Visayas Supply Augmentation Auction

2009

DOE DEPARTMENT CIRCULAR NO. DC2009-05-0006

VISAYAS SUPPLY AUGMENTATION AUCTION (VSAA) RULES

WHEREAS, Section 2 of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA), declared as a policy of the State to ensure the quality, reliability, security and affordability of the supply of electric power, protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power, and encourage the efficient use of energy and other modalities of demand side management;

WHEREAS, Republic Act No. 7638, or the "Department of Energy Act of 1992", as amended by Section 37 of the EPIRA, authorized DOE to exercise supervision and control over all government activities relative to energy projects and to formulate rules and regulations necessary to implement the objectives of these laws;

WHEREAS, Section 37 (i) of EPIRA, specifically mandates the DOE to develop policies and procedures and, as appropriate, promote a system of energy development incentives to enable and encourage energy participants to provide adequate capacity to meet the demand including, among others, the reserve requirements;

WHEREAS, the availability and adequacy of electricity is necessary for the continuous operation of vital industries and thus it is incumbent upon the government to take the necessary measures to ensure that there will be no power interruptions in any part of the country;

WHEREAS, the current power situation in the Visayas Grid, as certified by the System Operator (SO) or the National Grid Corporation of the Philippines (NGCP), requires for additional power capacities to meet the increasing power needs and to maintain the mandatory energy reserve of the region; TSAHIa

WHEREAS, the new generating plants in the Visayas Grid as reported by the private proponents to the DOE are expected to come on stream by 2010 and 2011;

WHEREAS, the DOE conducted the Visayas Stakeholders' Meetings on January 15-16, 2009 where it presented and discussed the Visayas Supply Augmentation Auction Program (VSAAP);

WHEREAS, the DOE issued Circular No. DC2009-01-0001 on January 16, 2009, which directed DOE-attached agencies (PSALM, NPC, TransCo, and NEA), all power industry participants, consumers and various stakeholders to adopt and implement contingency measures to ensure adequate and reliable electric power supply in the Visayas grid particularly in the islands of Cebu, Negros, Panay and Bohol;

WHEREAS, under the said DOE Circular, the Philippine Electricity Market Corporation (PEMC), in coordination with the NGCP as the system operator, was directed to draft the rules, guidelines and procedures for the implementation of the VSAAP, in consultation with the electric power industry participants;

WHEREAS, on February 4-6, 2009, the VSAAP was officially endorsed by the Visayas electric power industry participants during a series of public consultations held in Cebu, Negros and Panay islands;

WHEREAS, the DOE posted the draft VSAA Rules in its website from March 06, 2009 to April 02, 2009 and thereafter conducted a public consultation on the same;

WHEREAS, the DOE conducted the Visayas public consultation in Cebu City on April 03, 2009 wherein the industry participants gave their full agreement to the VSAA Rules as manifested in the Joint Endorsement signed by the Visayas electric power industry participants;

NOW THEREFORE, pursuant to its mandate under the EPIRA, the DOE hereby issues adopts and promulgates the attached VSAA Rules which shall take effect fifteen (15) days following its publication in two (2) newspapers of general circulation. HESAIT

Taguig, Metro Manila, ______________.

(SGD.) ANGELO T. REYES

Secretary

VISAYAS SUPPLY AUGMENTATION AUCTION (VSAA) RULES

TABLE OF CONTENTS

CHAPTER 1 — INTRODUCTION

1. Objectives of the Visayas Supply Augmentation Auction

2. Regulatory Framework

3. Dispute Resolution

4. Compliance and Enforcement

5. Commencement of the VSAA

CHAPTER 2 — PARTICIPANTS AND REGISTRATION

2.1. Visayas Supply Augmentation Auction Participants

2.3. Categories of Auction Participants

2.4. Qualifications and Registration of Auction Participants

2.4.1. Qualifications of Supply Augmentation Service Providers

2.4.2. Qualifications of Customers

2.4.3. Authority of VSAA Administrator to Pre-Qualify Auction Participants IHCESD

2.4.4. Registration in Multiple Categories

2.4.5. Registration of a Distribution Utility as Supply Augmentation Service Provider

2.4.6. Participation of End-Users Connected to a Distribution Network

2.5. Application Process

2.5.1. Submission of Application

2.5.2. Assessment of Auction Limits and Load Profile of Applicants for Supply Augmentation Service Providers

2.5.3. Approval of Application

2.5.4. Disapproval of Application

2.6. Cessation of Registration, Suspension and De-Registration

2.6.1. Cessation of Registration

2.6.2. Suspension

2.6.2.1. Grounds of Suspension

2.6.2.3. Notice of Suspension

2.6.2.4. Effect of Suspension

2.6.2.5. Lifting of Suspension

2.6.2.6. Resumption of Participation

2.6.3. De-Registration

2.6.3.1. Grounds of De-Registration

2.6.3.2. Notice of De-Registration

2.6.3.3. Effect of De-Registration

2.6.3.4. Resumption of Registration

2.7. Registration Lists

2.8. VSAA Service Providers

2.8.1. VSAA Administrator

2.8.2. System Operator

2.8.3. Grid Metering Services Provider

2.8.4. Distribution Utilities

CHAPTER 3 — SUPPLY AUGMENTATION SCHEDULES AND PRICES

3.1. Approval by the ERC

3.2. Categories of Supply Augmentation Services

3.3. Supply Augmentation Auction Zones

3.4. Determination of Supply Deficit for Auction

3.4.1. Energy Requirement Covered by Auction

3.4.2. Determination of Supply Deficit

3.5. Determination of Augmentation Schedules and Prices

3.5.1. Objective

3.5.2. Augmentation Schedules

3.5.3. Merit Order List

3.5.4. Augmentation Prices

3.6. Auction Intervals and Timetable

3.6.1. Auction Interval

3.6.2. Auction Timetable

3.7. Supply Deficit Forecasting

3.8. Submission of System Information

3.9. Submission and Validation of Auction Offers

3.9.1. Submission of Quantity Offers

3.9.2. Submission of Price Offers

3.9.3. Validation of Offers EacHCD

CHAPTER 4 — AUGMENTATION SCHEDULE IMPLEMENTATION AND DISPATCH

4.1. Implementation of Augmentation Schedules

4.2. Communication of Augmentation Schedules and Dispatch Instructions

4.3. Corrective Actions in Real-Time Dispatch

4.4. Compliance to Augmentation Schedules

4.5. Sanctions of Auction Participants

4.6. Post Dispatch Report

4.6.1. VSAA Administrator

4.6.2. System Operator and Distribution Utilities Report

4.6.3. Provision of Post Dispatch Reports

CHAPTER 5 — METERING, BILLING AND SETTLEMENTS

5.1. Metering

5.1.1. Provision of Metering Services

5.1.2. Minimum Metering Requirements

5.1.3. Retrieval and Submission of Metering Data

5.1.4. Validation and Conversion of Metering Data

5.2. Determination of VSAA Settlement Amounts

5.3. Settlement Process and Timetable

5.3.1. Billing Month

5.3.2. Issuance of Preliminary Settlement Statements

5.3.3. Issuance of Final Settlement Statements

5.3.4. Revision of Final Settlement Statements

5.3.5. Disputes on Settlement Statements

5.4. Remittances and Collection

5.4.1. Responsibility of the VSAA Administrator

5.4.2. Amounts for Remittance or Collection

5.4.2.1. VSAA Customers

5.4.2.2. Supply Augmentation Auction Service Providers

5.4.2.3. Auction Participants with Multiple Participation

5.4.3. Effect of Shortfall on Collection

5.4.4. Payment Due Dates

5.4.4.1. Payment by VSAA Customers and Auction Participants

5.4.4.2. Remittance of Payment to Supply Augmentation Service Providers

5.4.4.3. Payment for Revised Settlement Statements

5.4.4.4. Banking Holidays

5.4.5. Manner of Payment

5.4.6. Late Payment Penalty

5.4.7. Payment in Cases of Settlement Disputes aTcIEH

5.5. Prudential Requirement

5.5.1. Purpose

5.5.2. Obligation to Provide Security

5.5.3. Amount of Security

5.5.4. Forms of Security

5.5.5. Monitoring of Net Exposure

5.5.6. Drawdown on the Security

5.5.7. Margin Call

5.5.8. Replenishment or Replacement of Security

5.6. Suspension of Auction Participants

CHAPTER 6 — REPORTING, INFORMATION DISCLOSURE AND CONFIDENTIALITY

6.1. Information Disclosure

6.1.1. Definition of Market Information

6.1.2. Provision of Information

6.1.3. Publication of Information

6.1.3.1. Publication Timetable

6.1.3.2. Market Information Website

6.1.3.3. Other Means of Information Access

6.1.4. Regulatory Access and Monitoring

6.1.5. VSAA Data Catalogue

6.2. Data and Records Retention . . . Error! Bookmark not defined

CHAPTER 7 — SUSPENSION OF THE VSAA

7.1. Grounds for Suspension

7.2. Emergency Events

7.3. Force Majeure Events

7.4. Declaration of Suspension

7.4.1. Who Can Declare Suspension

7.4.2. Notification to VSAA Participants

7.5. Lifting of Suspension

7.6. Effect of Suspension

7.7. Auction Suspension Reports

CHAPTER 8 — TERMINATION OF THE VSAA

8.1 Declaration of Termination

8.2. Effect of Termination

8.3. No Liability for the VSAA Administrator

CHAPTER 9 — EFFECTIVITY AND AMENDMENT OF THE RULES

9.1. Purpose of the Rules

9.2. Scope of Application

9.3. Effectivity and Enforceability

9.4. Interpretation

9.5. Amendment

9.5.1. Initiation of amendments

9.5.2. Consultation with VSAA Participants IEaHSD

9.5.3. Approval

9.5.4. Publication and Effectivity

9.6. Automatic Amendment to Conform with DOE or ERC Issuances

9.7. Auction Manuals and Guidelines

CHAPTER 10 — GLOSSARY

APPENDIX A — AUCTION TIMETABLE

APPENDIX B — QUANTITY AND PRICE OFFER FORMAT AND CRITERIA FOR VALIDATION OF OFFERS

APPENDIX C — CALCULATION OF PRUDENTIAL REQUIREMENT AND NET EXPOSURE

APPENDIX D — PUBLICATION AND REPORTING TIMETABLE AND DATA CATALOGUE

CHAPTER 1

Introduction

1. Objectives of the Visayas Supply Augmentation Auction

The objectives of the Visayas Supply Augmentation Auction are to establish a venue for —

a) implementing an interim solution to the deficit supply situation in the Visayas grid, particularly in the Cebu, Negros and Panay sub-grid that will allow for a smooth transition to the implementation of a market-based approach to trading of electricity; and

b) allowing electric power industry participants in the affected regions to contribute to easing the electric power Supply Deficit through the implementation of demand-side and supply-side management measures;

2. Regulatory Framework

2.1. The Department of Energy is mandated under Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001, to exercise supervision and control over all government activities relative to energy projects to attain the goals provided for in Republic Act No. 7638, as amended, otherwise known as the Department of Energy Act of 1992. It is likewise mandated to formulate rules and regulations as may be necessary to implement the objectives set forth in Republic Act No. 7638.

2.2. The Energy Regulatory Commission is the independent, quasi-judicial body created under Republic Act No. 9136 with the mandate to promote competition, encourage market development, ensure customer choice and penalize abuse of market power in the restructured electricity industry. Under said Act, it is mandated to act on applications for cost recovery and return on demand-side management projects, as well as to establish and enforce a methodology for setting transmission and distribution wheeling and retail rates for the captive market of a distribution utility, taking into account all relevant considerations, including the efficiency or inefficiency of regulated entities. In addition, it also has the specific mandate to monitor the activities in the generation and supply of electric power industry with the end view of promoting free market competition and ensuring that the allocation or pass through of bulk purchase cost by distributors is transparent and non-discriminatory.

2.3. Pursuant to their other respective functions and authorities, the DOE approves the VSAA Rules while the ERC approves the Pricing and Cost Recovery Methodology for the VSAA. SEcAIC

2.4. The Visayas Supply Augmentation Auction Rules as promulgated by the DOE, and the Pricing and Cost Recovery Methodology as approved by the ERC will govern the implementation and operation of the Visayas Supply Augmentation Auction.

2.5. The VSAA Rules and the Pricing and Cost Recovery Methodology apply to all registered participants in the VSAA as well as the VSAA Administrator, the System Operator, the Metering Services Providers, the Grid Owner and the Distribution Utilities operating in the Cebu, Negros and Panay sub-grids. cSCADE

3. Dispute Resolution

Pursuant to Republic Act No. 9136, the ERC has original and exclusive jurisdiction over all cases contesting rates, fees, fines and penalties imposed by the ERC in the exercise of its powers, functions and responsibilities under said Republic Act No. 9136 and over all cases involving disputes between and among participants or players in the energy sector.

The VSAA participants, however, shall act in good faith and use all reasonable endeavors to settle any conflict arising out of their transactions or participation in the VSAA through alternative means of dispute resolution before resorting to litigation or dispute resolution before the ERC. The VSAA Administrator shall establish alternative dispute resolution mechanisms for this purpose. This dispute resolution mechanism shall be approved by the DOE.

4. Compliance and Enforcement

The DOE shall establish the necessary processes for monitoring and ensuring compliance and enforcement of the VSAA Rules, the auction manuals and guidelines, and other relevant issuances on the VSAA. aDATHC

5. Commencement of the VSAA

The commencement of the Visayas Supply Augmentation Auction shall be declared by the DOE upon the formulation and establishment of all necessary documents, infrastructures and activities that need to be undertaken prior to start of VSAA.

CHAPTER 2

Participants and Registration

2.1. Visayas Supply Augmentation Auction Participants

2.2. The participants of the VSAA, collectively referred to as VSAA Participant are —

a) Distribution Utilities

b) Directly-connected customers or end-users of electricity

c) Generators

d) VSAA Administrator

e) System Operator

f) Metering Services Provider

2.3. Categories of Auction Participants

2.3.1. The categories of Auction Participants are —

a) Supply Augmentation Service Providers and

b) Customers

2.3.2. Supply Augmentation Service Providers are —

a) Embedded Generators and self-generation facilities capable of synchronizing to the distribution grid, collectively referred to as Embedded Generators;

b) Grid Generators; and

c) Interruptible Load Service Providers

2.3.3. Customers are —

a) Distribution Utilities, which can be an electric cooperative, a private corporation, government-owned utility, and industrial or economic zone administrator, or existing local government unit; and

b) End-users of electricity that are directly connected to the transmission grid.

2.4. Qualifications and Registration of Auction Participants

2.4.1. Qualifications of Supply Augmentation Service Providers

2.4.1.1. To qualify as Supply Augmentation Service Provider, an Embedded Generator must comply with the following —

a) It is authorized by the ERC to operate a generation facility, provided that such facility must have a net generation capacity of not less than one (1) MW.

b) Its generation facility is located and operating within the franchise area of a Distribution Utility.

c) Its generation facility must be capable of parallel operation, is capable of multiple start-up in one day with of a maximum start-up time of thirty (30) minutes, and has a time-of-use meter with sixty-day digital storage function. ISAaTH

d) All or part of the generation supplied by its generation facility is not covered by a power supply contract. If partially covered by contract, only the un-contracted capacity of not less than one (1) MW can be offered as a supply augmentation service in the VSAA.

2.4.1.2. To qualify as a Supply Augmentation Service Provider, a Grid Generator must comply with the following requirements —

a) It is authorized by the ERC to operate a generation facility that

supplies power to the VSAA Supply Augmentation Auction Zones;

b) Its generation facility has a net generation capacity of not less than one (1) MW; is capable of parallel operations; is capable of multiple start-up in one day with a maximum start-up time of thirty (30) minutes, has a remote telemetering unit (RTU) connected to the Energy Management System of the System Operator and has a time-of-use meter with sixty-day digital storage function. IEAacT

c) All or part of the generation generated is not covered by a power supply contract or bilateral contract. If partially covered by contract, only the un-contracted capacity of not less than one (1) MW can be offered as a supply augmentation service in the VSAA.

2.4.1.3. To qualify as an Interruptible Load Service Provider, a person or entity must comply with the following requirements —

a) It is an end-user of electricity, with demand of not less than one (1) MW, connected either to the transmission network or distribution network. If connected to a distribution network, the relevant Distribution Utility shall register as an Interruptible Load Service Provider on behalf of the end-user. AaHcIT

b) It may or may not have an embedded or self-generation facility that is capable of parallel operation.

c) Power supply to its facilities can be interrupted within thirty (30) minutes and its facility must have a time-of-use meter with sixty-day digital storage function.

d) It has an existing valid power supply contract with a generator or supplier.

2.4.2. Qualifications of Customers

To qualify as a Customer, a person or entity must either be —

2.4.2.1. Distribution Utility which can be an electric cooperative, a private corporation, government-owned utility, industrial zone or economic zone administrator, or existing local government unit, that has an exclusive franchise to operate a distribution system.

2.4.2.2. End-user of electricity that is directly connected to the transmission network and which has a valid and existing connection agreement.

2.4.3. Authority of VSAA Administrator to Pre-Qualify Auction Participants

The VSAA Administrator may modify the qualification requirements that will be imposed, depending on its assessment of the capability of an applicant to comply with the requirements, provided, however, that the required licenses and franchises shall always be complied with, and that any modification made shall also be made to apply on all applicants without discrimination.

2.4.4. Registration in Multiple Categories

A person or entity which qualifies under more than one category of participation may register in each category for which it is qualified. Registration in each category shall be covered by separate applications.

2.4.5. Registration of a Distribution Utility as Supply Augmentation Service Provider

2.4.5.1. End-users with interruptible loads which are located and operating within the franchise area of the Distribution Utility can transact in the VSAA only through their respective Distribution Utilities. Thus, it shall be the Distribution Utility that shall register as the Interruptible Load Service Provider or Supply Augmentation Service Provider on behalf of these end-users. It is provided, however, that the interruptible loads being represented must also possess all the required technical qualifications. It is provided, furthermore that the Distribution Utility can only transact as an Interruptible Load Service Provider in respect to a specific end-user/s within its franchise area that will provide interruptible load services. The end-user represented shall be registered with the VSAA Administrator by the Distribution Utility. HIAESC

2.4.5.2. A Distribution Utility may also register as a Supply Augmentation Service Provider on behalf of a qualified Embedded Generators located and operating within its franchise area. In such case, it shall be the registered Supply Augmentation Service Provider instead of the Embedded Generator and the latter shall not transact directly in the VSAA. The Embedded Generators being represented must also possess all the required technical qualifications.

 

2.4.6. Participation of End-Users Connected to a Distribution Network

End-users of electricity which are connected to a distribution network that are qualified to provide interruptible load service can only transact in the VSAA through the Distribution Utility in whose network they are connected.

2.5. Application Process

2.5.1. Submission of Application

2.5.1.1. Qualified parties intending to participate in the VSAA shall register with the VSAA Administrator, and must satisfy all the requirements set by the VSAA Administrator for registration in the VSAA.

2.5.1.2. After receipt of the application, the VSAA Administrator shall assess the documents submitted and may require additional documentation or information from the applicant which it considers reasonably necessary to aid in its assessment of the application.

2.5.2. Assessment of Auction Limits and Load Profile of Applicants for Supply Augmentation Service Providers

2.5.2.1. For applicants intending to register as Supply Augmentation Service Providers, the VSAA Administrator shall assess the Auction Limit of the applicant, which is maximum generation capacity for Embedded or Grid Generators or level of load or energy requirement for Interruptible Load Service Providers that can be offered for auction.

2.5.2.2. The criteria for setting the Auction Limit are as follows —

a) The Auction Limit for Embedded Generators or Grid Generators is equal to the dependable capacity less the monthly contracted energy in MWh divided by seven hundred twenty (720) hours. Generator quantity offers should be based on the generator's uncontracted capacity for the relevant Auction Interval but shall in no way exceed the Auction Limit. For peak periods, the quantity offers are expected to be less than the Auction Limit.

b) The Auction Limit for Interruptible Load Service Providers is equal to its historical peak demand which is within the allowed energy drawdown in one hour stated in its supply contract with generators. Interruptible load Quantity Offers should be based on the load's contracted demand for the relevant Auction Interval but shall in no way exceed the Auction Limit. For off-peak to mid-peak periods, the quantity offers is expected to be less than the Auction Limit.

The Auction Limit shall be fixed, and can only be changed with prior approval by the VSAA Administrator.

2.5.2.3. In addition, applicants intending to register as Interruptible Load Service Providers shall submit, with their application, their hourly meter data profile for the immediate past twelve (12) months. Upon approval of the application, the hourly data profile submitted by the applicant and accepted by the VSAA Administrator will be binding on the applicant for settlement of its VSAA transactions. aSATHE

2.5.3. Approval of Application

2.5.3.1. The VSAA Administrator shall approve the application if, after evaluation, it determines that the applicant meets all the qualifications and requirements for participation and that all relevant documents and information have been submitted.

2.5.3.2. Approval shall be given within fifteen (15) days after receipt of complete documentation from the applicant. The applicant shall be notified in writing of the approval of the application.

2.5.3.3. Upon approval, the applicant shall sign and submit to the VSAA Administrator the VSAA Participation Agreement in the form prescribed by the VSAA Administrator. The registration of the applicant will not become effective without the duly signed agreement. In order not to delay effectivity of the registration, the applicant may also be required to submit a duly signed VSAA Participation Agreement as part of the application requirements. CScaDH

2.5.3.4. The registration of the applicant shall take effect on the first Auction Day of the immediately succeeding billing period after approval of the application and submission of the VSAA Participation Agreement, or on such earlier or later date as the VSAA Administrator may approve on request of the applicant.

2.5.4. Disapproval of Application

2.5.4.1. If the VSAA Administrator determines that the applicant does not meet all the qualifications or requirements for participation, it shall disapprove the application and notify the applicant of the same and the reason for disapproval not later than fifteen (15) business days after receipt of complete documentation from the applicant.

2.5.4.2. The applicant may rectify the shortcomings identified by the VSAA Administrator as reason for disapproval of its application, and re-submit its application to the VSAA Administrator. The VSAA Administrator shall then evaluate the application as if it is a new application. cCDAHE

2.6. Cessation of Registration, Suspension and De-Registration

2.6.1. Cessation of Registration

2.6.1.1. An Auction Participant that wishes to cease its participation in the VSAA or in one of the categories of participation for which it is registered, shall notify the VSAA Administrator in writing of its intent to cease registration.

2.6.1.2. If the Auction Participant is a Distribution Utility, the cessation of registration shall also apply to all Interruptible Load Service Providers located within its franchise area. In such case, the Distribution Utility must seek conformity of these Interruptible Load Service Providers of the cessation of registration and submit proof of the same to the VSAA Administrator.

2.6.1.3. The cessation of registration shall take effect on the date stated by the Auction Participant or on such other date as the VSAA Administrator may deem more appropriate. The VSAA Administrator shall give notice in writing to the Auction Participant of the effective date of the cessation.

2.6.1.4. The cessation of registration shall not affect the obligation of the Auction Participant to settle all its obligations to the VSAA Administrator.

2.6.2. Suspension

2.6.2.1. Grounds of Suspension

2.6.2.2. The VSAA Administrator may suspend an Auction Participant from participating in the VSAA on any of the following grounds —

a) Breach of any provision of the VSAA Rules, VSAA manuals or guidelines, or relevant rules, regulations, issuances, resolutions or decisions of the ERC or the DOE; SEIaHT

b) Default in the payment of its VSAA settlement amounts and other monetary obligations to the VSAA Administrator, as defined in Chapter 5. Dispute by the Auction Participant shall not prevent the VSAA Administrator from suspending the former.

c) Disconnection by the Auction Participant from the Grid or distribution network to which it is connected, for any reason.

d) Any other ground that becomes known to the VSAA Administrator that suspends the right, license or authority of the VSAA Participant to operate or provide the services for which it was registered in the VSAA.

2.6.2.3. Notice of Suspension

The VSAA Administrator shall notify the Auction Participant of its suspension in writing stating the reasons for and the effective date and hour of the suspension. IESAac

2.6.2.4. Effect of Suspension

a) The suspended Auction Participant shall cease its participation in the VSAA in all categories for it is registered. If it is a VSAA Customer, it will be treated as a Non-Participating Grid Customer and its Supply Deficit will not be considered in the Supply Deficit for auction. It will then be subject of Manual Load Dropping allocation implemented by the System Operator.

b) The suspension will not affect the obligations of the Auction Participant to settle all its obligations to the VSAA Administrator.

2.6.2.5. Lifting of Suspension

Upon request of the suspended Auction Participant, the VSAA Administrator shall lift the suspension if it reasonably considers that the event that gave ground for the suspension has already been rectified to its satisfaction. It shall notify the Auction Participant in writing of the lifting of the suspension indicating the effective date and hour when the Auction Participant may resume participation.

2.6.2.6. Resumption of Participation

Upon receipt of the notice of resumption from the VSAA Administrator, the Auction Participant shall notify the VSAA Administrator of the exact date and time when it intends to resume participation. The notice is important as this would be the basis for the VSAA Administrator to re-activate the Auction Participant's access to the VSAA System and to include its Supply Deficit in the determination of the Supply Deficit for auction.

2.6.3. De-Registration

2.6.3.1. Grounds of De-Registration

The VSAA Administrator shall de-register an Auction Participant from participating in the VSAA upon the occurrence of any of the following grounds which the VSAA Administrator reasonably considers as incapable of rectification —

a) Breach of any provision of the VSAA Rules, other published VSAA manuals or guidelines, or relevant rules, regulations, issuances, resolutions or decisions of the ERC or the DOE;

b) Payment default as defined in Chapter 5. Dispute by the Auction Participant shall not prevent the VSAA Administrator from de-registering the former.

c) Disconnection by the Auction Participant from the Grid or distribution network to which it is connected, for any reason.

d) Revocation of the authorization such as but not limited ERC authorizations or certificates, franchises, certificates of public convenience and necessity, of the Auction Participant to operate or to provide the services for which it was registered in the VSAA.

e) Any other ground that becomes known to the VSAA Administrator that makes it illegal for the Auction Participant to continue to operate or provide the services for which it was registered in the VSAA. EHaCTA

2.6.3.2. Notice of De-Registration

The VSAA Administrator shall notify the Auction Participant in writing of its de-registration stating the reasons for and the effective date and hour of the suspension.

2.6.3.3. Effect of De-Registration

a) The de-registered Auction Participant shall completely cease its participation in the VSAA in all categories for it is registered. If it is a VSAA Customer, it will be treated as a Non-Participating Grid Customer and its Supply Deficit will not be considered in the determination of the Supply Deficit for auction. It will be subject of Manual Load Dropping allocation imposed by the System Operator.

 

b) The de-registration of the Auction Participant will not affect the obligations of that Auction Participant to settle all its obligations to the VSAA Administrator. HSaEAD

2.6.3.4. Resumption of Registration

If the grounds for which the Auction Participant has been de-registered have already been rectified, the Auction Participant may submit to the VSAA Administrator a new application for registration. It shall be subject to the same qualifications and procedures for application, as if it is a new applicant.

2.7. Registration Lists

2.7.1. The VSAA Administrator shall publish the following lists —

a) List of applicants and the category for which they are applying.

b) List of registered VSAA Participants and the category to which they are registered.

c) List of Auction Participants that have ceased participation.

d) List of suspended Auction Participants and the reason for their suspension.

e) List of De-Registered Auction Participants and the reason for their de-registration.

The lists shall also be submitted to the DOE and the ERC on a regular basis.

2.8. VSAA Service Providers

2.8.1. VSAA Administrator

2.8.1.1. The VSAA Administrator shall be the Philippine Electricity Market Corporation pursuant to DOE Circular No. DC2009-01-0001 dated 16 January 2009.

2.8.1.2. Responsibilities of the VSAA Administrator.

The VSAA Administrator shall be responsible for —

a) The preparations for the establishment the VSAA, including, but not limited, to the formulation of the rules, procedures and guidelines to implement the VSAA; cDEHIC

b) The operations of the VSAA and comply with its obligations as set forth and in accordance with these Rules, and in relevant rules, regulations, issuances, decisions and resolutions of the DOE or the ERC; and

c) The allocation of resources for the establishment and operations of the VSAA, and collect administration fees from the VSAA Auction Participants to defray its cost and expenses; provided that the level of the administration fees shall be approved by the ERC.

2.8.2. System Operator

2.8.2.1. The System Operator is the Visayas System Operator of the National Grid Corporation of the Philippines.

2.8.2.2. Responsibilities of the System Operator.

In respect to the operations of the VSAA, the System Operator shall be responsible for —

a) Implementing the Augmentation Schedules generated by the VSAA Administrator, in accordance with these Rules and relevant rules, regulations, issuances, decisions and resolutions of the DOE or the ERC;

b) Performing the functions as set forth in these Rules and in relevant rules, regulations, issuances, decisions and resolutions of the DOE or the ERC; and

c) Subject to prevailing system security and reliability guidelines, strictly implementing the manual load dropping schedules particularly of Non-Participating Grid Customers and the daily generation schedules of generation plants. Strict compliance with such schedules is crucial to the efficient operations of the VSAA, and non-compliance may result in disadvantage or prejudice to Auction Participants.

2.8.3. Grid Metering Services Provider

2.8.3.1. The Grid Metering Services Provider (also Metering Services Provider) shall be the relevant group or unit of the National Grid Corporation of the Philippines performing metering services for participants connected to the Grid.

2.8.3.2. Responsibilities of the Metering Services Provider

In respect to the operations of the VSAA, the Metering Services Provider shall be responsible for —

a) Collecting and retrieving meter data from grid participants, and submitting the same to the VSAA Administrator in accordance with these Rules; and

b) Performing the functions as set forth in these Rules and in relevant rules, regulations, issuances, decisions and resolutions of the DOE or the ERC.

2.8.4. Distribution Utilities

2.8.4.1. If a registered Supply Augmentation Service Provider is located or operating in the franchise area of a Distribution Utility or if a Distribution Utility is transacting in the VSAA on behalf of Embedded Generators or Interruptible Load Service Providers operating within its franchise area, such Distribution Utility shall be responsible for the following —

a) Monitoring and ensuring the compliance by the Supply Augmentation Service Provider of the Augmentation Schedules generated by the VSAA Administrator. Strict compliance with such schedule is crucial to the efficient operations of the VSAA and failure to strictly comply may result in prejudice to other VSAA participants;

b) Retrieving, collecting and validating the meter data of the Supply Augmentation Service Provider in its franchise area, and submitting the same to the VSAA Administrator; and

c) Performing the functions as set forth in these Rules and in relevant rules, regulations, issuances, decisions and resolutions of the DOE or the ERC.

2.8.4.2. The Distribution Utility may also participate in the VSAA auction on behalf of qualified interruptible loads and Embedded Generators located within its franchise area. In such case, it shall perform all the functions and comply with all the obligations of a Supply Augmentation Service Provider, in addition to the functions stated in the foregoing section. cSDHEC

CHAPTER 3

Supply Augmentation Schedules and Prices

3.1. Approval by the ERC

Consistent with its mandate to act on application for cost recovery and return on demand side management projects, the ERC shall approve the Pricing and Cost Recovery Methodology that will apply to the VSAA, and will include the methodology for the following —

a) Scheduling and pricing of supply augmentation;

b) Determination of settlement amounts of VSAA supply augmentation auction service providers and determination of the allocation of supply augmentation costs among VSAA Customers; and IDCcEa

c) Mechanism for the recovery by the participating Distribution Utilities of the supply augmentation costs incurred by them.

3.2. Categories of Supply Augmentation Services

3.2.1. The categories of Supply Augmentation Services that can be auctioned in the VSAA are —

3.2.1.1. Embedded Generation which refers to the supply of electric power from self-generation facilities or Embedded Generators that are indirectly connected to the Grid through the distribution network of a Distribution Utility. The capacity that can be offered for supply augmentation service, however, is strictly limited to the capacity not covered by any contract with any customer.

3.2.1.2. Grid Generation which refers to the supply of electric power by Generators that are directly connected to the Grid, which are otherwise not classified as self-generation facilities or Embedded Generators, such as but not limited to generation from the independent power producers. The capacity that can be offered for supply augmentation service, however, is strictly limited to the capacity not covered by any contract with any customer.

3.2.1.3. Interruptible load which refers to the voluntary load curtailment by end-users of electricity that are either connected to the distribution network of a Distribution Utility or directly connected to the transmission Grid, provided, however that the load offered to be curtailed is covered by an existing power supply contract. aCASEH

3.3. Supply Augmentation Auction Zones

The VSAA shall operate in the islands of Cebu, Negros and Panay. The inclusion of other provinces or franchise areas in the Visayas region shall be subject to prior declaration by the DOE.

3.4. Determination of Supply Deficit for Auction

3.4.1. Energy Requirement Covered by Auction

The energy requirement or Supply Deficit that will be covered by the VSAA auction is the expected shortfall of power supply in the Cebu, Negros and Panay sub-grids taking into consideration the limitations of the interconnections between these islands.

3.4.2. Determination of Supply Deficit

The VSAA Administrator shall determine the Supply Deficit for the following day in accordance with the methodology approved by the ERC under the VSAA Pricing and Cost Recovery Methodology.

3.5. Determination of Augmentation Schedules and Prices

3.5.1. Objective

The VSAA Administrator shall determine the VSAA Auction Schedules and Auction Prices in accordance with the VSAA Pricing and Cost Recovery Methodology approved by the ERC. The determination shall have the objective of minimizing the cost of serving the Supply Deficit in the Supply Augmentation Auction Zones taking into consideration constraints in the system. cDTHIE

3.5.2. Augmentation Schedules

For all Auction Interval of the Auction Day when it determines that there is a Supply Deficit, the VSAA Administrator shall generate the Augmentation Schedule which shall be transmitted to the System Operator and the Auction Participants in accordance with the Auction Timetable.

3.5.3. Merit Order List

3.5.3.1. For each Auction Interval of the Auction Day when there is a Supply Deficit, the VSAA Administrator shall prepare a Merit Order List. The Merit Order List shall list all the Supply Augmentation Service Providers with valid offers for the relevant Auction Interval and their corresponding available quantity ranked in ascending order based on the Price Offers.

3.5.3.2. The Merit Order List shall be the basis for the System Operator to call on additional augmentation should the scheduled augmentation be insufficient to meet the Supply Deficit in real-time. DaTICE

3.5.4. Augmentation Prices

The Augmentation Prices at which the transactions of an Auction Participant are to be settled shall be determined in accordance with the methodology approved by the ERC under the VSAA Pricing and Cost Recovery Methodology.

3.6. Auction Intervals and Timetable

3.6.1. Auction Interval

An Auction Interval is one (1) hour, commencing on the hour.

3.6.2. Auction Timetable

3.6.2.1. The VSAA Administrator shall operate the VSAA in accordance with the Auction Timetable, which shall contain the schedules for the —

a) Submission of system information

b) Determination of Supply Deficit

c) Submission of offers

d) Validation and verification of offers

e) Processing of schedules and prices

f) Publication of day-ahead schedules

3.6.2.2. The Auction Timetable may be revised by the VSAA Administrator upon prior notice to the Auction Participants and publication in the Market Information Website. Any revision shall take effect at the Auction Day immediately after the first day publication. cEITCA

3.6.2.3. The Auction Timetable is presented in Appendix B.

3.7. Supply Deficit Forecasting

3.7.1. The VSAA Administrator shall determine and prepare the Supply Deficit forecast for the VSAA Zone for each hour of the following Auction Day. The Supply Deficit forecast shall be transmitted to the System Operator and the Auction Participants and shall also be published in the Market Information Website.

3.7.2. The System Operator shall prepare the Daily Operating Program for the following day and shall transmit the same to the VSAA Administrator not later than 16:00H of the current Auction Day. The Daily Operating Program shall include information on demand forecast, plant availability and capability, reserve requirements, interconnection limits, import/export for or from each island and other constraints and limitations in the power system. The System Operator shall also provide the VSAA Administrator a copy of the Manual Load Dropping Guide submitted by the National Power Corporation and the independent power producers in the Visayas Grid. acCTSE

3.7.3. In determining the Supply Deficit forecast for the following day, the VSAA Administrator shall consider the following data —

a) Total system demand forecast of Visayas grid;

b) Total generation schedule of the Visayas grid;

c) Total HVDC import/export schedule to the Luzon grid;

d) Interconnection limit and the scheduled import/exports within the Visayas Grid;

e) Reserve requirement and allocation for the Supply Augmentation Auction Zones;

f) Manual load dropping allocations; and

g) Scheduled outages of generators, transmissions/sub-transmission facilities, and local supply interruptions;

h) Other information that may be relevant for determining the Supply Deficit.

3.8. Submission of System Information

3.8.1. The Visayas System Operator shall submit to the VSAA Administrator such information as may be required for the determination of Supply Deficit for auction and the resulting Augmentation Schedules consistent with the auction algorithm objective as set forth in Rule 3.5.1. The information that shall be submitted shall include the following —

3.8.1.1. Interconnection Limits which shows the individual interconnection capability between Cebu and Negros and between Negros and Panay, including information on the tripping of associated equipment and de-ratings.

3.8.1.2. Daily Operating Program which shows the day-ahead forecast (for each island) including the expected import/export through the HVDC and the committed hourly generation. The Daily Operating Program for the next day shall be transmitted to the VSAA Administrator by the System Operator at 1600H of the current day. ITSacC

3.8.1.3. Manual Load Dropping Guide submitted by the National Power Corporation (NPC) and Independent Power Producers (IPPs). This will be the basis for determining the allocation of manual load dropping to non-participating grid customers which shall be deducted from the Supply Deficit for auction.

3.8.1.4. Reserve quantities that are allocated by the System Operator for the Supply Augmentation Auction Zones.

3.8.2. The Auction Participants and the System Operator shall also provide such other information as may be required by the VSAA Administrator for purposes of implementing the VSAA scheduling and pricing processes. This includes, but shall not be limited, to real-time system information as well as data generated by the Energy Management System of the System Operator.

3.9. Submission and Validation of Auction Offers

3.9.1. Submission of Quantity Offers

3.9.1.1. Embedded Generators and Grid Generators shall submit offers for the energy quantity they intend to produce on an hourly basis for the following day. The Interruptible Load Service Providers shall submit offers for the quantity they intend to curtail on an hourly basis for the following day. Where the Embedded Generators or Interruptible Load Service Providers are represented by a Distribution Utility, the latter shall submit the offers.

3.9.1.2. Quantity Offers shall be submitted in accordance with the Auction Timetable and may be revised at anytime prior to the gate closure which is initially set at 1400H of the current day.

3.9.1.3. Quantity Offers shall be in the format and shall contain the information as set forth in Appendix B. The format and information requirement may be modified by the VSAA Administrator from time to time. The modification shall be effective after notification to the Auction Participants and publication in the Market Information Website. cEaSHC

3.9.2. Submission of Price Offers

3.9.2.1. Price Offers shall be submitted on a weekly basis. Within the time set in the Auction Timetable, the Supply Augmentation Service Providers shall submit their Price Offers for each Auction Interval of the following week (i.e., next seven calendar days).

3.9.2.2. The Price Offer submitted shall be valid and shall be fixed for the week for which it was submitted.

3.9.2.3. Price Offers shall be in the format and shall contain the information as set forth in Appendix B. The format and information requirement may be modified by the VSAA Administrator from time to time. The modification shall be effective after notification to the Auction Participants and publication in the Market Information Website.

3.9.3. Validation of Offers

3.9.4. Quantity Offers and Price Offers will be validated by the VSAA Administrator before inclusion in the scheduling and pricing process. The criteria for validation are presented in Appendix B. The criteria may be modified by the VSAA Administrator from time to time. The modification shall be effective after notification to the Auction Participants and publication in the Market Information Website. EcHIAC

CHAPTER 4

Augmentation Schedule Implementation and Dispatch

4.1. Implementation of Augmentation Schedules

The System Operator shall be responsible for the implementation of the Augmentation Schedules generated by the VSAA Administrator. It shall strictly implement the schedules taking into consideration prevailing system security and reliability guidelines and requirements and the conditions of the power system in real-time.

4.2. Communication of Augmentation Schedules and Dispatch Instructions

Augmentation Schedules shall be transmitted by the VSAA Administrator to the System Operator and the VSAA Auction Participants within the time set in the Auction Timetable. The Distribution Utilities shall notify the Embedded Generators and Interruptible Load Service Providers within their franchise areas of the Augmentation Schedules.

4.3. Corrective Actions in Real-Time Dispatch

4.3.1. In the event that the level of actual deficit in supply for a particular Auction Interval deviates from the Supply Deficit forecast for that Auction Interval, the System Operator shall implement the following corrective actions in succession and in the order presented in this section.

4.3.1.1. If the System Operator determines that the actual deficit for any given Auction Interval during the day exceeds forecasted Supply Deficit for that Auction Interval, it shall call the unscheduled Supply Augmentation Auction Providers which have valid offers but were not scheduled to generate or drop load. The unscheduled Supply Augmentation Service Providers will be called based on the order of priority in the Merit Order List generated by the VSAA Administrator, until the deficit in supply is met.

4.3.1.2. If the unscheduled Supply Augmentation Service Providers have been called to generate or to drop load, the System Operator determines that — aDSIHc

a) The actual deficit already equals the dispatched Supply Augmentation Service Providers, it shall implement the VSAA Augmentation Schedule for the next Auction Interval, or

b) The actual deficit still exceeds the dispatched Supply Augmentation Service Providers, it shall implement manual load dropping on Non-Participating Grid Customers until the actual deficit equals the dispatched Supply Augmentation Service Providers.

4.3.1.3. If after implementing the above measures, the System Operator determines that the actual deficit still exists, it shall implement Manual Load Dropping on VSAA Customers. The level of load to be dropped for each Customer will be in proportion to their original Manual Load Dropping allocation.

4.3.1.4. If the System Operator determines that the actual deficit for any given Auction Interval during the day is less than the forecasted Supply Deficit for that Auction Interval, it shall implement the VSAA Augmentation Schedule subject to prevailing system security and reliability guidelines. cCSDTI

4.4. Compliance to Augmentation Schedules

4.4.1. All Supply Augmentation Service Providers shall strictly comply with their respective Augmentation Schedules and with the dispatch instructions of the System Operator.

4.4.2. The System Operator, the VSAA Administrator and the relevant Distribution Utilities shall continuously monitor and take measures to ensure the compliance of the Supply Augmentation Service Providers with the Augmentation Schedules and dispatch instructions.

4.5. Sanctions of Auction Participants

Any Auction Participant which consistently breaches the Augmentation Schedule or consistently fails to comply with the dispatch instructions of the System Operator may be liable for sanctions. It is provided, however, that the ERC has the exclusive jurisdiction over all disputes amongst electric power industry participants.

4.6. Post Dispatch Report

4.6.1. VSAA Administrator

After each Auction Day, the VSAA Administrator shall prepare a report on dispatch compliance which shall contain —

4.6.1.1. Actual Load Profile of Cebu, Negros and Panay sub-grids based on the snapshot data from the System Operator;

4.6.1.2. Comparison amongst the forecasted demand as set out in the Daily Operating Program, the Supply Deficit forecast, the committed generation schedule, and manual load dropping as against the actual conditions as shown in the snapshot data and post-dispatch reports from the System Operator and the Distribution Utilities;

4.6.1.3. Deviation of the forecast Supply Deficit from the actual deficit in supply for each Auction Interval;

4.6.1.4. Non-compliance by Auction Participants with Augmentation Schedules; and

4.6.1.5. Such other relevant information such as information significant events that occur during a particular Auction Interval.

4.6.2. System Operator and Distribution Utilities Report

After each Auction Day, the System Operator and the relevant Distribution Utilities shall prepare daily Post-Dispatch Report and transmit the same to the VSAA Administrator. DAEcIS

4.6.3. Provision of Post Dispatch Reports

The post dispatch report shall be submitted to the ERC and the DOE, with copies furnished to the Auction Participants upon their request. The report of the VSAA report shall also be published in the Market Information Website.

CHAPTER 5

Metering, Billing and Settlements

5.1. Metering

5.1.1. Provision of Metering Services

Metering services for VSAA transactions shall be provided by the following —

(a) The Metering Services Provider duly authorized by the ERC which shall be responsible for retrieval and collection of meter data for Grid-level participants. Currently, this service is being provided by the relevant metering services group of the National Grid Corporation of the Philippines.

(b) The Distribution Utilities which shall be responsible for retrieving, collecting and validating meter data for all Supply Augmentation Service Providers located and operating within its franchise area. aTIEcA

(c) The VSAA Administrator which shall perform validation and processing of the meter data of the VSAA Participants for purposes of settlement of VSAA transactions.

5.1.2. Minimum Metering Requirements

VSAA Customers and Supply Augmentation Service Providers must have revenue metering facilities that are compliant with the minimum requirements set by the VSAA Administrator. The requirements may be revised by the VSAA Administrator, from time to time, as it may deem more appropriate to ensure accuracy of and facilitate collection of metering data.

5.1.3. Retrieval and Submission of Metering Data

The Metering Services Provider and the relevant Distribution Utility shall collect and retrieve meter data of VSAA Auction Participants and transmit the same to the VSAA Administrator in such format as may be required by the latter. If possible, the meter data shall be transmitted on a daily basis. Complete meter data for the billing month shall be transmitted no later than three (3) days after the end of the billing month to ensure prompt billing of VSAA transactions. aTEAHc

5.1.4. Validation and Conversion of Metering Data

5.1.4.1. The VSAA Administrator shall be responsible for the validation of metering data provided to it, and after validation, convert the same into settlement-ready meter data.

5.1.4.2. In case the VSAA Administrator determines that there are erroneous or missing meter data, it shall notify the relevant Metering Services Provider or Distribution Utility through a pertinent meter trouble report. Upon receipt of the meter trouble report, the Metering Services Provider or the relevant Distribution Utility shall verify the reported error or missing data and shall supply the VSAA Administrator of the correct or complete meter data. Corrections shall be performed and the corrected meter data submitted to the VSAA Administrator no later than three (3) days after the end of the billing month.

5.2. Determination of VSAA Settlement Amounts

The methodology for determination of the —

a) Settlement Amounts for VSAA transactions of Supply Augmentation Service Providers, including the determination of settlement quantities and augmentation prices;

b) Supply augmentation cost allocation to the VSAA Customers; and

c) Cost recovery by the participating Distribution Utilities of the supply augmentation cost allocation incurred by them.

that will be applied in the VSAA shall be as approved by the ERC.

5.3. Settlement Process and Timetable

5.3.1. Billing Month

The VSAA Billing Month shall be the period commencing from 0000H of the 26th day of the calendar month until 2400H of the 25th day of the following month (e.g., 0000H 26 December to 2400H 25 January).

5.3.2. Issuance of Preliminary Settlement Statements

5.3.2.1. Within ten (10) days from the end of the billing month, the VSAA Administrator shall issue to all Auction Participants which has VSAA transactions for the month, a preliminary statement setting out the transactions of that Auction Participant and the amounts due to or from said Auction Participant.

5.3.2.2. The preliminary statement to be issued shall contain sufficient data as to enable the Auction Participant to audit the calculations made. The preliminary statement is not yet binding for settlement but is issued for purposes of audit and review by the Auction Participant.

5.3.2.3. If the Auction Participant determines that there is an error or discrepancy in the preliminary statement, it shall notify the VSAA Administrator which shall review the calculations and verify the errors or discrepancies reported, and thereafter, make corrections as appropriate.

5.3.2.4. If the VSAA Administrator, after issuing the preliminary statement, determines that there is an error or discrepancy in the preliminary statement of any VSAA Auction Participant, it shall correct the same and inform the relevant Participant of the correction. cDIaAS

5.3.3. Issuance of Final Settlement Statements

Within eighteen (18) days from the end of the billing month, the VSAA Administrator shall issue the final settlement statement, which shall be the basis for collection and payment, and the corresponding invoices. The final settlement statement shall include such supporting data that would enable the Auction Participant to audit the calculations made.

5.3.4. Revision of Final Settlement Statements

If any amount in the final settlement statement has been determined to be in error and it has been corrected, the VSAA Administrator shall issue a revised settlement statement setting out the correct amount, and the corresponding invoice reflecting corresponding settlement adjustment. The settlement amount due (if any) shall be payable on the dates and time stated in the succeeding sections.

5.3.5. Disputes on Settlement Statements

5.3.5.1. If any dispute arises between the VSAA Administrator and an Auction Participant in respect to any amount stated in the final settlement statement or its supporting data, the parties shall endeavor to settle the same amicably and within a reasonable period.

5.3.5.2. Disputes on any amount in the final settlement statement may be brought within twelve months from the relevant billing period. No dispute may be raised beyond such period.

5.3.5.3. Disputes shall be resolved through the alternative dispute resolution mechanism established by VSAA Administrator and approved by the DOE before filing a formal complaint to the ERC.

5.4. Remittances and Collection

5.4.1. Responsibility of the VSAA Administrator

The VSAA Administrator shall be responsible for collecting payments from the VSAA Customers and for remitting the same, on a pass-through basis, to the Supply Augmentation Service Providers.

5.4.2. Amounts for Remittance or Collection

5.4.2.1. VSAA Customers

For each billing month, the VSAA Customer shall remit to the VSAA Administrator the sum of the —

(a) Administration fees plus;

(b) Supply Augmentation Cost Allocation plus;

(c) All other amounts payable by the VSAA Customer to the VSAA Administrator less the sum of;

(d) All amounts payable by the VSAA Administrator to the VSAA Customer.

5.4.2.2. Supply Augmentation Auction Service Providers

For each billing month, the VSAA Administrator shall remit to the Supply Augmentation Service Provider the sum of the —

(a) Aggregate Settlement Amounts payable to the said Supply Augmentation Service Provider less;

(b) Administration fees payable less;

(c) Any amount payable by that Supply Augmentation Service Provider for any VSAA transactions.

5.4.2.3. Auction Participants with Multiple Participation

For Auction Participants that have transactions both as VSAA Customer and as Supply Augmentation Service Provider, the amounts to be remitted by that Auction Participant to the VSAA Administrator is the sum of —

(a) Aggregate Administration Fees payable by that Auction Participant plus;

(b) Aggregate Supply Augmentation Cost Allocation payable by that Auction Participant plus;

(c) All other amounts payable by that Auction Participant to the VSAA Administrator less;

(d) Aggregate Settlement Amounts Payable to that Auction Participant less;

(e) All other amounts payable to that Auction Participant by the VSAA Administrator.

5.4.3. Effect of Shortfall on Collection

In the event that the amounts collected by the VSAA Administrator, including all amount drawn from the prudential security, is insufficient to pay for the aggregate settlement amounts due, the amount collected less the market fees due to the VSAA Administrator, shall be allocated to the Auction Participants in the proportion that the amount due to them for the billing month bears to the total amount due to all Auction Participants for that billing month.

The VSAA Administrator shall not be liable for any delays in the remittances to VSAA Auction Participants due to shortfall or delay in the collection.

5.4.4. Payment Due Dates

5.4.4.1. Payment by VSAA Customers and Auction Participants

Not later than 12:00 noon of the thirtieth day after the end of the billing month, the VSAA Customers and the Auction Participants which have net amounts payable to the VSAA Administrator shall pay to the VSAA Administrator in cleared funds all the amounts due, without need of prior demand.

5.4.4.2. Remittance of Payment to Supply Augmentation Service Providers

By the end of banking hours on the third business day after the payment due date of VSAA Customers or Auction Participants as provided for in the foregoing Section 5.4.4.1, the VSAA Administrator shall pay to the Supply Augmentation Service Providers the aggregate amounts (if any) payable to the latter.

5.4.4.3. Payment for Revised Settlement Statements

Payments of the amounts due under any revised settlement statements shall be remitted to the VSAA Administrator not later than 12:00H on the tenth (10th) business day from the date of issuance of the revised settlement statement.

Remittance of payments by the VSAA Administrator to the relevant Auction Participant to whom payment is due shall be on the third business day following the date of payment by the Auction Participant from whom payment is due.

5.4.4.4. Banking Holidays

If any of the stated due dates fall on a banking holiday, the due date shall be the next banking day.

5.4.5. Manner of Payment

All payment should be received by the VSAA Administrator in cleared funds on or before the stated due date and time. Payments may be made by electronic fund transfer using the electronic fund transfer facility of the VSAA Administrator or by real time gross settlement, or by such other means as may be set by the VSAA Administrator with prior notice to all Auction Participants. All relevant bank charges shall be to the account of the Auction Participant. DTcASE

5.4.6. Late Payment Penalty

If an Auction Participant fails to pay any amount due on the stated due date, the unpaid amount shall be charged a default interest at the rate equivalent to the prevailing ninety-one (91) day Treasury Bills rate published by the Bureau of Treasury plus 200 basis points for each day of delay until fully paid. Where no interest rate is published or made available for a particular day, the interest rate published or made available for the immediately preceding day shall be used.

5.4.7. Payment in Cases of Settlement Disputes

The Auction Participants shall promptly pay their obligations on due date whether or not they have disputed or continue to dispute the amounts stated to be payable by them.

5.5. Prudential Requirement

5.5.1. Purpose

The prudential requirement is imposed to ensure that the Auction Participants are able to meet their obligations as they fall due thus ensuring, in turn, the effective operation of the VSAA as well as fostering confidence amongst the VSAA Auction Participants that their transactions will be paid as they fall due.

5.5.2. Obligation to Provide Security

All Auction Participants shall provide and maintain a security in the form and in the amount prescribed by the VSAA Administrator. The security shall be maintained at the required level for the duration that the Auction Participant is registered in the VSAA.

The VSAA Administrator, at its discretion, may exempt any Auction Participant from maintaining a security if it reasonably believes that the amounts payable to that Auction Participant is always greater than the amount payable by that Auction Participant to the VSAA Administrator.

5.5.3. Amount of Security

The amount of the security shall be determined by the VSAA Administrator taking into consideration the projected average energy deficit of the Auction Participant. The amount of the security shall be sufficient to cover the exposure to that Auction Participant for sixty-three (63) Auction Days. The supply augmentation limit of the Auction Participant shall not exceed ninety-five (95) percent of the amount of required security. The supply augmentation limit is the energy level that a particular Auction Participant can transact in the VSAA. CacTSI

The formula for determining the amount of the security is set forth in Appendix C.

5.5.4. Forms of Security

The security to be provided by the VSAA Auction Participant shall either be —

a) cash.

b) stand-by letter of credit issued by a bank acceptable to the VSAA Administrator.

5.5.5. Monitoring of Net Exposure

The VSAA Administrator shall monitor the net exposure of the Auction Participants. If it reasonably considers that the amount of security being maintained by any Auction Participant has become inadequate or exceeds the required amount, considering the level of its transactions in the VSAA, it shall notify the Auction Participant of the discrepancy. If the amount of the security has become inadequate, the VSAA Administrator shall make a margin call by giving notice to the Auction Participant to submit additional security in accordance with Section 5.5.8. If the amount has exceeded the requirement, the VSAA Administrator shall return the excess amount to the Auction Participant, or apply the same in payment of the latter's obligations in the VSAA. cCaATD

5.5.6. Drawdown on the Security

In the event that an Auction Participant fails to pay its obligations on due date, the VSAA Administrator shall immediately draw on the security, without need of prior consent from the Auction Participant, it shall, however, notify the latter of the drawdown.

5.5.7. Margin Call

If the VSAA Administrator determines that the amount of the security of an Auction Participant has become inadequate to cover the exposure of the VSAA Administrator to that Auction Participant, it shall immediately make a margin call by giving notice to that Auction Participant. The Auction Participant shall satisfy the margin call by submitting additional security in accordance with the succeeding section.

5.5.8. Replenishment or Replacement of Security

5.5.8.1. In case of a margin call or in case of a drawdown on the security by the VSAA Administrator, the Auction Participant shall replenish its security in the amount required to bring the security to the required level within twenty-four (24) hours from time of receipt of the margin call or from drawdown by the VSAA Administrator.

5.5.8.2. If, even without a margin call, the Auction Participant becomes aware that its security has deteriorated and its aggregate value has become less than the required security, it shall immediately replace or replenish the same to the required amount.

5.6. Suspension of Auction Participants

In accordance with Chapter 2, an Auction Participant shall be suspended from transacting in the VSAA in case of payment default arising from —

(a) prolonged delay in the payment of any amount due to be paid to the VSAA Administrator; or

(b) failure to submit and maintain prudential security in the form and amount and within the period required by the VSAA Administrator.

Dispute by the Auction Participant of any amount due or partial payment or compliance shall not be grounds to defer or lift the suspension.

CHAPTER 6

Reporting and Information Disclosure

6.1. Information Disclosure

6.1.1. Definition of Market Information

Market Information refers to any information received by or generated by the VSAA Administrator in the course of the implementation and operation of the VSAA. This includes but is not limited to registration data of VSAA Participants, input data from VSAA participants and service providers, and information resulting from the various auction processes such as auction prices, schedules, and settlement data.

6.1.2. Provision of Information

6.1.2.1. In addition to any specific obligation of the VSAA Administrator under these Rules to provide information, the VSAA Administrator shall, upon written request, provide to any Auction Participant or any party any information concerning the VSAA, provided that such information is not confidential, and that it may charge a fee to cover the cost for providing such information.

6.1.2.2. The VSAA Administrator shall make available to the ERC all pertinent information which the latter will require in the course of performing its regulatory functions.

6.1.2.3. The VSAA Administrator shall make available to the DOE all pertinent information which the latter will require in performing its policy-making functions.

6.1.3. Publication of Information

6.1.3.1. Publication Timetable

The VSAA Administrator shall publish data and information in accordance with the publication timetable. The publication timetable may be revised from time to time, as the VSAA Administrator may deem appropriate. The initial publication timetable is presented in Appendix D. CScTDE

6.1.3.2. Market Information Website

The VSAA Administrator shall maintain a Market Information Website in which it will publish information which is then available to and may be accessed by the VSAA Participants. The website may be a shared facility with the Philippine Wholesale Electricity Spot Market.

All data, reports or documentation required to be published shall be published in the Market Information Website. Unless otherwise directed, publication in the website shall be deemed sufficient compliance with any publication requirement.

6.1.3.3. Other Means of Information Access

The VSAA Administrator may also publish or transmit reports, data or other documentation by other means such as but not limited to electronic mail, other forms of electronic data transmission facilities, or in printed form for distribution.

6.1.4. Regulatory Access and Monitoring

The VSAA Administrator shall provide access to information to duly authorized personnel of the ERC or the DOE for purposes of monitoring the implementation and operations of the VSAA and for verifying auction results and information.

6.1.5. VSAA Data Catalogue

The VSAA Administrator shall formulate and publish a VSAA Data Catalogue which will contain the detailed list of market information, means of publication or access and level of access and confidentiality. The Data Catalogue shall be revised by the VSAA Administrator from time to time to ensure accessibility and transparency of auction information.

The initial Data Catalogue is presented in Appendix D.

6.2. Data and Records Retention

The VSAA Administrator shall retain records of all auction data for a period of five (5) years from termination of the VSAA but for a maximum period of not more than ten (10) years. Auction data requiring retention refers to information provided to and generated by the VSAA Administrator in relation to registration of VSAA Participants, auctioning, scheduling and pricing, and settlement processes. TCacIE

 

CHAPTER 7

Suspension of the VSAA

7.1. Grounds for Suspension

The operations of the VSAA shall be suspended upon occurrence of any of the following events —

(a) Declaration of national emergency by the President of the Republic of the Philippines;

(b) Local calamities;

(c) Emergency events;

(d) Force majeure events.

7.2. Emergency Events

An emergency event may include —

a) a significant electricity supply capacity shortfall, being a situation where, after considering all possible supply augmentation, there is insufficient generation or supply options available to secure supply;

b) a power system disturbance due to an outage in the Grid or in the generating systems, which the VSAA supply augmentation cannot address;

c) a significant environmental phenomenon, including weather, storms, or fires which are likely to or are significantly affecting the power system for which the VSAA supply augmentation cannot address;

d) A system black-out or significant power system under-voltage condition;

e) Material damage to a distribution system which has or is likely to adversely affect the operation of the transmission system or render the VSAA supply augmentation auction ineffective; and

f) A situation, which competent governmental authorities declare to be an emergency, and which will render the VSAA supply augmentation ineffective.

7.3. Force Majeure Events

The following events shall constitute force majeure events that shall give ground to suspension of the VSAA.

7.3.1.1. Failure of communication facilities that makes it difficult for all the Auction Participants to submit their offers; or for the VSAA Administrator to receive offers from Auction Participants or to transmit Auction Schedules to the System Operator;

7.3.1.2. Failure of auction systems, whether due to software or hardware failure, that makes the VSAA Administrator unable to receive offers or system information necessary and indispensable for the auction, or to generate feasible Auction Schedules within the Auction Timetable.

7.3.1.3. Other similar events analogous to the foregoing.

7.4. Declaration of Suspension

7.4.1. Who Can Declare Suspension

Suspension due to national emergencies or local calamities can only be declared by the ERC. Suspension due to emergency or force majeure events may be declared by the VSAA Administrator or the System Operator in consultation with each other.

7.4.2. Notification to VSAA Participants

Upon declaration of suspension or upon receipt of notice of suspension from the ERC or the System Operator, the VSAA Administrator shall immediately inform the VSAA Participants and the System Operator of the declaration and the expected duration of the suspension.

7.5. Lifting of Suspension

Suspension shall be lifted upon cessation of the event causing the suspension, provided, however that only the ERC can declare lifting of suspension in cases when the suspension was declared by it. In other cases, the lifting may be declared by either the VSAA Administrator or the System Operator in consultation with each other.

7.6. Effect of Suspension

Upon declaration of suspension, all auction processes shall be suspended for all the Auction Intervals for the duration covered by the suspension. Auction offers submitted by the Auction Participants as well as day-ahead Augmentation Schedules and prices covering Auction Intervals affected by the suspension, including those that were already processed, published and disseminated shall automatically become ineffective, and shall not be binding on the VSAA Administrator, System Operator or any VSAA Participant. DEHaAS

7.7. Auction Suspension Reports

Within ten (10) business days from the declaration of market suspension, the VSAA Administrator and the System Operator shall prepare their respective reports showing the (a) grounds for suspension; (b) duration of suspension; and (c) actions taken to address the events that led to suspension. The report shall be submitted to the DOE and the ERC. Copies of the report may also be furnished to the VSAA Participants on request.

CHAPTER 8

Termination of the VSAA

8.1. Declaration of Termination

The DOE shall declare the termination of the VSAA upon the declaration of the commencement of the commercial operations of the Wholesale Electricity Spot Market in the Visayas Grid.

The DOE may also declare the termination of the VSAA even prior to WESM commencement date when it reasonably considers that the conditions for which the VSAA has been implemented do no longer exist, or if the VSAA has become ineffective in addressing the supply deficit in the Visayas, or if other demand-side management programs or supply augmentation measures are to be implemented, or on such other similar grounds which the DOE determines is appropriate. CcAITa

For this purpose, the VSAA Administrator shall submit to the DOE regular reports on the results of the operations of the VSAA detailing, among other things, the state of the supply and deficit in the Visayas grid, level of participation in the VSAA and other information that would aid the DOE in determining the effectiveness of the VSAA in achieving its objectives.

8.2. Effect of Termination

8.2.1. Notwithstanding the termination of the VSAA, the Auction Participants shall remain to be liable for the settlement of all their obligations to the VSAA Administrator and to other VSAA Participants.

8.2.2. The VSAA Administrator shall implement the necessary measures to ensure immediate collection and payment of all amounts due from or to Auction Participants.

8.2.3. The VSAA Administrator shall be allowed to recover from and allocated to Auction Participants such amounts to defray the costs incurred by it for the establishment and operation of the VSAA which has not yet been recovered from the administration fees already collected.

8.3. No Liability for the VSAA Administrator

The VSAA Administrator shall not be liable for any damages which any VSAA Participant or any other party may incur as a result or arising from the termination of the VSAA or from any action taken by the VSAA Administrator to cease operations of the VSAA.

CHAPTER 9

Effectivity and Amendment of the Rules

9.1. Purpose of the Rules

These Rules shall govern the implementation and operations of the VSAA.

9.2. Scope of Application

By their participation in the VSAA, the VSAA Administrator, the System Operator, the Metering Services Provider and the VSAA Participants bind themselves to comply with —

a) these Rules, and all other rules, regulations, issuances, decisions, resolutions that may be issued by the DOE or ERC relevant to the operations of the VSAA, and

b) guidelines and procedures set by the System Operator and the VSAA Administrator in the course of the operations of the VSAA. CcHDSA

9.3. Effectivity and Enforceability

These Rules shall become effective upon approval by the DOE, subject to conditions which the DOE may impose on its approvals.

9.4. Interpretation

Unless the context otherwise requires —

9.4.1. All italicized words in these Rules shall have the meaning as set forth in the Glossary unless otherwise defined in the specific provision of the Rule in which they are mentioned.

9.4.2. Headings in these Rules are made for convenience only and do not affect the interpretation of the Rules.

9.4.3. Any reference to these Rules or any provision thereof, or to any laws, rules and regulations or issuances includes any and all amendments or supplements to such Rules, laws, rules and regulations and issuances. HaDEIc

9.4.4. An expression referring to a person shall mean a natural person or a juridical entity.

9.4.5. Any reference to a person or entity shall also refer to that person's or entity's successors, executors or administrators.

9.4.6. Unless otherwise stated, a day refers to a calendar day beginning at 0000H of the day, while a week refers to the period from 0000H of a day until 00:00H on the seventh day following.

9.5. Amendment

9.5.1. Initiation of amendments

The VSAA Administrator, the System Operator or any VSAA Participant may initiate an amendment to the VSAA Rules. Where the amendment is initiated by a party other than the VSAA Administrator, the proposal for amendment shall be submitted to the VSAA Administrator.

9.5.2. Consultation with VSAA Participants

9.5.2.1. All proposals for amendments initiated by or submitted to the VSAA Administrator shall be published in the Market Information Website. The VSAA Participants shall be notified of the publication of any proposal.

9.5.2.2. Within such period as the VSAA Administrator may set, but in no case less than five (5) business days from the first day of its publication, any interested VSAA Participant may submit comments on or objection to the proposal.

9.5.2.3. The VSAA Administrator shall collate all comments and objections and publish a summary identifying the person or entity making the comment or objection and publish the same in the Market Information Website.

9.5.2.4. If it deems appropriate, the VSAA Administrator shall revise the proposal. Where the proposal was initiated by a party other than the VSAA Administrator, the proponent may also submit to the VSAA Administrator a revision or further justification of the proposal.

9.5.2.5. The revised proposal or the justification shall then be submitted for approval, and published in the Market Information Website.

9.5.2.6. The VSAA Administrator may conduct consultation meetings with the VSAA Participants on the proposed changes, as it deems fit and appropriate.

9.5.3. Approval

9.5.3.1. If it considers that the proposal is consistent with the objectives of the VSAA, the DOE shall approve the proposal.

9.5.3.2. Where the proposal relates to or affects any provision pertaining to the methodology for determining auction prices and schedules, cost recovery and settlement amounts, the same shall also be subject to approval by the ERC. For this purpose, the VSAA Administrator shall be authorized by the DOE to submit an application for approval by the ERC.

 

9.5.4. Publication and Effectivity

The approved amendment shall be published in the Market Information Website and shall become effective within five (5) business days from the first day of publication or on such earlier or later date as the VSAA Administrator, the DOE or the ERC may require.

9.6. Automatic Amendment to Conform with DOE or ERC Issuances

The VSAA Rules are deemed automatically amended to conform with rules, regulations, decisions, resolutions and issuances by the DOE or the ERC on matters pertinent or relevant to the VSAA.

The VSAA Administrator shall revise the Rules accordingly without need of following the procedures for amendments set forth in this Chapter and shall publish the revised version clearly indicating the basis for the revision.

9.7. Auction Manuals and Guidelines

In consultation with the VSAA Participants and the System Operator, the VSAA Administrator shall formulate relevant guidelines and procedures to implement any of the provisions of the VSAA Rules or other relevant issuances, resolutions or decisions of the DOE or the ERC. The said guidelines and procedures shall be submitted to the DOE for approval and shall become effective upon its approval by the DOE and its publication in the Market Information Website. CIHAED

CHAPTER 10

Glossary

Term	Abbreviation	Definition
	(if any)
Auction Day		The 24-hour period commencing at 0000H
Auction Interval		One hour, commencing on the hour
Auction Limit		Maximum generation capacity (in MW) for
		Embedded Generators or Grid Generators or
		the maximum level of load or energy
		requirement (in MW) for Interruptible Load
		Service Providers that can be offered for
		auction, as determined and fixed by the
		VSAA Administrator
Auction Participant		Persons or entities registered in the VSAA
		as either Supply Augmentation Service
		Provider or Customer
Auction Timetable		The timetable set by the VSAA
		Administrator for the operation of the
		VSAA scheduling and pricing processes
Augmentation Price		The price at which the supply augmentation
		services will be settled, which is determined
		in accordance with the VSAA Pricing and
		Cost Recovery Methodology approved by
		the ERC
Augmentation		The target levels for each generator or
Schedule		interruptible load scheduled to provide
		supply augmentation for a given Auction
		Interval, determined by the VSAA
		Administrator using the scheduling and
		pricing methodology approved by the ERC
Business day		Any day in which the banks are open in the
		islands of Cebu, Negros and Panay. If a
		local banking holiday is declared in any
		locality, the effect of such declaration will
		only apply to the VSAA Participant whose
		principal place of business is located in
		such locality.
Customer		Distribution Utility or end-consumer of
		electricity directly connected to the Grid
		that is registered with the VSAA
		Administrator to participate in the VSAA.
		Has the same meaning as VSAA Customer
Daily Operating	DOP	Daily day-ahead schedule of committed
Program		generation prepared by the System Operator
Department of	DOE	The government agency created pursuant to
Energy		Republic Act No. 7638 and which has
		expanded functions as set forth in Republic
		Act No. 9136
Distribution Utility,	DU	An electric cooperative, private corporation,
Distribution Utilities		government-owned utility, or existing local
		government unit, that has an exclusive
		franchise to operate a distribution system
Embedded		Generating units that are indirectly
Generator		connected to the Grid through the lines of
		the Distribution Utilities or industrial
		generation facilities that are synchronized to
		the Grid
Energy Regulatory	ERC	The independent, quasi-judicial regulatory
Commission		body created under Republic Act No. 9136
Generator,		A person or entity authorized by the ERC to
Generation		operate facilities used in the generation of
Company		electricity
Grid		The high-voltage backbone system of
		inter-connected transmission lines,
		substations, and related facilities which
		includes those located in the islands of
		Cebu, Negros and Panay
Grid Customer		Distribution Utility or an end-user of
		electricity that are directly connected to the
		Grid
Grid Generator, Grid		A person or entity authorized by the ERC to
Generation		operate facilities which are directly
Company		connected to the Grid and are used in the
		generation of electricity
Grid Metering		A person or entity authorized by ERC to
Services Provider		provide metering services, and which
		provides metering services to facilities
		directly connected to the Grid. This function
		is currently performed by the relevant unit
		of the National Grid Corporation of the
		Philippines. As used in these Rules, it has
		the same meaning as Metering Services
		Provider
Interruptible Load		Distribution Utility or end-user of electricity
Service Provider		that is capable of load curtailment and is
		registered with the VSAA Administrator
Manual load	MLD	Reduction or disconnection of load from the
dropping		power system in accordance with prevailing
		rules and guidelines
Market Information		The website maintained by the PEMC as a
Website		means to publish and provide access to data
		and information on the VSAA. This may be
		the same website as that of the Wholesale
		Electricity Spot Market
Merit Order List		The list generated by the VSAA
		Administrator which lists the Supply
		Augmentation Service Providers with valid
		offers for an Auction Interval in accordance
		to their respective Price Offers, from the
		lowest priced to the highest priced offer
Metering Services		A person or entity authorized by ERC to
Provider		provide metering services. This function is
		currently performed by the relevant unit of
		the National Grid Corporation of the
		Philippines. As used in these Rules, it has
		the same meaning as Grid Metering
		Services Provider
National Grid	NGCP	The corporation which has been granted the
Corporation of the		concession and franchise to operate and
Philippines		maintain the transmission system
Non-Participating		Grid Customers that have not registered to
Grid Customers		participate in the VSAA and whose Supply
		Deficit are excluded in the VSAA auction.
		Has the same meaning as non-VSAA
		Participant
Non-VSAA		Grid Customers that have not registered to
Participant		participate in the VSAA and whose Supply
		Deficit are excluded in the VSAA auction.
		Has the same meaning as Non-Participating
		Grid Customers
Philippine Electricity	PEMC	The entity that has been designated by the
Market Corporation		DOE to establish and operate the VSAA,
		and will serve as the VSAA Administrator
Pricing and Cost		Methodology for determining auction
Recovery		schedules and prices, settlement amounts
Methodology		and cost recovery mechanisms for VSAA
		transactions as approved by the ERC
Rules		The Visayas Supply Augmentation Auction
		Rules, also VSAA Rules
Self-Generation		Generation facility owned and constructed
Facility		by an end-user for such end-user's own
		consumption or internal use
Supply		An Embedded Generator, a Grid Generator
Augmentation		or an Interruptible Load Service Provider
Service Provider		registered with the VSAA Administrator
Supply Deficit		The forecasted shortfall of power supply in
		the Cebu, Negros and Panay islands taking
		into consideration the limitations of the
		interconnections between the islands, and
		deducting the Supply Deficit of
		non-participating Grid Customers
System Operator	SO	The party identified as the System Operator
		pursuant to the Philippine Grid Code which
		is the party responsible for generation
		dispatch, the provision of ancillary services,
		and operation and control to ensure safety,
		power quality, stability, reliability and
		security of the Grid. This function is
		currently performed by the relevant unit of
		the National Grid Corporation of the
		Philippines. Has the same meaning as
		Visayas System Operator
Visayas Supply	VSAA	The supply augmentation auction program
Augmentation		established and operated pursuant to DOE
Auction		Circular No. DC 2009-01-001 and other
		relevant issuances
Visayas System	VSO	The relevant unit of the System Operator
Operator		that performs the functions of the System
		Operator in the Visayas grid
VSAA Customer		Distribution Utility or end-consumer of
		electricity directly connected to the Grid
		that have registered with the VSAA
		Administrator to participate in the VSAA.
		Has the same meaning as Customer
VSAA Participant		Collectively referring to the persons or
		entities participating in the VSAA
VSAA Rules		The Rules approved by the DOE that would
		govern the operations of the VSAA

APPENDIX A

AUCTION TIMETABLE

APPENDIX B

QUANTITY AND PRICE OFFER FORMAT AND CRITERIA FOR VALIDATION OF OFFERS

Quantity and Price Offer Format

1. Quantity offers shall comprise of a single block offer and shall be submitted together with the following information:

• Auction Date — the trading day by which the quantity offers will apply;

• Island — island where the supply augmentation service provider is located (C - Cebu, N- Negros or P - Panay);

• Distribution Utility — the holder of the franchise to operate a distribution service where the supply augmentation service provider is located (e.g., VECO, PECO);

• Supply Augmentation Service Provider Type — can be a generator (GEN) or an interruptible load (ILD);

• Participant Name — short name of the entity that owns the supply augmentation service provider (e.g., SM);

• Resource Name — name that will identify the supply augmentation service provider from the rest of the providers (e.g., 1SM_ILD1);

• Real-Time Dispatch Flag — information that will tell whether the supply augmentation service provider can be called on to supply or curtail load during real-time dispatch corrections even if not included in the augmentation schedule (Y or N).

Table B1 below shows the tabulated information comprising the quantity offers.

Table B1 — Quantity Offer Information

 

Auction	Island	DU	Type	Participant	Resource	Real-	Qh1	→	Qh23	Q24
Date				Name	Name	Time
						Dispatch
3/26/2009	C	VECO	ILD	SM	1LD1	Y	1110	→	1110	1110
3/26/2009	N	CENECO	GEN	SMiguel	2GEN1	Y	2500	→	2500	2500
3/26/2009	P	ILECO	ILD	SMiguel	3LD1	Y	1000	→	1000	1000

2. Price Offers. Price offer is submitted once a week and valid for one week. The following table shows the information comprising the price offers.

Table B2 — Price Offer Information

Week	Year	Island	DU	Type	Participant	Resource	Poffer (P/MWh)
Number					Name	Name
15	2009	C	VECO	ILD	SM	1LD1	5000.12
15	2009	N	CENECO	GEN	SMiguel	2GEN1	10000.45
15	2009	P	ILECO	ILD	SMiguel	3LD1	4990.32

Validation Criteria and Procedures

1. Offers submitted shall be validated according to the following fields —

a. Syntax Validation. Quantity and price offers shall follow the specified format. Other syntax validation includes —

i. Operating Hours shall be an integer

ii. Real-Time Dispatch Flag is indicated as either Y or N

b. File Naming Convention Validation. Offers shall be in CSV file in the following file name convention —

i. Quantity Offer — Qxxxx_mm-dd-yyyy.csv where mm-dd-yyyy is the date of submission of the quantity offer.

ii. Price Offer — Pxxxx_mm-dd-yyyy.csv where mm-dd-yyyy is the date of submission of the price offer.

c. Quantity Offer Validation

i. Q_max Validation (Q_offer< Q_max) – the quantity offered by VSAA service provider (embedded/grid generators and interruptible loads) shall be validated against its registered maximum quantity (the Auction Limit).

ii. Q_min Validation (Q_offer> 1 MW) – the quantity offered by a VSAA service provider shall not be less than 1 MW.

d. Validation of Other Information — the following information shall be validated against the registered data:

i. Island

ii. DU

iii. Type of Supply Augmentation Service Provider

iv. Participant Short Name

v. Resource Name

2. Gate Closure

a. Gate closure for quantity offers for the next day shall be 1400H of the current day.

b. Gate closure for price offers for the following week shall be 1200H Thursday of the current week. AEDHST

APPENDIX C

CALCULATION OF PRUDENTIAL REQUIREMENT AND NET EXPOSURE

The amount of the security that will be required for each Auction Participant will be determined as —

 PR = 2 x EAIC x AMHEC

Where:

PR - Prudential Requirement in Pesos required from an Auction Participant

EAIC - Estimated Average Incremental Cost in Pesos per kWh

AMHEC - Average Monthly Historical Energy Consumption of an Auction Participant

PEMC shall determine the estimated average incremental cost using inputs from the Visayas System Operator.

Net Exposure

The Net Exposure of an Auction Participant is determined as —

Where:

NE^d - net exposure in Pesos covering d number of days

SAAC^d - accumulated supply augmentation auction cost in Pesos covering d number of days

MQ^d_P - metered quantity of participant P covering d number of days

d - number of days by which the net exposure is being computed SIcEHD

P - auction participant

When the Net Exposure exceeds the prudential security, the Auction Participant shall submit additional security to the VSAA Administrator.

Prudential Factor

The supply augmentation limit is determined as the product of the prudential factor and the prudential requirement. The prudential factor is determined as —

	BP + PP
PF =	––––––––––––
	BP + PP + RT

Where:

PF = Prudential Factor

BP = number of days in a billing period (i.e., 30 days)

PP = Payment Period. The number of days after the end of the billing period by which the cost of auction transaction is due (i.e., 30 days after end of billing period)

RT = Reaction Time. The maximum number of days by which a replacement security should have been received by the VSAA Administrator. THADEI

With BP, PP and RT equal to 30 days, 30 days and 3 days, respectively, the prudential factor is —

	BP + PP		30+30
PF =	–––––––––––	=	––––––––––	= 0.95
	BP + PP + RT		30 + 30 + 3

APPENDIX D

PUBLICATION AND REPORTING TIMETABLE AND DATA CATALOGUE

PUBLICATION AND REPORTING TIMETABLE

Information	Timetable	Description
VSAA Registration Lists	Prior to commencement of	List of applicants
	VSAA, and updated as may	List of registered participants
	be required	List of suspended participants
		List of de-registered
		participants
VSAA Rules	Prior to commencement of
	VSAA, and updated as may
	be required
Supply Deficit Forecast	Published daily	Hourly resolution
Daily Generation schedules	In accordance with System	Hourly resolution
(from the System Operator)	Operator publication protocol
Indicative Prices	Published daily	Hourly resolution
(or Settlement Prices of
the last resource to be
scheduled to provide
supply augmentation)
Augmentation Schedules	Published daily	Hourly resolution
Settlement Prices	Published monthly	Hourly resolution
Offers and Bids	Published monthly	Hourly resolution
System Information and	In accordance with System	System information provided
significant events	Operator notification protocol	by the System Operator and
		significant events in real-
		time, including but not
		limited to manual load
		dropping allocation,
		transmission and generation
		outages, etc.

VSAA DATA CATALOGUE — INPUT DATA

Category	Information	Information	Means of Disclosure by
		Provider	VSAA Administrator
			Format	Where
Rules and	VSAA Rules	VSAA Administrator	Printed/	Website
Regulatory			Electronic
Information	VSAA Regulatory Filings	VSAA Administrator	Printed/	Website
	and Orders		Electronic
	Administration Fees	VSAA Administrator	Printed/	Website
			Electronic
Participant	Commercial Information	Participant	Printed/	On
Registration			Electronic	request
Data	Technical Information	Participant	Printed/	On
			Electronic	request
Registration	List of Applicants	VSAA Administrator	Printed/	Website
Lists			Electronic
	List of Registered	VSAA Administrator	Printed/	Website
	Participants		Electronic
	List of Suspended	VSAA Administrator	Printed/	Website
	Participants		Electronic
	List of De-registered	VSAA Administrator	Printed/	Website
	Participants		Electronic
System	Load Forecast	System Operator	Electronic	Website
Information
	Reserve Requirements	System Operator	Electronic	Website
Auction	Quantity Offers	Participant	Electronic	Website
Offers
	Price Offers	Participant	Electronic	Website
Settlement	Meter Data	Metering Services	Electronic	Not
Data		Provider or		published
		Distribution Utility

VSAA DATA CATALOGUE — OUTPUT DATA

Category	Information	Information	Means of Disclosure
		Provider	Format	Where
Schedules and	Augmentation schedules	VSAA Administrator	Electronic	VSAA
Prices				System
				(current
				information)
				Website
				(historical
				information)
	Clearing Prices	VSAA Administrator	Electronic	VSAA
				System
				(current
				information)
				Website
				(historical
				information)
System	Manual Load Shedding	System Operator	Electronic	Website
Information	(based on post-dispatch
	report)
Settlement	Participant Settlement	VSAA Administrator	Electronic	VSAA
Data	Prices			System or
				Email or
	Participant Settlement	VSAA Administrator	Electronic	other
	Quantities			Electronic
				Means
	Participant Settlement	VSAA Administrator	Electronic
	Amounts

 

Published in The Philippine Star on May 28, 2009.