NGCP given more time to explain procurement

MANILA, Philippines — The Energy Regulatory Commission (ERC) has given the National Grid Corp. of the Philippines (NGCP) more time to complete its explanation on its failure to comply with Department of Energy (DOE) circulars on the procurement of ancillary services after its deadline lapsed last week.

The ERC on Sept. 12 issued an order directing NGCP to submit within 15 days a verified explanation as to why no administrative penalty should be imposed for possible violation of DOE circulars on the contracting of ancillary services to ensure grid security and stability.

Deadline for the NGCP’s submission was supposed to be on Oct. 17.

NGCP, however, filed a motion for extension for an additional period of 15 days or until Nov. 1, within which to submit its verified explanation.

NGCP requested for the extension due to voluminous records involved and the need of its personnel to retrieve and examine relevant data/records necessary to prepare its explanation.

“The commission notes that a reasonable period was already given to NGCP to comply with the commission’s directive to submit its verified explanation pursuant to the order dated September 12, 2022,” the ERC said.

“However, given the circumstances raised by NGCP in its motion, the commission gives it the last opportunity to comply with the said directive,” it said.

The ERC ordered NGCP to submit its verified explanation on or before Nov. 1 “without further extension.”

NGCP is a privately owned corporation in charge of operating, maintaining and developing the country’s state-owned power grid.

The ERC earlier said NGCP failed to comply with various sections of DOE Department Circular 2021-10-0031 titled “Prescribing the Policy for the Transparent and Efficient Procurement of Ancillary Services by the System Operator.”

These include the section requiring NGCP to seek approval from the DOE on its ancillary service agreement procurement plan, as well as sections mandating NGCP to seek the approval of the DOE on the terms of reference of the ancillary service competitive selection process (AS CSP).

It likewise failed to comply with the sections requiring NGCP to complete the AS CSP within six months from the effectivity of the circular, according to the ERC.

The AS CSP is the process whereby ancillary service providers are awarded ancillary service contracts through transparent and competitive bidding in accordance with the rules and regulations set by government regulators.

Ancillary services are seen 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 ERC said that while NGCP has already issued the terms of reference and the schedule for the conduct of AS CSP, it has yet to comply with the provisions in existing policies adopted by the DOE pursuant to its mandate as a policy-making authority.