NGCP: Outages seen as ERC rejects extension of standby power deals

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Metro Manila (CNN Philippines, March 27) — Consumers may experience power interruptions as the Energy Regulatory Commission (ERC) denied the National Grid Corporation of the Philippines' (NGCP) month-on-month extension of ancillary services (AS) agreements, or standby power supply deals.

In a statement, the NGCP said the regulator rejected its request after it opened the bids for AS more than a week ago. Contracts may be awarded “no later than April 18.”

However, due to regulatory processes, a provisional approval from the ERC for the new deals “may not be expected earlier than June 2023,” the NGCP added.

“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,” it said.

“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 power agreement, NGCP cannot nominate power plants to provide the critical services,” the NGCP said.

According to NGCP, ancillary services support the transmission of power from generators to consumers to maintain reliable operations.

The failure to secure one might lead to fluctuations, which can damage sensitive equipment.

“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," it said. "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."

Reacting to the NGCP's statement, ERC chair Monalisa Dimalanta said: "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."