=== dc2016-05-0007-pages-1.ppm === 5 Republic of the Philippines ee DEPARTMENT OF ENERGY DEPARTMENT CIRCULAR NO. —DC2O0Il@ - 05 - 0007 ~~ PROVIDING POLICIES FOR FURTHER IMPROVEMENTS OF THE OPERATIONS AND METERING INSTALLATIONS OF THE METERING SERVICES PROVIDERS (MSPs) IN THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) AND RETAIL MARKET WHEREAS, Section 30 and 37(f) of the Electric Power Industry Reform Act of 2001 (EPIRA) provides that the Department of Energy (DOE) is mandated to, among others: a) Supervise the restructuring of the electric power industry; b) Ensure the reliability, quality and security of supply of electric power; c) Develop policies and procedures and, as appropriate, promote a system of energy development incentives to enable and encourage electric power industry participants to provide adequate capacity to meet demand including, among others, reserve requirements; d) Jointly with the electric power industry participants, shall establish the Wholesale Electricity Spot Market (WESM) and formulate the detailed rules governing the operations thereof; and e) Exercise such other powers as may be necessary to attain the objectives of the EPIRA; WHEREAS, on 28 June 2002, the DOE, with the endorsement of the electric power industry participants, promulgated the WESM Rules through Department Circular No. DC2002-06- 003; WHEREAS, on 09 January 2013, the DOE promulgated the Retail Rules through Department Circular No. DC2013-01-0002, entitled “Promulgating the Retail Rules for the Integration of Retail Competition and Open Access in the Wholesale Electricity Spot Market”; WHEREAS, on 26 June 2013, the Retail Market commenced its commercial operation and integration in the WESM; WHEREAS, pursuant to the governance structure under the WESM Rules and Retail Rules, the Philippine Electricity Market Auditor (PEM Auditor)/ PEM Audit Committee (PAC) was created among, others, to conduct annual audits of the systems, procedures and performance of the Market Operator (MO) and review of metering installations and arrangements of the Metering Services Providers (MSPs) for the wholesale and retail markets; WHEREAS, the PAC, with the assistance of WESM-Technical Working Group created by the DOE, conducted the Ist Metering Arrangements Review for WESM MSPs and the 24 Metering Arrangements Review for both WESM MSP and Retail MSPs in 2014 and 2015, respectively, through an Independent Auditor; Energy Center, Bonifacio Global City, Taguig City, Philippines : Tel. No. 479-2900; Fax 812-6194 f === dc2016-05-0007-pages-2.ppm === WHEREAS, the PAC through Philippine Electricity Market Corporation (PEMC) submitted to the DOE the Audit Reports of the aforementioned independent audits or review of the MSPs for appropriate action and consideration; WHEREAS, the DOH studied the abovementioned Audit Reports, and it recognized that several audit findings such as appropriate metering, sites, ownership and accountability of meters and implementation of business procedures should be addressed to improve the operations and efficiency of the MSPs in the integrated WESM and Retail Market as well as provide a more accurate metering and settlement data; NOW THEREFORE, from the foregoing premises and pursuant to its authority under the EPIRA and the WESM Rules, the DOE hereby adopts, issues, and promulgates the following policies for the improvement of metering installations and operations of the Metering Services Providers (MSPs) in the WESM and Retail Market: Section 1. Ownership and Accountability of Metering Intallations in the WESM. In addition to the provisions of the WESM Rules, Retail Rules and Market Manuals, the Metering Services Providers (MSPs) and Trading Participants shall adhere to the following guidelines: a) Irrespective of the ownership of the metering facilities, the designated MSP is responsible for the regular testing, calibration and maintenance of the Metering Installations, and shall ensure that the said requirements for Metering Installation are complied with; b) The relevant Trading Participant shall collaborate with the MSP on the conduct of the said testing, calibration and maintenance, and shall allow the MSP to access the said Metering Installations at all times; and c) The MSP shall perform such regular testing, calibration and maintenance of the said Metering Installations subject to the metering charge to the relevant Trading Participant, provided that such charges shall be filed by the MSP with the Energy Regulatory Commission (ERC) for approval. Section 2. Appropriate Location of Metering Points and Market Trading Node in the WESM. In order to minimize the use of Site Specific Loss Adjustment (SSLA) and to enhance the nodal-based load forecasting of the Market Operator, the Connection Point, Metering Installations/ Metering Point and the installation of Remote Terminal Units (RTU) in the Grid shall be harmonized or properly located in the same point. For this purpose, the National Grid Corporation of the Philippines (NGCP) as the Transmission Service Provider shall provide, install and maintain a Remote Terminal Unit (RTU) at the Connection Point of the Users (i.e. Generating Plants and Loads) to the Grid in accordance with the Philipine Grid Code (PGC). Likewise, the NGCP as the Metering Services Provider (MSP) shall ensure that all Metering, Installations shall be installed at the Connection Point as required in the PGC. lo ensure compliance and timely completion of this directive, the NGCP shall submit to the DOE within two (2) months from the effectivity of this Circular of its compliance program for all Connnection Points which are not yet provided with RTUs and Metering Installations. Said compliance program shall incorporated in the NGCP rate applications to be filed with the ERC for the recovery of costs. DC2016=O05-0007- Policies for Metering Service Provider Page 2 of 3 v === dc2016-05-0007-pages-3.ppm === Further, PEMC shall coordinate with NGCP on the said installation of RTUs in oder to properly represent the Market Trading Nodes with the said Connection Point of the Users to the Grid in the the WESM’s Market Network Model. PEMC and NGCP shall continuously collaborate for the achievement of this undertaking and shall provide quarterly report or updates to the DOE. Section 3. Metering Service Providers Internal Business Procedures. All MSPs in the WESM and Retail Market shall develop and update an Internal Business Procedures with regard to their obligations on the WESM Rules, Retail Rules, Market Manuals and other related DOE and ERC issuances. ‘The said internal procedures shall cover, as minimum, the following categories: a) Meter installation, registration and maintenance; b) Meter data collection an uploading, including management of Meter Trouble Report (MIR); c) Internal performance monitoring and improvement; and d) Enforcement of the requirements of the Rules and Codes on non-owned metering. All MSPs are hereby encouraged to collaborate with each other for the development or enhancement of their Internal Business Procedures. Section 4. Retail Metering Service Provider. To ensure consistency of the Retail Rules with the DOE Department Circular Nos. DC2012-05-0005 and DC2012-11-0010, which prescribed the general policies for the implementation of the Retail Competition and Open Access (RCOA) particularly on the designation of Distribution Utilities as default Retail Metering Services Providers, the NGCP in coordination with the PEMC shall review and recommend to the Rules Changes Committee the appropriate rules changes in the applicable provisions of the Retail Rules and Market Manuals. Section 5. Regulatory Support. The ERC, in the exercise of its powers and functions under the EPIRA, is hereby enjoined to support the timely approval of the necessary funding requirement or rate application of the NGCP or the MSPs for the proper implementation of the policies set herein. Section 6. Separability Clause. If for any reason, any section or provision of this Circular is declared unconstitutional or invalid, such parts not affected shall remain valid and subsisting. Section 7. Effectivity. This Circular shall take effect upon publication in at least two (2) newspapers of general circulation and shall remain in effect until otherwise revoked. Issued this May 2016 at the DOE, Energy Center, Rizal Drive, Bonifacio Global City, Taguig City, Metro Manila. ZENAIDA WW. MONSADA Secretary i Republic of the Philippines DEPARTMENT OF ENERGY TT 19 MAY 2016 DC2016-05- 0007 - Policies for Metering Service Provider Page 3 of 3