Department Circular No. 2005-11-010

 

 

ADOPTING FURTHER AMENDMENTS TO THE WESM RULES

 

WHEREAS, Rule 8.6.1 of the Wholesale Electricity Spot Market (WESM) Rules provide for the approval by the Department of Energy (DOE) of proposals for any WESM rules changes upon endorsement by the PEM Board;

 

WHEREAS, on September 9, 2005, the Interim Rules Change Committee has approved a resolution endorsing for approval before the PEM Board changes in the WESM Rules pertaining to the governance, procedure on rules change, and market operations including correction of clerical errors;

 

WHEREAS, after discussion, the PEM Board has resolved on September 27, 2005 to approve for endorsement to the Department of Energy (DOE) the abovestated changes to the WESM Rules;

 

NOW THEREFORE, pursuant to its authority under the WESM Rules, the DOE hereby issues, adopts and promulgates the following amendments to the WESM Rules:

 

A.       Amendments to the WESM Rules

 

1.       Rule 1.4.2.7 (d) is amended to read –

 

“(d) Has not been employed by any electric power industry participant, or a company or body related to or associated with a WESM participant (as defined in clause 1.4.2.7 (c) within one year prior to nomination date; and

 

2.       Rule 1.6.2 (c) is hereby deleted and intentionally left blank.

 

3.       Rule 1.9 is amended to read as follows –

 

“Where the WESM Rules identify matters that are subject to review or consultation in accordance with the public consultation procedures, the PEM Board shall ensure that, as a minimum, the following procedures are followed:

 

(a)      The PEM Board shall publish in the market information website particulars of the matter to WESM Participants and other interested persons, inviting written submissions concerning the matter to be made by a specified date.”

 

4.       Rule 3.5.4.1 (as amended) is further amended to read –

 

“Each Customer may submit a forecast in respect of each trading interval for each of its registered load facilities for each trading day of the week in accordance with the timetable.  The forecast submitted by the Customer shall be used by the Market Operator in the preparation of Net Load Forecast if it is within the forecast tolerance range published by the Market Operator.

 

“If the Customer fails to submit a forecast of its load facilities in accordance with the timetable or if the Customer forecast submitted is not within the published forecast tolerance range, the forecast prepared by the Market Operator at the node where the Customer is located shall be used.

 

Prior to the commencement of the spot market, the Market Operator, in consultation with WESM Participants, shall determine and publish the forecast tolerance range.  The forecast tolerance range may be varied from time to time by the Market Operator

 

5.       Rule 3.6.5 is amended to read –

 

From time to time, the System Operator and the Market Operator shall investigate the scope for further development of the market dispatch optimization model beyond the minimum requirements specified in clause 3.6.1 and submit their recommendations in a report to the PEM Board for consultation with WESM Members.

 

6.        Rule 3.9.6 is amended to read –

 

If, as a result of load shedding, no ex-ante prices can be determined or communicated within the timeframe specified in the timetable, or the calculated prices are believed to be in error, the Market Operator shall, as soon as possible, issue a pricing error notice in accordance with clause 3.10.5.

 

7.       Rule 3.10.5 is amended to read –

 

In the event where no ex-ante prices can be determined or communicated within the timeframe specified by the timetable, or the calculated prices are believed to be in error, as a result of load shedding, occurrence of constraint violation coefficients, or for any other reason:

 

                    The Market Operator may, as soon as possible after the end of a trading interval, issue a pricing error notice, in which case, the ex-post quantities and the ex-post prices determined according to clause 3.10.7 shall also serve as ex-ante quantities and ex-ante prices.

                     

                    If no pricing error notice is issued within the time specified in the foregoing paragraph, the ex-post prices and quantities shall serve as ex-ante prices and quantities and shall stand irrespective of the outcome of any subsequent investigations or resolutions of any dispute.

                     

                    Should the pricing error also include reserves, the reserve quantity and price determined in the ex-post run shall serve as the reserve quantity and prices.

                     

 

8.       Rule 3.10.6 is amended to read –

 

The ex-post nodal energy price for each market trading node shall be determined as the shadow price on the energy balance equation for that market trading node, formed in accordance with clause 3.6.1.4 (c), in an ex-post dispatch optimization performed, in accordance with the timetable, to determine target dispatch levels for the end of that trading interval assuming:

 

a.       The plant status at the end of that trading interval as determined for the ex-post dispatch optimization or if load shedding occurred in that trading interval, the plant status which would have pertained at the end of that trading interval, as indicated in the targets determined by the ex-post dispatch for that trading interval;

 

b.       The generation offers which applied at the beginning of that trading interval;

 

c.        The unrestrained load determined from metering data, or estimated, at the end of that trading interval, to apply at each market network node for that trading interval.

 

9.       Rule 3.10.7 is amended to read –

 

The Market Operator, in consultation with WESM participants and subject to approval by the PEM Board, shall develop and publish procedures to be employed in clauses 3.10.6 (d) and (e) in establishing the network configuration and other constraints to be assumed for the determination of ex-post nodal energy prices for circumstances in which power system conditions materially change during the trading interval, with a view to ensuring that:

 

(b)      The ex-post prices produced in accordance with clause 3.10.6, properly and fairly represent conditions at the end of the trading interval.

 

10.     Rule 3.13.1.1 is amended to read –

 

Trading Participants who sell electricity pursuant to bilateral contracts and wish those bilateral contracts to be accounted for in settlements shall, after each trading day, in accordance with the billing and settlements timetable:

 

(a)      Submit a schedule to the Market Operator specifying the MWH bilateral sell quantities at each relevant market trading node, in each trading interval of that trading day;

 

11.     Rule 3.13.6 (a) is amended to read –

 

For each trading interval, the gross ex-post energy settlement quantity for each market trading node shall be determined by the Market Operator as follows:

 

(a)      If the market trading node is defined under clause 3.2.2.1 as lying in the boundary of the power system operated by the System Operator, the gross ex-post energy settlement quantity for the market trading node is the net metered flow into the power system operated by the System Operator through the associated meter;

 

(b)      If the market trading node is defined under clause 3.2.2.2 as a generator node lying on the interface between networks, apparatus or equipment operated by parties other than the System Operator the gross ex-post energy settlement quantity for the market trading node is the net metered flows through the associated meter from the Generation Company to the Customer side of the meter; and

 

12.     Rule 3.13.7 is amended to read –

 

For settlement purposes, the ex-ante energy settlement quantity for any market trading node in any trading interval shall be determined by the Market Operator by adjusting the gross ex-ante energy settlement quantity for that market trading node and any trading interval, as measured in accordance with clause 3.13.5 or estimated in accordance with clause 3.13.6, for bilateral contract quantities notified to the Market Operator under clause 3.13.1.1, or inferred by the Market Operator under clause 3.13.1.1 and accepted as valid under clause 3.13.1.2 by:

 

13.     Rule 3.13.16.1 is amended to read –

 

If the transactions required by clauses 3.13.14.2 (a), (b) and (d), in aggregate, result in a surplus or deficit remaining, this will be known as the net settlement surplus.

 

14.     Rule 3.14.7 is amended to read –

 

After the Market Operator is to be paid under clause 3.14.6 and in accordance with the schedule set in the billing and settlements timetable, the Market Operator shall pay to each WESM Member in cleared funds the settlement amount (if any) stated to be payable to that WESM Member in that WESM Member’s final statement.

 

15.     Rule 6.2.3 is amended to read –

 

During market suspension and intervention, the Market Operator shall impose an administered price to be used as basis for settlements.

 

Prior to the spot market commencement date, the Market Operator shall develop and publish the methodology for determining the administered price to be used during market suspension or intervention of the spot market.  Said administered price is to be endorsed by the PEM Board for ERC approval.

 

16.     Rule 6.5.1.1 (b) is amended to read –

 

The System Operator shall also:

 

1.        Implement any load shedding in a manner consistent with the system security and reliability guidelines; and

 

2.        To the extent possible, determine a rotating outage plan, and rotate any load shedding requirements.

 

17.     Rule 7.3.1.1 (i) is amended to read–

 

The dispute resolution procedures set out in this clause 7.3 apply to all disputes which may arise between any of the following:

 

as to:

 

(i)       A dispute under or in relation to the rules and regulations issued by the ERC and DOE under the Act, where such rules and regulations provide that the dispute resolution procedures under the WESM Rules are to apply to any dispute under or in relation to that rules and regulations; or

 

18.     Rule 8.2.2.2 is amended to read –

 

The principle applicable to the composition and operation of the PEM Board as set out in clause 1.4.2 apply also to the composition of the Rule Change Committee.

 

19.            Rule 8.2.9 is added and will read –

 

(a)      Subject to clause 8.6.4.2, the Rule Change Committee will recommend for approval of the PEM Board a system of classification of changes to the WESM Rules.

 

(b)      Subject to approval by the PEM Board, the Rule Change Committee will develop and publish detailed guidelines and procedures to be employed in the consideration, approval, publication and effectivity of any proposed change to the WESM Rules.  These guidelines and procedures will, as far as practicable, be consistent with the provisions of this chapter 8, provided, however, that the Committee may establish procedures, time periods and manner of publication and effectivity other than as stated in this chapter 8 depending on the classification of the proposed change.

 

20.     Rule 8.5.4 is amended to read –

 

Approving and submitting proposed Rule change for approval

 

If the PEM Board concludes that the proposed change to the WESM Rules satisfies the criteria which are set out in clause 8.4.1 and that the processes and procedures set out in clause 8.4 have been duly followed, the PEM Board:

 

(a)      shall submit the proposed change to the WESM Rules to the DOE for approval if the proposed change requires approval by the DOE under the classification system approved pursuant to clause 8.6.4.2; or

 

(b)      shall cause publication of the approved rule change, if the proposed rule change requires approval of the PEM Board only.  The approved rule change will become effective after its publication on such date and for such period as the PEM Board determines.

 

21.     Rule 8.6 is amended to read –

 

Approval of Proposed Rule Changes by the DOE

 

22.            Rule 8.6.4.1 is amended to read –

 

If the DOE concludes that a proposed change to the WESM Rules is consistent with the Act and the public interest and satisfies the criteria which are set out in clause 8.4.1, it shall approve the amendment and cause its publication.  The change to the WESM Rules approved by the DOE will take effect within fifteen days from its publication, or on such later date as the DOE, determines.

 

23.            Rule 8.6.4.2 is amended to read –

 

Upon recommendation of the Rules Change Committee, the PEM Board shall ratify the classification system of rule change proposals developed by the Committee pursuant to clause 8.2.9 (a) that will delineate proposals requiring DOE review and approval vis-ΰ-vis proposals that can be acted upon at the PEM Board level.  This classification shall be approved by the DOE.

 

24.     The definition of administered price under Rule 11 is amended to read –

 

Administered price.  A price imposed by the Market Operator to the Trading Participants during market suspension and intervention to be used for settlements which price is determined in accordance with the methodology developed and published by the Market Operator and approved by the ERC.

 

25.     The definition of Business Day under Rule 11 is amended to read –

 

Business day.  Any day on which the spot market is open for business.

 

And the following clerical corrections:

 

1.       Rule 3.8.1 is amended to read –

 

Prior to commencement of each trading interval, the Market Operator shall, in consultation with the Grid Operator, and in accordance with the timetable:

 

(b)      Prepare a forecast of the unrestrained net load expected at each market trading node for the end of that trading interval;

 

2.       Rule 3.8.2.2 (b) is amended to read –

 

Load shedding or other directions issued by the System Operator during the trading interval;

 

3.       Rule 3.11.1.2 (a) is amended to read –

 

Final dispatch offers and when applicable, reserve offers;

 

4.       Rule 3.11.1.2 (e) is amended to read –

 

The identification of the Trading Participant submitting the dispatch bid or dispatch offer

 

5.       Rule 3.13.12 (a) is amended to read –

 

The Market Operator shall calculate the line rental trading amounts for each transmission line in the market network model as:

 

(a)      The expected flow of energy out of the receiving node of the market network line as determined by the market dispatch optimization model multiplied by the ex-ante nodal energy settlement price at that node; less

 

6.       Rule 3.13.14.1 is amended to read –

 

For each billing period, the Market Operator shall determine the settlement amount for each Trading Participant as the sum of the aggregate trading amounts for the trading intervals in that billing period, determined in accordance with clause 3.13.14.2: plus

 

7.       Rule 3.15.7.1 (a) is amended to read –

 

Publish the suspension notice; and

 

8.       Rule 3.15.7.6 is amended to read –

 

If:

 

(b)      The Market Operator has issued a suspension notice to a WESM Member due to a failure by the WESM Member to continue to satisfy the prudential requirements and in the Market Operator’s reasonable opinion the WESM Member is incapable of rectifying that failure for any reason.

 

9.       Rule 4.4.2 is amended to read –

 

Subject to clause 4.4.3, Generation Company or Customer which is involved in the trading of energy shall not be registered as a Metering Services Provider for any connection point in respect of which the metering data relates to its own use of energy.

 

B.       Effectivity

 

These amendments shall be effective fifteen (15) days following its publication in two (2) national newspapers of general circulation.

 

 

 

RAPHAEL P. M. LOTILLA

Secretary

 

Metro Manila, Philippines

November 11, 2005

 

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