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DEPARTMENT OF ENERGY

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DEPARTMENT CIRCULAR NO. DC 2013- 07- el a

ADOPTING FURTHER AMENDMENTS TO THE WESM RULES
(Defining the Gross Ex-Post Energy Settlement Quantity for Market Trading Nodes)

WHEREAS, Section 37 of the Electric Power Industry Reform Act provides that the DOE,
jointly with the electric power industry participants, shall establish the Wholesale Electricity
Spot Market (WESM) and formulate the detailed rules governing the operations thereof;

WHEREAS, on 28 June 2002, the DOE, upon the joint endorsement of the electric power
industry participants, promulgated the WESM Rules through Department Circular No.
2002-06-003;

' WHEREAS, any changes, amendments, and modifications to the WESM Rules shall be
undertaken in accordance with the provisions of Chapter 8 thereof;

WHEREAS, on 20 March 2013, the Philippine Electricity Market Corporation (PEMC)
submitted its proposed amendment to Clause 3.13.6 (Defining the Gross Ex-Post Energy
Settlement Quantity for Market Trading Nodes) of the WESM Rules to the Rules Change
Committee (RCC) for consideration and approval;

WHEREAS, the proposal intends to introduce more solid basis for the netting of

bidirectional energy flows in a trading interval recorded in the meter as read in Clause 3.13.6
of the WESM Rules;

WHEREAS, on 03 April 2013, the RCC and the PEMC thoroughly discussed the Proposed
amendments during the 73"4 RCC Meeting;

WHEREAS, on the same meeting, the RCC agreed to published the proposal in the WESM
website to solicit comments from participants and other interested parties;

WHEREAS, on 15 May 2013, the RCC in its 74k Meeting deliberated upon the comments

submitted and agreed to adopt the proposed amendment as originally submitted by PEMC
for endorsement to the PEM Board;

WHEREAS, on 20 June 2013, after due evaluation and deliberation, the PEM Board has
resolved to approve for endorsement to the DOE the above stated amendment to the WESM
Rules;

WHEREAS, on 01 July 2013, the above stated amendment was endorsed to the DOE for
approval, consistent with Chapter 8 of the WESM Rules;

Republic of the Philippines h SGBLy -. :
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Tels.: (Trunks) 840-1401 to 40; Fax 840-2067: 840-2236; 840-2067 (Domestic); 632-840-2173; 632-840-2236; 632-840- 2087
(International)

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

Section 1. Amendment to the WESM Rules..

1.1 Clause 3.13.6 under Defining the Gross Ex-Post Settlement Quantity for Market
Trading Nodes is amended to read ~

For each trading interval, the gross ex-post energy settlement quantity before being
adjusted for bilateral contracts for each market trading node shall be determined by
the Market Operator as follows:

(a) If the market trading node is defined under clause 3.2.21 as lying on the
boundary of the power system operated by the System Operator, the gross ex-
post energy settlement quantity for the market trading node is the net metered
flow into the power system operated by the System operator through the
associated meter, provided however, that if the market trading node is a
customer node, and there is no ERC-registered embedded generation facility
associated with that node, or the source of injection cannot be traced, any
injection shall not be accounted for in determining the gross ex-post energy
settlement quantity for that node;

XXX XXX XXX

(d) If the net metered flows registered through a meter is inconsistent with the
expected power flows at the market trading node to which that meter is
associated, the Metering Services Provider shall determine and shall notify the
Market Operator and the relevant Trading Participant the appropriate manner
of determining the gross ex-post settlement quantity for that market trading node.

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.

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

Issued this Lo July 2013 at the DOE, Energy Center, Rizal Drive, Bonifacio Global City,
Taguig City, Metro Manila.

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CARLOS JERICHO L. PETILLA
Secretary

els Republic of the Philinn;
ee DEPARTMENT OF ENER EES
- IN REPLYING PLS CiTE:

_ SOE-JLP.139

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