=== dc2021-03-0008-pages-1.ppm === Republic of the Philippines DEPARTMENT OF ENERGY (Kagawaran ng Enerhiya) DEPARTMENT CIRCULAR NO.__DC 202)- 04 - COOk Ww ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) RULES AND MARKET MANUALS FOR THE IMPLEMENTATION OF POLICY AND FRAMEWORK GOVERNING THE OPERATIONS OF EMBEDDED GENERATORS 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, Retail Rules and their Market Manuals shall be undertaken in accordance with the provisions of Chapter 8 of the WESM Rules; WHEREAS, on 08 February 2019, the DOE promulgated the Department Circular No. DC2019-02-0003, providing the framework governing the operations of Embedded Generators; WHEREAS, under the Section 11.1 of the Department Circular No. DC2019-02-0003, the Market Operator was mandated to propose changes to the WESM Rules and Market Manuals to incorporate the new policy on Embedded Generators, WHEREAS, 10 June 2019, the Independent Electricity Market Operator of the Philippines (IEMOP) submitted to the Rules Change Committee (RCC) its proposed amendments to the WESM Rules and various Market Manuals in line with the implementation of the Department Circular No. DC2019-02-0003; WHEREAS, on 21 June 2019, the RCC during its 153 RCC Meeting discussed the proposed amendments, and thereafter approved the publication of the proposals in the WESM market information website to solicit comments from market participants and other interested parties; WHEREAS, on 16 August 2019, the RCC during its 155" RCC Meeting deliberated on the proposal giving due course to the comments received from WESM participants, Philippine Electricity Market Corporation and the Technical Committee; WHEREAS, on 20 September 2019, the RCC during its 156" RCC Meeting finalized and approved the proposal for endorsement to the PEM Board; Energy Center, Rizal Drive, Bonifacio Global City, Taguig City, Metro Manila, Philippines Tel. No.: 8840-2267 * Trunktine: 8479-2900 Website: www.doe.gov.ph * E-mail: info@doe.gov.ph === dc2021-03-0008-pages-2.ppm === WHEREAS, on 25 September 2019, after due evaluation and deliberation, the PEM Board during its 16" Regular PEM Board Meeting approved for endorsement to the DOE the above stated RCC proposal; WHEREAS, on 01 October 2019, the PEM Board-approved amendments to the WESM Rules and relevant Market Manuals were submitted to the DOE for final approval, in compliance with Chapter 8 of the WESM Rules; 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; NOW THEREFORE, after careful review of the PEM Board-approved proposal and the comments and recommendations received on the same, the DOE, pursuant to its authority under the EPIRA and the WESM Rules, hereby adopts, issues, and promulgates the following amendments to the WESM Rules and various Market Manuals: Section 1. Amendments to the WESM Rules. The following provisions of the WESM Rules, as amended, are hereby further amended: a. Section 2.3.1.1 (Generation Company) under Categories of WESM Member is amended to read as — “2.3.1.1 A Generation Company with facilities directly connected to a transmission system shall register with the Market Operator as a WESM member. A Generation Company with embedded generator shall register with the Market Operator as a WESM Member if it meets the criteria under Clause 2.3.1.10; otherwise, it may register as a WESM Member on a voluntary basis.” b. Section 2.3.1.3 (Generation Company) under Categories of WESM Member is amended to read as — “9.3.1.3 Subject to Clauses 2.3.1.5 and 2.3.1.6, a generating unit or a group of generating units connected at a common connection point with a nameplate rating or a combined nameplate rating of greater than or equal to the following regional thresholds shall be classified as a scheduled generating unit: (a) 10 MW for Luzon Grid; (b) 5 MW for Visayas Grid; and (c) 5 MW for Mindanao Grid.” c. Section 2.3.1.4 (Generation Company) under Categories of WESM Member is amended to read as — “9 3.1.4 Subject to Clauses 2.3.1.5 and 2.3.1.6, a generating unit or a group of generating units connected at a common connection point with a nameplate rating or a combined nameplate rating less than the regional ET DC ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) RULES AND MARKET MANUALS FOR THE }MPLEMENTATION OF POLICY AND FRAMEWORK GOVERNING THE OPERATIONS OF EMBEDDED GENERATORS 2/8 === dc2021-03-0008-pages-3.ppm === thresholds provided in Clause 2.3.1.3, shall be classified as a non- scheduled generating unit, but may at its option be classified as a scheduled generating unit.” d. New Section 2.3.1.13 (Generation Company) under Categories of WESM Member is added to read as — “9 3.1.13 A Generation Company of an embedded generator shall register with the Market Operator if: (a) The Pmax of its generating unit is greater than or equal to 10 MW and is located in the Luzon grid, or 5 MW and is located in the Visayas or Mindanao grids; or (b) The Pmax of its generating unit is below the regional thresholds provided under Clause 2.3.1.10(a) but it has a bilateral contract outside its host distribution utility, or intends to sell to the WESM, or inject power to the transmission system, or (c) Its generating unit is under the Feed-in Tariff system.” e. The term “Pmax’ is added under Glossary (Chapter 11) to read as — “Pmax. The maximum demand in MW that a generating unit, or generating block or module in case of a combined cycle power plant, can reliably sustain for an indefinite period of time, based on time generator capability tests as provided in the latest Certificate of Compliance.” f. The term “Non-Scheduled Generating Unit" under Glossary (Chapter 11) is amended to read as — “Non-Scheduled Generating Unit. A generating unit or a group of generating units connected at a common point with a nameplate rating and a combined nameplate rating less than the regional thresholds provided in Clause 2.3.1.3.” g. The term “Scheduled Generating Unit” under Glossary (Chapter 11) is amended to read as — “Scheduled Generating Unit. A generating unit so classified in accordance with Clause 2.3.1.2 (a)(i). A generating unit or group of generating units connected at a common connection point with a nameplate rating or a combined nameplate rating of greater than or equal to the regional thresholds provided in Clause 2.3.1.3.” Section 2. Amendments to the WESM Manual on Metering Standards and Procedures. The following provisions in the WESM Manual on Metering Manual on Metering Standards and Procedures Issue 12.0 are hereby amended: a. Section 2.8 (Communication Links for the Meter) under Metering Installation Standards is amended to read as — “2.8. COMMUNICATION LINKS FOR THE METER ET DC ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) RULES AND MARKET MANUALS FOR THE IMPLEMENTATION OF POLICY AND FRAMEWORK GOVERNING THE OPERATIONS OF EMBEDDED GENERATORS 18 3 === dc2021-03-0008-pages-4.ppm === The communication link to be installed for metering installations of facilities directly connected to the transmission system shall be a dedicated line for metering purposes (e.g. PLDT, Bayantel, Digitel lines or GSM Modem) of the MSP. The communication link to be installed for metering installations of embedded generators shall comply with the relevant provisions of the Philippine Distribution Code.” b. Section 2.9 (Security of Metering Installations and Data) and its Subsections under Metering Installation Standards are amended and renumbered to read as — “2.9 SECURITY OF METERING INSTALLATIONS AND DATA 2.9.1 General Requirements Security of metering installations of facilities directly connected to the transmission system shall comply with the requirements of this Section 2.9. Metering installations of embedded generators shall comply with the security requirements of the Philippine Distribution Code. 2.9.2 Physical Security of Metering Equipment XXX XXX XXX 2.9.2.1 Instrument transformers connections XXX XXX XXX 2.9.2.2 Conduit Systems XXX XXX XXX 2.9.2.3 Second Terminal Box XXX XXX XXX 2.9.2.4 Meter Enclosure XXX XXX XXX 2.9.2.5 Meter Test Block/Switch XXX XXX XXX 2.9.2.6 Meter Seals and Padlock bc ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) RULES AND MARKET MANUALS FOR THE IMPLEMENTATION OF POLICY AND FRAMEWORK GOVERNING THE OPERATIONS OF EMBEDDED GENERATORS Ale === dc2021-03-0008-pages-5.ppm === XXX XXX XXX 2.9.2.7 Metering Perimeter XXX XXX XXX 2.9.3 Security of Metering Data 2.9.3.1 Each metered WESM Member through its Metering Services Provider shall ensure that the metering data recorded in each metering installation is protected from direct local or remote electronic access, including during the transfer of such metering data to the communication interface of the metering database. The Metering Services Provider shall implement suitable password and other security controls. 2.9.3.2 Metering data shall be protected during delivery to the Market Operator other than electronic means, protected from access by persons other than itself regardless of the medium, including but not limited to diskette, CDs and paper, on or in which such metering data is transcribed, transferred or stored for purposes of such delivery. 2.9.3.3. Each Metering Services Provider shall keep all records of passwords for electronic access to metering data confidential. 2.9.3.4 The Metering Services Provider shall provide, for each metering installation in respect of which it is the Metering Services Provider ‘read-only’ passwords to the Market Operator. 2.9.3.5 The Metering Services Provider may, and at the request of the Market Operator shall, change one or more of the passwords relating to a metering installation in respect of which it is the Metering Services Provider.” c. New Section 2.10.4 under Redundant Metering Installation is added to read as — “210.4 Facilities of embedded generators are not required to have alternate metering.” Section 3. Amendments to the WESM Manual on Registration, Suspension and De-Registration Criteria and Procedures. The following provisions in the WESM Market Manual on Registration, Suspension and De-Registration Criteria and Procedures, Issue No. 8.0 are hereby amended: a. Section 1.4 (General Guidelines) and its Subsections under Introduction and General Guidelines are amended and renumbered to read as — “4.4 General Guidelines XXX XXX XXX i EOTTY SPOT MARKET Dc ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) RULES AND MARKET MANUALS FOR THE IMPLEMENTATION OF POLICY AND FRAMEWORK GOVERNING THE OPERATIONS OF EMBEDDED GENERATORS 5/8 === dc2021-03-0008-pages-6.ppm === 1.4.3 A Generation Company with embedded generator shall register with the Market Operator if: (a) The Pmax of its generating unit is greater than or equal to 10 MW and is located in the Luzon grid, or 5 MW and is located in the Visayas or Mindanao grid, or (b) The Pmax of its generating unit is below the regional thresholds provided under Section 1.4.3 (a) but it has a bilateral contract outside its host distribution utility, or intends to sell to the WESM, or inject power to the transmission system, or (c) Its generating unit under the Feed-in Tariff system. 1.4.4 Given the mandatory nature of membership in the WESM for relevant persons or entities, the Market Operator shall endeavor to ensure that no unnecessary barriers to entry to the WESM are presented. 1.4.5 Considering its implications, suspension and deregistration from the WESM shall be carried out in strict compliance with the procedures in this Manual.” b. Section 2.5.4.1 (Generation Unit Classification) under Other Considerations is amended to read as — “2.5.4 Other Considerations 2.5.4.1. Generation Unit Classification (a) An Applicant wishing to register as Generation Company shall, upon application, classify each of the generating unit or group of generating units which form part of the generation system it owns or operates or controls or from which it otherwise sources electricity as either ~ (i) Scheduled generating unit/s for unit/s that are connected to a common connection point with a nameplate rating or a combined nameplate rating of greater than or equal to the following regional thresholds: o 10 MW for Luzon Grid o 5 MW Visayas Grid; and o 5MW for Mindanao Grid. (ii) Non-scheduled generating unit/s for unit/s that are connected at a common connection point with a nameplate rating and a combined nameplate rating of less than the regional thresholds for scheduled generating unit/s. However, the Generation Company may also elect to have such unit/s classified as scheduled generating units. a DC ~ ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) RULES ANO MARKET MANUALS FOR THE IMPLEMENTATION OF POLICY AND FRAMEWORK GOVERNING THE OPERATIONS OF EMBEDDED GENERATORS 6/8 === dc2021-03-0008-pages-7.ppm === (iii) A must dispatch generating unit for a generating unit or group of generating units connected at a common connection point that is intermittent renewable energy resource-based, whether or not under the Feed-in Tariff system, such as wind, solar, run-of-river hydro or ocean energy with the corresponding DOE certification. However, the Generation Company may also elect to have such unit/s classified as scheduled generating unit/s or non-scheduled generating unit/s subject to this Section. (iv)A priority dispatch generating unit for a generating unit or group of generating units connected at a common connection point that uses biomass as fuel, that is under the Feed-in Tariff system, with the corresponding Feed-in Tariff Certificate of Compliance issued by the ERC. However, the Generation Company may also elect to have such unit/s classified as scheduled generating unit/s or non-scheduled generating unit/s subject to this Section. (v) Battery Energy Storage System are generating units that are connected at a common connection point that are capable of storing electrical energy through chemical reactions from which it is able to charge or discharge electrical energy to the power system and that can be dispatched to any operating level within their entire capacity range but are also constrained by a MW or MWh limit to (1) generate Energy, (2) curtail the consumption of Energy in the case of demand response, or (3) consume Energy. However, the Generation Company may also elect to have such unit/s classified as scheduled generating unit/s or non-scheduled generating unit/s subject to this Section. (vi)Pumped-storage units are generating units connected at a common connection point that is capable of storing water from a lower elevation reservoir to a higher elevation reservoir for the purpose of production of electrical power shall be classified as a pumped-storage unit. However, the Generation Company may also elect to have such unit/s classified as scheduled generating unit/s or non-scheduled generating unit/s subject to this Section.” c. Section 5.2.1 (Requirements for Cessation of Registration/Notice to the Market Operator) under Cessation of Registration is amended to read as- “5.2.1 Requirements for Cessation of Registration/Notice to the Market Operator 5.2.1.1 A WESM Member wishing to cease to be registered in any one or more of the categories in which it is registered shall notify the Market Operator, System Operator and the Network Service Provider in writing. XXX XXX XXX i bc ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) RULES AND MARKET MANUALS FOR THE IMPLEMENTATION OF POLICY AND FRAMEWORK GOVERNING THE OPERATIONS OF EMBEDDED GENERATORS 7/8 === dc2021-03-0008-pages-8.ppm === 5.2.1.5 A voluntary WESM Member may de-register by following the procedures in this Section 5.2.1.” 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. Section 5. Effectivity. This Circular shall take effect 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 2020 at the DOE, Energy Center, Rizal Drive, Bonifacio Global City, Taguig City, Metro Manila. ONSWG. CUSI Secretary » Republic af tha Philippines C2 DEPARTMENT OF ENERGY “ It REPLYING PLS, CITE LAL ATTA MAR 16 20:21 AP RRL DC. — ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM) RULES AND MARKET MANUALS FOR THE IMPLEMENTATION OF POLICY AND FRAMEWORK GOVERNING THE OPERATIONS OF EMBEDDED GENERATORS 8/8