NGCP warns of power outages as ERC rejects request of interim ancillary services agreements

CEBU CITY – The National Grid Corporation of the Philippines (NGCP) warns the public of possible intermittent power interruptions as the Energy Regulatory Commission (ERC) denied its request for month on month extensions on ancillary services agreements, while the competitive selection process is being undertaken.

“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,” NGCP bared.

The ERC’s refusal came after NGCP concluded the acceptance and opening of bids for Ancillary Services (AS) on March 14, 15, and 16 for Luzon, Visayas, and Mindanao respectively.  NGCP is currently evaluating the bids and expects to formally award contracts to winning bidders no later than April 18.

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. 

With ERC’s denial of this interim arrangement, NGCP’s hands are tied. 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, NGCP explained.

According to 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, NGCP added.

“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,” NGCP said.

With this disappointing development, NGCP said this leaves them with no other option. If NGCP signs interim extensions, it expects the ERC to issue yet another show cause order.  If it does not have AS, NGCP will be unnecessarily subjecting consumers connected to the grid to avoidable and damaging fluctuations or worse, interruptions, NGCP explained.

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