| Sat, 28 Nov 2020

advisories & notices

Advisories & Notices
Implementation of the Original Methodology for the Calculation of Initial Prudential Requirements
Thu, 11 Jun 2020


Please be informed that the calculation of initial prudential requirements (IPR) has been reverted to the original methodology since the effectivity of the new methodology, implemented beginning May 2019, has lapsed on 31 May 2020.




Initial PR of new customers is calculated from projected exposure based on:

  • 10% of projected consumption
  • System average price

Initial PR of new customers is calculated from projected exposure based on:

  • Projected spot purchase (MWh)
  • Locational prices (load and contract)


Clauses 3.15.4 and of the WESM Rules and Section 7.4.1 (a) and (b) of the WESM Manual on Billing and Settlement were reverted to the original provisions. Both documents were re-published accordingly.


It can be recalled that the calculation of IPR was modified by way of an urgent proposed amendment1 submitted to the Rules Change Committee (RCC) and approved by the PEM Board on 23 April 2019. Correspondingly the new methodology was implemented for a 6-month period beginning May 2019. The implementation period was extended for another six (6) months until 31 May 2020 pursuant to PEM Board Resolution No. 2019-17-02.


In compliance to the rules change process, the new methodology was re-submitted as a general proposed amendment2 and was endorsed by the PEM Board to the DOE for approval and promulgation on 06 September 2019. The original methodology will be in effect pending the DOE’s approval of the new methodology. You will be informed accordingly of any developments on this matter.


For any inquiries, you may get in touch with the following:

PEMC-Market Assessment Group (Rules Review Division):



Independent Electricity Market Operator of the Philippines:



For your information and guidance. Thank you.


1 Urgent proposed amendments undergo an expedited rules change process. These proposals take effect upon PEM Board approval, and are re-submitted as general proposed amendments for the DOE’s final approval (WESM Rules Clause

2 General proposed amendments undergo the regular rules change process. These proposals take effect upon the DOE’s final approval and promulgation (WESM Rules Clause