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Republic of the Philippines
DEPARTMENT OF ENERGY

DEPARTMENT CIRCULAR NO.__DC20|7- 04 - 0004.
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ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT
MARKET (WESM) RULES AND MARKET MANUALS
(Provisions on Registration)

WHEREAS, Sections 30 and 37(f) of the Electric Power Industry Reform Act (EPIRA)
provides that the DOE, jointly with the electric power industry participants, shall
establish the Wholesale Electricity Spot Market (WESM) and formulate the detailed
rules governing the operations thereof;

WHEREAS, on 28 June 2002, the DOE, with the endorsement of 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
including its Market Manuals shall be undertaken in accordance with the provisions of
Chapter 8 thereof;

WHEREAS, on 29 July 2016, the Rules Change Committee (RCC) received the
Dispute Resolution Administrator's (DRA) proposed amendments to the WESM Rules
and Market Manuals on Dispute Resolution and Registration, Suspension and De-
Registration Criteria and Procedures;

WHEREAS, the DRA’s proposal sought to align the relevant provisions of the WESM
Rules and pertinent Market Manuals with the agreement-based or commercial
arbitration framework, and it intended to enhance and clarify vague procedures in the
WESM Dispute Resolution Process;

WHEREAS, on 03 August 2016, the Rules Change Committee (RCC) during its 117"
RCC Meeting initially discussed the said proposal, which thereafter approved its
publication in the WESM website to solicit comments from market participants and
other interested parties;

WHEREAS, on 05 October 2016, the RCC during its 119'° RCC Meeting deliberated
on the proposal giving due course to the comments received from market participants
and the DOE, and thereafter, it finalized and approved the proposal for endorsement
to the PEM Board;

WHEREAS, on 29 November 2016, after due evaluation and deliberation, the PEM
Board during its 1215 PEM Board Meeting approved for endorsement to the DOE the
above stated proposal, except for the proposed amendments concerning dispute
resolution fees and administrative costs which requires further review and study of the
RCC;

Energy Center, Rizal Drive, Bonifacio Global City, Taguig City, Metro Manila, Philippines
Tels.: (Trunks) 840-1401 to 40; Fax 840-2067; 840-2236; 840-2067 (Domestic); 632-840-2173; 632-840-2236; 632-840-2067
(International)
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WHEREAS, on 09 December 2016, the above stated PEM Board-approved
amendments to the WESM Rules and Market Manuals on Registration, Suspension
and De-Registration Criteria and Procedures were submitted to the DOE for final
approval, in compliance with Chapter 8 of the WESM Rules;

WHEREAS, the DOE reviewed the said PEM Board-approved proposal, and deems it
appropriate and consistent with the WESM Rules and the objectives of the WESM;
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 and relevant Market Manuals:

Section 1. Amendments to the WESM Rules. The following provisions in the WESM
Rules are hereby amended:

Clause 2.5.6.3 under Notice of Non-approval of Application is amended to read as

“2.5.6.3 The applicant, upon being notified by the Market Operator that its
application has been disapproved under Clause 2.5.6.1 and the grounds therefor,
may, at its option, rectify the defects and re-submit a corrected application.”

Section 2. Amendments to the WESM Market Manual on Registration,
Suspension and De-Registration Criteria and Procedures. The following provisions
in the Registration, Suspension and De-Registration Criteria and Procedures are
hereby amended:

Section 2.5.7 under Registration of Direct VWWESM Members and Trading
Participants is amended to read as -

“2.5.7 Non-Approval of Applications/Remedies
XXX XXX XXX

c) The Applicant whose application is disapproved may rectify the
shortcomings in the application and re-submit the same. If it elects to
re-submit the application, the re-submitted application shall be acted
upon by the Market Operator following the same timetable set forth in
this Manual as if it were a new application.”

Section 3. Applicability. In addition to the current WESM Rules and Market Manuals,
these amendments in the WESM Rules and Market Manuals set forth in this Circular
shall also apply to WESM Rules and Market Manuals for the implementation of the
Enhancements to WESM Design and Operations, which were promulgated by the
DOE through Department Circular No. DC2016-10-0016.

Section 4. Separability Clause. If for any reason, any section or provision of this
Circular is declared unconstitutional or invalid, such parts not affected shall remain
valid and subsisting.

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DC 2017-04 -00e4¥Adopting Further Amendments to the WESM Rules and Market Manuals (Frovisions on Reg jg tration )

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Section 5. Effectivity. This Circular shall take effect after fifteen (15) days following
the completion of its publication either in the Official Gazette or two (2) newspapers of
general circulation in the Philippines, and shall remain in effect until] otherwise revoked.

Issued this April 2017 at the DOE, Energy Center, Rizal Drive, Bonifacio Global
City, Taguig City, Metro Manila.

M/

AONSO’GCUSI

Secreta Vy~
Republic of the Philippines
DEPARTMENT OF ENERGY
@ IN REPLYING PLS. CITE:

C-1700166

NUH

APR 20 2017

DCA -0y-O0QY Adopting Further Amendments to the WESM Rules and Market Manuals (Provisions on Registra ion)