Department Circular No. 2005-11-009





WHEREAS, Section 30 of Republic Act No. 9136, otherwise known as the “Electric Power Industry Act of 2001” or “EPIRA” enjoined the Department of Energy (DOE) to establish the Wholesale Electricity Spot Market (WESM) that would facilitate a transparent, competitive and reliable market for electricity;


WHEREAS, pursuant to the said mandate, the DOE constituted, among others, the WESM Steering Committee on 31 May 2004, through Department Order No. 2004-06-007, to monitor the timeline, action plans and the overall target implementation of the WESM, and ensure the effective coordination of various activities amongst the government agencies or functional units, industry participants and such other entities involved in the WESM;


WHEREAS, significant progress has been made towards the commencement of WESM commercial operation and the fundamental components of the market are expected to be completed or finalized, including:  the Market Management System (MMS), formation of the respective committees, the processing of its filing with the Energy Regulatory Commission (ERC) of the approval of the Price Determination Methodology;


WHEREAS, considering this progress made and to assist the Philippine Electricity Market Corporation (PEMC), currently chaired by the DOE, in putting in place all the necessary components for the successful implementation of the WESM and in the interest of a transparent and level playing field for all industry participants, there is a need for a direct feedback mechanism to assess the overall readiness of various industry participants as would enable them to participate in the market as well as allow future market participants and service providers to assess and certify their own readiness to participate after WESM commences commercial operation;


NOW, THEREFORE, premises considered, the DOE hereby constitutes the Task Force on WESM Commercial Operation Readiness (TF-COR) and directs all industry participants to accomplish the initial self-assessment and certification forms in accordance with this Department Circular.


SECTION 1.  Creation of the Task Force on WESM Commercial Operation Readiness.  – To facilitate the regular monitoring and institute a feedback mechanism amongst responsible parties to facilitate the commercial operation of the WESM, a task force is hereby created to coordinate and report to the WESM Steering Committee issues or recommendations affecting the readiness of individual participants/their respective sectors for the commencement of WESM commercial operation.


SEC. 1.1.  Composition of the Task Force.  – The TF-COR shall be composed of one representative and one alternate representative from each of the following agencies/entities:




Department of Energy




Philippine Electricity Marketing Corporation-Market Operator (PEMC)




National Transmission Corporation (TransCo)




Power Sector Assets and Liabilities Management Corporation (PSALM)



National Power Corporation (NPC)




National Electrification Administration (NEA)

















SEC. 1.2.  Functions of the Task Force.  The TF-COR shall exercise the following functions:


(a)      Provide regular updates every two (2) weeks to the WESM Steering Committee on the progress and status of the industry participants’ respective readiness for the commercial operation of WESM;


(b)      Coordinate efforts amongst industry participants and their respective sectors, convene and organize meetings for this purpose and implement a regular, efficient and direct feedback mechanism amongst responsible parties;


(c)      Facilitate mutual cooperation and sharing of information amongst the individual participants and provide the DOE necessary access to information on matters relevant to the dissemination of the basis for the declaration of the commencement of WESM commercial operation;


(d)      Identify issues in relation to the preparation of the industry for WESM commercial operation and provide recommendation for DOE Secretary’s consideration towards the resolution of these issues;


(e)      Perform such other functions as may be necessary and designated to it by the DOE for the successful commencement of WESM commercial operation.


SEC. 1.3.  Responsibilities of Each Functional Unit.  In addition to the respective responsibilities that may be assigned to each member of the TF-COR, each agency/entity shall provide, subject to availability and internal approval processes, the necessary personnel and resources to lend administrative support to the TF-COR as may be necessary.


SEC. 1.4.  Meetings.  – The TF-COR shall meet twice a month or more often at such other time as the DOE directs in order to assess the status of each sector’s readiness.  Within 15 calendar days from the effectivity of this Department Circular, the each member of the TF-COR shall submit the list of its representative/alternate representative to the DOE.  Within 10 calendar days thereafter, the DOE shall convene the first meeting of the TF-COR.


SEC. 2.  Categories of WESM Participants.  – The following are the parties required to conduct their respective readiness assessment.


(1)      Generation Companies;


(2)      Network Service Providers –


(a)     Electric Cooperatives;


(b)     Distribution Utilities;


(3)      Distribution Utilities;


(4)      Customers;


(5)      Philippine Electricity Market Corporation;


(6)      National Transmission Corporation as –


(a)      System Operator;


(b)      Metering Service Provider;


(c)      Grid Operator; and


(7)      Suppliers/Aggregators


SEC. 3.  Compliance.  – All industry participants are required to submit their respective initial self-assessment to the DOE, as chair of the TF-COR, within 10 calendar days from the effectivity of this Circular.  Every two weeks thereafter, unless the TF-COR provides otherwise, all industry participants shall submit to the TF-COR an update on their initial assessments, including any problem and/or actions taken thereon.


SEC. 4.  Readiness of ECs.  – In the case of Electric Cooperatives (ECs), the National Electrification Administration (NEA), as member of the TF-COR, must henceforth assume primary responsibility to monitor the readiness of ECs and provide training programs and other necessary activities to encourage the ECs’ effective participation in the WESM.  Towards this end, the NEA shall be primarily responsible for the preparation and submission by the ECs of the regular updates provided in Section 3 and NEA shall also provide the TF-COR with its recommendations and/or actions to address any problem indicated by the ECs in their updated assessments. 


SEC. 5.  Confidentiality.    – Any confidential information obtained by the TF-COR in the course of its review/assessment shall be maintained in full confidentiality and will be used solely for the purposes expressed in this Department Circular.


SEC. 6.  No amendment or repeal of existing laws.  – Nothing in this Department Circular shall be construed as to amend, supplant, or repeal any of the mechanisms or institutions already existing or responsibilities already allocated and provided for under any existing law, rule or contract.  However, to the extent necessary, previous issuances by this Department in relation to the subject matter herein shall be deemed amended accordingly.


This Department Circular shall take effect immediately after its publication in two (2) newspapers of general circulation and shall remain in effect until otherwise revoked.


Fort Bonifacio, Taguig, Metro Manila, 11 November 2005.








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