ERC issues show cause order to NGCP on Ancillary Services


The Energy Regulatory Commission (ERC) has issued a show cause order to the National Grid Corporation of the Philippines (NGCP) for “failure to comply with Department of Energy (DOE) Circulars on the contracting of ancillary services (AS) to ensure grid security and stability.” 

ERC said that the NGCP failed to comply with certain sections of the DOE Department Circular No. 2021-10-0031 or the “Prescribing the Policy for the Transparent and Efficient of Ancillary Services by the System Operator”, including the mandates where NGCP must seek approval of the DOE on its AS agreement procurement plan as well as the terms of reference of the AS competitive selection process (CSP); and to complete the said CSPs to be completed within six months from the effectivity of the circular. 

“While the ERC notes that NGCP has already issued the TOR and the schedule for the conduct of AS CSP, the latter has yet to comply with the abovecited provisions in existing policies adopted by the DOE pursuant to its mandate as a policy-making authority,” ERC said in a statement. 

Earlier, the NGCP said that 1,776.7 megawatts (MW) worth of firm contracts to cover the grid’s reserve requirements. 

ERC has given NGCP 15 days from receiving the show cause order to submit their verified explanation as to why no administrative penalties should be imposed upon it on the possible violations cited. 

“The submission shall also include necessary proof that will support all the allegations in its verified explanation,” ERC noted. 

In a policy issued in 2019, the DOE has required the NGCP to contract 100% firm power reserve and engage in the forward contracting of reserve requirements to ensure grid reliability.