DOE to NGCP: file an MR with the ERC



The Department of Energy on Tuesday advised the National Grid Corporation of the Philippines to file for a motion for reconsideration with regards to the decision of the Energy Regulatory Commission to deny the monthly extensions of ancillary services agreements.

The DOE said that the decision was promulgated back in December 2022.

“At that time, NGCP has not yet implemented the Competitive Selection Process (CSP) for Ancillary Service (AS),” the DOE said in their statement.

The DOE advised the NGCP that they can take the next steps with regards to their request.

“Since the CSP for AS is now nearing completion, the NGCP may file a motion for reconsideration before the ERC with updated on the CSP for AS,” they said.

“At the end of the day the NGCP has the responsibility of maintaining grid reliability that requires ancillary service, and DOE expects the NGCP will live up to this responsibility,” the DOE said.

However, according to the ERC, as of Tuesday, no motions have been filed.

“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,” the ERC said.

Earlier, the NGCP warned the public of the possibility of intermittent power interruptions as the ERC denied their request for month-on-month extensions on ancillary services agreements, while the competitive selection process is being undertaken.

In a statement, the NGCP said 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 NGCP is currently evaluating the bids and expects to formally award contracts to winning bidders no later than April 18, 2023.

The Ancillary Services Procurement Agreements resulting from this competitive selection process (CSP) shall still be subjected to the approval of the ERC.

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.

“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. 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,” explained NGCP.

Ancillary services support the transmission of power from generators to consumers to maintain reliable operations.

These are necessary for NGCP to manage power fluctuations to ensure the quality and reliability of power flowing through its system.

If 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.

“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. 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,” explained NGCP.

NGCP has written to the Department of Energy (DOE) asking it to intervene in the issue, and avert avoidable power interruptions.

Catherine R. Cueto

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