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Republic of the Philippines
DEPARTMENT OF ENERGY
(Kagawaran ng Enerhiya)

DEPARTMENT CIRCULAR NO._ PC 202! -07- 002Y ,

ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY
SPOT MARKET (WESM) RULES FOR THE OPERATION OF THE RENEWABLE
ENERGY MARKET

WHEREAS, Section 37 and 37(p) of the Electric Power Industry Reform Act (EPIRA)
mandates the DOE to supervise the restructuring of the electricity industry and
formulate such rules and regulations as may be necessary to implement the objectives
of the Act;

WHEREAS, Sections 30 and 37(f) of the 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, under Section 8 of the Renewable Act of 2008 states that the DOE shall
establish the Renewable Energy Market (REM) and shall direct the Philippine
Electricity Market Corporation (PEMC) to implement changes to the WESM Rules in
order to incorporate the rules specific to the operation of the REM under the WESM;

WHEREAS, on 04 December 2019, the DOE promulgated the REM Rules through
Department Circular No. DC2019-12-0016 to facilitate the compliance of the
Mandated Participants with the Renewable Portfolio Standards (RPS);

WHEREAS, on 27 February 2020, the PEMC submitted to the Rules Change
Committee (RCC) its proposed amendments to the WESM Rules and Retail Rules for
the operation of REM as approved by the REM Governance Committee:

WHEREAS, the proposal aims to harmonize the WESM Rules and the Retail Rules
with the policies stipulated in Section 8 of the Renewable Act of 2008 and the REM
Rules;

WHEREAS, the proposal also aims to enable the RE Registrar (RER) to carry out its
functions in issuing Renewable Energy Certificates (RECs) by gaining rights of access
to WESM and Retail Market registration, metering, and settlement data and other

Energy Center, Rizal Drive, Bonifacio Giobal City, Taguig City, Metro Manila, Philippines 1632
Trunk line No. (632) 8479-2900

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confidential information that are vital to the REM operations and its corresponding
reporting mechanism pursuant to the RPS Rules;

WHEREAS, on 10 March 2020, the RCC during its PEMC submitted the RGC-
approved proposal, which the RCC approved for publication in the PEMC website to
solicit comments from industry stakeholders and interested parties:

WHEREAS, following the 30-working day commenting period from publication date on
11 March 2020, comments were received from the Independent Electricity Market
Operator of the Philippines (IEMOP);

WHEREAS, on 15 May 2020, the RCC during the 165° RCC Meeting reviewed the
proposal and deliberated the comments, and thereafter approved for endorsement to
the PEM Board;

WHEREAS, on 27 May 2020, after due evaluation and deliberation, the PEM Board
during its 24°" Regular PEM Board Meeting approved for endorsement to the DOE the
above stated RCC-approved proposal:

WHEREAS, on 08 June 2020, the Philippine Electricity Market Corporation submitted
the abovementioned PEM Board-approved proposed amendments to the DOE;

WHEREAS, on 31 July 2020, the DOE posted the draft Department Circular adopting
the proposed amendments in the DOE website to solicit comments from the market
participants and other interested parties;

WHEREAS, on 10 and 15 December 2020, the DOE conducted various public
consultation on the said proposed amendments to ensure transparency and
consistency with the objectives of the EPIRA;

WHEREAS, the DOE reviewed the said PEM Board-approved proposal and the
comments and recommendations from the public consultation, made further revisions
on the proposed amendments for consistency with the objectives of the WESM such
as transparency and efficiency;

NOW THEREFORE, pursuant to its authority under the EPIRA, 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. New Clause 5.2.1.6 under Clause 5.2.1 (Provision of Information) is hereby added
to read as:

"5.2.1.6 The Market Operator shall make available to the Renewable Energy
Registrar all pertinent information to facilitate the participation and
transaction with the RE Market of the WESM members, for their
compliance to the Renewable Portfolio Standards, pursuant to the RE
Act.”

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OC. ~ ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM)
RULES FOR THE OPERATION OF THE RENEWABLE ENERGY MARKET
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b. Clause 5.3.2 (i) under Clause 5.3.2 (Exceptions) is added to read as:

“5.3.2 (l)The disclosure of registration and settlement information to the RE
Registrar, pursuant to the REM Rules, of the following:

i. WESM members participating in the REM; and

ii. directily-connected customers who have contracts with Generation
Companies.”

c. New term Renewable Energy Market under the Glossary is hereby added to read
as:

“Renewable Energy Market or REM. The market developed and implemented by
PENC where the trading of Renewable Eneray Certificates (RECs) is made.”

dG. New term REM Rules under the Glossary is hereby added to read as:

“REM Rules. The REM Rules refers to the rules established by the DOE for the
operation of the RE Market and to govern the conduct of the RE Registrar for the
purpose of implementing the RPS Rules for both the On-Grid and Off-grid Areas.

e. New term Renewable Energy Registrar under the Glossary is hereby added to read
as

“Renewable Energy Registrar or the RE Registrar. The unit established in
accordance with Republic Act No. 9513 to issue, keep and verify RECs
corresponding to energy generated from eligible RE facilities.”

Section 2. Separability Clause. |f 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 3. 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 JUI 0 9 2021 at the DOE, Energy Center, Rizal Drive, Bonifacio
Global City, Taguig City, Metro Manila.

ANA
ONSO G. CUS!
PE Republic of the Philippines Secretary

CAME) OfPARTMENT OF ENERGY
CeO i nemuvina ma cre

OE-AGC-210041

MT

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oc. - ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET (WESM)
RULES FOR THE OPERATION OF THE RENEWABLE ENERGY MARKET