GenCos want DOE to ensure NGCP compliance to bidding rules
By Myrna M. Velasco – September 4, 2022, 8:30 PM
from Manila Bulletin
GenCos want DOE to ensure NGCP compliance to bidding rules
To end the Filipino consumers’ distress over recurring brownouts and rate spikes, especially during the summer months, the country’s power generation companies (GENCOs) are seeking the imprimatur of the Department of Energy (DOE) to guarantee utmost compliance to rules and policies on the scheduled bidding of power reserves or ancillary services to be procured this month by the National Grid Corporation of the Philippines (NGCP), the country’s system operator (SO).
In a letter to Energy Secretary Raphael P. M. Lotilla dated August 30 this year, the Philippine Independent Power Producers Association Inc. (PIPPA) raised at least three conditions yet to be complied with by the system operator based on the terms of the competitive selection process (CSP) and the guiding Circular of the DOE to guarantee a successful and legally valid outcome of the power reserves auction.
Ancillary services or power reserves are extremely necessary in ensuring reliable and efficient operations of the power system. This is also the most needed development so the finger-pointing on the power grids’ repeated predicament of tight supply and protracted rotational brownouts would finally end.
At this stage, the NGCP has formally opened the bidding process for its contracting of required ancillary services – primarily those on regulating reserve, contingency reserve, dispatchable reserve, reactive power support and blackstart service.
The prescribed bid submission dates are September 19 for Luzon grid; September 20 for Visayas grid; and September 21 for Mindanao grid and the opening of bids will be the day after. Then after the warranted period of post-qualification and evaluation of the submitted tenders, the transmission firm has slated the issuance of “notice of award’ within October 17-21 this year.
But as conveyed in a DOE letter to PIPPA on July 15, 2022, Director Mario C. Marasigan specified that “NGCP has yet comply with the provisions” of DOE Circular DC 2021-10-0031 or the policy prescribing for the “transparent and efficient procurement of ancillary services by the System Operator.”
The provisions of the DOE Circular yet to be accomplished by the system operator include those on: Section 7.4 which stipulates that “prior to the publication of the Invitation to Bid, the SO shall submit to the DOE the following documents: the TOR (terms of reference) if consistent with the CSP policy; and the draft instruction to bidders, if consistent with the final TOR.”
The other condition that shall be adhered to by the SO for the power reserves auction is prescribed under Section 7.5.1 of the DOE Circular which stipulates that the “TPBAC (Third Party Bids and Awards Committee) shall post the Invitation to Bid, all bid bulletins and related announcements on its website, the DOE website or DOE AS-CSP (ancillary services-competitive selection process) e-publication and posting.”
As relayed by the DOE to PIPPA, if non-compliance by the SO will carry on, the department will refer the matter to the Joint Congressional Energy Commission (JCEC) “without prejudice to the Energy Regulatory Commission’s further action on NGCP due to its regulatory authority over the SO.”
PIPPA indicated that on August 26, 2022, the transmission firm “posted an updated TOR together with a Bid Bulletin 2022-03 (Annex C), stating the revised timeline for the AS-CSP process.”
Relative to that, the association of power generators is asking the energy department “to verify if NGCP had already complied with the provisions of DOE’s AS CSP policy,” if referenced on the revised TOR and timeless that had been recently issued.
PIPPA President and Executive Director Anne Estorco-Montelibano, in her letter to the DOE Secretary, emphasized that their member-generators are already prepared and have been placing “great effort to actively participate in the bidding to provide the much-needed ancillary services for grid stability and energy security,” hence, they are expecting full compliance of the system operator to the bidding requirements for ancillary services or power reserves contracting.
Failing that, she qualified that the resulting Ancillary Services Procurement Agreements (ASPAs) and the whole process of the power reserves bidding may just end up invalid or void when these would already reach the evaluation and approval phase of the ERC.
Given such pending compliance concerns to the CSP as well as the DOE Circular then, the power generator-members of PIPPA are seeking guidance from the Energy Secretary as to how the bidding exercise for the power reserves needed for reliable operations of the power system will proceed from where processes are currently getting snagged.
