DOE formalizes order for NGCP to procure “sufficient” AS

NGCP substation

The National Grid Corporation of the Philippines (NGCP) has been ordered by the Department of Energy (DOE) to procure “sufficient” ancillary services (AS) to secure adequate power supply during shortages.

The DOE issued the directive in a circular dated October 4, but only formalized earlier this week. The order comes over four months after the department verbally directed the NGCP to get AS, or reserve power, in the wake of the Red Alerts in Luzon from May 31-June 2. The grid firm then warned of higher electricity rates as a consequence.

Further, NGCP was tasked to undergo a competitive selection process to eligible companies.

The grid operator, the DOE said, will be held responsible for making sure the procurement is carried out in a timely manner, “particularly the capability-testing of generating facilities.” Key documents must also be promptly issued.

NGCP is also required to submit an Ancillary Service Agreement Procurement Plan (ASAPP) containing its projected AS requirements for the next ten years and a plan for the acquisition of such services on or before March 31 yearly.

The ASAPP review’s outcome will be posted on NGCP’s website not later than end-April every year.

Auctions must also take place six months after the circular comes into effect. The contract period for AS suppliers is capped at five years. The order will take effect this Friday, 15 days after its publication in two general-circulation newspapers on October 14.