TABLE OF CONTENTS

BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

A SUMMARY OF THE MAJOR CHANGES TO THE WESM DESIGN AND OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . 2

SCHEDULING AND PRICING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

SHORTENING OF THE DISPATCH INTERVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

RE-STRUCTURING THE MARKET PROJECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

AUTOMATIC COMMITMENT OF PMIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

CONSTRAINT VIOLATION COEFFICIENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

PRICING RE-RUN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

OTHER PRICING METHODOLOGIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

DISPATCH PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

MEETING DISPATCH TARGETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

DISPATCH CONFORMANCE STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

THE NEW MARKET MANAGEMENT SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

SPECTRUM POWER 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

REAL-TIME DATA AND EXTERNAL CONSTRAINTS FROM THE SYSTEM OPERATOR . . . . . . . . . . . . . .7

LOAD FORECAST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SPECTRUM EMM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

MARKET PARTICIPANT INTERFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

MARKET RUNS AND MDOM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

POST MARKET RUN CALCULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ACTIVITIES IN LAUNCHING THE NEW MARKET MANAGEMENT SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

NMMS TRIAL OPERATIONS PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ACCESSING THE NMMS’ MARKET PARTICIPANT INTERFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

BACKGROUND
The current pursuit to implement the enhancements to the WESM Design started from the following reviews and audits:

99 Findings from the Special WESM Rules Review Committee (composed of representatives from the DOE, NPC,
PSALM, TRANSCO, and NEA) last March 2008; and
99 Findings and recommendations from the Annual Independent Market Operations Audit, particularly during the
annual audits on 2010, 2011, and 2012.

As a result, PEMC commissioned an independent body to conduct a WESM Design Study (WDS) with the objective
of providing recommendations to address several WESM design and implementation issues that undermine WESM’s
efficiency.

The WDS focused on the following market design and operational issues:

1. Conflict between “the automatic commitment of the Pmin” and the “Must-Offer Rule”;
2. Management of constraint violations;
3. Pricing error notices and market re-runs;
4. Ramping constraints; and
5. Shorter Dispatch Interval.

After PEMC submitted the results of the WDS, the DOE then issued Department Circular 2015-010-0015 on 23 October
2015, which further provides policies and directives on the Enhancements to the WESM Design and Operations.

The Guiding Principles from DOE Department Circular No. 2015-010-0015 are summarized in table below.

Principle Description
Gross Pool Generator trading participants offer their maximum
available capacity for central scheduling and dispatch
Net Settlement Trading participants may opt to settle their bilateral
contract quantities outside the market
Co-optimized Energy and Reserves Optimal dispatch of both energy and reserves given the
bids and offers and the constraints imposed
Self-Commitment Generators are responsible for the commercial and
efficient technical operations of their plants
Real-Time Market Schedule and prices are governed by commercial and
market forces and determined near real-time
Transparency Provision of timely and accurate market information
Table 1. Guiding Principles for the Enhanced WESM Design

PEMC then submitted proposed changes to the WESM Rules considering these guiding principles. After undergoing
the rules change process, the DOE then issued Department Circular 2016-010-0014 on 14 October 2016 that approves
the changes to WESM Rules reflecting the Enhancements to the WESM Design and Operations.

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A SUMMARY OF THE MAJOR CHANGES TO THE WESM
DESIGN AND OPERATIONS
SCHEDULING AND PRICING
SHORTENING OF THE DISPATCH INTERVAL
The dispatch interval will be shortened from the current 1-hour interval to a 5-minute interval, hence, the RTD will run
every 5-minutes to provide prices and schedules for that relevant interval.

As a result of the shortening of the dispatch interval, there will be no more ex-post run.

Also, there are no gate closures in submitting or revising generation offers, for Trading Participants to be able to revise
generation offers at any time during the Open Market Window. Even so, Trading Participants should still be mindful of
the market run execution timelines that are defined in the Dispatch Protocol when submitting or revising offers.

The following figure shows a sample timeline for RTD as detailed in the latest proposed Dispatch Protocol.

Figure 1. Sample RTD Timeline

RE-STRUCTURING THE MARKET PROJECTIONS

CHANGES IN DAP AND INTRODUCING HAP

The Day-Ahead Projection’s execution frequency changed from every four hours to every hour. Also, the Day-Ahead
Projection will introduce projection sensitivities, wherein each DAP run will be accompanied by four additional DAP
results that will depend on different percentage increment/decrement from the level of reference forecasted demand.
Currently, DAP sensitivities are proposed to be: +3%, +5%, -3%, -5%.

With the dispatch interval shortened to 5 minutes, a new Hour-Ahead Projection was introduced. The Hour-Ahead
Projection is run every 5 minutes and provides results for all the 5-minute intervals for the next hour (i.e. 09:05 HAP run
covers results for 09:10 until 10:05).

The restructuring of DAP, and the introduction of HAP were all made in an effort to eliminate the “blind spots” from the
current time up until the next seven days.

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 Figure 2. Illustration of Market Projections

USING A MULTI-INTERVAL SOLUTION FOR MARKET PROJECTIONS

For Trading Participants to make better commitment decisions, the solution for market projections was changed.
Currently, all intervals in the market projections are independently solved from each other, aside from the fact that the
previous interval’s schedules are used as off-take (or initial loading) to determine the capability for the current interval.

In the Enhanced WESM Design, all market projections use a security constrained dynamic dispatch, or a multi-interval
solution. This means that all intervals in a market projection run are considered as one solution. Further examples of
this method will be shown during the Trial Operations Program.

AUTOMATIC COMMITMENT OF PMIN

Based on the Enhanced WESM Design, the Pmin of a generating unit shall not be automatically committed in contrast
to today’s implementation. Generators shall manage their “technical Pmin” via their generation offers in the WESM.

CONSTRAINT VIOLATION COEFFICIENTS

The constraints for self-scheduled generation and branch groups shall be treated as soft constraints (with associated
constraint violation coefficients).

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PRICING RE-RUN
Currently, once a CVC is encountered in the RTD run, a pricing error is issued for that RTD run, hence, RTX prices for
the same interval shall be used to replace the RTD prices. Should a pricing error be issued for the RTX, a manual re-run
(MRR) shall be done for that affected interval, then, the MRR results shall be used to replace the RTX prices.

With the Enhanced WESM Design, RTD runs may still be reflective of CVCs, With the RTX gone, a “re-run” shall now
be done for the affected RTD. But instead of doing a “manual re-run”, an “automatic pricing re-run” shall be done, and
it will already be incorporated in the RTD run itself.

OTHER PRICING METHODOLOGIES

The other pricing methodologies such as (a) Price Substitution Methodology for Congestion, (b) Administered Prices,
and (c) Secondary Cap shall be incorporated in the New Market Management System in order to publish “settlement-
ready prices” near real-time.

PRICE SUBSTITUTION METHODOLOGY FOR CONGESTION

A new formula for the trigger factor shall be used taking into account a “weighted standard deviation” of the prices
instead of the “deviation from the marginal price”.

To add, Load Prices shall be determined using the ratio between the generator amount and the total load from the RTD
results. This price shall be immediately used for settlement.

In the Enhanced WESM Design, Regional PSM shall be applied in cases where the HVDC schedule is zero as opposed
to the current application where PSM is applied in cases where the HVDC limit is met.

ADMINISTERED PRICES

Load Prices shall be determined using the ratio between the generator amount using actual load and the total actual
load. This price shall be immediately used for settlement.

SECONDARY CAP

Load Prices shall be determined using the ratio between the generator amount using the secondary cap price and the
total load from the RTD results. This price shall be immediately used for settlement.

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DISPATCH PROCEDURES
MEETING DISPATCH TARGETS
The RTD schedules1 shall be provided every 5 minutes, and it represents the MW loading that should be met by the
respective generator at the end of that 5-minute interval.

Generators that choose “manual dispatch” shall be responsible for meeting their own MW dispatch targets. Generators
may opt to interface with the System Operator via the AGC.

DISPATCH CONFORMANCE STANDARDS2

Generators should meet their dispatch targets within the pre-defined dispatch tolerance limits.

For Actual MW Loading above the RTD Schedule:

»» Upper MW_DEV Threshold = + Max [ 1, (1.5% x Offer Capacity) ]
Where:
• Upper MW_DEV = Actual Generation – (RTD Schedule + Regulation Raise)]
• Offer Capacity refers the MW capacity offered for the Generator for the relevant dispatch interval

For Actual MW Loading below the RTD Schedule:

»» Lower MW_DEV Threshold = – Max [ 1, (3% x Offer Capacity) ]
Where:
• Lower MW_DEV = Actual Generation – (RTD Schedule – Regulation Lower)]
• Offer Capacity refers the MW capacity offered for the Generator for the relevant dispatch interval

If the MW Deviations (Upper/Lower MW_DEV) is beyond the threshold (Upper/Lower), then it is non-compliant for that
dispatch interval.

A generator is given a maximum reaction period of six dispatch intervals (30 minutes) to take action and implement
measures to go back within the upper/lower thresholds.

If a generator is unable to go back within the upper/lower thresholds for more than six dispatch intervals (30 minutes),
then it will be flagged for possible breach. Trading Participants are required to submit a reason in cases where it is
flagged for possible breach within three working days.

_______________________
1. RTD Schedules represent the dispatch targets to be met at the end of the dispatch interval
2. Based on latest RCC discussion

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SETTLEMENT
The following table shows a summary of the changes to settlement given the Enhanced WESM Design.

Feature Current Enhanced

Settlement Interval One Hour One Hour
Calculation Resolution One Hour Five Minutes3
Energy Trading Amount Two-Part Settlement One-Part Settlement
Administered Prices Calculated during settlement Calculated by NMMS
PSM Settlement Adjustments made during settlement PSM prices by NMMS is binding
MRU Settlement GPI plus additional compensation Additional compensation
Table 2. Summary of Changes for Settlement in the Enhanced WESM Design

The following figure shows an overview of the Settlement Design in the Enhanced WESM Design in comparison with
the Current Settlement Scheme.

Figure 3. Current vs. Enhanced Settlement Design

_______________________
3. Needs BCQ and MQ to be provided in a 5-minute resolution

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THE NEW MARKET MANAGEMENT SYSTEM
A critical component in implementing the Enhanced WESM Design is the deployment of the New Market Management
System (NMMS).

The NMMS is comprised of two major tiers, namely the Spectrum Power 7 and the Spectrum Power Electricity Market
Management (EMM).

Figure 4. Overview of NMMS Two-Tier Design

SPECTRUM POWER 7
REAL-TIME DATA AND EXTERNAL CONSTRAINTS FROM THE SYSTEM OPERATOR
Real-time data from the System Operator’s SCADA/EMS shall be transferred to the Market Operator’s SCADA (data
acquisition only) via the Inter-Control Center Communications Protocol (or ICCP).

Also, the Market Operator is equipped with a State Estimator to handle non-updating real-time data.

These new facilities aim to facilitate a more efficient transfer of real-time data from the System Operator to the Market
Operator.

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 Figure 5. Transfer and Management of Real-Time Data

Improvements in the transfer of data concerning the System Operator’s imposition of over-riding (external) constraints
were also made to adapt to the shortening of the dispatch interval.

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LOAD FORECAST
Changes in the applications that determine the short-term load forecast (for week-ahead and day-ahead projections)
and very short-term (for hour-ahead projection and real-time dispatch) were made in view of providing more accurate
market projections and RTD results.

Figure 6. Comparing the Features for Load Forecasting

SPECTRUM EMM
MARKET PARTICIPANT INTERFACE
Enhancements to the Market Participant Interface (MPI) were made to improve the following.
a. Submission of bids/offers via a new user interface or a web service
b. Viewing of Market Results

Also, a new feature for “monitoring compliances” is made available in the new MPI.

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 Figure 7. Overview of MPI Facilities

MARKET RUNS AND MDOM

As previously discussed, the NMMS will house the market runs for market projections (WAP, DAP, and HAP) and the
real-time dispatch (RTD).

Each market run will utilize the MDOM, where the following new features were added in view of the Enhanced WESM
Design, including future needs in obtaining an optimal set of schedules.
a. Automatic Pricing Re-run – automatically correct prices that reflect CVCs
b. Flexible Definition of Reserve Categories – configurable definition of constraints in determining reserve
schedules
c. Dual Resources – for limited energy storages systems (i.e. batteries) and pump-storage facilities
d. Decoupled Information (i.e. information on specific energy, loss, and congestion components are readily
available)

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POST MARKET RUN CALCULATIONS
Even if RTD prices are rid of CVCs, it should still be subject to the following pricing methodologies.
a. Price Substitution Methodology for Congestion
b. Administered pricing, and
c. Secondary cap

In order to provide settlement-ready prices near real-time, the NMMS incorporated the price calculations for the
aforementioned pricing methodologies based on the Enhanced WESM Design.

Figure 8. Illustration of NMMS Publication of Settlement-Ready Prices Near Real-Time

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ACTIVITIES IN LAUNCHING THE NEW MARKET
MANAGEMENT SYSTEM
Activities involving the New Market Management started in 2015 once the design specifications got underway. The
following shows the recent major activities involving the NMMS, including other major activities in the near future.

Figure 9. NMMS Deployment Timeline4

Key Dates:

• 01 March 2017: Kick-Off for the NMMS Trial Operations Program

• 02-25 March 2017: TOP Registration
• 27 February 2017 – 27 May 2017: NMMS Pre-Certification Audit
• 26 March 2017 – 25 May 2017: Conduct of NMMS TOP
• 25 May 2017 – 22 June 2017: Live Parallel Operations
• 23-25 June 2017: Limited Live Dispatch Operations
• 26 June 2017: Go Live

NMMS TRIAL OPERATIONS PROGRAM

The Trial Operations Program (TOP) aims to familiarize the Market Operator, System Operator, and Trading Participants
with the processes involved in trading, scheduling, pricing, and settlement in view of the implementation of the
Enhanced WESM Design through the New Market Management System. Test scenarios shall be provided for execution
in the NMMS TOP to accomplish the aforementioned objective. The following list shows the test case modules to be
executed during the NMMS TOP with their respective schedules of execution and involved parties.

_______________________
4. The Deployment of the NMMS is still subject to ERC’s approval of the new Price Determination Methodology (PDM)

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 Test Case Module Description Involved Parties Schedule
Market Operator
ICCP/SCADA Real-Time Data Exchange via ICCP Entire TOP
System Operator
Determination of Short-Term Load Forecast and
Load Forecasting Market Operator Entire TOP
Very Short-Term Load Forecast
• Bid Submission (UI/XML)
Market Operator
MPI • Viewing of Market Results Week 1
Trading Participants
• Compliance Monitoring
Execution of Market Projections (WAP, DAP, Market Operator
and HAP) to showcase the timeline and other System Operator
Market Projections Week 2
new MDOM features (i.e. new optimisation Trading Participants
methodology, DAP sensitivities, etc.)
Execution of RTD to showcase timeline and Market Operator
Real-Time Dispatch other MDOM features (i.e. automatic pricing re- System Operator Week 3-6
run, pump-storage, etc.) Trading Participants
Execution of Dispatch Interval Pricing Calculator
Post-Market Run (DIPC) to show prices that were subject to Market Operator
Week 6
Calculations PSM for Congestion, Administered Price, and Trading Participants
Secondary Cap.
Market Operator
Billing and Settlement Calculation of Settlement Amounts Week 7
Trading Participants
Market Operator
Free-For-All The MPI is open for TPs to explore. System Operator Week 7-8
Trading Participants
Table 3. List of NMMS TOP Test Case Modules

ACCESSING THE NMMS’ MARKET PARTICIPANT

INTERFACE
The same digital certificates provided to Trading Participants for the existing MPI shall be installed to the target laptops
or desktop PCs to be able to access the NMMS’ MPI.

The following minimum specifications are required to access the NMMS’ MPI.

Item PEMC Specifications

Computer Type Desktop or Notebook
Operating System Windows 7 Pro Windows 8 Pro Windows 10 Pro
CPU Minimum as required by OS
Memory Minimum as required by OS
Web Browser Internet Explorer 11
Java Runtime Java 6 Update 29
Internet Service Provider Any ISP
Internet Connection DSL / Broadband
Table 4. Minimum Specifications for the NMMS’ MPI
You may use the same or a different laptop or desktop PC to access the NMMS’ MPI. However, should it be the same
laptop or desktop PC, a new user profile should be created to differentiate the Existing MMS’ MPI from the NMMS’
MPI. Also, the OS needs to be Windows 8.1 Pro at the minimum to be able to emulate Internet Explorer 8 for the
Existing MMS’ MPI.

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