NGCP faces sanctions

The Energy Regulatory Commission wants the National Grid Corporation of the Philippines to account for its failure to comply with the government’s mandate to contract enough power reserves to maintain the resiliency and security of the grid.

Last Friday, the ERC issued Show Cause Orders through ERC Case Nos. 129, 130, and 131 SC to the NGCP for failing to follow the policies issued by the Department of Energy in October 2021.

Particularly, the ERC said the NGCP violated the DoE Department Circular No. 2021-10-0031 entitled, “Prescribing the Policy for the Transparent and Efficient Procurement of Ancillary Services by the System Operator.”

The ERC directed NGCP to file within 15 days upon the receipt of the SCO electronically and another five days after through personal service its verified explanation of why it should not be penalized for the violations cited.

The NGCP should also include necessary proof that will support all the allegations in its verified explanation.

Under the DoE order, the NGCP needs to seek approval from the DoE on its Ancillary Service Agreement Procurement Plan and it needs to get the approval of the agency on the Terms of Reference or ToR of the Ancillary Service Competitive Selection Process or AS CSP.

Likewise, the NGCP, the country’s lone transmission operator, should complete the AS CSP within six months from the effectiveness of the Circular.

Ancillary Services are important to support the transmission of capacity and energy from resources to loads while maintaining reliable operation of the grid per good utility practice and existing rules.

Meanwhile, the AS CSP is the process that awards Ancillary Service contracts to providers through transparent and competitive bidding following the rules and regulations set by government regulators.

“While the ERC notes that NGCP has already issued the ToR and the schedule for the conduct of AS CSP, the latter has yet to comply with the above cited provisions in existing policies adopted by the DoE according to its mandate as a policy-making authority,” the ERC said in an advisory on Saturday.

“On the other hand, the issuance of the ERC’s SCOs is consistent with the mandate of the ERC to enforce the implementing rules and regulations of the EPIRA, including those formulated and adopted by the DoE,” it added.

Last week, some Luzon customers experienced brownout after the grid was placed under “red alert” due to factors including unplanned power plant outages, transmission line tripping, and derating of electricity generation of some power facilities.

NGCP reported that at least seven electric generating plants were simultaneously forced outages leading to a loss of more than 3,400 megawatts in the power system.

The generating facilities on unscheduled shutdowns included Unit 1 of GNPower Dinginin plant, Calaca-2 plant, Masinloc 2 and 3, Sual 1 and 2 plants, and Quezon Power plant.

The outages were also perpetrated by the derated capacity of the other power plants, which resulted in 226MW additional capacity lost in the Luzon grid.

A yellow alert is raised when the power reserve falls below the ideal levels. On the other hand, when a supply-demand balance worsens, a red alert, which points to severe power deficiency that may lead to rotating power interruptions, is declared.

During a public hearing last week, NGCP president and CEO Anthony Almeda told the Senate Committee on Energy, chaired by Senator Raffy Tulfo, that all hands are on deck to avert any looming power crisis.

“Everything is under control… Here in the office, we make sure that everybody is online and the whole energy family is in discussion to work together to assure that we have enough supply of power. We make sure that everything is okay,” Almeda said.

Almeda also allayed fears that Chinese government support for the operations of the NGCP does not influence its overall efficiency in delivering services.

“I would like to assure the committee and our chairman that I am in control of the company and that all the Chinese here or not here are all board directors and they do not manage the company,” he said.

“I do all the daily activities regarding the transmission, rest assured to the committee that I am in control of the company as a Filipino,” he added.

Senator Tulfo recently proposed to form an Inter-Agency Council to strictly monitor the grid situation, especially since power interruptions still happen despite the NGCP and DoE monitoring the situation.

However, Energy Assistant Secretary Mario Marasigan, who represented the absent Secretary Raphael Lotilla, was quick to add that the DoE, in its capacity, will continue to closely monitor the grid situation and that emergency measures will be implemented once reserves decline.

“All of the power plants running in Luzon are being monitored daily and should there be instances like what happened last Sunday, it will be monitored closely. If we have to call out the plant operators, we will because we don’t just wait for reports,” Marasigan said.

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