THE National Grid Corp. of the Philippines (NGCP) on Monday asked the Department of Energy to step in to prevent “avoidable” power interruptions after the Energy Regulatory Commission (ERC) denied its request for a month-on-month extension of its ancillary services agreements that have expired.
Ancillary services are deployed by grid operators to maintain grid stability and reliability in response to changes in power supply and demand. These services can include frequency regulation, reserve power, reactive power and black start capability.
In a letter to Energy Secretary Raphael Lotilla, the NGCP said unless the ERC withdraws its order, the grid will be vulnerable to automatic load dropping caused by the “artificial lack of reserves.”
NGCP issued the warning as many of its ancillary agreements have expired and the competitive selection process is still ongoing.
“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 transmission grid operator said.
“The Philippine transmission grid shall be vulnerable to power interruptions resulting from an artificial lack of AS (ancillary service). Without an existing ASPA (ancillary service procurement agreement), NGCP cannot nominate power plants to provide the critical services,” NGCP said.
“NGCP considered these extensions as a middle ground strategy to remain compliant with the relevant DOE Circulars, while at the same time preserving the integrity of the transmission grid with the continuous provision of AS (ancillary service), especially during the summer months, when it is needed most,” NGCP said.
NGCP is responsible for determining, acquiring, and dispatching the needed AS levels required to maintain power quality and the reliability and security of the nationwide grid.
The company recently opened the AS bids and is conducting the evaluation with awarding of contracts to winning bidders scheduled no later than April 18, 2023.
The resulting ancillary services procurement agreements from the bidding will still be subject to the approval of the ERC.
NGCP said the provisional approval for the new ASPAs may not be expected earlier than June 2023.
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 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,” NGCP said.
NGCP said the ERC decision leaves the company 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,” NGCP said.
Also on Monday, a congressional leader supported the call of Senator Sherwin Gatchalian for the ERC to penalize erring power distributors who contract for too much power.
“The call to penalize power distributors that over contracted power supply and imposed the costs to consumers is a good call,” Surigao del Norte Rep. Robert Ace Barbers said.
But imposing fines on their mismanagement, Barbers said is not enough.
“They should be made to refund to the consumers who paid for electricity that they never used. The refund can come as discounted billings spread over a certain period,” Barbers said.
— Alena Mae S. Flores and Maricel Cruz
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