NGCP to start competitive bidding to comply with DOE’s AS policy


(UPDATED) The National Grid Corporation of the Philippines (NGCP) will begin a competitive bidding process to enter into firm contracts for ancillary services (AS) in compliance with the Department of Energy’s (DOE) policy.

With the bidding process, NGCP hopes to secure the best value for power consumers. The grid operator previously warned of a spike in electricity bills of up to Php278 if it heeds the AS policy as is.

AS are support services needed to maintain a grid’s power quality, reliability, and security.

NGCP’s move comes amid the word war between the grid firm and the DOE over who’s to blame for the Red Alerts leading to the rotational brownouts in Luzon two weeks ago.

“We want to guarantee the best pricing for AS, especially since this is a pass-on cost to consumers. With an open and public bidding process, we ensure full transparency and comply with internal governance imperative of accountability, which all our stakeholders deserve,” NGCP President and CEO Anthony Almeda said in a statement.

NGCP, however, said procuring AS on either firm or non-firm basis is not a solution to the recurring brownouts in the country.

“Signing a firm agreement will not give you additional power. It will just give you bigger bills. To convert [the] existing contracts, the payment scheme, that’s the only thing that will change. There won’t be a power plant that will magically turn up when we sign the firm contracts. You will just be paying more for the same services,” NGCP spokesperson Atty. Cynthia Alabanza said in an interview on the ABS-CBN News Channel on Tuesday.

[Your] problem is not ancillary services. Your problem is supply. If your problem is supply, the solution is more supply, not higher rates,” she continued.

Nonetheless, she re-echoed her firm’s appeal to the Energy Regulatory Commission to review the impact of the AS policy.

Alabanza added that the grid firm should be prudent in their contracting strategies to make sure that the power purchased for ancillary services are the best contracts to augment the grids’ needs.

“If you don’t have enough supply, NGCP sources everything from the same pot. And if that pot doesn’t hold enough to meet both [demand and supply], then you’re still going to have the same problem. NGCP has no business selling power. We just have to stabilize the delivery system, and the delivery system is broken,” she said.