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Republic of the Philippines
DEPARTMENT OF ENERGY

DEPARTMENT CIRCULAR NO._ DC 2021-03- 0004 wy

ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY
SPOT MARKET (WESM) RULES AND MARKET MANUAL ON PROCEDURES
FOR THE MONITORING OF FORECAST ACCURACY STANDARDS FOR MUST
DISPATCH GENERATING UNITS FOR THE IMPLEMENTATION OF
ENHANCEMENTS TO WESM DESIGN AND OPERATIONS

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, on 20 March 2017, the DOE promulgated the amended various WESM
Market Manuals for the implementation of Must Dispatch and Priority Dispatch
Generating Units in the WESM through Department Circular No. DC2017-03-0002:;

WHEREAS, any changes, amendments, and modifications to the WESM Rules,
Retail Rules and their Market Manuals shall be undertaken in accordance with the
provisions of Chapter 8 of the WESM Rules;

WHEREAS, on 11 Apri! 2019, the Philippine Electricity Market Corporation (PEMC)
submitted to the Rules Change Committee (RCC) its proposed amendments to the
Market Manual on Procedures for the Monitoring of Forecast Accuracy Standards for
Must Dispatch Generating Units;

WHEREAS, the proposal aims to mainly align the provisions of the abovementioned
Market Manual with the forthcoming operation of the new Market Management
System and to provide a more appropriate calculation for the forecast percentage
error;

WHEREAS, on 12 April 2019, the RCC during its 151S* RCC Regular Meeting
discussed with PEMC the proposed amendments, and thereafter approved the
publication of the proposed amendments in the PEMC information website to solicit
comments from market participants and other interested parties;

WHEREAS, on 21 June 2019, the RCC during its 153° RCC Regular Meeting
deliberated on the proposal giving due course to the comments received from market
participants, Technical Committee and the DOE, and thereafter finalized and
approved for endorsement to the PEM Board;

rae

ante Onmtne Dien Meien Danifanian Cinhsl Cite Tania City Motrn Manila Philinnines

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WHEREAS, on 31 July 2019, after due evaiuation and deliberation, the PEM Board
during its 14°° Regular PEM Board Meeting, approved the above stated RCC-
approved proposal;

WHEREAS, on 19 August 2019, the PEM Board-approved amendments to the
Market Manual on Procedures for the Monitoring of Forecast Accuracy Standards for
Must Dispatch Generating Units were submitted to the DOE for final approval, in
compliance with Chapter 8 of the WESM Rules;

WHEREAS, on 07 November 2019, the DOE posted the proposed amendments in
the DOE website to solicit further comments from the market participants and other
interested parties;

WHEREAS, on 12, 14 and 19 November 2019, the DOE conducted various public
consultations on the said proposed amendments to solicit inputs and consider
comments of stakeholders in the finalization of the amendments;

WHEREAS, the DOE reviewed the said PEM Board-approved proposal, made
revisions on the proposed amendments for consistency with the objectives of the
WESM and the DOE policies on the enhancements of WESM design and operations;

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
Market Manua!:

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

a. Clause 3.5.5.9 under Generation Offers and Data is amended to read as —

“85.5.9 The Enforcement and Compliance Office shall evaluate annually the
forecast accuracy standards complied with by must dispatch
generating units in accordance with Clause 3.5.5.8.”

b. Clause 3.5.5.11 under Generation Offers and Data is amended to read as —

*3.5.5.11 The Enforcement and Compliance Office shall report to the PEM Board
and the DOE the monthly and annual compliance of each must
dispatch generating unit to the forecast accuracy standards with
respect to its projected outputs."

Section 2. Amendments to the WESM Market Manual on the Procedures for the
Monitoring of Forecast Accuracy Standards for Must Dispatch Generating
Units. The following provisions in the WESM Market Manual on the Procedures for
the Monitoring of Forecast Accuracy Standards for Must Dispatch Generating Units
Issue 1.0 are hereby amended:

DC — ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT
MARKET (WESM) RULES AND MARKET MANUAL ON PROCEDURES FOR THE MONITORING OF
FORECAST ACCURACY STANDARDS FOR MUST DISPATCH GENERATING UNITS FOR) THE
IMPLEMENTATION OF ENHANCEMENTS TO WESM DESIGN AND OPERATIONS 2

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a. Section 1.1 (Background) under Introduction is amended to read as —

“1.1

1.1.1

XXX

BACKGROUND

The WESM Rules require generation companies to submit to the
Market Operator projected outputs in respect of their must dispatch
generating units for each dispatch interval.

XXX XXX

Moreover, the Enforcement and Compliance Office is required by the
WESM Rules to report to the PEM Board and the DOE the annual
compliance of each must dispatch generating unit to the forecast
accuracy standards with respect to its projected outputs.”

b. Section 2.1.2 (Glossary) under Definitions is amended to read as:

“2.1.2

Glossary

(a) Forecast percentage error. Error (in %) of the projected output
submitted by a must dispatch generating unit with respect to its
maximum metered quantity over a billing period as dependable
capacity and calculated in accordance with Section 4.2.3.

(b) Initial loading. Loading (in MW) for the beginning of the dispatch
interval assumed in, or estimated by, the dispatch optimization
performed prior to the beginning of that dispatch interval.

(c) MAPE. xxx XXX

(d) Mean absolute percentage error. xxx XXX

(e) Must dispatch generating unit. xxx — Xxxx

(f) Perc95. xxx XXX

(g) Percentile 95 of the forecasting error. xxx xxx

(h) Projected quantity. Estimated generation of a must dispatch
generating unit over a dispatch interval based on its submitted
projected output assuming linear ramping calculated in accordance
with Section 4.2.4.

(i) Transition Period. xxx”

c. Section 3.1 (Market Operator) and its Subsections under Responsibilities ts
amended to read as:

“3.1

3.1.1

DC

Enforcement and Compliance Office

The Enforcement and Compliance Office shall evaluate annually the
compliance of each must dispatch generating unit to the forecast
accuracy standards in this Market Manual.

The Enforcement and Compliance Office shall report to the PEM Board
and the DOE its evaluation on the annual compliance of each must

- ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT

MARKET (WESM) RULES AND MARKET MANUAL ON PROCEDURES FOR THE MONITORING OF
FORECAST ACCURACY STANDARDS FOR MUST DISPATCH GENERATING UNITS. FOR THE

IMPLEMENTATION OF ENHANCEMENTS TO WESM DESIGN AND OPERATIONS

3/8
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dispatch generating unit to the forecast accuracy standards with
respect to each must dispatch generating unit’s projected outputs.”

d. Section 3.4.2 under Generation Companies is amended to read as:

“3.4.2

Generation Companies 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
market horizon. After the occurrence of the significant event referred to
above, the Generation Company shall submit a written report to the
Market Operator with supporting data immediately within the following
trading day.”

e. New Section 3.5 under Responsibilities is added to read as:

"3.5

3.5.1

Market Operator

The Market Operator shall advise the must dispatch generating units of
their real-time dispatch schedules, and any output restrictions imposed
as a result of the dispatch scheduling process or by the System
Operator.”

f. Section 4.1 (Standards) under Forecast Accuracy Standards and Procedures is
amended to read as:

“4.4

4.1.1

4.1.2

DC

Standards

Each must dispatch generating unit shall comply with the following
standards with respect to its mean absolute percentage error (MAPE)
and percentile 95 of the forecasting error (Perc95) determined in
accordance with Section 4.2 and calculated over the period specified in
Section 4.1.2:

oo Standards _
Technology TaApE | perc95

<
9

The MAPE and Perc95 of each must dispatch generating unit shali be
calculated over the period starting on the 26th of December of a year
and ending on the 25th of December of the succeeding year.

—- ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT

MARKET (WESM) RULES AND MARKET MANUAL ON PROCEDURES FOR THE MONITORING OF
FORECAST ACCURACY STANDARDS FOR MUST DISPATCH GENERATING UNITS FOR) THE
IMPLEMENTATION OF ENHANCEMENTS TO WESM DESIGN AND OPERATIONS 4/8

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4.1.3 Subject to Section 4.5 of this Market Manual, must dispatch generating
units who fail to meet the requisite forecast accuracy standards set out
in Section 4.1.1 of this Market Manual may be liable for sanctions
imposed under Clause 7.2 of the WESM Rules, and in accordance with
the WESM Penalty Manual.”

g. Section 4.2 (Calculations) under Forecast Accuracy Standards and Procedures is
amended to read as:

“4.2 Calculations

4.2.1 The MAPE of a must dispatch generating unit for a period shall be
calculated using the following formula:

XXX XXX XXX

Where,

MAPE,, mean absolute percentage error (in %) of must
dispatch generating unit i for period p

nN, number of dispatch intervals within period p wherein forecast
percentage errors were calculated

FPE,, forecast percentage error (in %) of must dispatch
generating unit i for dispatch interval t calculated in accordance
with Section 4.2.3

XXX XXX XXX

4.2.3 The forecast percentage error for a dispatch interval of a must dispatch
generating unit shall be calculated using the following formula:

PO MON 100%

FPE, .=|————=
i MQnnann

Where,

FPEis forecast percentage error (in %) of must dispatch
generating unit i for dispatch interval t

PQit projected quantity (in MWh) of must dispatch generating
unit i for dispatch interval t calculated in accordance with Section
4.2.4

DC — ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT
MARKET (WESM) RULES AND MARKET MANUAL ON PROCEDURES FOR THE MONITORING OF
FORECAST ACCURACY STANDARDS FOR MUST DISPATCH GENERATING UNITS FOR THE

IMPLEMENTATION OF ENHANCEMENTS TO WESM DESIGN AND OPERATIONS 5/8

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MQit metered quantity (in MWh) of must dispatch generating
unit i for dispatch interval t as provided by the Metering Services
Provider

MQmaxibpt Maximum metered quantity (in MWh) of must
dispatch generating unit i during billing period bp where dispatch
interval t belongs as provided by the Metering Services Provider

4.2.4 The projected quantity for each dispatch interval of a must dispatch
generating unit shall be calculated using the following formula:

1 ILjy+ PO;
PQi t= n x Ss

Where,

PQi,t projected quantity (in MWh) of must dispatch generating
unit for dispatch interval t

IL; initial loading (in MW) of must dispatch generating unit i for
each dispatch interval t used in the scheduling process

PO; , projected output (in MW) of must dispatch generating unit i
for each dispatch interval t used in during the scheduling
process

n number of dispatch interval(s) within an hour

4.2.5 A one hundred (100) percent FPE shall be imposed to a must dispatch
generating unit on a particular dispatch interval where its maximum
metered quantity is equal to zero (0) and a projected quantity is not
equal to zero (0).

4.2.6 A one hundred (100) percent FPE shall be imposed to a must dispatch
generating unit for non-submission of projected output.

4.2.7 A zero (0) percent FPE shail be imposed to a must dispatch generating
unit on a particular dispatch interval where its projected quantity and
maximum metered quantity are equal to zero (0).”

h. Section 4.3 (Exclusions) under Forecast Accuracy Standards and Procedures is
amended to read as:

“4.3.1 Forecast percentage errors occurring on the following conditions shall
be excluded from the calculation of the MAPE and Perc95 of must
dispatch generating units:

ee
DC — ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT
MARKET (WESM) RULES AND MARKET MANUAL ON PROCEDURES FOR THE MONITORING OF
FORECAST ACCURACY STANDARDS FOR MUST DISPATCH GENERATING UNITS FOR THE

IMPLEMENTATION OF ENHANCEMENTS TO WESM DESIGN AND OPERATIONS 6/8

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(a) the dispatch target of the must dispatch generating unit was
restricted below its projected output,

(b) the output of the must dispatch generating unit was restricted by the
System Operator as indicated in the System Operator's report
submitted to the Market Operator in accordance with the WESM
Rules;

(c) a market suspension or market intervention was declared for the
dispatch interval,

(d) an outage resulted in its derating; or

(e) a natural calamity (e.g., typhoon, landslide) affected the ability of
the must dispatch generating unit to forecast accurately.”

i. Section 4.4 (Monitoring, Reporting and Review) under Forecast Accuracy
Standards and Procedures is amended to read as:

"4.4.1 The Enforcement and Compliance Office shall report to the PEM Board
and the DOE the annual compliance of each must dispatch generating
unit to the forecast accuracy standards with respect to its projected
outputs within two (2) calendar months after the end of the period
specified in Section 4.1.2.

4.4.2 The Enforcement and Compliance Office shall report to the PEM Board
and the DOE the status of the compliance of each must dispatch
generating unit to the forecast accuracy standards as of the most
recent Billing Period with a final statement on a monthly basis.

4.4.3 The Market Operator shall review annually the forecast accuracy
standards set in Section 4.1, and shall provide recommendation to the
PEM Board and the DOE.”

j. Section 4.5 (Transition Period) under Forecast Accuracy Standards and
Procedures is amended to read as:

“4.5 Transition Period

4.5.1 A transition period covering the period specified by the DOE shall be
implemented. The sanction on the non-compliance with the forecast
accuracy standards shall be implemented upon the commercial
operation of the enhanced WESM design and operations.

4.5.2 During the transition period, must dispatch generating units who fail to
meet the requisite forecast accuracy standards set out in Section 4.1.1
of this Market Manual shall not be liable for sanctions imposed under
this Market Manual.

4.5.3 Before the end of the transition period, the Market Operator shall
submit to the DOE and other concerned government agencies a report

eee
DC —- ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT
MARKET (WESM) RULES AND MARKET MANUAL ON PROCEDURES FOR THE MONITORING OF
FORECAST ACCURACY STANDARDS FOR MUST DISPATCH GENERATING UNITS FOR THE
IMPLEMENTATION OF ENHANCEMENTS TO WESM DESIGN AND OPERATIONS

7/8
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on the compliance of must dispatch generating units to the forecast
accuracy standards, and it shall inform the must dispatch generating
units on their performance with respect to the forecast accuracy
standards.

XXX XXX XXX”

k. Section 5.2 (Publication) under Amendment, Publication and Effectivity is
amended to read as:

“5.2 Publication

5.2.1 This Market Manual, as it may be amended from time to time, shall be
published in the WESM market information website.”

|. Appendix A (NIST Method for Calculating Percentiles) is amended to read as:

“Appendix A NIST Method for Calculating Percentiles

XXX XXX XXX

Sample list: Yj = {5%, 12%, 3%, 20%, 15%}. N = 5

Sample ordered data: Yi = {3%, 5%, 12%, 15%, 20%}; N = 5

XXX XXX XXX”
Section 3. Separability Clause. If for any reason, any section or provision of this
Circular is declared unconstitutional or invalid, such parts not affected shall remain
valid and subsisting.
Section 4. Effectivity. This Circular shall take effect fifteen (15) days following its
complete publication in at least two (2) newspapers of general circulation. Copies
thereof shall be filed with the University of the Philippines Law Center — Office of
National Administrative Register (UPLC-ONAR).

Issued this MAR 16 202620 at the DOE, Energy Center, Rizal Drive, Bonifacio
Global City, Taguig City, Metro Manila.

O eel’

Sacretary

Le fs Republic of the Philippines
ead DEPARTMENT OF ENERGY
east

9

ge In REPLYING PLS. CITE:
DOE-AGC-21001156
QQ OUN GLUE
DC - ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT
MARKET (WESM) RULES AND MARKET MANUAL ON PROCEDURES FOR THE MONITORING OF

FORECAST ACCURACY STANDARDS FOR MUST DISPATCH GENERATING UNITS FOR THE
IMPLEMENTATION OF ENHANCEMENTS TO WESM DESIGN AND OPERATIONS 8/8