=== dc2016-10-0014-pages-01.ppm === Republic of the Philippines DEPARTMENT OF ENERGY DEPARTMENT CIRCULAR NO, DO 201 - lo - 0Ol4 | aad ADOPTING FURTHER AMENDMENTS TO THE WESM RULES (Enhancements to WESM Design and Operations) WHEREAS, Sections 30 and 37(f) of the Electric Power Industry Reform Act (EPIRA) provides that the Department of Energy (DOE), jointly with the electric power industry participants, shall establish the Wholesale Electricity Spot Market (WESM) and tormulate the detailed rules governing the operations thereof; WHEREAS, on 28 June 2002, the DOE, jointly with the electric power industry participants, promulgated the WESM Rules through Department Circular No, DC2002-06-003; WHEREAS, any changes. amendments, and modifications to the WESM Rules and its Market Manuals shall be undertaken in accordance with the provisions of Chapter 8 thereot; WHEREAS, on 05 November 2015, the DOF issued Department Circular No, DC2015-10- 0015 providing the policies for further enhancement of the design and operations of the WESM, which were based on the WESM Design Study commissioned on 02 April 2013 and results of the yearly independent audits of the system and procedures of the market operations; WHEREAS, on 01 December 2015, pursuant to the said policies of the DOE, the Philippine Electricity Market Corporation (PEMC) submitted to the Rules Change Committee (RCC) the Proposed Changes to the WESM Rules for the Implementation of Enhancements to Market Design and Operations; WHEREAS, on 02 December 2015, the RCC during, its 107 RCC Meeting initially discussed the said proposal, which thereafter approved its posting in the WESM website to solicit comments from market participants and other interested parties; WHEREAS, on 03 February 2016 and 02 March 2016, the RCC during its 10%» and 110% RCC Meetings, respectively, deliberated on the said proposal giving due course to the comments received from market participants and the DOE; WHEREAS, on 03 March 2016, the RCC during its 111 RCC Meeting further deliberated on and finalized the said proposals, which thereafter approved its endorsement to the PEM Board; WHEREAS, on 31 March 2016, after due evaluation and deliberation, the PEM Board during its 115% PEM Board Meeting approved for endorsement to the DOE the above stated RCC proposed amendments to the WESM Rules; WHEREAS, on 08 April 2016, the above stated amendments to the WESM Rules were submitted to the DOE for final approval, in compliance with Chapter 8 of the WESM Rules; Energy Cente, Aaa! Orive Bonitacio Gional Giry Taguig City Metro Mania Prwlippines Tein. (Trunks) 840-1401 to 40 Fax 640-2057. 840-2236. 840-2067 (Domeahc) 622-440-2172 632-840-2236 832-840 2067 (trterruatnoral === dc2016-10-0014-pages-02.ppm === WHEREAS, the DOE thoroughly reviewed the abovementioned PEM Board-approved amendments to the WESM Rules, made further revisions and deemed it consistent with the objectives of the WESM and the DOE policies on the enhancement of WESM design and operations; and NOW THEREFORE, pursuant to its authority under the EPIRA and the WESM Rules, the DOE hereby adopts, issues, and promulgates the following amendments to the WESM Rules: Section 1. Amendments to the WESM Rules. The following, provisions in the WESM Rules are hereby amended: (a) Clause 1.3.1.2 under Responsibilities of the Market Operator is amended to read as - "1.3.12 In pertorming Clause 1.3.1.1 (d), the Market Operator shall: XXX NXN NNN (b) Identify any significant variations in accordance with the guidelines to be developed in Clause 1.3.1.3; and XXX XXX XXX” (b) Clause 1.3.1.3 under Responsibilities of the Market Operator is amended to read as - “13.1.3 The Market Operator shall, in consultation with WVESM Participants, develop, review and update, as may be necessary, guidelines as to what constitutes a significant variation ” Clause 1.4.2.4 under Composition of the PEM Board is amended to read as - ~_ “1.4.24 The PEM Board shall consist ot: XXX XXX OXKA (b) One (1) Director representing the TRANSCO or its concessionaire; XX* XXN XNA (d) Clause 2.3.1.8 under Generation Company is amended to read as - "23.1.8 A Generation Company is required to operate scheduled generating umts and priority dispatch generating unts in accordance with the scheduling and dispatch procedures described in Chapter 3, and in accordance with the dispatch conformance standards specified in accordance with Clause 3.8.5.” (e) Clause 2.3.3 under Trading Participant is amended to read as - “2.3.3 Trading Participant XXX XXA XXX DCD TOE - Amenuiments ty WESM Rules (Enhancements to WESM Design and Operations Page 2or45 === dc2016-10-0014-pages-03.ppm === 2.3.3.5 If at any time a Trading Participant ceases to be eligible to be registered as a Trading Participant in accordance with Clause 2.3.3.4, that Trading Participant shall inform the Market Operator accordingly and, as soon as practicable after the Market Operator becomes aware that a Tradmg Participant is no longer eligible to be registered, the Market Operator shall issue a suspension notice in respect of that Tradimg Participant in accordance with Clause 3.15.8.” (f) Clause 2.3.5.3 under Ancillary Services Provider is amended to read as - "2.3.5.3 Prior to the registration of a Trading Participant or a Network Service Provider as an Ancillary Services Provider eligible to provide reserves in accordance with Clause 2.3.5.1, the Systent Operator shall: XXN XXX XXX (d) Provide certification to the Market Operator which sets out the relevant information determined under Clause 2.3.5.3 (a), (b) and (¢).” (g) Clause 2.3.5.5 is added as a new provision under Ancillary Services Provider to read as- "2.3.5.5 Ancillary Services Providers shall comply with the dispatch conformance standards developed pursuant to Clause 3.8.5." (h) Clause 2.7.2 under Suspension is amended to read as - "2.7.2 Effect of a Suspension Notice If a Trading Participant who is either a Direct WESM Member or an Indirect WESM Member receives a suspension notice trom the Market Operator in accordance with any provision of the WESM Rules, that Trading Participant is suspended trom participation in the spot market unless and until the Market Operator declares the suspension notice to be revoked in accordance with Clause 3.15.8." (i) Clause 3.1 under The Market is amended to read as - “3.1 Scope of Chapter 3 This Chapter 3 sets out the rules which govern the operation of the spot market and related matters, including but not limited to: (a) The definition of the market network model, Customer pricing zones, reserve categories and reserve regions, dispatch mterval, settlement mterval and timetable; xxx XXX XNA id) The procedures for provision of ancillary sermces and tor determining payment tor reserves; (e) The procedures for preparing week ahead projections, day-ahead projections, and hour-alead propections; DCI 10014 ~ Amendments to WESM Rules (Enhancements 1 WESM Design and Operations) Payne: 38 43 === dc2016-10-0014-pages-04.ppm === XXA XNA XX*N (i) The procedures for determining, paying and receiving settlement amounts; ” XXX XAK XXX. (j) Clause 3.2.1.1 under Market Network Model is amended to read as - “3.2.1.1 The Market Operator shall maintain and publish a market network model, which will be used for the purpose of central scheduling and dispatch, pricing and settlement. The Market Operator shall also publish any adaptations or adjustments to the market network model.” (k) Clause 3.2.1.2 under Market Network Model is amended to read as - "3.2.1.2 The market network model shall represent fairly, and in a manner which will facilitate consistent and reliable operation of the power system: XXX XXX XXX (b) The sub-transmission network under the control of the Distribution Utility and other aspects of the power system which may materially attect dispatch of scheduled generating units or pricing within the spot market.” (1) Clause 3.2.1.4 under Market Network Model is amended to read as - "3.2.14 Where appropriate, the Market Operator in coordination with the System Operator or with other Network Service Providers shall make alterations to the market network model, so as to maintain: (a) the relationship between the market network model and the transmission and /ot the sub-transmission network, and XXN XXX OXNA.” (m)Clause 3.2.2 and its sub-clauses under Market Network Model, Trading Nodes, and Pricing Zones are amended to read as - “3.2.2 Market Trading Node 3.2.2.1 A market trading node is a designated point in the market network model where energy is bought or sold based on the dispatch schedules and prices determined by the market dispatch optimization model XNX XXX XNA 3.2.2.3 If the connection point of the Trading Participant could not be represented in the market network model or if a particular market trading node must be assigned to more than one (1) Trading Participant because the conditions set in Clause 3.2.2.2 are not met, the affected Trading Participants, the Metering Services Provider and the DOW 140014 - Amendments 10 WESM Rules (Enhancements to WESM Design and Operations) Pape 4 ot 45 === dc2016-10-0014-pages-05.ppm === Network Service Provider will mutually agree on adjustments that will be implemented by the Market Operator and the System Operator. 3.224 Nodal prices at market trading nodes shall be used tor the settlement ot energy for both generators and Customers. 3.2.25 The Market Operator shall maintain, publish, and continuously update a register of market trading nodes, defined in accordance with Clause 3.2.2.1 so as to accurately reflect changes in the market network model and the WESM Member responsible for cach market trading node.” (n) Clause 3.2.3.1 under Customer Pricing Zones is amended to read as - "3.2.3.1 Customer market trading nodes may be grouped into Customer pricing zones in accordance with the procedures to be developed by the Market Operator and subject to the approval of the PEM Board. The Market Operator shall maintain and publish the Customer pricing zones to be used tor the settlement of energy tor Customers.” (o) Clause 3.3.1.1 under Introduction of Ancillary Services is amended to read as - “3.3.1.1 Anetllary services are services that are essential to the management of power system secunty, that facilitate orderly trading in electricity and ensure that electricity supplies are of an acceptable quality as defined in the Gnd Code,” (p) Clause 3.3.1.3 under Introduction of Ancillary Services is amended to read as - “3.3.1.3 The requirements for ancillary services are to be met in the following ways: XXX XXX -XNX (b) By the System Operator procuring ancillary seroiwes in accordance with Clause 333." (q) Clause 3.3.2.1 under Ancillary Services Contracting by the System Operator is amended to read as - "3.3.2.1 The System Operator shall use reasonable endeavors to ensure that sufficient facilites ave available and operable to provide tor XXX MXN 0 OXXN (c) availability, at all times, of the number of independent power sources able to provide black start-up facilities, determined in accordance with the procedures developed by the System Operator to ascertain the quantities of ancillary services which the System: Operator shall procure.” (r) Clause 3.3.3 and its sub-clauses under Ancillary Services are amended to read as - “3.3.3 Ancillary Services Agreements XXX NAN NXA DC2Oe-L-0014 - Amendments to WESM Rules (Enhancements i WESM Design and Openitions) Page 5 o1 45 === dc2016-10-0014-pages-06.ppm === 3.3.3.2 The System Operator shall arrange for the provision of adequate ancillary services for each region through any or a combination of the tollowing: (a) by entering into contracts with Ancillary Services Prowiders; or (b) by competitive spot market trading, in accordance with Clause 3.3.4. 3.3.3.3 Payment for ancillary services purchased under an ancillary services agreement may include: (a) A payment for both contracted capabilities and a measure of the ancillary services provided; (b) A demonstrable spot market opportunity cost, that is lost spot market revenue or opportunity costs incurred by the Ancillary Services Provider as a result of providing the ancillary services; (c) A fair return to the Ancillary Services Provider in respect of any additional direct costs associated with providing the ancillary service; and (d) When applicable. subject to Clause 33.4.1, a price for that ancillary seroice established by a competitive spot market mechanism 3.3.3.4 Payments for ancillary services that are provided under Clause 3.3.3.2 (b) are to be made by the Market Operator via the settlements system in accordance with Clause a.13.13: 3.3.35 Ancillary services agreements shall contain a provision pursuant to which the capability of the relevant Ancillary Services Provider to provide ancillary serinces shall be demonstrated from time to time to the satisfaction of the System Operator according, to the standard test procedures established under the Gnd Code and Distrifution Code.” Clause 3.3.4.3 is added as a new provision under Reserve Market Arrangements to read as - — (s “%3.4.3 The Market Operator, in consultation with the System Operator, shall determine an appropriate set of reserve regions that will be used for the purpose of setting reserve requirements, and determining reserve prices and reserve cost recovery charges.” (t) Clause 3.3.44 is added as a new provision under Reserve Market Arrangements to read as - “3.3.44 The Markel Operator shall maintain and publisi the set of reserve categories, as well as the defined reserve regions, that shall be traded in the spot market.” (u) Clause 3.3.5 under Ancillary Services is amended to read as - “3.3.5 Reserve Market Cost Recovery’ (v) Clause 3.3.5.1 under Reserve Market Cost Recovery is amended to read as - DCQOe 1H 1g - Amendments 10 WESM Rules (Enhancements ty WESM Design ard Opreratients) Page oot 45 === dc2016-10-0014-pages-07.ppm === "3.3.5.1 The Market Operator shall maintain and publish reserve cost recovery zones within which reserve cost recovery charges may be recovered to meet each locationally specific requirement.” (w) Clause 3.3.5.2 under Reserve Market Cost Recovery is amended to read as - “3.3.5.2 The costs of reserves are to be recovered through the settlement amounts calculated by the Market Operator under Clause 3.13.9 in accordance with the cost recovery formula to be developed by the Market Operator for each reserve category.” (x) Clause 3.3.5.4 under Reserve Market Cost Recovery is amended to read as ~ “3.3.5.4 When allocating, reserve cost recovery charges to Trading Participants in a particular reserve cost recovery zone as published in Clause 3.3.5.1, the Market Operator may recover the cost of reserves from Trading Participants and Network Service Providers.” (y) Clause 3.3.7 and its sub-clauses under Ancillary Services are amended to read as - "3.3.7 Approval. Periodic Review and Evaluation of Reserve Market Arrangements 3.3.71 The Market Operator, in consultation with System Operator and WESM Participants shall conduct a periodic review and evaluation of the following: (a) Reserve categories, reserve regions, reserve market cost recovery formula, and locationally specific reserve requirements; and (b) Procedures developed under this Clause 3.3 with a view to refining these procedures to promote the }VESM objectives and better meet the requirements of the power system operation. 3.3.7.2 Any proposed changes in the procedures reviewed under this Clause 3.3.7 shall be approved in accordance with the rules change process set out in Chapter 8.” (z) Clause 3.4 under The Market is amended to read as - “3.4 Market Dispatch Interval, Settlement Interval and Timetable” (aa) Clause 3.4.1 and its sub-clauses under Market Dispatch Interval, Settlement Interval and Timetable are amended to read as - "3.4.1 Dispatch Interval 3.4.1.1 A dispatch mterval is defined to be a five (5) minute period. 3.4.1.2 The market dispatch optinuzation model defined in Clause 3.6 will be run by the Market Operator for each dispatch interval. If the market dispatch optimization muxtel is not successfully rut for any dispatch interval, then the results of the hour-ahead projection shall be used for that dispatch mteroal in accordance with the relevant Market Manual DC2016-10-00) ~ Amendments to WESM Rules (Enhancements to WESM Design and Operations) Page 7 of 45 === dc2016-10-0014-pages-08.ppm === 3.4.1.3 Nodal energy dispatch prices for energy and dispatch imterval prices for each reserve category and each reserve region will be determined for each dispatch mteroal” (bb) Clause 3.4.2 and its sub-clauses under Market Dispatch Interval, Settlement Interval and Timetable are amended to read as - “34.2 Settlement Interval 3.4.2.1 A settlement terval is defined to be a period of one (1) hour, commencing on the hour. 3.4.2.2 Energy settlement prices and energy settlement quantities shall be determined tor every settlement interval, in accordance with Clauses 3.10.6 and 3.13, respectively. 34.23 Reserve settlement prices and reserve settlement quantities tor each reserve region and reserve category shall be determined for every settlement interval, in accordance with Clauses 3.10.7 and 3.13.5, respectively.” (cc)Original Clause 3.4.2 and its sub-clauses under Market Dispatch Interval, Settlement Interval and Timetable are renumbered and amended accordingly to read as - “3.4.3 Timetable XXN NXN NNN 3.4.3.2 The timetable shall include the schedule and procedure tor the tollowing: (a) Determining and publishing week alwad projections tor each hour including precise specification of the market horizon to be used for such projections; (b) Determining and publishing day-ahead projections tor each hour including precise specification of the market honzon to be used for such projections; (c) Submitting offers, bids and data; (d) If necessary, for any other action to be taken by the Market Operator, the System Operator, or any WESM Member during the operation of the spot market; (e) Determining and publishing hour-ahead projections for each dispatel interval including precise specification of the market horizon to be used tor such projections; and (f) Determining and publishing /oad torecasts, real-time despatch schedules, and market prices. XXX XXX XXX °° (dd) Clause 3.5.2 and its sub-clauses under Submission of Offers, Bids. and Data are amended to read as - "3.5.2 Network Service Provider Data 3.5.2.1 Each Network Service Provider shall submit to the System Operator standing network data relating to all network elements which are under that Network Sermce DCD 1-OG ~ Amendments to WESM Rules (Enhancements ty WESM Design and Operatic) Payee But 45 === dc2016-10-0014-pages-09.ppm === Provider's control, which the Market Operator shall include in the market network model, in accordance with Clause 3.5.2.6, and the Grd Code and Distribution Code, 3.5.2.2 Each Network Service Provider shall submit to the System Operator any planned outages of network elements which are under that Network Service Provider's control and that are included in the market network model. 3.5.2.3 Each Network Service Provider shall submit to the System Operator, in real time, information on the present state of its network including status of switches or circuit breakers and all available measurements for all network elements which are under that Network Sermer Provider's control and that are included in the market network model 3.5.24 If there is any material long term change in the status or configuration ot a network under the control of a Network Service Prooider, the standing network data relevant to that network shall be revised by the relevant Network Service Provider, and submitted to the System Operator. 3.5.25 Each Network Service Provider shall submit period-specific network data variations to the System Operator as soon as any material change in previously submitted network data becomes apparent with respect to the expected state of any of its networks in any dispatch interval of any trading day in the current week ahead market horizon. 3.5.26 The standing network data and any variations to that data submitted in accordance with Clause 3.5.2.5 shall be provided by Network Service Providers in a form which allows the System Operator to readily derive and verify the information specified in Appendix A2, as it may pertain to any dispatch mterval of any trading day in the week ahead market horizon. 3.5.2.7 Each Network Service Provider shall immediately advise the System Operator ot any circumstances which threaten a significant probability of material adverse change in the state of its network in any dispatch mteroal of any trading day in the current week ahead market horizon.” (ece)Clause 3.5.3.1 under System Operator Data is amended to read as - "3.5.3.1 The System Operator shall submit to the Market Operator standing network data relating, to all network elements which are under a Network Service Provuler's control and included in the market network model, in accordance with the timetable.” (ff) Clause 3.5.3.2 under System Operator Data is amended to read as - pe “3.5.3.2 Where necessary, the System Operator shall, in accordance with the timetable, promptly advise the Market Operator to: (a) Vary the market network model representation employed for any dispatch mterval to take account of information received trom Network Service Providers; and (b) Apply, or vary, any system security constramts, overriding constramts or reserve requirements constraints to be applied im any dispatch interval to take account of current, or projected, system conditions.” DXO20 16. 1040014 - Amendments to WESM Rules (Enhancements to WESM Destin and Operations) Pape Hat 45 === dc2016-10-0014-pages-10.ppm === (gg) Clause 3.5.3.5 under System Operator Data is amended to read as - “3.5.3.5 In accordance with the timetable, any revision under Clause 3.5.3.2 to the system representation or constramts to be employed with respect to any market dispatch interval shall take effect the next time a market dispatch optimization model run is initiated.” (hh) Clause 3.5.3.6 under System Operator Data is amended to read as - "3.5.3.6 The System Operator shall advise the Market Operator of any circumstances which threaten a significant probability of material adverse change in the state of the network, or system, in any dispatch imterval of any trading day in the current week ahead market honzon.” (ii) Clause 3.5.3.7 under System Operator Data is amended to read as - "3.5.3.7 The System Operator shall submit to the Market Operator a variable renewable energy aggregated generation forecast for each of the dispatch intervals within the next trading day and update the same once every dispatch interval in accordance with the relevant Market Manuals and the relevant provisions of the Grd Code.” (jj) Clause 3.5.3,10 is added as a new provision under System Operator Data to read as - “3.53.10 The Market Operator shall publish the market network model representation, all network status data, any system security constramts, overriding constramts or reserve requirements constraints used ino any market projections, dispatches, prices and settlements.” (kk) Clause 3.5.3.11 is added as a new provision under System Operator Data to read as - "3.53.11 The Sustem Operator shall be responsible for taking measures to ensure that the Market Operator is provided with data in a timely and reliable manner, and which has undergone a process of quality checking by the System Operator and cross-quality checking by the Market Operator, and, if required and teasible, substitution from alternative primary sources.” (Il) Clause 3.5.4 and its sub-clauses under Submission of Offers, Bids and Data are amended to read as - "3.54 Load Forecasting All load forecasts at each Customer market trading node in the market network model shall be specified in units of megawatt (MVV) and will apply to the end of the relevant dispatch interval unless otherwise stated. 3.54.1 Each Customer may submit a forecast in respect of each dispatcl: interval tor each of its registered load facilities tor each trading day of the week in accordance with the timetable. DCI 10-0014 ~ Amendments te WESM Kules (Enhancements ty WESM Design and Operations) rayne Wot a === dc2016-10-0014-pages-11.ppm === NAN XXX XXX 3.5.43 The unrestrained net load forecast shall be prepared so as to represent the net load as it would be, or would have been, in the absence ot load shedding. 3.5.4.4 If loss of load is expected to occur in any dispatch mterval, a restrained net load forecast for that dispatch interval shall be prepared on the same basis, but accounting for load shedding to the extent that it is expected to occur 3.54.5 The Market Operator shall annually review the performance of its nodal load forecasts used for week ahead projections, day-ahead projections, hour-ahead projections, and determining dispatch schedules 3.5.4.0 The Market Operator shall periodically review the methodologies for performing, nodal load forecasts used tor week ahead projections, day-ahead projections, hour-ahead projections, and determining, dispatch schedules,” (mm) Clause 3.5.5.1 under Generation Offers and Data is amended to read as - "3.5.5.1 Each Scheduled Generation Company including, Generation Compames with bilateral contracts shall submit a standing generation offer for each of its scheduled generating units for each dispatch interval in each trading day of the week in accordance with the timetable. The standing generation offer shall apply until revised or updated by the Scheduled Generation Company.” (nn) Clause 3.5.5.3 under Generation Offers and Data is amended to read as - "3.5.5.3 Each Generation Company shall submit check data to be used by the Market Operator, in accordance with Clause 3.5.12, to assist in determining the validity of any generation offer which may be submitted by the scheduled generator ~ (oo) Clause 3.5.5.4 under Generation Offers and Data is amended to read as ~ "3.5.5.4 Each Non-Scheduled Generation Company shall submit a standing nomination of loading levels for each of its non-scheduled generating units for each dispatch interval in each trading day of the week in accordance with the timetable. The standing nomination of loading levels shall apply until revised or updated by the Non- Scheduled Generation Company.” (pp) Clause 3.5.5.5 under Generation Offers and Data is amended to read as - “3.5.5.5 Generation Compames shall provide to the Market Operator and the System Operator standing, projected outputs in respect of their must dispatch generating units and priority dispatch generating units tor each dispatch mterval in each trading day of the week in accordance with the relevant Market Manuals and provisions of the Gnd Code. The standing projected outputs shall apply until revised or updated by the relevant Generation Company.” (qq) Clause 3.5.6.1 under Customer Demand Bids is amended to read as - DCD i> 10-0014 - Amendments to WESM Rules (Enhancements te WESM Design atl Operations) Page 11 of 45 === dc2016-10-0014-pages-12.ppm === “3.5.6.1 Each Customer may submit a standing demand bid in respect of each dispatch interval tor each of its registered scheduled load facilities for each trading day of the week in accordance with the timetable.” (rr) Clause 3.5.7.2 under Generation Company Reserve Offers is amended to read as - "3.5.7.2 When applicable, subject to Clause 3.3.4.2, each scheduled generator registered as an Ancillary Services Provider in respect of a reserve facility in a particular reserve region shall submit a standing reserve offer for each of its relevant reserve facilites in respect of that reserve region for each dispatch mterval for each day of the week in accordance with the timetable. The standing reserve offer shall apply until revised or updated by the scheduled generator registered as an Ancillary Services Provider.” (ss) Clause 3.5.8.1 under Customer Reserve Offers is amended to read as - “3.5.8.1 This section shall apply only upon commencement of the spot market for ancillary services established under Clause 3.3.4 with the ancillary service certification by the System Operator and upon approval of ERC for other types of ancillary reserves.” (tt) Clause 3.5.8.2 under Customer Reserve Offers is amended to read as - “3.5.8.2 When applicable, subject to Clause 3.3.4.2, each Customer registered as an Ancillary Services Provider in respect of a reserve facility in a particular reserve region may submit a standing reserve offer for each of its interruptible load facilities in respect of that reserve region for each dispatch interval for each day of the week in accordance with the timetable.” (uu) Clause 3.5.8.3 under Customer Reserve Offers is amended to read as - "3.5.8.3 Each reserve offer submitted by a Customer under Clause 3.5.8.2 shall: XNX XXX XXX (c) Include the information specified in Appendix A1.2.” (vv) Clause 3.5.9.1 under Revision of Standing Ofters/ Bids is amended to read as “3.5.9.1 A standing generation offer, a standing reserve offer, a standing nomination of loading levels, a standing projected output, or a standing demand bid tor any dispatch interval in any day of the week may be revised by the relevant Generation Company or Customer in accordance with the timetable.” (ww) Clause 3.5.10 under Submission of Offers, Bids and Data is amended to read as - "3,5,10 Initial Setting of Market Ofters/ Bids DC201-10-0014 ~ Amendments to WESM Rules (Enhancements to WESM Design and Openitions) Page 12 of 45 === dc2016-10-0014-pages-13.ppm === When the Market Operator updates a market projection under Clause 3.7, the standing offers, standing nomination of loading levels, standing projected outputs, and standing bids shall be effective in the absence of revised market offers. nomination of loading levels, projected outputs, and market bids for the corresponding dispatch interval and day of the week.” (xx) Clause 3.5.11.1 under Revision of Market Offers/Bids, Nomination of Loading Levels, and Projected Outputs is amended to read as - "3.5.11.1 Each scheduled Trading Participant which has submitted standing offers or bids may revise any of its market offers or market Inds tor any dispatch interval in any trading day of the current week ahead market horizon in accordance with the timetable, and subject to Clause 3.5.11.4 and each revised market offer or market hud submitted shall provide the information set out in Appendix Al.” (yy) Clause 3.5.11.5 under Revision of Market Offers/Bids, Nomination of Loading Levels, and Projected Outputs is amended to read as - "3,.5.11.5 Market bids or market offers for any dispatch interval may be revised by Trading Particrpants prior to gate closure if they no longer represent a reasonable estimate of (a) the expected availability of the relevant generating unit or scheduled load tor that dispatch interval; or (b) the demand Inds or offers likely to apply for the real-time dispatch optimization of that dispatch interval,” (zz) Clause 35.11.60 under Revision of Market Offters/Bids, Nomination of Loading Levels, and Projected Outputs is amended to read as - "3.5.11.6 In submitting market bids or market offers for any dispatelt interval, Trading Participants shall also take into account the tollowing (a) The time remaining until the occurrence of the relevant dispatch imterval involved: and XXX XXX OXAX” (aaa) Clause 3.5.11.7 under Revision of Market Offers/Bids, Nomination of Loading Levels, and Projected Outputs is amended to read as - “3,5,.11.7 Trading Participants shall immediately advise the System Operator and Market Operator of any circumstances which threaten a significant probability of material adverse change in the state of their facilities in any dispatch interval of any trading day in the current week ahead nurket hionzor. ” XXX xX XXA (bbb) Clause 3.5.1.8 under Revision of Market Offers/ Bids, Nomination of Loading Levels, and Projected Outputs is amended to read as - “3.5.11,8 Prior to the spot market commencement date, the System Operator shall provide the Market Operator, tor publication, a non-exhaustive list of events that will be DCIO16 HLOOL - Amendments to WESM Rules (Enhancements to WESM Design and Operations) Pape 13 of 45 === dc2016-10-0014-pages-14.ppm === deemed to be or to cause a material adverse change in circumstances for the purposes of Clause 3,5.11.7." (cee) Clause 3.5.11.9 under Revision of Market Offers/Bids, Nomination of Loading Levels, and Projected Outputs is amended to read as - “3.5.11.9 Each market offer, nomination of loading level, projected output, or market bid for a particular dispatch interval is deemed to stand with effect from the time it is initiated under Clause 3.5.10 or revised under Clause 3.5.11 and will be used in preparing all market forecasts, dispatch targets or prices for that dispatch interval, unless and until a valid revision to the market offer, nomination of loading level, projected output, or market bid is accepted by the Market Operator.” (ddd) Clause 3.5.13 and its sub-clauses under Submission of Offers, Bids and Data are amended to read as - “3.5.13 Overriding Constraints 3.5.13.1 Subject to Clause 3,5.13.2, the System Operator may require the Market Operator to impose constramts on the power flow, energy generation of a specific facility in the gnd to address system security threat, to mitigate the effects of a system emergency, or to address the need to dispatch generating units to comply with systems, regulatory and commercial tests requirements, The System Operator, the Market Operator and the Trading Participants, shall develop the criteria and procedures for dispatch of generating units that are required to run asa result of the imposition or relaxation of constraints stated in the preceding paragraph, and the manner for compensating said units. XXX XXX XXX 3.5.13.2 Prior to the spot market commencement date, the System Operator, in consultation with Trading Participants and the Market Operator, shall publish a general description of the nature of circumstances which will cause it to recommend imposition or relaxation of constraints and the type of action which may be taken. 3.5.13.3 When acting under Clause 3.5.13.1, the System Operator shall: (a) Notify the relevant Trading Participant of the situation as soon as practicable; and (b) Record appropriate details of the incident. 3.5.13.4 At the request of the Market Operator or any WESM Member, the Market Surveillance Committee may review any decision by the System Operator or the Market Operator to impose or relax constramts, as the case may be. 3.5.13.5 If a review conducted under Clause 3.5.13.4 concludes that a Trading Parheipant or the Market Operator or the System Operator has acted inappropriately, and has thereby imposed significant costs on other parties, the Market Surveillance Committee may reter that matter to the Enforcement and Compliance Officer under Clause 7.2 or require that Trading Participant or the Market Operator or the System Operator (as the case may be) to pay compensation in accordance with Clause 7.2.” DC 16-10-0018, - Amendments to WESM Rules (linhancements to WESM Design and Operations) Page 14 of 45 === dc2016-10-0014-pages-15.ppm === (eve) Clause 3.6.1.1 under Model Definition is amended to read as - “3.6.1.1 The market dispatch optimization mode! simultaneously determines dispatch targets for the end of a dispatch interval, reserve allocations for the dispatch interval, associated nodal energy dispatch prices at all trading, nodes in the power system and when applicable reserve prices for all reserve regions ” (fff) Clause 3.6.1.2 under Mode! Definition is amended to read as - "3.6.1.2 The Market Operator shall maintain and publish the detailed formulation of the market dispatch optimzation model in accordance with the WVESM objectives.” (geR8) Clause 3.6.1.4 under Model Definition is amended to read as - “3.6.1.4 In formulating the market dispatch optimization model, the Market Operator and System Operator shall ensure that the dispatch for each dispatch interval is made subject to: XXX XXX OX (b) Constraints representing the technical characteristics of reserve facility categories, including joint energy and reserves capacity limits and joint energy and reserves ramping limits, where applicable; (c) Energy balance equations tor each node in the market network model ensuring that the net load forecast tor the end of the dispatch interval at each market trading node as determined by the Market Operator is met; (d) Constraints representing limitations on the ramp rates from the plants statuses or standing data deemed to apply prior to the commencement of the dispatch terval; (e) Constraints defining power system reserve requirements as provided by the System Operator under Clause 3.5.3 including, co-optimized dispatel: and applicable ancillary services requirements; (f) Network constraints, as implied by the market network model and any system security constraints provided by the System Operator under Clause 3.5.3; xX XXX XXX (1) Any additional constramts that pertain to the operational modes of generators, loads or similar facilities.” (hhh) Clause 3.6.1.5 under Model Definition is amended to read as - "3.6.1.5 The market dispatch optimization model shall be designed so that. subject to the approximations and adjustments provided for by Clause 3.6.4: XXX XXX XXX c) It will produce nodal energy dispatch prices for each market trading node, and when applicable reseroe prices for each reserve category and reserve region, so that the recommended dispatch targets for each individual Trading Participant would be optimal for that participant at those prices, given their offers and demand bids and DOA ine TOOK =~ Amendments to WESM Rules (Enhancements to WESM Design and Operations) Page 15 of 45 === dc2016-10-0014-pages-16.ppm === after accounting for other constramts which may affect that Trading Participant; and (d) It will perform its functions in accordance with the performance standards approved by the PEM Board in accordance with Clauses 13.2.3 and 10.4.10,2.” (iii)Clause 3.6.1.8 under Model Definition is amended to read as - “3.6.1.8 When restricting dispatch targets under Clause 3.6.1.7, the market dispatch optimization mode! shall consider the following, hierarchy when a combination of the groups are to be restricted: (a) Market offers of scheduled generating units; (b) Non-scheduled generating units; (c) Priority dispatch generating units; and (d) Must dispatch generating units.” (ii) Clause 3.6.2 and its sub-clauses under Market Dispatch Optimization Model are amended to read as - "3.6.2 Constraint Violation Variables and Coefficients Constramts that may be relaxed in the market dispatch optimization model shall be set up with one (1) or more non-negative violation variables and associated constraint violation coefficients to ensure that the market dispatch model will always find a solution which satisties all constraints, if such a solution exists. The constraint molation coefficients shall be set for: (a) market dispatches; and (b) market pricing re-nins when the oe dispatch has resulted in a non-zero violation variable. 3.62.1 The constramt violation coefficients shall be set for market dispatches so as to ensure that: (a) the market dispatch model will always find a solution which satisfies all constraints, if such a solution exists; and (b) the violated constramts are prioritized, such that the dispatches of network elements, loads and generating units are physically feasible and reflect the priorities or how the System Operator should manage system security and reliability. 3.6.2.2 The constraint violation coefficients shall be set for market pricing re-runs so as to ensure that: (a) the dispatches of all network elements, loads and generating units produced by the market optimization algorithm are approximately the same as the original market dispatches; and (b) the prices produced by the market optimization algorithm will be appropriate in all the circumstances, taking into consideration the processes defined in Clause 3.10 to adjust or override those prices for market projection, dispatch and settlement purposes when there are instances of non-zero constraint violation variable values. 3.6.2.4 The constraint violation coefficients may: DC2016-1)-0014 — Amendments to WESM Rules (Enhancements to WESM Design and Operations) Vave 16 ol 45 === dc2016-10-0014-pages-17.ppm === XXX XXX NXN (b) Increase progressively as the constraint eolation becomes more severe; and (c) Increase or decrease as a function of the length of time for which the constramt has been violated. 3.6.24 The constraint violation coefficients tor the nodal energy balance equations referred to in Clause 3.6.1.4 (c): (a) will be known as the nodal value of loss load (nodal Voll); and (b) may vary from node to node and/or be set so as to reflect application of nodal loss load priorities. 3.6.2.5 The Market Operator, in coordination with the System Operator, and in consultation with the WVESM Members shall regularly review the appropriateness and applicability of constramt violation variables and their associated constramt molation coefficients levels in accordance with Clause 10.4.11.1; and revise as may be necessary to ensure that it reflects the actual conditions of the network. Such revisions shall be approved by the PEM Board and shall be published in accordance with the timetable, 3,6.2.6 For constraints which use two (2) or more violation variables, all violation variables must have upper bounds other than the violation variable corresponding to the highest constraint violation coefficient.” (kkk) Clause 3.6.3 under Market Dispatch Optimization Model is amended to read as ~ “3.63 Interpretation of Model Outputs The output of the market dispatch optimization model is to be interpreted as providing energy and when applicable reserve dispatch targets tor the end of each dispatch interval to which the market dispatch optimization model is applied.” (1) Clause 3.6.6 under Market Dispatch Optimization Model is amended to read as - "3.6.6 Market Settlement The market shall be cleared, prices determined, and dispatch determined according, to the mode! results for each dispatch: mterval, in the torm that is written, The model results shall not be challenged ex-post. XXX XxX XXX (mmm) Clause 3.6.7 with sub-clauses are added as new provisions under Market Dispatch Optimization Model to read as - "3.6.7 Automatic Pricing Re-runs 3.6.7.1 Should the market dispatch optimization model result in one (1) or more non-zero constramt violation vanable values then the dispatch schedules shall remain the same DQ 1-001, ~ Amendments to WESM Rules (Enhancements io WESM Deskin and Operatuns) Page 17 of 45 === dc2016-10-0014-pages-18.ppm === but the prices for energy and reserves shall be determined from an automatic re-run of the market dispatch optimization model with relaxed constraints. 3.6.7.2 The purpose of the automatic market pricing reruns is to ensure that the energy and reserve prices reflect: (a) the marginal costs of supplying energy at each novde: (b) the marginal costs of supplying reserves; (c) shortage pricing, when there is a shortage of supply at a node or regional level; and (d) excess pricing when there is an excess of supply at a node or regional level. Such methodology for shortage pricing and excess pricing shall be approved by the DOE and ERC. 3.6.7.3 The automatic re-run of the dispatch optimization shall use the following changes to any of the constraints that had non-zero constraint violation variable values: (a) For each nodal energy balance constraint that was violated, the constraint molation coefficient tor the new violation variable shall be set; and (b) For all other constramts that were violated, each constraint’s requirement shall be reduced by the minimum amount to a level that prevents a violation of that requirement, 3.6.7.4 The automatic re-run shall solve the market dispatch optimization model with the reduced nodal energy and other violated constraint’ s requirements. 3.6.7.5 The prices determined trom the automatic pricing re-run shall be the prices used for projections, dispatch schedules and settlements, 3.6.7.6 The automatic re-run process of detecting non-zero constraint ptolation variable values, setting up the relaxed dispatch optimization and solving it shall occur as quickly as possible or the time nominated in the Market Operator's published performance standards as required in Clause 1.3.2.3. 3.6.7.7 Subject to the procedures published in accordance with Clause 3.6.7.8, the Market Operator may implement automatic pricing re-runs even where the market dispatch optimization model does not reflect non-zero constraint violation variable values, 3.6.7.8 Subject to the procedures approved by the DOE, the Market Operator shall develop and publish the procedures of the automatic pricing re-runs. Such procedures shall provide the criteria and conditions for performing the automatic pneing re-runs.” (nnn) Clause 3.7 under The Market is amended to read as - “3.7 Market Projections The Market Operator shall prepare and publish week alwad projections, day-alwad projections, and hour-ahead projections using the market dispatch optimization model, in accordance with the timetable” DCA 10-0014 = Amendments to WESM Rules (Enhancements to WESM Design and Operanons) Page 18 ot 45 === dc2016-10-0014-pages-19.ppm === (000) Clause 3.7.1.2 under Week Ahead Projections is amended to read as - “4.7.1.2 Week ahead projections shall be prepared tor all one (1) hour intervals within the relevant market honzon as defined in the timetable.” (ppp) Clause 3.7.1.3 is added as a new provision under Week Ahead Projections to read as ~ “3.7.1.3 Week ahead projections shall be based on the market dispatch optimization model defined in Clause 3.6 based on input data prepared by the Market Operator over the appropriate time horizon in accordance with Clause 3.7.4." (qqq) Clause 3.7.2.2 under Day-Ahead Projections is amended to read as - "3.7.2.2 Day-ahead projections shall be prepared for all one (1) hour intervals starting from the succeeding interval for up to the end of the next trading day, with load scenanos, Within the relevant market horizon as defined in the timetable.” (rrr) Clause 3.7.2.3 is added as a new provision under Day-Ahead Projections to read as - “3.7.2.3 Day-ahead projections shall be determined by running the market dispatch opiimizahon model defined in Clause 3.6 with input data prepared by the Market Operator over the appropriate time horizon in accordance with Clause 3.7.4.” (sss) Clause 3.7.3 and its sub-clauses under Market Projections are amended to read as - “3.7.3 Hour-Abead Projections 3.7.3.1 Hour-ahead projections shall be prepared using the market dispatch optimization model by the Market Operator and published at every dispatch interval, in accordance with the timetable, to assist Trading Participants to anticipate and respond to spot market conditions which might reasonably be expected to occur over the next hour. 3.7.3.2 Hour-alwad projections shall be prepared for all dispatch intervals within the relevant market horizon as defined in the timetable. 3.7.3.3 Hour-ahead projections shall be determined by running the market dispatch optimization model defined in Clause 3.6 with input data prepared by the Market Operator over the appropriate time horizon in accordance with Clause 3,74." (ttt) Original Clause 3.7.35 and its sub-clauses under Market Projections are renumbered and amended accordingly to read as - “3.7.4 Preparation of Market Projections XXX XXX XXA DC2 1g - Amendments to WESM Rules (Enhancements ti) WESM Design and Operations) Page 19 of 45 === dc2016-10-0014-pages-20.ppm === 3.7.4.3 The Market Operator shall prepare a market projection corresponding to each load scenario developed under Clause 3.7.4.2. XXX XXX XXX 3.7.4.5 Market projections shall be prepared by the Market Operator through the application of the market dispatch optimization model to all one (1) hour intervals or dispatch intervals, as applicable, within the relevant market horizon as defined in the Hmetable 3.7.4.6 When preparing week ahead projections and day-alead projections, the starting conditions for each successive one (1) hour interval shall be determined in respect of: (a) the first one (1) hour interval, as the actual, or expected, power system conditions at the time of the commencement of the market projection; and (b) subsequent one (1) hour intervals, as the projected power system conditions determined by the market dispatch optimization model for the end of the previous one (1) hour interval in that market projection. XXX XXX XXX 3.74.9 When preparing hour-ahead projections, the starting conditions for each successive dispatch interval shall be determined as follows: (a) In respect of the first dispatch interval, as the projected power system conditions determined by the market dispatch optimization model that was used to determine targets for the end of the current dispatch interval; and (b) In respect of subsequent dispatch intervals, as the projected power system conditions determined by the market dispatch optimization model for the end of the previous dispatch interval executed as part of the hour-ahead projection.” (uuu) Original Clauses 3.7.4 and 3.7.4.1 under Market Projections are renumbered and amened accordingly to read as - "3.7.5 Published Intormation 3.7.5.1 Based on the information referred to in Clause 3.7.4, each market projection published by the Market Operator in accordance with the timetable specified in the relevant Market Manuals shall contain the following information for each dispatch interval or one (1) hour interval, as applicable, in the period covered by the market projection: XXX XXX XXX (e) Projected reserve schedules for reserve region and reserve facility categories; XXX ¥XX XXX (h) identification and quantification of: DCA O- 10014 — Amendments te WESM Kules (Enhancements to WESM Design and Operations) Mager 2 ol 45 === dc2016-10-0014-pages-21.ppm === XXX (vvv) (i) projected nodal loss of load requirement, XXX ¥XN (iv) one (1) hour intervals or dispatch intervals tor which low or inadequate capacity margins are projected to apply; (v) projected congestion on market network lines; and (vi) non-zero constraint wolation variables and their associated constramt wmolation coefficients.” Clause 3.8.1 under Scheduling and Dispatch Implementation is amended to read as - “3.8.1 Responsibilities of the Market Operator Prior to commencement of each dispatch interval, the Market Operator shall, in consultation with the System Operator, and in accordance with the timetable prescribed in the relevant Market Manuals: (a) (b) (c) id) ~ (e) (#) (h) (1) (www) read as - Determine, or estimate, the status of all generation facility for that dispatch interval; Prepare a forecast of the unrestrained net load expected at each market trading node tor the end of that dispatch interval; Adjust that unrestrained net load forecast to account for nodal loss of load, if required, in accordance with Clause 3.9.5; Determine the most appropriate network configuration and state to be assumed for the end of that dispatch interval; Use the market dispatch optimization model to determine the target loading level in MIV tor each scheduled generating umt, must dispatch generating unit, pnonty dispatch generating unit, non-scheduled generating unit, scheduled load and reserve facility tor the end of that dispatel: interval using, the latest data from the System Operator and Trading Participants; Submit to the System Operator the dispatch schedule containing, the target loading levels to be achieved at the end of that dispatch mteroal, determined in accordance with Clause 3.8.1 (e). Send to all Trading Participants a dispatch schedule that contains target loading levels in respect of their scheduled generating unit, must dispatch generating umit, priority dispatch generating unt and non-scheduled generating units calculated under Clause 3.8.1 (e) tor each dispatch interval prior to the commencement of that dispatch imterval in accordance with the relevant Market Manuals; Ensure that the dispatch schedule issued to a must dispatch generating unit or prority dispatch generating unit includes the intormation on whether or not the scheduled output of the generating unit has been restricted in accordance with Clause 3.6.1.7; and Submit to the System Operator the hour-ahead Merit-Order Table ranked trom lowest to highest which shall be based on the offers prior the start of a one (1) hour settlement interval Clause 3.8.2.1 under Responsibilities of the System Operator is amended to DXC2U LOY - Amendments ty WESM Rules (Enhancements ty WESM Desitn and Operations) Payee 23 mt 45 === dc2016-10-0014-pages-22.ppm === “3.8.2.1 During each five (5) minutes dispatch interval, the System Operator shall use its reasonable endeavors to: (a) Monitor the implementation of the dispatch targets as determined by the Market Operator at the end of that dispatch interval; (b) Implement the hour-ahead Merit-Order Table provided by the Market Operator; (c) Maintain system security consistent with the requirements of the Grid Code; (d) Implement load shedding, it necessary, as provided by Clause 3.9; (e) Dispatch constrain-on or constrain-off generators or must-run units if all available reserves are exhausted during, a dispatch interval. The System Operator may also dispatch generators as must-run units in specific grid areas which have become isolated from the rest of the gnd and in which the Market Operator cannot determine the generator schedules; (f) In relation to (d) above, the System Operator shall incorporate to its ancillary service procurement plan must-run units as an additional type of ancillary service. For this purpose, the criteria and procedures developed under Clause 3.5.13 shall be revised accordingly; and (g) Intervene, where necessary, as provided by Clauses 6.3 and 65.” (xxx) Clause 3.8.2.2 under Responsibilities of the System Operator is amended to read as - "3.8.2.2 After each one (1) hour interval, in accordance with the timetable, the System Operator shall advise the Market Operator of: (a) (b) (c) (d) (e) (f) XXX situations in which it became necessary for dispatcl mstructions to deviate from the dispatch targets’ determined by the Market Operator; load shedding or other directions issued by the System Operator during, that one (1) hour interval; significant incidents in which ancillary services was called upon during that one (1) hour interval; network constraints which affected dispatch during, that one (1) hour interval; binding security constraints which affected dispatch during that one (1) hour interval; operational irregularities arising during that one (1) hour interval including but not limited to any circumstances in which there was prima facie evidence of a failure to follow dispateh mstructions; and XXX BXA. The System Operator shall likewise provide a dispatch deviation report to the Market Operator, in accordance with the timetable and the dispatch conformance standards in Clause 3.8.5, detailing among, others the circumstances and dispatch levels of units that were constramed-on or constramed-off or put on must-run during that one (1) hour interval.” (yyy) Clause 3.8.2.3 under Responsibilities of the System Operator is amended to read as - “3.8.2.3 Betore each dispatch interval, in accordance with the timetable prescribed in the relevant Market Manuals, the System Operater shall submit to the Market Operator DCA 10014 ~ Amendments by WESM Rules (Enhancements to WESM Design and Operations) Prague 22 of 45 === dc2016-10-0014-pages-23.ppm === the vanable renewable energy aggregated generation forecast for each interconnected system it operates in accordance with the Grid Code.” (zzz) Clause 3.83 and its sub-clauses under Scheduling and Dispatch Implementation are renumbered and amended accordingly to read as - “3.8.3 System Operator Implementation of Real-Time Dispatch 3.8.3.1 All dispatch targets shall be specified in units of megawatt (MVV) and will apply to the end of the relevant dispatch interval unless otherwise stated. 3.8.3.2 The Market Operator shall communicate the target loading levels to the Trading Participants through the market participant interface in accordance with the timetable. 3.8.3.3 All scheduled generating units and priority dispatch generating units shall follow all instructions from the System Operator, in accordance with the Gnd Code, the WESM Rules and pertinent Market Manuals, 3.8.3.4 Subject to Clause 3.8.3.5, if, in real time, the available generation from a must dispatch generating umt differs from the available generation assumed in the dispatch schedule provided to the System Operator, the System Operator shall allow the must dispatch generating untt to generate at its maximum available output, and, if all available frequency regulation is exhausted during a dispatch mterval, shall adjust the dispatch of other generating units, to compensate as required in accordance with relevant Market Manuals. 3.8.3.5 The System Operator shall instruct a must dispatch generating unit or a priority dispatch generating unit to restrict its Output or constrain its ramp rate to a level specified by the System Operator, but only while the grid is not operating in normal state, in accordance with the Gnd Code and the relevant Market Manuals.” 3.8.3.6 If the System Operator has instructed a must dispatch generating unit or a priority dispatch generating wut to restrict its output, the System Operator shall instruct the generating umt to remove the restriction as soon as practicable after the actual or potential system security issue has been resolved.” (aaaa) Clause 3.8.4.1 under Dispatched Trading Participants is amended to read as - “3.8.4.1 Scheduled generating units and priority dispatch generating units who are dispatched shall use reasonable endeavors to reach the target loading level by the end of that dispatch imterval and within the dispatch conformance standards specified in Clause 3.8.5 and those Trading Participants should not be required to operate in any different way unless required to respond to a direction in accordance with Clauses 6.3 and 65.” (bbbb) Clause 3.8.4.4 under Dispatched Trading Participants is amended to read as - “3.8.4.4 A must dispatch generating unt shall generate at its maximum available output at all times, unless the Market Operator or System Operator has instructed the generating unit to restrict output under Clauses 3.8.1 (h) or 3.83.5." DCQN1LO- 1-00), ~ Amendments to WESM Rules (Enhancements to WESM Design and Operations) Page 23 of 45 === dc2016-10-0014-pages-24.ppm === (cece) Clause 3.8.5 under Scheduling and Dispatch Implementation is amended to read as - "3.8.5 Dispatch Conformance Standards” (dddd) = Clause 3.8.5.1 is added as a new provision under Dispatch Conformance Standards to read as - "3.8.5.1 The Market Operator, in consultation with the System Operator and Trading Participants, shall develop dispatch conformance standards to be set torth in the relevant Market Manual.” (cece) Clause 3.8.5.2 is added as a new provision under Dispatch Conformance Standards to read as - “3.8.5.2 The dispatch conformance standards shall be consistent with the Gnd Code and Distribution Code and shall be set tor each type of plant.” (ffff) Clauses 3.8.5.3 1s added as a new provision under Dispatch Conformance Standards to read as - "3.8.5.3 The Market Operator, in consultation with the System Operator and Trading Parterpants, shall establish the procedures for the: (a) application of the dispatch conformance standards tor registered generating units or scheduled load facilities: (b) development and application of dispatch conformance standards tor Intending WESM Members, (c) monitoring and reporting of non-compliances; and (d) events that a faciity has been identified to be non-conforming,” (gage) Clause 3.8.5.4 is added as a new provision under Dispatch Conformance Standards to read as - “38.5.4 Checking for non-contormance shall take into account any ancillary service schedule, ancillary service responses, or emergency directions issued to dispatched Trading Participants, or the operation of a generation unit at its minimum stable level.” (hhhh) = Clause 3.8.5.5 is added as a new provision under Dispatch Contormance Standards to read as - “3.8.5.5 The Market Operator shall implement the procedures in Clauses 3.8.5.1 and 3.8.53 through a system to automatically check for non-conformance.” (iti) Clause 3.8.5.6 is added as a new provision under Dispatch Conformance Standards to read as - “3.8.5.6 The Market Operator, in consultation with the System Operator and Trading Partiapants, shall periodically review the application and the appropriateness of the procedures in Clauses 3.8.5.1 and 3.8.5.3." DCD H-OO}G = Amendments to WESM Rules (Enhancements © WESM Design andl Operations) Page 24.00 45 === dc2016-10-0014-pages-25.ppm === (jjjj)Clause 3.8.5.7 is added as a new provision under Dispatch Conformance Standards to read as - “3.8.5.7 The Market Operator shall maintain and publish the dispatch conformance standards in Clauses 3.8.5.1 and 3.8.5.3." (kkkk) = Original Clauses 3.8.6 and 3.8.7, 3.8.7.1 and 3.8.7.2 under Scheduling and Dispatch Implementation are hereby deleted. (111) Original Clause 3.8.8 and its sub-clauses under Scheduling and Dispatch Implementation is renumbered and amended accordingly to read as - “3.8.6 Sanctions of Trading Participants 3.8.6.1 Any Trading Participant who consistently fails to use its reasonable endeavors to act in accordance with dispatch schedules issued under Clause 3.8.1 (g), dispatch instructions issued by the System Operator, or who breaches the dispatch conformance standards published under Clause 3.8.5.7, may be liable of a sanction imposed under Clause 7,2. XXX XXX xxx” (mmmm) Clause 3.9.1 under Treatment of Load Shedding, Excess Generation and Reserve Violation is amended to read as - "3.9.1 Direction to Conduct Load Shedding System Operator may direct a WWESM Member to conduct load shedding in response to: (a) an overall shortage of supply capacity to meet the demand in a region as specified by the System Operator; or (b) other network conditions, as determined by the System Operator in accordance with the security and reliability guidelines established under the Grid Code and Distribution Code.” (nnnn) Clause 3.9.2 under Treatment of Load Shedding, Excess Generation and Reserve Violation is amended to read as - "3.9.2 Market Operator Advice on Nodal Loss of Load In the event that: XXX XXX XXX (b) dispatch optimization performed under Clause 3.8 indicates that nodal /oads are expected to be reduced by the presence of non-zero nodal energy constraint molation variables or nodal energy dispatch prices which are expected to be equal to, or exceed, nodal value of lost load at any Customer market trading node in the market network model, then the Market Operator shall immediately inform the System Operator of the presence of nodal loss of load.” DC20 16-10-0014 - Amendments to WESM Kules (Enhancements to WESM Design and Operations) Pape 23 of 45 === dc2016-10-0014-pages-26.ppm === (0000) Clause 3.9.3 under Treatment of Load Shedding, Excess Generation and Reserve Violation is amended to read as - "3.9.3 System Operator Responsibility to Initiate Load Shedding The System Operator: (a) shall, if informed by the Market Operator under Clause 3.9.2, act immediately in accordance with the security and reliability guidelines to mitigate the effects of the presence of the nodal loss of load or any other considerations which the System Operator considers relevant under the Grid Code and Distribution Code and any other applicable regulatory instrument; and (b) shall initiate load shedding in response to any other circumstances which it reasonably considers necessitates such action under the Gnd Code and Distribution Code or any other applicable regulatory instrument.” (pppp) Clause 3.9.4 under Treatment of Load Shedding, Excess Generation and Reserve Violation is amended to read as - "3.9.4 Advising of Load Shedding If it is anticipated that load shedding will occur in a dispatch imterval during the one (1) hour interval, the System Operator shall, as soon as possible, advise its load shedding plans to: XXX XXX ANN (qqqq) . Clause 3.9.5 under Treatment of Load Shedding, Excess Generation and Reserve Violation is amended to read as - “3.9.5 Revising Forecasts If advised by the System Operator of the likelihood of load shedding in any dispatch mnterval under Clause 3.9.4, the Market Operator shall, as soon as possible: (a) If practical within the time frame remaining before the start of that dispatch interval, revise the load forecasts to be used to determine the dispatch schedule for that dispatch interval in accordance with Clause 3.5.4.4, to account for those load shedding plans; and XXX XXX pds ai (rtrr) Clause 3.9.7 under Treatment of Load Shedding, Excess Generation and Reserve Violation is amended to read as - “3.9.7 Management of Load Shedding The System Operator shall manage all aspects of dispatching while the Market Operator shall manage dispatch pricing, during, periods when load shedding is required in accordance with the detailed procedures to be developed by the System Operator DCI 10019 — Amendments to WESM Rules (Enhancements te WESM Design and Operations) Page 20 01 45 === dc2016-10-0014-pages-27.ppm === and the Market Operator with WESM Participants, and subject to approval by the PEM Board, consistent with the Grd Code and Distribution Code.” (sss5) Clause 3.9.8.2 under Management Procedures for Excess Generation is amended to read as - "3.9.8.2 Where necessary to shut down generating systems under Clause 3.9.8.1, the System Operator shall manage all aspects of dispatching while the Market Operator shall manage pricing, in accordance with the procedures to be developed by the Market Operator, in consultation with the System Operator and WESM Participants, and subject to approval by the PEM Board. The procedures shall also take into account the occurrence of excess generation during /our-ahead projection and/or dispatch mterval when the System Operator has exhausted all mitigating measures to address the excess generation,” (tttt) Clause 3.9.8.3 under Management Procedures for Excess Generation is amended to read as - “3.9.8.3 During the hour-ahead projection and/or dispatch terval, it excess generation is imminent or is detected in the power system by the System Operator in accordance with the Gnd Code and it is established that the excess generation is being caused by a generating system that is not following its dispatch schedule or observing a linear ramp rate, then the Generation Company representing the generating system in the market may be liable of a sanction under Clause 7.2. The Generation Company representing the generating system that is not following, its dispatch schedule or observing, linear ramp rate, however, shall compensate other generation system that has been constrained-off by the System Operator. Such conditions shall also be considered in the procedures to be developed under Clause 3.9.8.2.” (uuuu) Clause 3.9.9.1 under Management Procedures for Reserve Violation is amended to read as - “3.99.1 Should either the dispatch optimization or any market projection indicate a violation of a reserve requirement. the Market Operator shall: (a) Promptly inform the System Operator that there is a reduction in the level of the reserve requirement. XXX XXX XXX" (vvvv) Clause 3.9.9.2 under Management Procedures tor Reserve Violation is amended to read as - "3.9.9.2 Thereafter, the Market Operator shall provide a regular report to the PEM Board, the DOE and ERC regarding the violation of the reserve requirement.” (wwww) Clause 3.10.1 under Determination of Market Prices is amended to read as - "310.1 Calculation of Prices For each dispatch imterval, the Market Operator shall calculate, and publish in accordance with the timetable: DXC201T 10-0014 ~ Amendments to WESM Kules (Enhancements to WESM Design and Operations) Maye 27 of 45 === dc2016-10-0014-pages-28.ppm === (a) Ex-ante nodal energy dispatch prices in accordance with Clause 3.10.2; (b) Ex-ante zonal energy prices in accordance with Clause 3.10.3; and (c) When applicable, reserve prices in accordance with Clause 3.10.7.” (XXXx) Clause 3.10.2 under Determination of Market Prices is amended to read as - “3.10.2 Determination of Ex-Ante Nodal Energy Dispatch Price The ex-ante nodal energy despatch price for each market trading node in any dispatch interval shall, subject to Clause 3.10.5, be determined as the ¢x-ante shadow price on the energy balance equation or equivalent mathematical formulation for that market trading node formed in accordance with Clause 3.6.1.4 (c), in the market dispatch optimization performed for that dispatch interval in accordance with Clause 3.8.1." (vyyy) Clause 3.10.4 under Determination of Market Prices is amended to read as - “3.10.4 Publishing Ex-Ante Prices According to Timetable The Market Operator shall publish the ex-ante nodal energy dispatch prices and the ex- ante zonal energy prices, prior to the commencement of the dispatch interval to which they apply in accordance with the timetable.” (zz2z) Clause 3.10.5 under Determination of Market Prices is amended to include new provisions to read as - 3.10.5 Pricing Error Notice 3.10.5.1 In the event where no ex-ante dispatch prices can be determined or communicated within the timeframe specified by the timetable, or the calculated prices are believed to be in error, notwithstanding the application of automatic pricing re-run under Clause 3.6.7.1, as a result of load shedding, occurrence of constraints wtolation coefficients, or for any other reason, the Market Operator shall issue a pricmg error notice, 3.10,5.2 Upon issuance of a pricing error notice, the Market Operator shall, as soon as practicable, implement a market pricing re-run. 3.10.5.3 The market pricing re-runs shall be performed through the market dispatch optimization model using appropriately revised inputs. 3.1054 The Market Operator shall develop and publish the procedures for the determination of the market pricing re-run prices. Such procedures shall provide the criteria and conditions for the market pricing re-run and the timetable for implementation. 3.10.5.5 The procedures developed for the market pricing re-runs shall be designed to produce prices reflecting supply shortages at any nodes where there was load shedding and prices reflecting excess supply where there was excess generation.” DQ HHO01d = Amendments to WESM Rules (Enhancements to WESM Design and Operations) Page 28 of 45 === dc2016-10-0014-pages-29.ppm === (aaaaa) = Original Clauses 3.10.6, 3.10.7 and 3.108 under Determination of Market Prices are hereby deleted. (bbbbb) Original Clause 3.10.9 under Determination of Market Prices is renumbered and amended accordingly to read as - “3.10.6 Determination of Energy Settlement Prices Subject to Clause 3.10.5, the energy settlement prices for each market trading node in each settlement tnterval shall be determined as: (a) (b) (c) (cccce) For generators, the dispatch schedule-weighted average nodal energy dispatch prices for the set of dispatch mtervals corresponding to that settlement mterval determined for that generator market trading node in accordance with Clause 3.10.2; For Customers, the dispatch schedule-weighted average of its nodal energy dispatch prices tor the set of dispatch intervals corresponding to that settlement interval determined tor that Customer market trading node in accordance with Clause 3.10.2; and For Customers that have been approved by the ERC to use zonal pricing, the ex- ante dispatch schedule-weighted average of the zonal energy prices for the set of dispatch intervals within that settlement interval determined for that Customer market trading node in accordance with Clause 3.10.3, if that node is deemed to be a Customer market trading node within a detined Customer pricing zone.” Original Clause 3.10.10 under Determination of Market Prices is renumbered and amended accordingly to read as - “3.10.7 Determination of Reserve Price and Reserve Settlement Price (a) When applicable, the reserve pnce for each market reserve zone and reserve category in each dispatch imterval shall be determined as the shadow price on the relevant reserve requirement constraint, defined in accordance with Clause 3.6.1.4 (e), in the dispatch optimization for that dispatch interval and published by the Market Operator before the start of that dispatch interval. (b) When applicable, the reserve settlement pce for each reserve zone and reserve category in each settlement interval shall be determined as the schedule-weighted average of the corresponding reserve prices for that reserve category.” (ddddd) Clause 3.11.1.1 under Market Information is amended to read as - “3.11.1.1 The Market Operator shall publish the tollowing: (a) Nodal energy dispatch prices for all dispatch mtervals and for each market trading node; (b) Energy settlement prices tor all settlement intervals and for each market trading node; (c) Zonal energy prices tor all dispatch intervals and for each Customer pricing zone; (d) Zonal energy settlement prices tor all settlement intervals and for each Customer PICINg ZONE; (e) When applicable, reserve prices and reserve settlement prices and requirements for each reserve region and reserve category; DC20 6-H ~ Amendments to WESM Rules (Enhancements to WESM Desyn and Operations) Pago 29 of 45 === dc2016-10-0014-pages-30.ppm === (f) Binding network constraints, for each dispatch interval in accordance with the tumetable; (g) Violated network and other constraints and the corresponding non-zero constramt violation variable values; (h) The status of all elements of the market network model such as network element outages, network switch and circuit breaker statuses; and (i) Settlement intormation to enable a WESM Participant to recreate or independently verify its settlements.” (eevee) = Clause 3.11.1.2 under Market Information is amended to read as - "3.11.1.2 As part of the information record under Clause 5.2.5, the Market Operator shall retain details of: XXX XNN NAN (c) actual availabilities of generating units and sciteduled load including, for each dispatch interval and dispatch offer and dispatch bid: XXX XXX XXX" (ftftf) Clause 3.11.1.3 under Market Information is amended to read as - "3.11.1.3 Each trading day, in accordance with the timetable, the Market Operator shall publish: (a) The dispatch schedule tor each scheduled generating unit, must dispatch generating umt, priority dispatch generating unit, non-scheduled generating unit and scheduled load tt. each dispatch interval in the settlement intervals tor the previous trading day; and (b) A summary of the information provided to it with respect to each dispatch interval by the System Operator in accordance with Clause 3.8.2.2.” (ggggg) Clause 3.11.14 is added as a new provision under Market Information to read as - “3.11.14 All intormation available to all market participants shall be deemed to be publicly available information.” (hhhhh) Clause 3.12.7 is added as a new provision under Financial Transmission Rights to read as - "3.12.7 Price Substitution Methodology for Congestion Prior to the implementation of the financial fransmission rights, the Market Operator shall develop and publish a Market Manual that details the methodology for price substitution in the event of extreme nodal price separation arising from network congestion.” (iit Clause 3.13.1 under Settlement Quantities and Amounts is amended to read as - DOING TOO — Amendments to WESM Rules (Enhancements to WESM Design and Operations) Page Mot 45 === dc2016-10-0014-pages-31.ppm === "3,13,1 Submission of Bilateral Contract Data for Energy” (iii) Clause 3.13.1.1 under Submission of Bilateral Contract Data for Energy is amended to read as - "3.13.1.1 Trading Participants who sell electricity pursuant to bilateral contracts and wish those Ilateral contracts to be accounted for in settlements after each trading day, in accordance with the billing and settlement timetable, shall: (a) Submit a schedule to the Market Operator specifying the MWH1 bilateral sell quantities at each relevant market trading node, in each settlement interval of that trading day; XXX XXX -XXN™ (Kkkkk) Clause 3.13.2 under Settlement Quantities and Amounts is amended to read as ~ "3.13.2 Submission of Bilateral Contract Data for Reserves” (IN) Clause 3.13.21 under Submission of Bilateral Contract Data for Reserves is amended to read as - “3.13.2.1 When applicable, Tradmg Participants who sell reserve capacities pursuant to bilateral contracts with the System Operator, shall submit these bilateral contracts after each trading day, in accordance with the billing and Ree timetable to be accounted for in settlements.” (mmmmm) Clause 3.13.2.2 under Submission of Bilateral Contract Data for Reserves is amended to read as - “3.13.2.2 The System Operator shall also provide information on their contracted reserve Capacities to the Market Operator for purposes of validating the capacities identified in Clause 3,13.2.1" (nnnnn) Original Clause 3.13.2 and its sub-clauses under Settlement Quantities and Amounts are renumbered and amended accordingly to read as - “3.13.3 Submission of Transmission Right Data 3.13,3.1 This section shall apply only upon commencement of the transmussion rights market established under Clause 3.12.1. 3.13.3.2 Trading Participants who hold transmission rights and wish to have those transmission rights accounted for in settlements shall, after each trading day, in accordance with the timetable, submit to the Market Operator a schedule specifying; XXN XXX XXX (b) the MWH quantities of each transmission right in each settlement interval of that trading day, as they apply at the sending node; DC20 1 1-004 ~ Amendments to WESM Kules (Enhancements to WESM Design and Operations) Page 31 of 45 === dc2016-10-0014-pages-32.ppm === (c) the agreed loss differential associated with each transmission right, if any, as a proportion of the quantity specified in Clause 3.13.3.2 (b); and (d) that the System Operator is in agreement with the submission made under Clause 3.13.3 (and providing evidence of that agreement), and will cover any deficit in that System Operator's settlements position with the spot market arising as a result of honoring this transmission ngiit.” (Q0@00) Original Clause 3.13.3 under Settlement Quantities and Amounts is renumbered and amended accordingly to read as - “3.13.4 Data for Bilateral Contracts and Transmission Rights The Market Operator shall: XXX XXX —oXXN (b) If the data provided under Clause 3.13 is valid or complete, employ that data for settlement purposes in accordance with Clauses 3.13.7 and 3.13.12.” (Ppppp) Original Clause 3.13.4 under Settlement Quantities and Amounts is renumbered and amended accordingly to read as - “3.13.5 Reserve Settlement Quantity “The reserve settlement quantity for each Trading Participant in each settlement interval shall be calculated as. (a) The average of the reserve schedule tor each facility, less (b) The reserve contracted quantities in accordance with Clause 3.13.21, if any.” (qqqqq) Original Clauses 3.13.5 and 3.13.5.) under Settlement Quantities and Amounts are hereby deleted. (rrrrr) Clause 3.13.6 under Settlement Quantities and Amounts is amended to read as- “3.13.6 Defining the Gross Energy Settlement Quantity for Market Trading Nodes For each settlement imterval, the gross energy settlement quantity before being, adjusted tor bilateral contracts tor each market trading node shall be determined by the Market Operator as follows: (a) It the market trading node defined under Clause 3.2.2.1 is located on the boundary of the power system operated by the System Operator, the gross 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 market trading 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 energy settlement quantity for that node; DCI 10014 ~ Amendments to WESM Rules (Enhancements to WESM Design and Openitiuns) Payee 32.01 45 === dc2016-10-0014-pages-33.ppm === (b) If the market trading node detined under Clause 3.2.2.2 1s a generator market trading node lying on the interface between networks, apparatus or equipment operated by parties other than the System Operator, the gross energy settlement quantity for the market trading node is the net metered flows through the associated meter trom the Generation Company to the Customer side of the meter; (c) If the market trading node defined under Clause 3.2.2.2 is a Customer market trading node located on the interface between networks, or equipment operated by parties other than the System Operator, the gross energy settlement quantity tor the market trading node is the negative of the amount determined for the corresponding generator market trading node in Clause 3.13.6 (b); and (d) If the net metered flows registered through a meter is inconsistent with the expected power flow to 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 Tradimg Partictpant the appropriate manner of determining the gross settlement quantity for that market trading node.” (8888) Clause 3.13.7 under Settlement Quantities and Amounts is amended to read as - “3.13.7 Energy Settlement Quantity Adjustments for Bilateral For settlement purposes, the energy settlement quantity for any market trading node in any settlement interval shall be determined by the Market Operator by adjusting the gross energy settlement quantity tor that market trading node and any settlement interval, as measured in accordance with Clause 3.13.6 for bilateral contract quantities notified to the Market Operator under Clause 3.13.1.1, or inferred by the Market Operator under Clause 3,13,1.1 and accepted as valid under Clause 3.13.1.2 by: (a) Subtracting all bilateral! sell quantities notified for that node in that settlement interval trom the measured or estimated gross energy settlement quantity tor that node m that settlement terval; and (b) Adding, all bilateral buy quantities interred for that node in that settlement interval to the measured or estimated gross energy settlement quantity for that node in that settlement interval.” (ttttt) Clause 3.13.8 under Settlement Quantities and Amounts is amended to read as - “3.13.8 Determining the Energy Trading, Amount For settlement purposes, the energy trading amount tor each market trading node and settlement mterval will be determined as the energy settlement price for that node in that settlement interval multiplied by the energy settlement quantity (in MWh) tor that node in that settlement interval.” (uuuun) Original Clause 3.13.9 under Settlement Quantities and Amounts is hereby deleted. (vvvvy) = Original Clause 3.13.10 and its sub-clauses under Settlement Quantities and Amounts are renumbered and amended accordingly to read as - DCQU16- 1040014 — Amendments to WESM Rules (Enhancements to WESM Design and Operations) Page 33 of 45 === dc2016-10-0014-pages-34.ppm === “3.13.9 Determining the Reserve Trading, Amount 3.13.9.1 For settlement purposes, the reserve trading amount tor each Trading Partictpant who supplies reseroe to a particular reserve region in a settlement terval will be determined as the reserve price for that reserve region in that settlement imterval multiplied by the reserve settlement quantity tor that Trading Participant in that reserve region for that settlement interval. 3.13.9.2 During, the initial operation of the interim WESM, the reserve trading amount shall be calculated based on the cost of reserves contracted for by the System Operator.” (wwwww)Original Clause 3.13.11 under Settlement Quantities and Amounts is renumbered and amended accordingly to read as - “3.13.10 Determining the Reserve Cost Recovery Charge The reserve cost recovery charge for settlement purposes will be determined for each Trading Participant in each settlement interval in accordance with the procedures developed under Clause 3.3.5." (xXxxxx) Original Clause 3.13.12 under Settlement Quantities and Amounts — is renumbered and amended accordingly to read as - “3.13.11 Calculation of Line Rental Trading Amounts The Market Operator shall calculate the line rental trading amounts tor each bilateral contract associated with the delivery of the bilateral contract quantities through the transmission line in the market network model as: (a) The expected flow of energy out of the receruing node of the market network line as determined by the market dispatch optimization model multiplied by nodal energy settlement price; less (b) The expected flow of energy into the sending node multiplied by the nodal energy settlement price of the market network ime as determined by the market dispatch optimization model.” (vyyyy) Original Clause 3.13.13 under Settlement Quantities and Amounts — is renumbered and amended accordingly to read as - “3.13.12 Determining the Transmission Rights Trading Amount For settlement purposes, the transmission nght trading amount for each transmission right in each settlement interval is to be determined as: (a) The MWh capacity of that transmission right in that settlement interval as notitied under Clause 3.13.2, multiplied by the energy settlement price for the receroing node in that settlement interval; minus the sum of (b) The MWh capacity of that transmission right, in that settlement interval, as notified under Clause 3.13.2, multiplied by the energy settlement price at the sending node in that settlement interval; plus DCQUI 10-0014 = Amendivents ty WESM Rules (Enhancements ¢ WESM Design and Operations) Page 4 of 45 === dc2016-10-0014-pages-35.ppm === (c) The MWh capacity of that transmission right in that settlement interval, as notified under Clause 3.13.2, multiplied by the agreed loss differential for that transmission nght, as notified under Clause 3.13.2, multiplied by the energy settlement price at the recerving node in that settlement interval.” (zzzzz) Original Clause 3.13.14 and its sub-clauses under Settlement Quantities and Amounts are renumbered and amended accordingly to read as - “3.13.13 Settlement Amounts for Trading Participants 3.13.13.1 For each billing period, the Market Operator shall determine the settlement amount for each Trading Participant as the sum of the aggregate trading amounts for the settlement intervals in that billing period, determined in accordance with Clause 3.13.13.2: plus (a) any amount payable by the Market Operator to that Trading Participant in respect of that billing pertod and not accounted for in Clause 3.13.13.2, including payment for any ancillary seroices purchased on behalf of the System Operator, less the sum of (b) any market fees which that Trading Participant is required to pay in respect of that billing period as determined in accordance with Clause 2.10; plus (c) any other amounts payable by that Trading Participant to the Market Operator in respect of that billing period, including any reserves cost recovery charges. 3.13.13.2 The aggregate trading amount for a Tradmg Participant tor a settlement mterval equals the sum of: (a) the energy trading amounts for each market trading node for which that Trading Participant is responsible calculated in accordance with Clause 3.13.8 (which may be positive or negative tor any Trading Partictpant); plus (b) the reserve trading amounts tor each reserve region into which that Trading Participant contributes reserve calculated in accordance with Clause 3.13.9 (which will always be positive for both Generation Companies and Customers); plus (c) the transmission night tradmg amounts for each transmission right held by the WESM Participant calculated in accordance with Clause 3.13.12 (which will typically be positive for any Trading Particrpant); less the sum of (d) the reserve cost recovery charge determined for that Trading Participant with respect to any reserve cost recovery zone within which it has any facility connected calculated in accordance with the procedures developed under Clause 3.3.5 (which will be positive tor any Trading Partictpant); and (e) any other reserve cost recovery charges determined tor that Trading Participant in accordance with the procedures developed under Clause 3.3.5 (which will be positive tor any Trading Participant), 3.13.13.3 The Market Operator shall develop and implement, subject to approval by the ERC, the appropriate pricing and settlement methodology for compensation of Trading Participants whose generating units are designated as must-run units or identified as displaced generators, and the corresponding recovery mechanism for the same.” D0 10-00 ~ Amendments ty WESM Rules (Enhancements ty WESM Design and Operations) Paye ho 45 === dc2016-10-0014-pages-36.ppm === (aaaaaa) = Original Clause 3.13.16 and its sub-clauses under Settlement Quantities and Amounts are renumbered and amended accordingly to read as - “3.13.14 Treatment of Remaining Settlement Surplus 3.13.14.1 If the transactions required by Clause 3.13.13.2 (a), (b) and (d), in aggregate, result in a surplus or deficit remaining, this will be known as the net settlement surplus 3.13.14.2 The net settlement surplus; (a) May be retained by the Market Operator to fund deficit as a result of transactions required in Clauses 3.13.13, or may be flowed back to the WWESM Participants in accordance with the procedures to be developed under Clause 3.13.14.3, or may be used by the Market Operator to establish and support the market for financial transmission rights subject to the approval of the PEM Board; and XXX XXX XXX 3.13.14.3 The Market Operator shall: XXX XXX XXX" (bbbbbb) Original Clause 3.13.17 and its sub-clauses under Settlement Quantities and Amounts are renumbered and amended accordingly to read as - “3.13.15 Settlement Amounts for Trading Participants with Bilateral Contracts 3.13.15,1 For each billing period, the Market Operator shall determine the settlement amount for each Trading Partictpant with bilateral contract as the sum of the aggregate trading amounts tor the settlement intervals in that billing period, determined in accordance with Clause 3.13.15,2 plus: (a) any amount payable by the Market Operator to that Trading Participant in respect of that fllitg period and not accounted for in Clause 3.13.15.2, including payment for any ancillary services purchased on behalf of the System Operator; less the sum of (b) any market fees which that Trading Participant is required to pay in respect of that billing period as determined in accordance with Clause 2.10; plus (c) any other amounts payable by that Trading Participant to the Market Operator in respect of that billing period, including any reserve cost recovery charges.” 3.13.15.2 The aggregate trading amount for a Trading Participant tor a settlement interval equals the sum of: (a) the energy trading amounts for each market trading node tor which the Trading Partiapant is responsible calculated in accordance with Clauses 3.13.7 and 3.13.8; (b) the ine rental trading amount corresponding, to the quantity of bilateral contract of that Trading Participant calculated in accordance with Clause 3.13.11; DCQ01 6-10-0014 - Amendments to WESM Rules (Enhancements to WESM Design and Operations) Maye 3 ot 45 === dc2016-10-0014-pages-37.ppm === (c) the reserve trading amounts for each reserve region into which that Trading Participant contributes reserve calculated in accordance with Clause 3.13.9 (which will always be positive for both Generation Companies and Customers); (d) the transmission right trading amounts for each transmission nght held by the WESM Participant calculated in accordance with Clause 3.13.12 (which will always be positive for both Generation Companies and Customers); (e) the reserve cost recovery charge determined for that Trading Participant with respect to any reserve cost recovery zone within which it has any facility connected calculated in accordance with the procedures developed under Clause 3.3.5 (which will always be positive for any Trading Participant); and (f) any other reserve cost recovery charges determined for that Trading Participant in accordance with the procedures developed under Clause 3.3.5.” (ececee) Clause 3.14.11,3 under Payment Default Procedure is amended to read as - “314.113 It: xXxXA xX&AA XXX (c) The Market Operator receives notice from the detaulting WESM Member that it is not likely to remedy the default specified in the definilt notice, then the Market Operator may issue a suspension notice in accordance with Clause 3.15.8 under which the Market Operator notifies the defaulting \VESM Member that it is prohibited from participating in the spot market.” (dddddd) Clause 3.15.5.2 under Replacement of Security is amended to read as - "3.15.52 If: XXX XXK XXX (b) That VESM Member does not remedy that failure within three (3) working days after being notified by the Market Operator of the tailure, then the WWESM Member is deemed to be in default and the Market Operator shall give the WESM Member a suspension notice in accordance with Clause 3.15.8." (eeeeee) Clause 3.15.6.3 under Drawdown of Security is amended to read as - “3.15.63 It a WESM Member tails to comply with Clause 3.15.6.2 within the time period referred to in that clause, then the Market Operator shall give the (VESM Member a suspension notice in accordance with Clause 3.15.8." (fttttf) Clause 3.15.8.3 under Suspension of a WESM Member 1s amended to read as “3.15.83 If a suspension notice is revoked, the Market Operator shall publicize that fact in the same manner in which the suspension notice was publicized in accordance with Clause 3.15.8.1." DC20 16-10-0014 = Amendments to WESM Rules (Enhancements to WESM Desipn and Operations) Pago 37 at 48 === dc2016-10-0014-pages-38.ppm === (ggeeee) Clause 4.5.1 under Metering Installation is amended to read as - “4.5.1 Metering Installation Components A metering installation shall. XXN XXX XXX {e) Have electronic data recording facilities such that all metering data can be measured and recorded in accordance with the relevant Market Manual; XXX XXX XXX" (hhhhhh) Clause 4.9 under Metering is amended to read as - “4.9 Data Validation and Substitution The Market Operator is responsible tor the validation and substitution of metering data after being furnished settiement-ready metering data by the Metering Services Provider and shall develop data validation procedures in consultation with 1VESM Participants and in accordance with Appendix B1.2 (d).” (iiiiii) Clause 5.2.6.2 under Market Audit is amended to read as - "5.2.6.2 The spot market audit shall cover and review compliance by the Market Operator with its procedures and the effectiveness and appropriateness of systems utilized in the operation of the spot market, including but not limited to: AXA XNN XXX (d) The market dispatch optimization model's pricing and dispatch scheduling, processes; XXX XXX OXNN” (iiiiii) Clause 6.7.1 under Force Majeure is amended to read as - “6.7.1 Force Majeure Event A force majeure is the occurrence of an event or events in the grid and in a dispatch interval that is/are not within the reasonable control, directly or indirectly, of the System Operator, Market Operator and WWESM Member, to the extent that such event, despite the exercise of the reasonable diligence, cannot be or be caused to be prevented, or removed and has resulted in a reduction in the normal capacity of part or all of the power system during that dispatcl interval and such reduction is likely to materially affect the operation of the spot market or materially threaten system security.” (kkkkkk) Clause 6.9.2.2 under Declaration of Market Suspension is amended to read as DCI 10-00]4 ~ Amendments to WESM Rules (Enhancements to WESM Design and Operations) Page 38 of 45 === dc2016-10-0014-pages-39.ppm === “6.9.2.2 The spot market is deemed suspended at the start of the dispatch mterval or any settlement interval in which the ERC advises the Market Operator that the spot market is suspended.” (UN) Clause 6.9.3.1 under Effect of Market Suspension is amended to read as - "6.9.3.1 The market price during a dispatch mterval in which the ERC has declared the spot market to be suspended and up to the time that the market resumes in accordance with Clause 6.9.24 is to be determined by the Market Operator in accordance with Clause 6.2.3." (mmmmmm) Clause 6.93.2 under Effect of Market Suspension is amended to read as - “6.93.2 During a dispatch interval in which the spot market is suspended, the WVESM Rules will continue to apply with such modifications as the Market Operator reasonably determines to be necessary, taking into consideration the circumstances and conditions giving rise to the decision by the ERC to suspend the spot market.” (nnnnnn) Clause 7.2.2.8 under Breaches of the WESM Rules by WESM Members is amended to read as - “7.2.2.8 The Enforcement and Compliance Officer may further recommend to the PEM Board that the WESM Menther determined to be in breach be suspended in accordance with Clause 3.15.8 if the said Member has: XXX NNN XXX The Enforcement and Comphance Officer may recommend to the PEM Board tor approval the suspension of the party in breach in accordance with Clause 3.15.8," (eEe0000) Glossary Chapter 11 is amended to include The following definition of terms under the Glossary Chapter 11 - “Automatic Pricing Re-run. The automated process under Clause 3.6.7 that solves the market dispatch optinuzation model with relaxed constraints after detecting non-zero constraimt! violation variable values to produce energy and reserve prices according, to the timetable. Customer Market Trading Node, A market trading node at which electricity will normally be purchased from the spot market and which is classified as a Customer market trading node in accordance with Clause 3.2. Dispatch Conformance Standards. Standards that define whether or not dispatched Trading Participants comply with dispatch schedules and dispatch mstructions tor energy and reserves in accordance with Clause 3.8.5. Dispatch Instruction. Refers to the instruction issued by the System Operator to Trading Participants such as Generation Compantes with scheduled generating wuts and to Generation Companies whose generating units will provide ancillary services to implement the final dispatch schedule in real time DC20 16-10-0014 ~ Amendments to WPSM Rules (Enhancements to WESM Design and Operations) Pay 34 of 45 === dc2016-10-0014-pages-40.ppm === Dispatch Interval. A five-minute period commencing every five (5) minutes according to the timetable and Clause 3.4.1. Energy Settlement Price. The schedule-weighted average nodal energy dispatch prices for the set of dispatch intervals corresponding to a settlement interval, determined for a market trading node in accordance with Clause 3.10.6. Energy Trading Amount. Determined as the energy settlement price for that node in that settlement interval multiplied by the energy settlement quantity (in MWh) for that node in that settlement interval in accordance with Clause 3.13.8. Generator Market Trading Node. A market trading node at which electricity will normally be sold to the spot market and which is classified as a generator market trading node in accordance with Clause 3.2.2.2. Gross Energy Settlement Quantity. The energy settlement quantity determined in accordance with Clause 3.13.6 for a market trading node, in a settlement interval betore any adjustment for Inlateral contracts. Hour-Ahead Projection. Projections of market conditions for the dispatch imtervals in the hour ahead determined and publisited by the Market Operator in accordance with Clause 3,7.3. Market Run. A particular instance of the market dispatch optimization model performed for a particular dispatch miterval, or a set of such instances model performed for all the dispatch intervals in a market horizon. . Nodal Energy Dispatch Price. The price determined by the Market Operator for a particular market network node and dispatch interval, immediately prior to commencement of that dispatch interval, directly from the market dispatch optimization for that dispatch mterval in accordance with Clause 3.10.2. In the case of market projections, the nodal energy price may be determined on a dispatch interval basis (hour-ahead projections) or trading one (1) hour interval basis (day-alead projections and week ahead projections). Reserve Price. The price tor reserve in a particular reserve region and dispatch mteroal, determined in accordance with Clause 3.10.7. Reserve Settlement Price. The schedule-weighted average price for each reserve region and reserve category in each settlement interval, determined in accordance with Clause 3.10.7, Reserve Settlement Quantity, The amount of reserve deemed to have been supplied by a reserve Supplier in a particular reserve region and settlement interval, determined in accordance with Clause 3.13.5 Reserve Trading Amount, Determined for each Trading Partiapant who supplies reserve. This is computed as the reserve settlement price multiplied by the reserve settlement quantity tor that Trading Participant in that reserve region for that settlement interval in accordance with Clause 3.13.9. D201 10 ~ Amendments te WESM Rules (Enhancements to WESM Desin ond Operations) Page 40 01 45 === dc2016-10-0014-pages-41.ppm === Settlement Interval. A 1-hour period commencing on the hour according to the tunetable and Clause 3.4.2. Technical Committee, The committee of that name established in accordance with Clause 1,7." (pppppp) The definitions of the following terms under Glossary Chapter 11 are amended to read- “Constraint Violation Coefficients, Coefficients set for constraint violation variables by the Market Operator in accordance with Clause 3.6.2. The Market Operator shall ensure that, if constramts shall be violated, such violation will occur in appropriate priority order. Dispatch Schedule The target loading levels in MW tor each scheduled generating unit, must dispatch generating unit, priority dispatch generating unit, non-scheduled generating unit, scheduled load and reserve facility for the end of that dispatch interval, determined by the Market Operator through the use of a market dispatch optimization model in accordance with Clause 3.8.1. Ex-Ante. A matter determined in relation to a dispatch mterval betore that dispatch interval commences. Excess Generation, Generations which may be scheduled to occur in excess of load requirements, even though nodal energy dispatch prices have fallen to the market price floor, and which shall then be dealt with in accordance with Clause 3.9.8. : Interruptible Load. Means load that a Customer is able to interrupt at very short notice in response to: (a) A frequency deviation, or (b) A request of the System Operator, in order to meet applicable ancillary service requirements, subject to the requirements of the Grid Code and Distribution Code. Line Rental. The economic rental arising from the use of a transmission line, calculated as the difference in value between flows out of the recerving node of that line and flows into the senditg node, in accordance with Clause 3.13.11 Load Weighted Average. An average produced by multiplying each nodal energy dispatch pnce by the load at that node, summing the results, and then dividing by the sum of the loads involved. Market Bid. A demand ind for a particular dispatch mteroal corresponding to a settlement interval of a particular trading day in the current market horizon, whether formed trom a standing hid in accordance with Clause 3.5.10 or revised by the relevant Trading Partrcrpant in accordance with Clause 3.5.11 Market Dispatch Optimization Model. The optimization model which contains the mathematical algorithm to be used for the purposes of determining dispatch schedules and nodal dispatch prices, and preparing market projections based on the price determination methodology approved by ERC DC2016-1040014 - Amendments t) WESM Rules (Enhancements to WESM Design and Operations) Page 41 of 45 === dc2016-10-0014-pages-42.ppm === Market Network Model. A mathematical representation of the power system, which is used for the purpose of determining dispatch: schedules and nodal dispatch prices, and preparing market projections. Market Offer. A generation offer tor a particular dispatch interval corresponding to a settlement interval of a particular trading day in the current market horizon, whether formed from a standing offer in accordance with Clause 3.5.10 or revised by the relevant Trading Participant im accordance with Clause 3.5.11. Market Price. A generic term covering prices for energy and reserve, nodal or zonal, as appropriate, Market Projections. Week ahead, day-ahead, or our ahead projections of spot market conditions, performed in accordance with Clause 3,7, Must-Run Unit (MRU). A generating unit identified and instructed, by the System Operator to either a) come on-line, or b) provide additional energy on a particular dispatch interval but the dispatch of which is said to be out-of-merit, to address system security requirements, For clarity, MRU shall be utilized only after the System Operator has exhausted all available ancillary services. MR Us are classified as follows: a) Scheduled MRU - MRU designated by the System Operator before the dispatch interval and included in the real-time dispatch schedule through the imposition of security limit as defined in the WVESM Dispatch Protocol Manual. b) Real-Time MRU - MRU designated by the System Operator within a dispatch interval. Net Settlement Surplus. The settlement surplus remaining after all market transactions have been accounted for, including the assignment of transmission line rentals to Network Service Providers. This remainder is assumed to be attributable to economic rentals arising from other binding, constraints, and accounted tor in accordance with Clause 3.13.14. Pricing Error Notice. A notice issued in accordance with Clause 3.9.6 advising the market that prices for a particular dispatch mterval are unavailable, or invalid. Projected Output. The loading level nominated by a Generation Company for its must dispatch generating units or priority dispatch generating units indicating, the forecasted output of its must dispatch generating unit or priority dispatch generating unit at the end of a dispatch interval. Projection. A set of results derived in accordance with Clause 3.7 trom a series ol market dispatch optimization model rans describing, projected market conditions over an hour-ahead, day-ahead or week ahead market honzon tor a particular scenarto of net forecast load, and set of assumptions with respect to availability of key system elements. Receiving Node. For a transmission line, the node trom which there is a net flow of electricity into that line in a particular settlement interval to be accounted tor in determining the ling rental, in accordance with Clause 3.13.11. For a transrmssion night, the node to which the issuer of the transmission nght ts deemed to guarantee transfer of electricity, to be advised to the Market Operator in accordance with Clause 3.15. Reserve. Ancillary services that are traded in the WESM, DC201e-1-00)4 - Amemiments by WESM Rules (Enhancements te WESM Design and Operations) Paye 42 0 4% === dc2016-10-0014-pages-43.ppm === Reserve Facility Category. A particular type of reserve facility, characterized by its technology (e.g. mterruptible load, synchronized generation, non-synchronized generation) which is reflected in the type of offer it can make. Sending Node. For a transmission line, the node into which there is a net flow of electricity out of that line in a particular settlement interval to be accounted for in determining the line rental, in accordance with Clause 3.13.11, For a transmission night, the node from which the issuer of the transmission nght is deemed to guarantee transter of electricity, to be advised to the Market Operator in accordance with Clause 3.13.2, Settlement Amount. The amount payable by or to a Trading Participant, or Network Service Provider, in respect of a billing period as determined by the Market Operator under Clause 3.13.13 or 3.13.15. Settlement Price. An energy or reserve settlement price. Settlement Quantity. An energy or a reserve settlement quantity. Suspension Notice. A notice issued by the Market Operator under Clause 3.15.8. Timetable, The timetable prepared by the Market Operator for Operation of the spot market in accordance with Clause 3.4.3. Trading Amount, The amount to be paid by, or paid to a Trading Participant, or Network Service Prowider in respect of energy, reserve, line rentals, or transmission nights calculated in accordance with Clause 3.13.7, 3.13.8, 3.13.9, or 3.13.13, respectively, Transmission Right. The right to financial compensation based on differences between nodal energy dispatch prices at different market trading nodes as notified under Clause 3.13.3, and settled in accordance with Clause 3.13.12. WESM Participants. All entities under Clause 2.2.1 that are authorized by the ERC to participate in the WVESM in accordance with the Act. Zonal Energy Price. The price determined in accordance with Clause 3.10.3 for each Customer pricing zone under Clause 3.2.3.” (999994) The following terms defined under Glossary Chapter 11 are hereby deleted- Ancillary services cost recovery charge: Customer Node; Dispatch Tolerances; Ex-Ante Dispatch; Ex-Ante Energy Settlement Price; Ex-Ante Nodal Energy Price; Ex-Ante Zonal Energy Price; 8. Ex-past; 9 Ex-Post Energy Settlement Price; 10. Ex-Post Energy Settlement Quantity; MOUs up o DC20 Le TOO = Amendments to WESM Rules (Enhancements to WESM Design and Operations) Page 43 of 45 === dc2016-10-0014-pages-44.ppm === 11. Ex-Post Nodal Energy Price; 12. Ex-Post Zonal Energy Price; 13, Generator Node; 14. Gross Ex-Ante Energy Settlement Quantity, 15. Gross Ex-Post Energy Settlement Quantity; 16. Nodal Energy Price; 17. Reserve Effectiveness Factor: 18. Run; 19. Trading Interval; 20, Zonal Reserve Price; and 21. Zonal Reserve Settlement Quantity. (vyyvyvyvy) Appendix Al.1, under Generation Offer, is amended to read as - "AL.1 Generation Ofters Generation offers; (a) may include up to ten (10) generation offer blocks per (aggregate) unit, and the maximum combined capacity of generation and reserve offers must not be less than the maximum available capacity of the generator; (b) shall be for a minimum block size of one (1) MV; (c) shall have monotonically increasing prices, starting from zero generation; (d) may include negative prices; and (e) shall include minimum and maximum up/down namp rates.” _ (ezezzzzzz) Appendix Al.2, under Reserve Offers, is amended to read as - “A1.2 Reserve Offers Reserve offers trom Generatron Companies shall consist of: XX” XxX XXX (d) A minimum block size of one (1) MI; and (e) Monotonically increasing prices starting from zero for the first offer block, which shall correspond to the mandatory reserve capability required trom that Generation Company under its connection agreement. Reserve offers trom Customers shall consist of: XXX Xxe XXX” (aaaaaaaaaa) Appendix A2, under Information to be Supplied by Network Service Provider, is amended to read as - “Network Characteristics Most of these information will be supplied as standing data which will be updated only as required for a dispatch mterval, XXX XXX xxx" DC21 10-0014 ~ Amendments te WESM Rules (Enhancements to WESM Design and Operations) lage 4 ot 45 === dc2016-10-0014-pages-45.ppm === Section 2. Transitory Provisions. This amended WESM Rules shall be initially used for the development of the WESM’s New Market Management System (NMMS) and actual implementation of the enhancements to WESM design and operations. Notwithstanding, the current WESM Rules shall remain effective for the commercial operation of the integrated WESM and Retail Market until the DOF issuance through a Department Circular of the commencement date for the NMMS Section 3, Review of the Market Manuals, For the timely completion of the implementation of the enhancements to WESM design and operations, the responsibility of the Philippine Electricity Market Corporation (PEMC) to review and facilitate necessary amendments to the related Market Manuals to ensure consistencies with the amended WESM Rules is hereby reiterated Section 4. Separability Clause. If tor any reason, any section or provision of this Circular is declared unconstitutional or invalid, such parts not affected shall remain valid and subsisting. Section 5. 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 October 2016 at the DOE, Energy Center, Rizal Drive, Bonifacio Global City, Taguig City, Metro Manila. s) SAgacusi ‘yee Vy OCT 14 2016 Rema OF enend .AGC-16000891 A DCI THN - Amendments to WESM Rules (Enhancements to WESM Design and Operations) Pape 45 of 43