DoE’s Cusi urges NGCP to meet reserve contract requirement instead of seeking Palace intervention
By Marielle C. Lucenio
ENERGY Secretary Alfonso G. Cusi called on the power grid operator to meet the standards for power reserve contracts, which serve as a buffer in the event power plants fail unexpectedly, instead of asking the Palace to resolve its standoff on reserve levels with the Department of Energy (DoE).
“I don’t think (it’s necessary) all the National Grid Corp. of the Philippines (NGCP) has to do is comply with its obligation to provide firm reserves in accordance to the concession agreement,” Mr. Cusi told BusinessWorld in a text message.
The NGCP wrote to the Office of the President (OP) seeking its intervention, citing the need to ensure continuous power during the election period in May.
The DoE requires the grid to have reserve power, known as ancillary services (AS) on tap committed under firm contracts. The NGCP’s position is that full compliance with the firm-contract requirement will ultimately raise power prices because of the expense involved in committing reserves. It said it instead proposes to tap a network of AS providers under firm and non-firm contracts.
Non-firm contracts are verbal agreements to supply AS if needed.
In a news conference on Jan. 25, Electric Power Industry Management Bureau Director Mario C. Marasigan said the NGCP must have all of its power reserves committed under firm contracts to insulate it from power market disruption.
The NGCP’s letter to the OP specifically sought Palace intervention on demand-side management — referring to measures that will regulate consumer usage. Among its proposals were holiday declarations to ensure power is available during critical election and vote counting days.
“Non-working holidays can help as ensure there will be more power supply in the grid on the day and a day after the elections especially with the closure of commercial (establishments) and government offices,” NGCP Assistant Vice-President and spokeswoman Cynthia D. Perez-Alabanza told BusinessWorld via Viber Sunday.
The Jan. 31 letter, which the OP received on Feb. 3, noted that 2021 actual demand exceeded 2019 pre-pandemic demand by 296 megawatts (MW) with the 2022 projected demand peak expected to exceed 2019 levels by 1,043 MW or 9%.
This is the first time the NGCP has written to the OP regarding power supply matters. It is also the second time it has sought Palace intervention in connection with the elections.
The NGCP’s own data indicate a firm contract level equivalent to 809.3 MW. It estimates that it requires 1,776.7 MW more to meet the full coverage level on firm contracts. Non-firm contracts are equivalent to 2,807.2 MW.
