NGCP mulls lower charges on ancillary services

MANILA, Philippines - The National Grid Corporation of the Philippines (NGCP), the operator of the country’s power transmission highway, is looking to lower charges on its ancillary services (AS), its top official said.

The Energy Regulatory Commission (ERC), the country’s power regulator, has granted NGCP the provisional authority to implement its ancillary service procurement agreement (ASPA) with three Aboitiz-owned power firms – SN Aboitiz Power-Magat Inc., SN Aboitiz Power – Benguet  Inc. and Therma Luzon Inc.

NGCP is eyeing ancillary services that may be 30 percent to 40 percent less than the current structure for the same amount of reserves.

“We are constantly looking for ways to lessen ancillary service cost by engaging power generators who are technically capable and willing to provide AS at a rate acceptable to grid users,” said NGCP president Henry Sy Jr.

NGCP earlier asked the ERC for authority to procure ancillary services from the three power plants to augment the existing reserves for the Luzon grid wherein demand is increasing.

Ancillary services are 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.

At present, NGCP said the available reserves are not sufficient to comply with the required levels of contingency and dispatchable reserves prescribed in the Philippine Grid Code (PGC).

NGCP spokesperson Cynthia D. Perez-Alabanza said by entering into an agreement with the ancillary service suppliers, NGCP is ensured of the reliability of the supply of reserves necessary to maintain the quality and frequency of electricity transmitted to distribution utilities and other grid users.

The agreements will be effective for a period three years, NGCP said.

“We continue to push for less expensive ancillary services to make sure that we only get the more efficient and affordable ancillary services providers. We want to serve our grid customers better. We will secure the reliability and stability of the grid, but we will not burden the end-consumers,” he said.

As grid operator, NGCP is tasked to bill and collect AS charges based on the ERC-approved rates. These charges, however, do not form a part of NGCP’s revenues and are only pass-on charges remitted entirely to the generation companies from which the AS are sourced.