NGCP raises power supply alarm to brownouts

System operator National Grid Corporation of the Philippines (NGCP) has issued straightforward warning to consumers to brace for rotational blackouts after the Energy Regulatory Commission’s (ERC) has thumbed down its bid to extend monthly its existing ancillary services contracts.

The ancillary services procurement agreements (ASPAs) pertain to the contracts for volume of power supply procured by NGCP to provide for electricity reserves needed in its operations of the country’s electricity network.

“NGCP warns the public of the possibility of intermittent power interruptions as ERC denies its request for month-on-month extensions on ancillary services agreements, while the competitive selection process is being undertaken,” the transmission firm said in a statement.

The competitive selection process or CSP refers to the auction that the company has been carrying out so it can procure power supply that can be allotted as ancillary services or reserves – that way, the power transmission network can be operated reliably – and there’s also a reserve that can be readily dispatched when there is sudden loss of capacity in the system.

The company specified “the Philippine transmission grid shall be vulnerable to power interruptions resulting from an artificial lack of ancillary services. Without an existing ASPA, NGCP cannot nominate power plants to provide the critical services.”

The transmission firm indicated it had already formally corresponded with the Department of Energy (DOE) “asking it to intervene in the issue, and avert avoidable power interruptions.”

NGCP expounded that “the ERC’s refusal came after NGCP concluded the acceptance and opening of bids for ancillary services (AS) on March 14, 15 and 16, 2023 for Luzon, Visayas, and Mindanao, respectively.”

The company emphasized that it is still “evaluating the bids and expects to formally award contracts to winning bidders no later than April 18, 2023.”

It explained that the ASPAs resulting from the CSP “shall still be subjected to the approval of the ERC,” emphasizing that given the regulatory evaluations and approvals that its ASPA applications will have to go through, there is no certainly that these procured power reserves can save the power system from outages – especially with surges in demand during the summer months.

“With the regulatory processes that applications of this nature need to undergo, a provisional approval for the new ASPAs resulting from the AS-CSP may not be expected earlier than June 2023,” transmission firm said.

NGCP recounted that many of its AS agreements have actually expired already, hence, it has been resorting to “month on month extensions of our existing agreements to ensure the sufficiency of services while the procurement process is ongoing.”

When asked for comment, ERC Chairperson Monalisa C. Dimalanta said the regulatory agency “awaits NGCP’s filing of a motion for reconsideration, which is provided for under the Revised Rules of Practice of the Commission so we can officially revisit our ruling.”

The company stated these ancillary services “are necessary for NGCP to manage power fluctuations to ensure the quality and reliability of power flowing through its system.”

It qualified that if these reliability needs in the power system are “not managed properly, fluctuations can cause damage to sensitive equipment, or even automatic load dropping (ALD) if the fluctuations are severe enough to pose a danger to the transmission system as a whole.”

NGCP stressed “with this disappointing development, our hands are tied. If we sign interim extensions, we expect the ERC to issue us yet another show cause order. If we do not, we will be unnecessarily subjecting consumers connected to the grid to avoidable and damaging fluctuations or worse, interruptions.”