Law Summary
Commencement of WESM Commercial Operations
- The Wholesale Electricity Spot Market (WESM) began commercial operations on 26 June 2006.
Initial Challenges for Distribution Utilities (DUs) in WESM Membership
- Prior to WESM operations, several Distribution Utilities (DUs) could not meet the technical and financial requirements for WESM membership.
- Their non-membership limited their supply options within the electricity market.
Introduction of the Wholesale Aggregator Scheme
- To assist DUs, particularly small Electric Cooperatives (ECs), the ERC promulgated Rules for the Registration of Wholesale Aggregators on 22 May 2006.
- This scheme facilitated the participation of these DUs in the WESM by allowing an entity to aggregate their supply requirements.
Department of Energy (DOE) Circular Requiring WESM Membership
- DOE Circular 2010-05-0006, issued on 6 May 2010, mandated DUs to be members of WESM, either directly or indirectly.
- Non-compliant DUs faced disconnection from the electric grid.
Current Status of WESM Membership Among DUs
- Nearly all on-grid DUs in Luzon and Visayas, except PELCO III and PECO, are registered members of WESM, either directly or indirectly.
- This expanded membership provides these DUs with additional supply options to maintain continuous electricity supply in their areas.
DOE Policy Changes Impacting Financial Requirements
- DOE Circular 2014-03-0008 issued on 26 March 2014 reduced Prudential Requirements (PR) for WESM membership from 63 days to 35 days.
- This reduction alleviated financial burdens on small Electric Cooperatives.
- As a result, the support that justified the Wholesale Aggregator scheme became unnecessary.
Stakeholder Consultations on Wholesale Aggregator Scheme
- A public consultation was held on 19 April 2012 to discuss stakeholder comments on the Wholesale Aggregator scheme.
- It was concluded that the technical and financial barriers previously hindering DU participation in WESM no longer existed.
Resolution to Discontinue Wholesale Aggregator Scheme
- After deliberation, the ERC approved and adopted the discontinuance of the Wholesale Aggregator scheme and the related registration rules.
- No new applications or renewals for Wholesale Aggregator Certificates of Registration will be accepted or evaluated.
- Existing Certificates shall remain valid only until their respective terms expire.
ERC’s Continuing Oversight and Future Possibilities
- The ERC will continue to assess market conditions.
- If necessary, the ERC may introduce new supply aggregation schemes or authorize entities under such schemes to provide additional supply options for DUs.
- The objective remains to ensure service reliability, promote efficiency, and reduce electricity costs.
Effectivity of the Resolution
- The Resolution takes effect 15 days after its publication in a newspaper of general circulation nationwide.
- Copies of the Resolution are to be furnished to the University of the Philippines Law Center-Office of the National Administrative Register for record-keeping.