ERC to NGCP: Explain failure to comply with reserve power rules

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THE ENERGY Regulatory Commission (ERC) has directed the National Grid Corp. of the Philippines (NGCP) to explain its failure to procure sufficient ancillary services or reserve power to ensure grid security and stability.

In a media release over the weekend, the energy regulatory body said that it issued a show-cause order on Sept. 16 to NGCP due to the power transmission firm’s failure to comply with the Department of Energy’s (DoE) circular issued in October 2021.

The ERC cited three sections of the DoE’s department circular which it said NGCP failed to comply.

Section 4.2 requires NGCP to seek approval from the DoE on its ancillary service agreement procurement plan; Sections 7.4 and 7.5 mandate NGCP to seek the approval of the DoE on the terms of reference of the ancillary service competitive selection process (AS CSP); and Sections 7.1 and 7.11 require NGCP to complete the AS CSP within six months from the effectivity of the circular, the ERC said in the release.

NGCP was given 15 days upon the receipt of the show-cause order to give its explanation, electronically, while it was given another five days to send its explanation through personal service as to why no administrative penalty should be imposed on the cited violations.

“The submission shall also include necessary proof that will support all the allegations in its verified explanation,” the regulator said.

Privately owned NGCP has yet to respond to BusinessWorld’s request for comments.

The DoE issued the department circular last year after power reserves became deficient, resulting in outages.

The ERC said ancillary services “are necessary to support the transmission of capacity and energy from resources to loads, while maintaining reliable operation of the grid in accordance with good utility practice and existing rules.”

The competitive selection of ancillary services providers is required before the awarding of contracts.

The ERC said that while NGCP issued a schedule and terms of reference for the conduct of the AS CSP, it has yet to comply with the existing policies set by the DoE. — Ashley Erika O. Jose