WHEREAS, Republic Act No. 9136, otherwise known as the "Electric Power Industry Privatization Act of 2001" (the "Act"), which became effective on 26 June 2001, provides for the framework for the restructuring of the electric power industry to bring about a free and fair competition on the pricing of electricity;

WHEREAS, the Act mandates the establishment of a wholesale electricity spot market (the "WESM") where the trading of electricity can be made;

WHEREAS, the Act enjoined the Department of Energy (the "DOE") to establish the WESM and to jointly formulate with the electric power industry participants the detailed rules thereof, within one (1) year from the effectivity thereof, provided, that the price determination methodology shall be subject to the approval of the Energy Regulatory Commission (the "ERC");