=== dc2021-10-0034-pages-1.ppm ===
PX. Py Republic of the Philippines
ie > DEPARTMENT OF ENERGY
(Kagawaran ng Enerhiya)

DEPARTMENT CIRCULAR NO._ Dé 2021 -10- 0034

ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY
SPOT MARKET (WESM) RULES AND MARKET MANUAL ON THE
PROCEDURES FOR CHANGES TO THE WESM RULES, RETAIL RULES AND
MARKET MANUALS

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
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.
DC2002-06-0003;

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 13 March 2020, the Rules Change Committee (RCC) finalized its
proposed amendments to the WESM Rules and Market Manual relative to the rules
change process, and thereafter approved the publication of the proposed
amendments in the market information website to solicit comments from market
participants and other interested parties;

WHEREAS, the proposal aims to enhance the rules change process and align with
relevant policies of the DOE concerning WESM governance;

WHEREAS, on 15 May 2020, the RCC during its 165° Meeting reviewed and
deliberated on the proposal giving due course to the comments and recommendations
received from the market participants, and thereafter approved its endorsement to the
PEM Board;

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

WHEREAS, on 10 June 2020, the PEM Board-approved amendments to the WESM
Rules and Market Manual on the Procedures for Changes to the WESM Rules, Retail
Rules and Market Manuals were submitted to the DOE for final approval, in
compliance with Chapter 8 of the WESM Rules;

Energy Center, Rizal Drive, Bonifacio Global City, Taguig City, Metro Manila, Philippines
Tel. No.: 8840-2267 * Trunkline: 8479-2900
Website: www.doe.gov.ph * E-mail: info@doe.gov.ph

=== dc2021-10-0034-pages-2.ppm ===
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 public consultations
on the abovementioned proposed amendments to solicit inputs and consider
comments of stakeholders in the finalization of the same;

WHEREAS, in a letter dated 23 March 2021, the DOE remanded the proposal to the
PEM Board to address inconsistencies in the proposal relating to the process of the
PEM Board approval of the urgent proposals, its period of effectivity and endorsement
as general amendment to the DOE;

WHEREAS, on 16 April 2021 and 21 May 2021 the RCC discussed and deliberated
on the proposed revisions to address the inconsistencies raised by the DOE and
thereafter adopted RCC Resolution No. 2021-04 entitled “Addition to RCC Resolution
No. 2020-14 on the Proposed WESM Manual on Procedures for Changes to the
WESM Rules, Retail Rules and Market Manuals” for endorsement to the PEM Board;

WHEREAS, on 26 May 2021, after due evaluation and deliberation, the PEM Board
during its 36 Regular Meeting approved for endorsement to the DOE the above
stated RCC proposal:

WHEREAS, in a letter dated 10 June 2021, the PEM Board endorsed the said
proposal to the DOE for its approval;

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 Market Manual on
the Procedures for Changes to the WESM Rules, Retail Rules and Market Manuals:

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

a. Clause 8.4.1.2 under Clause 8.4.1 (Rules Change Classification Procedures) is
hereby amended to read as:

“8.4.1.2 The process for the approval of proposed amendments to the WESM
Rules and/or existing Market Manuals, or adoption of new Market
Manuals shall be made in accordance with the detailed guidelines and
procedures under WESM Rules Clause 8.4.1.3.

The effectivity of changes to the WESM Rules and/or existing Market
Manuals or the adoption of new Market Manuals shall be as follows:

(a) Urgent Proposals shall take effect 24 hours after the completion of
publication and shall be effective for no more than six (6) months
from such approval, or until such time that a general amendment on
the same matter has been approved and takes effect, whichever

DC. ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET
(WESM) RULES AND MARKET MANUAL ON THE PROCEDURES FOR CHANGES TO THE WESM RULES,
RETAIL RULES AND MARKET MANUALS

Page 2 of 8

=== dc2021-10-0034-pages-3.ppm ===
comes first. The PEM Board may extend the effectivity only once for
up to six (6) months and shall inform the DOE of such extension.
Urgent proposals shall apply only to proposed amendments to the
provisions of the WESM Rules and/or existing Market Manuals.

(b) Minor and/or General Proposals shall take effect upon approval and
promulgation by the DOE.”

b. Clause 8.5.2 under Clause 8.5 (Consideration of Proposals to Change the WESM
Rules or Market Manuals or Adopt New Market Manuals by the PEM Board) is
hereby amended to read as:

“8.5.2 PEM Board discretions when assessing a proposal for a change in the
WESM Rules or Market Manuals, or for the adoption of new Market
Manuals

XXX XXX XXX

(b) Consult with such persons as the PEM Board reasonably considers
will likely be affected by the proposal;

(c) Seek such information and views from any person whom the PEM
Board considers relevant or as may be practicable in the
circumstances; and

(d) Remand a proposal to the Rules Change Committee for further
study. As necessary, the Rules Change Committee may subject a
proposal to consultation as set out in WESM Rules Clause 8.4.5 (b).”

c. Clause 8.6.4 under Clause 8.6 (Approval of Proposal for Changes to the WESM
Rules or Market Manuals or Adopt New Market Manuals) is hereby amended to
read as:

“8.6.4 Approval of a proposal

If the DOE concludes that a proposal is consistent with the Act and the
public interest and satisfies the criteria, which are set out in WESM Rules
Clause 8.4.2, it shall approve the proposal, cause its publication, and
inform the Governance Arm to incorporate approved amendments to the
relevant market rules documents for posting in the Governance Arm
website and market information website. The proposal approved by the
DOE shall take effect within fifteen (15) working days from its publication
or on such later date as the DOE, determines or upon such time that the
amendment may be implemented.”

Section 2. Amendments to the WESM Market Manual on the Procedures for
Changes to the WESM Rules, Retail Rules and Market Manuals. The following
provisions in the Market Manual on the Procedures for Changes to the WESM Rules,
Retail Rules and Market Manuals, Issue No. 3.0, are hereby amended:

a. Section 1.1 (Purpose) under Section 1 (Introduction) is amended to read as:

a Purpose
DC ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET

(WESM) RULES AND MARKET MANUAL ON THE PROCEDURES FOR CHANGES TO THE WESM RULES,
RETAIL RULES AND MARKET MANUALS
Page 3 of 8
=== dc2021-10-0034-pages-4.ppm ===
This Manual:
XXX XXX XXX

(b) Describes the responsibilities and undertakings required of the DOE,
the PEM Board, the Rules Change Committee, the other WESM
Governance Committees, any WESM Member and of any interested
parties in the initiation, evaluation, and approval or disapproval of any
amendment, review or interpretation of the WESM Rules, Retail
Rules and Market Manuals, guidelines and issuances governing the
WESM. The procedures described in this Market Manual shall be
read and construed consistent with Chapter 8 of the WESM Rules.”

b. Original term “PEM Board Committees” under Section 2.1 (Definitions) is amended
to read as:

“WESM Governance Committees refers to the Committees created by the PEM
Board pursuant to the WESM Rules.”

c. Original term “PEM Committee Secretariat” under Section 2.1 (Definitions) is
amended to read as:

‘WESM Governance Committee Secretariat refers to the support group tasked to
handle administrative matters of the WESM Governance Committees.”

d. Original term “Publish” under Section 2.1 (Definitions) is amended to read as:

“Publish means to make information available through the market information
website and the Governance Arm website.”

e. Section 5.3 (To whom submitted) under Section 5 (Proposals for Rules Change) is
amended to read as:

“5.3 To whom submitted

(a) The proposals shall be submitted to the Rules Change Committee
through the WESM Governance Committee Secretariat, who shall
check for the completeness of the proposal and its compliance with
the formal requirements set forth in Section 5.2 of this Manual. Only
proposals which are made in the prescribed form shall be accepted
and considered as submitted.

(b) Complete proposals shall be given due course and shall be
forwarded to the Rules Change Committee for consideration.
Proposals for general and minor amendments shall be forwarded to
the Rules Change Committee within five (5) working days from
receipt of complete proposal. Proposals for urgent amendments will
be forwarded immediately upon receipt as provided for in Section
7.2(a).

(c) Incomplete proposals or those which do not comply with the formal
requirements shall be denied due course, and the WESM

DC ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET
(WESM) RULES AND MARKET MANUAL ON THE PROCEDURES FOR CHANGES TO THE WESM RULES,
RETAIL RULES AND MARKET MANUALS

Page 4 of 8

=== dc2021-10-0034-pages-5.ppm ===
Governance Committee Secretariat shall notify the proponent of the
denial citing the grounds therefor. The proponent may re-submit the
proposal and comply with the formal requirements.”

f. Section 6.1.1 (Assessment of Proposal) under Section 6.1 (Rules Change
Committee) is amended to read as:

“6.1.1 Assessment of Proposal

(a) Upon endorsement by the WESM Governance Committee
Secretariat, the Rules Change Committee shall give due course to
the proposal in the next Rules Change Committee meeting.

XXX XXX XXX

(d) If the Rules Change Committee determines that the proposal
satisfies the criteria, it shall notify the PEM Board of the proposal and
proceed to evaluate the proposal in the manner set forth in this
Market Manual.”

g. Section 6.1.2 (Consultation and referral to Other Committees and Persons) under
Section 6.1 (Rules Change Committee) is amended to read as:

“6.1.2 Consultation and referral to Other Committees and Persons
XXX XXX XXX

(b) The following committees or persons shall likewise be notified of the
proposal and invited to make their written submissions within the
period stated in Section 6.1.3(a) of this Market Manual:

(i) XXX XXX = XXX

(ii) XXX XXX — XXX

(iii) the PEM Audit Committee, where the proposal affects any
matter falling under its competence;

(iv) XXX XXX — XXX

(v) XXX XXX — XXX

(vi) the Energy Regulatory Commission, where the proposal affects
any provision of the Philippine Grid Code, Philippine
Distribution Code, and other ERC issuances, for the purpose,
among other things, of determining the effect of the proposal
and the need to harmonize such proposal with the provisions of
these issuances.

”

XXX XXX = XXX

h. Section 6.1.3 (Written Submissions) under Section 6.1 (Rules Change Committee)
is amended to read as:

“6.1.3 Written Submissions

DC ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET
(WESM) RULES AND MARKET MANUAL ON THE PROCEDURES FOR CHANGES TO THE WESM RULES,
RETAIL RULES AND MARKET MANUALS

Page 5 of 8
=== dc2021-10-0034-pages-6.ppm ===
(a) Xxx XXX XXX

(b) Only written submissions actually received by the WESM
Governance Committee Secretariat within the prescribed period shall
be validly considered by the Rules Change Committee.

(C) Xxx XXX XXX

(d) The written submissions may be provided through printed
documents, by electronic means or by facsimile, and directed to the
Rules Change Committee through the WESM Governance
Committee Secretariat.”

i. Section 6.2.2 under Section 6.2 (PEM Board) is amended to read as:
"6.2.2 The PEM Board shall render its decision

(a) Xxx XXX XXX

(i) x KX XXX

(ii) consult with persons who are likely to be affected by the proposal;

(iii) seek such information and views from any person with expertise
on the subject matter of the proposal; and

(iv) remand the proposal to the Rules Change Committee for further
study. As necessary, the Rules Change Committee may subject
the proposal to consultation as set out in WESM Rules Clause
8.4.5 (b).

”

XXX XXX XXX

j. Section 7.4 (Effectivity of Urgent Amendment) under Section 7 (Urgent
Amendments) is amended to read as:

“7.4 Effectivity of Urgent Amendment

(a) The approved urgent amendment shall become effective within
twenty-four (24) hours upon publication of the relevant Rules and/or
Market Manuals) in the market information website and Governance
Arm website. The Governance Arm and Market Operator shall issue
an advisory to the participants of the date of its effectivity. The
Governance Arm and Market Operator shall publish the amendments
within twenty-four (24) hours from its approval, and advisories shall
be made through email, the market information website and the
Governance Arm website.

XXX XXX = XXX

(f) Within ten (10) days from ratification by the PEM Board of the urgent
amendment or upon approval by the PEM Board, the Rules Change
Committee shall notify and invite all WESM Members and all other
interested parties of the amendment to make written submissions as
a general amendment in accordance with Section 6 hereof. After one
(1) billing period but no later than ninety (90) calendar days from the

DC ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET
(WESM) RULES AND MARKET MANUAL ON THE PROCEDURES FOR CHANGES TO THE WESM RULES,
RETAIL RULES AND MARKET MANUALS

Page 6 of 8
=== dc2021-10-0034-pages-7.ppm ===
PEM Board's approval, the Market Assessment Group shall prepare
and submit to the Rules Change Committee, copy furnished the PEM
Board and the DOE, an assessment report on the implementation of
the approved urgent amendments. Thereafter, the Rules Change
Committee shall deliberate on the written submissions received to
consider the urgent amendment as a general amendment in
accordance with Section 6 hereof.

(g)On the basis of the assessment conducted by the Market
Assessment Group, the PEM Board may extend the effectivity of
urgent amendments only once for up to six (6) months and shall
inform the DOE of such extension.”

k. Section 8 (Effectivity) is amended to read as:

“8 Effectivity of Minor and General Amendment

General and minor amendments to the WESM Rules, Retail Rules and
Market Manual(s) approved by the DOE shall take effect fifteen (15)
working days from its publication in two (2) newspapers of general
circulation, or on such later date as determined by the DOE, or upon
such time that the amendments may be implemented. Urgent
amendments to the WESM Rules shall take effect in accordance with
Section 7.4 of this Manual.”

|. Section 9.2 (Custodian of Records) under Section 9 (Reports and Records) is
amended to read as:

“9.2

Custodian of Records

The Head of the Rules Change Committee Secretariat shall have official
custody and be in-charge of the records prepared for or in connection
with the rules change process, including but not limited to the journal,
resolutions and minutes of deliberations of the Rules Change Committee
or the PEM Board. The Governance Arm shall keep and maintain the
Official version of all the amendments made pursuant to this Market
Manual.”

m.Section 11.2 (Publication and Effectivity) under Section 11 (Amendments,
Publication and Effectivity) is amended to read as:

"12

Publication and Effectivity

This Market Manual, as it may be amended from time to time, shall be
published in the Governance Arm website and market information
website for reference of the stakeholders.

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.

DC

ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET

(WESM) RULES AND MARKET MANUAL ON THE PROCEDURES FOR CHANGES TO THE WESM RULES,
RETAIL RULES AND MARKET MANUALS

Page 7 of 8

=== dc2021-10-0034-pages-8.ppm ===
Section 4. Effectivity. This Circular shall take effect fifteen (15) days following its
complete publication in at least two (2) newspapers of general circulation and shall
remain in effect until otherwise revoked. Copies thereof shall be filed with the University
of the Philippines Law Center — Office of National Administrative Register (UPLC-
ONAR).

Issued on OC] 12 2021 atthe Energy Center, Rizal Drive, Bonifacio Global City,
Taguig City, Metro Manila.

sh &cusi

ecretary

yt Republic of the Philippines
ey DEPARTMENT OF ENERGY
Chall REPLYING PLS, ciTE:

DOE-AGC-
WA 01

DC ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY SPOT MARKET
(WESM) RULES AND MARKET MANUAL ON THE PROCEDURES FOR CHANGES TO THE WESM RULES,
RETAIL RULES AND MARKET MANUALS

Page 8 of 8