New NGCP ancillary services proposals 40 percent cheaper

Business Mirror

Published on Thursday, 14 February 2013 19:28

Written by Lenie Lectura / Reporter

THE National Grid Corp. of the Philippines (NGCP) asked on Thursday the Energy Regulatory Commission (ERC) to approve its Ancillary Services Procurement Agreements (ASPAs) with various power generating firms.

The country’s power grid operator has sealed agreements with Trans-Asia Power Generation Corp. (TA-Power), Trans-Asia Oil and Energy Development Corp. (Trans-Asia), and Panasia Energy Inc. (Panasia).

 “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 ancillary services [AS] by as much as 40 percent, and at  the same time, ensure the availability of AS capacity for the reliability and security of the grid,” NGCP said.

AS, as defined in Section 4 (b) of the Electric Power Industry Reform Act of 2001, 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, the Visayas and Mindanao grids.

The NGCP has the crucial role of providing AS to all transmission users of Luzon, the Visayas and Mindanao grids. It is also mandated to implement the ERC promulgated Ancillary Service Procurement Plan and the Ancillary Services Cost Recovery Mechanism.

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

AS also 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 lack of power supply.

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