NGCP Article

NGCP warns of power outages amid ERC denial of interim ancillary services agreement

Published on March 27, 2023 12:00 AM

NGCP warns the public of the possibility of intermittent power interruptions as the Energy Regulatory Commission (ERC) denies its request for month on month extensions on ancillary services agreements, while the competitive selection process is being undertaken.

The ERC’s refusal came after NGCP concluded the acceptance and opening of bids for Ancillary Services (AS) on 14, 15, and 16 March 2023 for Luzon, Visayas, and Mindanao, respectively. NGCP is currently evaluating the bids and expects to formally award contracts to winning bidders no later than 18 April 2023. 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, 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,” explained NGCP.  

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