# DC2021-06-0015 — Declaring the Commercial Operations of Enhanced WESM Design and Providing Further Policies ## Department Circular No. DC2021-06-0015 Signed: 25 June 2021 by DOE Secretary Alfonso G. Cusi Effectivity: Immediately upon publication in the Official Gazette or two (2) newspapers of general circulation --- ## WHEREAS RECITALS 1. EPIRA Sections 30 and 37 provide that DOE, jointly with electric power industry participants, shall establish the WESM and formulate the detailed rules governing operations thereof. 2. On 28 June 2002, DOE promulgated DC2002-06-0003 (WESM Rules). 3. On 23 October 2015, DOE issued DC2015-10-0015 providing policies for implementation of the Enhanced WESM Design and Operations (EWDO). 4. On 04 May 2017, DOE issued DC2017-05-0009 "Declaring the Launch of the WESM in Mindanao and Providing for Transition Guidelines," effective 26 June 2017. 5. On 29 December 2020, ERC promulgated the Price Determination Methodology for the EWDO. 6. On 24 May 2021, DOE posted for comments the draft circular declaring the commercial operations date of the EWDO with a one-week comment period. 7. On 27 May 2021, PEMC submitted to DOE a certification on the readiness of Luzon, Visayas, and Mindanao Grids for EWDO implementation pursuant to DC2017-05-009. 8. On 11 June 2021, IEMOP submitted to DOE the report on the Limited Live Dispatch Operations (LLDO) from 28 May 2021 to 04 June 2021. 9. DOE, upon evaluation of the reports submitted by PEMC on EWDO readiness and by the MO on LLDO results, found that needed preparations have been met, but deemed it necessary to provide additional support and measures to ensure efficient transition of the Trading Participants. --- ## SECTION 1. DECLARATION OF COMMERCIAL OPERATION DATE OF THE EWDO DOE declares the commercial operation of the EWDO effective **26 June 2021** (Commercial Operation Date) in Luzon, Visayas, and Mindanao. All WESM Members and concerned Electric Power Industry Participants shall comply with the provisions of this DC, the WESM Rules, and Market Manuals covering the EWDO, subject to the following during the initial phase: 1.1. **For Luzon and Visayas:** Compliance to Dispatch Conformance Standards shall be relaxed for the first **three (3) months** from Commercial Operation Date in accordance with Section 3 of this DC. 1.2. **For Mindanao:** WESM Central Scheduling shall continue to be implemented until **25 July 2021** based on the WESM Central Scheduling Guidelines in Annex A. During this period, resulting WESM prices for Mindanao will not be binding on any party and all energy transactions shall be settled in accordance with applicable power supply agreements. Thereafter, actual commercial operations shall commence in accordance with the relaxation for the first three (3) months of: - 1.2.1. Posting of Prudential Requirements (PR); and - 1.2.2. Dispatch Conformance Standards. --- ## SECTION 2. RELAXATION OF PRUDENTIAL REQUIREMENTS (PR) The posting of PR by Mindanao WESM Trading Participants shall be relaxed for three (3) months subject to Section 1. 2.1. Mindanao WESM Trading Participants shall be allowed to post the required PR within the three (3) month relaxation period. 2.2. For each spot transaction during the relaxation period, the concerned Mindanao WESM Trading Participants shall ensure timely settlement of monthly bills with the MO. Otherwise, interest shall apply per applicable WESM Rules and Market Manuals. 2.3. Prior to the lapse of the three (3) month relaxation period, Mindanao Trading Participants who may not be able to post the required PR may opt to change their registration status to Indirect WESM Membership and transact in the WESM through a Direct WESM Member counterparty. Otherwise, applicable sanctions and/or penalties shall be imposed. --- ## SECTION 3. RELAXATION OF DISPATCH CONFORMANCE STANDARDS Compliance to Dispatch Conformance Standards shall be relaxed for three (3) months subject to Section 1. 3.1. WESM Trading Participants in Luzon, Visayas, and Mindanao shall be exempted from sanctions and penalties for breach of Dispatch Conformance Standards during the three (3) month relaxation period. Notwithstanding, the Enforcement and Compliance Office (ECO) shall continue to monitor observance of Dispatch Conformance Standards for purposes of evaluating the initial commercial operation of EWDO. All Trading Participants shall ensure full compliance with all other obligations under the WESM Rules and Market Manuals. 3.2. Upon the lapse of the three (3) month relaxation period, Trading Participants shall ensure full compliance with Dispatch Conformance Standards. --- ## SECTION 4. ASSIGNMENT OF METERING SERVICE PROVIDER (MSP) FOR EMBEDDED GENERATORS (EG) The host Distribution Utility (DU) of EGs may provide metering services to EGs operating within their franchise area until ERC promulgates appropriate rules. 4.1. A host DU intending to register as MSP for EGs within its franchise area shall submit an intention letter to ERC prior to the Commercial Operation Date. 4.2. The host DU acting as MSP shall ensure compliance with applicable WESM Rules and Market Manuals, including metering standards and timely submission of metering data. 4.3. The DU-MSP shall be regularly subject to the conduct of MSP audit undertaken by the PEM Audit Committee. --- ## SECTION 5. COMPLIANCE TO WESM REGISTRATION All Trading Participants shall ensure completion of WESM registration prior to Commercial Operation Date. Otherwise, applicable sanctions and/or penalties shall be imposed per WESM Rules, Market Manuals, and other relevant DOE issuances. --- ## SECTION 6. REGULATORY SUPPORT ERC shall ensure provision of regulatory support consistent with the policies set forth under this Circular and in accordance with existing laws and procedures. It shall impose penalties for any violation. --- ## SECTION 7. SEPARABILITY --- ## SECTION 8. REPEALING CLAUSE All issuances inconsistent with the provisions of this Circular are hereby repealed or amended accordingly. --- ## SECTION 9. EFFECTIVITY Effective immediately upon publication in the Official Gazette or two (2) newspapers of general circulation. Copies shall be filed with UP Law Center-ONAR. --- # ANNEX A: GUIDELINES ON THE WESM CENTRAL SCHEDULING IN MINDANAO **IEMOP — Guidelines on the Mindanao Grid's Live Dispatch Operations** **Version 1.0 — 18 June 2021** --- ## 1. BACKGROUND All Mindanao Generator Trading Participants are expected to implement the 5-minute dispatch schedules generated from the New Market Management System (MMS) during the WESM Central Scheduling (WCS) period. Settlement shall be based on existing contractual arrangements in Mindanao; there is no settlement of WESM transactions. All Generators required to register in WESM, including those voluntarily registered, shall participate in the WCS — including grid-connected and embedded generators. --- ## 2. RESPONSIBILITIES **2.1. Generators** - Shall ensure access to generation resources in the MMS Market Participant Interface (MPI) with updated Digital Certificate and valid user credentials. - May alternatively transact in the MMS using the MPI's API Web Service (optional). - Trading Participants and plant operators shall maintain a communication protocol for timely coordination of dispatch targets. - Shall inform the Market Operator of any issues or concerns encountered during WCS. **2.2. System Operator** - Shall ensure its Energy Management System (EMS) is available for the Market Operator to capture real-time data via the Inter-Control Center Communications Protocol (ICCP). - Shall submit input constraints in the MMS (e.g., overriding constraints, outages, transmission limits, reserve requirements). - Shall submit information on all re-dispatch instructions to the Market Operator. - Shall submit a report to the Market Operator on observations on the WCS implementation. - Metering Services Providers shall continue to submit metered quantity (MQ) data to the Central Registration and Settlement System (CRSS); settlements during WCS remain per current contracted arrangements in Mindanao. **2.3. Market Operator** - Shall regularly update regional demand forecasts for market projections (WAP, DAP, and HAP) and for real-time dispatch (RTD) market runs. - Shall ensure the MMS is available to provide accurate and timely dispatch schedules to Generators and the System Operator. - Shall ensure the Market Participant Interface (MPI) is always available to Market Participants. - Shall submit to DOE an evaluation of the WCS considering all inputs from Generators and the System Operator. --- ## 3. PROCEDURES DURING WCS **3.1. Current Contractual Obligations and Interim Mindanao Dispatch Protocol** - All generators and customers shall still perform their existing processes in accordance with their contracts. - All generators and customers are expected to continue their responsibilities under the Interim Mindanao Dispatch Protocol. **3.2. Submission of Working Offers** - Scheduled Generators shall submit working offers in the MMS based on their Day-Ahead Generation Schedule (DAGS): - MW quantity up to DAGS offered at P0.00/MWh. - MW quantity beyond DAGS up to maximum available capacity offered at preferred price. - Generators shall consider the technical Pmin commitment when submitting offers. - Generators shall revise working offers in consideration of in-day re-nominations. - During tripping of generation units, generators shall cancel working offers. - Generators can only declare up to three (3) ramp rate break quantities for their ramp rate profile. **3.3. Central Scheduling of Contracted Ancillary Services in WESM** - Scheduled Generators with a Day-Ahead Ancillary Service Schedule (DAASS) shall update working offers to include reserve offers. - All reserve offers shall contain two offer break quantities: - First MW: zero; next MW: based on DAASS (except for regulation reserve). - Regulation reserve providers: half DAASS for regulation up (RU), half for regulation down (RD). - Contingency and dispatchable reserve providers: reserve offers equal to DAASS. - The two reserve offer break quantities shall be offered at P0.00/MWh. - Generators may revise reserve offers based on re-nominations with the System Operator. **3.4. Submission of Working Nominations** - Must-Dispatch, Priority Dispatch, and Non-Scheduled Generators shall submit accurate 5-minute MW nominations in the MMS MPI. - Shall revise working nominations to reflect the best estimate of generator output in the immediate horizon. - During tripping, generators shall cancel working nominations. **3.5. Submission of Standing Offers and Nominations** - Scheduled Generators shall submit Standing Offer Profiles in the MMS. - Must-Dispatch, Priority Dispatch, and Non-Scheduled Generators shall submit Standing Nomination Profiles in the MMS. **3.6. Start-up and Shutdown Procedures** - Generators scheduled to start-up or shutdown shall request clearance from the System Operator at least **four (4) hours** before scheduled start-up. - Once cleared, generators shall manage the start-up and shutdown sequence through their offers (e.g., accurate ramp rate profiles, managed offer MW/price blocks). **3.7. Implementation of 5-minute Dispatch Schedules** - Generators (except scheduled ancillary service providers) shall ramp to their target 5-minute dispatch schedules while considering DAGS or in-day re-nominations. - If 5-minute dispatch schedule exceeds DAGS or in-day re-nomination: dispatch only up to DAGS or in-day re-nomination. - System Operator provides dispatch instructions to scheduled ancillary service providers. - System Operator may re-dispatch generators based on: (a) available ancillary services; or (b) Load Adjustment Notice. - Generators shall follow SO re-dispatch instructions and log the reason in the MMS MPI Dispatch Conformance Display. - In cases where 5-minute RTD schedule is below Pmin: - If expected to start-up/shutdown: ramp towards RTD schedule. - If currently online: ramp towards Pmin. - If currently offline: stay offline. - Immediately revise offers to ensure generating unit is scheduled at intended MW level. - These guidelines may still be overridden by SO for reliability reasons. **3.8. Settlement During WCS** - Settlement is based on existing contractual arrangements between Generators and Customers in Mindanao. - There is no settlement of WESM transactions. **3.9. Complying with 5-minute Dispatch Schedules and Instructions** - Generators shall follow generation dispatch procedures in Section 3.7. - Non-compliance shall be reported to PEMC's Enforcement and Compliance Office, with reason provided near real-time to the Market Operator through the Dispatch Conformance Standards (DCS) module of the Market Participant Interface.