NGCP warns of power outages after ERC denies extension of ancillary service deals


Posted at Mar 27 2023 11:12 AM | Updated as of Mar 27 2023 11:47 AM

MANILA — Possible power interruptions loom as the Energy Regulatory Commission denies the request for the extension of the National Grid Corp of the Philippines' month-to-month ancillary service agreements while the competitive selection process is ongoing, the NGCP said on Monday.

Ancillary services support the transmission of power from generators to consumers to maintain reliable operations and are necessary to manage power fluctuations, the NGCP said in a statement.

The ERC refusal came after the NGCP's acceptance and opening of bids for ancillary services (AS) on March 14, 15, and 16, 2023 for Luzon, Visayas, and Mindanao, which are currently being evaluated, it said.

"Many of NGCP’s AS agreements have expired. We have resorted to month-to-month extensions of our existing agreements to ensure the sufficiency of services while the procurement process is ongoing," the NGCP said.

"With ERC’s denial of this interim arrangement, our hands are tied. The Philippine Transmission Grid shall be vulnerable to power interruptions resulting from an artificial lack of AS. Without an existing ASPA, NGCP cannot nominate power plants to provide the critical services," it added.

NGCP said it expected to formally award contracts to winning bidders "no later than April 18, 2023." But the ERC will still need to approve Ancillary Services Procurement Agreements resulting from this competitive selection process. 

With the regulatory processes, a provisional approval for the new ASPAs resulting "may not be expected earlier than June 2023," the NCGP added. 

It said it has appealed to the Department of Energy to intervene with the issue to avert power interruptions.

"We have always conducted the procurement of AS with good faith, with the best services for the least cost as a primary motivating factor. We have done much to improve the procurement process, but above all else, we must be able to provide these services," the NGCP said. 

"With this disappointing development, this leaves us with no other option. 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," it continued. 

The NGCP earlier said reserves are thinning as demand peaks during the dry season.


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