DoE won’t intervene pending NGCP ancillary services appeal

By Ashley Erika O. Jose – March 28, 2023 | 8:12 pm
from Business World

NGCP.PH

THE Department of Energy (DoE) said it is awaiting the Energy Regulatory Commission’s (ERC) ruling on an appeal filed by the National Grid Corp. of the Philippines (NGCP) to extend contracts to supply reserve power on a month-by-month basis.

The NGCP sought DoE authorization to extend contracts which allow it to tap standby power capacity, agreements which are known as ancillary services (AS) contracts.

AS contracts represent uncommitted capacity that the NGCP can draw from if baseload supply proves inadequate. The NGCP is required by law to maintain a minimum level of AS power in reserve as a safety buffer in the event baseload plants fail.

Keeping reserve power on tap involves costs, which the NGCP has warned will lead to power rate increases if it is forced to maintain AS contracts at the legally prescribed level.

“There is a process for NGCP to submit the MR (motion for reconsideration) with the ERC (Energy Regulatory Commission). At this time, we need to wait for ERC and NGCP to settle the matter,” the DoE said in a statement.

On Monday, the NGCP warned of possible power interruptions during the dry season following after the ERC rejected its request for month-to-month extensions of its AS agreements.

The grid operator then asked the DoE to authorize the extension of its current AS procurement agreements (ASPAs).

“All they need to do is file a motion for reconsideration with the ERC. There’s no need to be alarmist, okay? The ERC will hear the petition. You must not over worry yourselves,” Energy Secretary Raphael P.M. Lotilla told reporters on the sidelines of a briefing in Taguig City on Tuesday.

The NGCP said that the ERC issued its ruling while the competitive selection process (CSP) for ASPA was ongoing.

“Since the CSP for AS is now nearing completion, the NGCP may file a motion for reconsideration before the ERC with updates… At the end of the day, the NGCP has the responsibility of maintaining grid reliability that requires ancillary services, and DoE expects the NGCP to live up to this responsibility,” the department said.