NGCP bats for lower ancillary services rates for power consumers

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QUEZON CITY, Feb 19 – As part of its continuing efforts to improve grid reliability while ensuring minimal impact on power rates, the National Grid Corporation of the Philippines (NGCP) has taken steps to lower the overall cost of ancillary services (AS) by as much as 40%.

NGCP filed at the Energy Regulatory Commission (ERC) applications for the approval of its Ancillary Services Procurement Agreements (ASPAs) with Trans-Asia Power Generation Corp. (TA-POWER), Trans-Asia Oil and Energy Development Corp. (TRANS-ASIA), and Panasia Energy, Inc. (PANASIA), with prayer for the issuance of provisional authority.

“The ASPA rates filed at the ERC are significantly lower and cheaper than the current ASPAs. The new contracting methodology, rates, and payment structure to be applied on all prospective ASPAs are designed to lower the overall cost of AS by as much as 40%, and at the same time ensure the availability of AS capacity for the reliability and security of the grid,” NGCP said.

NGCP has the crucial role of providing AS to all transmission users of Luzon, Visayas and Mindanao grids as required by the Electric Power Industry Reform Act of 2001 (EPIRA), its Implementing Rules and Regulations, the Philippine Grid Code (PGC) and the Wholesale Electricity Spot Market (WESM) Rules. NGCP is also mandated to implement the ERC-promulgated Ancillary Service Procurement Plan (ASPP) and the Ancillary Services Cost Recovery Mechanism (AS-CRM).

Ancillary Services, as defined in Section 4 (b) of the EPIRA, are “those services that are necessary to support the transmission of capacity and energy from resources to loads while maintaining reliable operation of the transmission system in accordance with good utility practice and the Grid Code”. Such AS are needed to ensure reliability in the operation of the transmission system and consequently, in the reliability of the electricity supply in the Luzon, Visayas and Mindanao Grids.

It is the responsibility of NGCP to adequately serve generation companies, distribution utilities and suppliers requiring transmission service and/or ancillary services through the transmission system.

Ancillary services stabilize electricity supply and prevent system-wide blackout. These regulate the electricity coming into homes so that lights do not flicker. During times of emergencies when a power plant unexpectedly breaks down, these services make a back-up plant readily available to temporarily augment the lack of supply.

As NGCP is responsible for determining, acquiring, and dispatching the capacity needed to supply the required ancillary services and for developing and proposing wheeling charges and ancillary service tariffs to the ERC, it makes sure that only efficient but affordable ancillary services providers are contracted.

It should be noted that NGCP bills and collects AS charges from its direct customers then remits these collections directly and entirely to the AS providers. As the collecting agent, NGCP does not get revenues from the said charges.

NGCP is a privately owned corporation in charge of operating, maintaining, and developing the country’s power grid. It transmits high-voltage electricity through “power superhighways” that include the interconnected system of transmission lines and towers, substations and related assets. (NGCP)