=== dc2024-01-0004-pages-1.ppm ===
Republic of the Philippines
DEPARTMENT OF ENERGY
(Kagawaran ng Enerhiya)

DEPARTMENT CIRCULAR NO._DC2024- ol- 200%,

ADOPTING FURTHER AMENDMENTS TO THE WHOLESALE ELECTRICITY
SPOT MARKET (WESM) RULES AND THE WESM MANUAL ON REGISTRATION,
SUSPENSION AND DE-REGISTRATION CRITERIA AND PROCEDURES

(Provisions on Preferential Dispatch of Renewable Energy Generating Units)

WHEREAS, Sections 30 and 37(f) of Republic Act (RA) No. 9136, or the “Electric
Power Industry Reform Act of 2001” (EPIRA), provide that the Department of Energy
(DOE), jointly with the electric power industry participants, shall establish the 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 (DC)
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, Section 20 of RA 9513, or the “Renewable Energy Act of 2008,” declares
that qualified and intermittent RE resources shall be considered “must dispatch” based
on available energy and shall enjoy the benefit of priority dispatch; further, the phrase
“RE generating unit with intermittent RE resources” refers to a RE generating unit or
group of units connected to a common connection point whose RE energy resource is
location-specific, naturally difficult to precisely predict the availability of RE energy
resource thereby making the energy generated variable, unpredictable and irregular,
and the availability of the resource inherently uncontrollable;

WHEREAS, the priority dispatch of generating units utilizing RE resources will aid in
accelerating the development and utilization of indigenous RE resources and reduce
dependence on imported conventional energy resources, thereby making the supply
and delivery of electric power more stable and secure;

WHEREAS, on 05 October 2022, the DOE promulgated DC No. DC2022-10-0031
titled “Declaring All Renewable Energy Resources as Preferential Dispatch Generating
Units in the Wholesale Electricity Spot Market Amending for This Purpose Department
Circular No. DC2015-03-0001”, amending the definition of Priority Dispatch to extend
to “all qualified and registered RE plants that are not Must Dispatch such as biomass,
geothermal, and impounding hydro plants which are given preference in the dispatch
scheduling process, taking into consideration their contractual obligations with their
respective customers”;

Energy Center, Rizal Drive cor. 34th Street, Bonifacio Global City, Taguig City, Philippines 1632
Tel. No. (Trunkline) (632) 8479-2900

Website: http://www.doe.gov.ph; Email: info@doe.gov.ph

=== dc2024-01-0004-pages-2.ppm ===
DC on Adopting Further Amendments to the WESM Rules and the WESM Manual on Registration,
Suspension and De-Registration Criteria and Procedures
Page 2 of 4

WHEREAS, on 31 July 2023, the PEM Board, in compliance with Chapter 8 of the
WESM Rules, submitted to the DOE its proposed amendments to the WESM Rules
and WESM Manual on Registration, Suspension and De-Registration Criteria and
Procedures, to operationalize and align the provisions thereof with DC No. DC2022-
10-0031;

WHEREAS, the DOE, cognizant that the intent of the proposal is consistent with the
objectives of the EPIRA and the WESM, drafted a circular to solicit comments and
recommendations from interested parties, posted the same on the DOE website on
07 August 2023 and conducted the following public consultations:

Leg | __—sDate | Venue
Luzon
Visayas
Mindanao

NOW, THEREFORE, after careful review of the PEM Board proposal and the
comments and recommendations received from stakeholders and 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 the WESM Manual
on Registration, Suspension and De-Registration Criteria and Procedures:

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

XXX MN: «XK
2.3. | Categories of WESM Member
2.3.1 Generation Companies

XXX XXX XXX

2.3.1.5. 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, shall be classified as a must
dispatch generating unit, but may at its option, be classified as a
scheduled generating unit or a non-scheduled generating unit
subject to Clause 2.3.1.4.

2.3.1.6 A generating unit or group of generating units connected at
a common connection point that are qualified renewable energy
plants that are not must dispatch, such as those using either
geothermal energy or biomass as fuel, or is an impounding hydro
plant, and is not providing frequency control ancillary services,
shall be classified as a priority dispatch generating unit, but may at
its option, be classified as a scheduled generating unit or a non-
scheduled generating unit subject to Clause 2.3.1.4.
=== dc2024-01-0004-pages-3.ppm ===
DC on Adopting Further Amendments to the WESM Rules and the WESM Manual on Registration,
Suspension and De-Registration Criteria and Procedures
Page 3 of 4

XXX XXX XXX
GLOSSARY
XXX XXX XXX

Frequency Control Ancillary Services. Ancillary services used by the
System Operator to maintain the frequency of the grid within the limits
prescribed by the Grid Code through the timely use of reserves and
demand control.

XXX XXX XXX
Priority Dispatch. Registered renewable energy plants that are not Must

Dispatch such as biomass, geothermal, and impounding hydro plants,
which are given preference in the dispatch scheduling process.

Projected Output. The loading level at the end of a dispatch interval
nominated by a Generation Company for its must dispatch generating units
or priority dispatch generating units. Projected output of a must dispatch
generating unit shall indicate its forecasted output. In the case of a priority
dispatch generating unit, projected output shall refer to its available
capacity, as defined in the WESM Rules or Market Manual.

XXX XXX XXX
Section 2. Amendments to the WESM Manual on Registration, Suspension and
De-Registration Criteria and Procedures. The following provisions of the WESM

Manual on Registration, Suspension and De-Registration Criteria and Procedures are
hereby amended:

XXX XXX XXX
Section 2. Registration
XXX XXX XXX
2.5. Registration of Direct WESM Members and Trading Participants
XXX XXX XXX
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 generating
=== dc2024-01-0004-pages-4.ppm ===
DC on Adopting Further Amendments to the WESM Rules and the WESM Manual on Registration,
Suspension and De-Registration Criteria and Procedures

Page 4 of 4

system it owns or operates or controls or from which it
otherwise sources electricity as either —

XXX XXX XXX

(iv) A priority dispatch generating unit for a generating unit or
group of generating units connected at a common
connection point that are qualified renewable energy
plants that are not must dispatch, such as those using
either geothermal energy or biomass as fuel, or is an
impounding hydro plant, and is not providing frequency
contro! ancillary services. 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.

XXX XXX XXX

Section 3. Repealing Clause. The provisions of other circulars, orders, issuances,
rules, and regulations which are inconsistent with the provisions of this Circular, are
hereby repealed, amended, modified, or superseded accordingly.

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 fifteen (15) days after its
publication in at least two (2) newspapers of general circulation. A copy of this Circular

shall be filed with the University of the Philippines Law Center — Office of the National
Administrative Register.

Issued this JAN { 2 2024 at the DOE, Energy Center, Rizal Drive cor. 34" Street,
Bonifacio Global City, Taguig City, Metro Manila.