The National Grid Corporation of the Philippines (NGCP) has warned the public of possible power interruptions following the denial by the Energy Regulatory Commission (ERC) of its request for interim ancillary service agreements.
“Many of NGCP’s AS agreements have expired. We have resorted to month-to-month extensions of our existing agreements to ensure the sufficiency of services while the procurement process is ongoing,” NGCP said in a statement.
NGCP has requested the monthly extension of contracts for ancillary services while undertaking a competitive selection process for the said services.
“With ERC’s denial of this interim arrangement, our hands are tied. The Philippine Transmission Grid shall be vulnerable to power interruptions resulting from an artificial lack of AS. Without an existing ASPA, NGCP cannot nominate power plants to provide the critical services,” NGCP said.
NGCP has recently concluded accepting and opening bids for AS or Luzon, Visayas, and Mindanao – which are currently being evaluated by the transmission company and will formally award contracts no later than April 18.
The ancillary services procurement agreement (APSA) resulting from the CSP is still subject to the approval of the ERC.
“With the regulatory processes that applications of this nature need to undergo, a provisional approval for the new ASPAs resulting from the AS CSP may not be expected earlier than June 2023,” NGCP stressed.
In an order dated December 12, 2022, and received by the NGCP on March 22, ERC denied the grid operator’s motion to allow a month-to-month extension of the existing ASPA.
“With this disappointing development, this leaves us with no other option. If we sign interim extensions, we expect the ERC to issue us yet another show-cause order. If we do not, we will be unnecessarily subjecting consumers connected to the grid to avoidable and damaging fluctuations or worse, interruptions,” NGCP said.
NGCP has written to the Department of Energy (DOE) to intervene with the issue in order to avoid power interruptions.
“Since the CSP for AS is now nearing completion, the NGCP may file a motion for reconsideration before the ERC with updates on the CSP for AS. At the end of the day, the NGCP has the responsibility of maintaining grid reliability that requires ancillary service, and DOE expects that NGCP will live up to this responsibility,” the DOE said in a statement.
