting the safety of personnel or equipment; or (iii) Complying with any instrument (including any contractual instrument or understanding governing the relationship between the parties); Any entity who receives information disclosed in accordance with Clause 6.2.2.1: (a) Shall not disclose the information to any person, except as provided by the IMEM Rules; and (b) Shall only use the information for the purposes for which it was disclosed under Clause 6.2.2.1. In the case of a disclosure under Clause 6.2.2.1(c), the disclosing party shall take appropriate precautions to ensure that the recipient keeps the information confidential in accordance with the provisions of this Section 6.2 and only uses the information for the purposes for which it was disclosed. 6.2.3. Indemnity and Survival 6.2.3.1 6.2.3.2 Each IMEM Member indemnifies the IMEM Operator against any claim, action, damage, loss, liability, expense or outgoing which the /MEM Operator pays, suffers, incurs or is liable for in respect of any breach of this Section 6.2 by that IMEM Member or any officer, agent or employee of that MEM Member, provided that no IMEM Member shall be liable for any of the foregoing to the extent they arise from the gross negligence or wilful misconduct of the IMEM Operator. Notwithstanding any other provision of the [MEM Rules, a person shall continue to comply with this Section 6.2 after that person has ceased to be an IMEM Member. 53 === dc2013-05-0008-pages-59.ppm === Chapter 7 - System Security and Market Suspension 7.1 MARKET SUSPENSION 7.1.1 Market Suspension and Intervention 7.1.1.1 7.1.1.2 7.1.1.3 7.1.1.4 7.1.1.5 7.1.1.6 7.1.1.7 The ERC may declare the operation of the /MEM to be suspended in any situation which competent governmental authorities declare to be a local, national, or international emergency, and which will render the /MEM ineffective. The [MEM Operator and the Mindanao System Operator may intervene in the operation of the IMEM for any IMEM Interval for which: (a) The Mindanao System Operator has declared an IMEM Emergency under Clause 7.2.1.1 or Clause 7.3.2.1; or (b) The IMEM Operator has notified a Force Majeure Event under Clause 7.4.2.2. Regardless of whether the beginning or end of an IMEM Emergency or Force Majeure Event is declared or notified before, at, or after the actual beginning or end of the event, the IMEM Operator and the Mindanao System Operator may declare an [MEM Intervention in any IMEM Interval to which the IMEM Emergency or Force Majeure Event applies. In the event of market suspension IMEM Members and Pending IMEM Members shall follow all directions of the ERC. If the ERC makes no specific direction, IMEM Members and Pending IMEM Members shall follow the same protocols as are in place for IMEM Intervention. In the event of an /MEM Intervention: (a) The Mindanao System Operator shall be responsible for giving directions to and coordinating the actions of IMEM Network Service Providers; (b) IMEM Network Service Providers are responsible for giving directions to and coordinating the actions of IMEM Trading Participants directly connected to their system; and (c) The Mindanao System Operator and the IMEM Operator shall coordinate their actions to restore normal operation of the Mindanao Power System and the IMEM. IMEM Trading Participants acknowledge that: (a) The operation of the Mindanao Power System involves risks to public safety and property and therefore accepts that the provisions of this Chapter 7 are appropriate and reasonable; (b) Their business interests will be subordinate to the need for the /MEM Operator and Mindanao System Operator to implement emergency procedures in accordance with Section 7.2.1 and to make declarations and issue emergency directions under Section 7.2.2 in an emergency; and (c) Subject to (a), the Mindanao System Operator shall issue emergency directions, and shall report such action to the IMEM Operator. Nothing in this Chapter 7 shall limit the ability of the Mindanao System Operator or IMEM Operator to take any action or procedure under this Chapter 7 which either the Mindanao System Operator or the IMEM Operator considers in their absolute discretion to be necessary to protect persons, property, or the environment. 54 === dc2013-05-0008-pages-60.ppm === 7.1.2 7.1.3 7.1.4 7.1.1.8 Notwithstanding any other provision contained in these IMEM Rules, the DOE or the ERC may investigate or require explanations regarding any market suspension or [MEM Intervention. Exemption from Liability due to Market Suspension and Intervention 7.1.2.1 7.1.2.2 In the event of market suspension or [MEM Intervention, any action of the IMEM Operator, the Mindanao System Operator or an IMEM Trading Participant in compliance with the emergency procedures provided in this Chapter 7 shall not constitute a breach of the MEM Rules, except in the case of an act committed in bad faith or gross negligence. Neither the IMEM Operator, nor the Mindanao System Operator, nor any IMEM Network Service Provider shall be liable for any loss incurred by an [MEM Trading Participant as a result of any action taken by the Mindanao System Operator or IMEM Operator under this Chapter 7. Declaration of Market Suspension and Intervention 7.1.3.1 7.1.3.2 7.1.3.3 7.1.3.4 7.1.3.5 7.1.3.6 7.1.3.7 7.1.3.8 When the ERC declares the suspension of the IMEM, the ERC shall notify the IMEM Operator as soon as possible. When the IMEM Operator is notified that the [MEM has been suspended, the IMEM Operator shall notify IMEM Members and Pending IMEM Members as soon as possible. The IMEM is deemed suspended at the start of the /MEM Interval in which the ERC advises the IMEM Operator that the [MEM is suspended. Following a declaration by the ERC under Clause 7.1.1.1, the IMEM is to remain suspended until the ERC notifies the IMEM Operator that IMEM operations may resume. When the IMEM Operator is notified that IMEM operations may resume, the IMEM Operator shall promptly notify IMEM Members and Pending IMEM Members of the resumption, and of the /MEM Interval in which IMEM operations will resume. The IMEM is deemed to resume at the start of the /MEM Interval which the IMEM Operator has notified to IMEM Members and Pending IMEM Members. Notwithstanding the suspension, the Mindanao System Operator may issue directions in the event of an IMEM Emergency to IMEM Members and Pending IMEM Members. When the IMEM Operator determines that it needs to intervene in the operation of the IMEM,, it shall notify the Mindanao System Operator and IMEM Trading Participants as soon as possible. Effect of Market Suspension and Intervention 7.1.4.1 7.1.4.2 7.1.4.3 During an [MEM Interval in which the IMEM is suspended, the IMEM Rules will continue to apply with such modifications as the IMEM Operator reasonably determines to be necessary, taking into consideration the circumstances and conditions giving rise to the suspension. Notwithstanding the suspension, the [MEM Operator may declare any [MEM Interval in which the IMEM is suspended to be an IMEM Trading Interval, in accordance with the relevant IMEM Manual. In the event of IMEM Intervention, the IMEM Rules will continue to apply, and all IMEM processes shall remain in place, except that the Mindanao System Operator is not required 55