ERC, NGCP should resolve ASPA issue – DOE

MANILA, Philippines — The Department of Energy (DOE) is keeping its hands off National Grid Corp. of the Philippines (NGCP)’s request for intervention on possible month-on-month extensions of its existing ancillary services contracts to prevent potential power outages this summer.

The DOE, in a statement yesterday, said that the NGCP and the Energy Regulatory Commission (ERC) would have to settle the issue.

“There is a process for NGCP to submit the motion for reconsideration with the ERC. At this time, we need to wait for the ERC and NGCP to settle the matter,” the agency said.

NGCP sent a letter to the DOE last Saturday seeking the agency’s intervention to prevent potential power outages following the denial of the ERC of its request for interim ancillary services agreements.

The month-on-month extensions were sought while the power transmission operator is undertaking a competitive selection process (CSP) for ancillary services (AS).

NGCP’s request for month-on-month extensions of existing ancillary services contracts were earlier thumbed down by the ERC.

The DOE said yesterday that the ERC decision denying monthly extensions of ancillary services agreements was promulgated back in December 2022.

At that time, it said NGCP had not yet implemented the CSP for AS.

“At the end of the day, NGCP has the responsibility of maintaining grid reliability that requires ancillary service, and DOE expects that NGCP will live up to this responsibility,” the agency said.

In an ambush interview, Energy Secretary Raphael Lotilla told reporters yesterday that all NGCP needs to do is “file a motion for reconsideration with the ERC.”

“There’s no need to be alarmist. It will be before the ERC. They will hear the petition. You must not overworry yourselves,” Lotilla said.

In an interview with “The Chiefs” on OneNews Monday night, NGCP spokesperson Cynthia Alabanza said NGCP is hoping the DOE would clarify its earlier issued circulars that were the basis of the ERC’s denial.

The ERC, in an order dated and promulgated on Dec. 12, 2022 and received by NGCP on March 22, 2023, denied the grid operator’s motion to allow the month-to-month extension of the existing Ancillary Services Procurement Agreement (ASPA) subject of the case.

In denying the motion, the ERC ruled that such extension is proscribed under DOE Circular 2019-12-0018, which disallows execution of ASPA on a non-firm basis, and Circular 2021-10-0001, which requires procurement of AS through CSP only.

“We will be filing our motion for reconsideration, but again that may take time. The fastest way really is for the DOE to clarify whether NGCP was in violation of the issuance. Since they are the ones who issued, they are in the best position to tell us whether we are violating what they issued,” she said.

Alabanza said NGCP is hoping that the power situation will not get severe “because as the temperature rises, the fluctuation will get worse.”

“In fact, ancillary services are most relevant during summer peak,” she said.

NGCP said ancillary services are necessary for it to manage power fluctuations to ensure the quality and reliability of power flowing through its system.

If not managed properly, it said that 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.