NGCP warns of power interruptions

THE NATIONAL Grid Corp. of the Philippines (NGCP) has warned of possible power interruptions this summer after the Energy Regulatory Commission (ERC) junked its request to extend its monthly ancillary services (AS) agreements.

The grid operator said in a statement that many of its AS deals have already expired, forcing it to extend existing agreements on a month-on-month basis “to ensure the sufficiency of services while the procurement process is ongoing.”

“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 AS procurement agreement (ASPA), NGCP cannot nominate power plants to provide the critical services,” NGCP said.

The ERC’s rejection came as the competitive selection process for ASPAs is now underway.

The NGCP said it has already accepted and opened bids for ancillary services for Luzon, Visayas, and Mindanao earlier this month. It is currently evaluating the bids and expects to formally award the contracts to the winning bidders by April 18.

However, the ERC’s provisional approval of the new ASPAs under the competitive selection process may not be expected earlier than June.

ERC Chairperson and Chief Executive Officer (CEO) Monalisa C. Dimalanta said it will revisit its ruling after the NGCP appeals the decision.

“ERC 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,” Ms. Dimalanta said in a Viber message on Monday.

In a March 25 letter to Energy Secretary Raphael P.M. Lotilla, NGCP President and CEO Anthony L. Almeda urged the Department of Energy to authorize the month-on-month extension of existing ASPAs.

Mr. Almeda said the company will file a motion for reconsideration on the grounds that the ERC circulars will apply only to new ASPAs, not extensions of existing ASPAs.

“Unless the ERC withdraws its Order, or the Department of Energy… authorizes the month-to-month extension of existing ASPAs by clarifying that Circular Nos. 2019-12-0018 and 2021-10-0001 do not apply to these contracts, the Philippine Grid will unnecessarily be vulnerable to ALD (automatic load dropping) caused by the artificial lack of ancillary service,” Mr. Almeda said.

Ancillary services “are necessary for NGCP to manage power fluctuations to ensure the quality and reliability of power flowing through its system,” the company said.

The NCGP said it has always conducted the procurement of ancillary services “with good faith,” in order to get the best services for the least cost.

“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,” NGCP said.

The Energy department last week said that it now projects a total of 15 yellow alerts on the Luzon grid this year, higher than its earlier projection of 12.

Meanwhile, the DoE has urged the public to practice energy efficiency and conservation measures amid an expected surge in power demand during the summer months. — A.E.O. Jose