The Senate Committee on Energy has directed the Department of Energy and the Energy Regulatory Commission to pursue the competitive selection process or bidding for the ancillary services requirement of the grid operator National Grid Corp. of the Philippines.
Senator Sherwin Gatchalian said during yesterday’s hearing that the Senate supports the contracting of reserves but “we want to make sure it is on a competitive manner and its important also to look at all the details.”
NGCP announced on Wednesday it would start the bidding process for its ancillary services requirement to help meet the objectives of the government and secure the best value for power consumers.
Ancillary services are support services needed to maintain power quality, reliability and security of the grid.
ERC chairperson Agnes Devanadera asked NGCP to come up with some sort of bidding and “30 days should start today, 30 days will be from today”.
Gatchalian, however, urged DOE and ERC to use the established CSP rules for distribution utilities and electric cooperatives.
Energy Secretary Alfonso Cusi expressed willingness to sit down with ERC and even supervise the CSP process for the conversion of the non-firm AS contracts to firm contracts.
DOE said the lack of firm AS contracts contributed to the lack of reserves plaguing Luzon grid.
NGCP president Anthony Almeda said in an earlier statement the conduct of the CSP will provide the best price to consumers.
NGCP, however, said procuring AS on either firm or non-firm basis is not a solution to the recurring brownouts in the country.
“What we have is a supply, and not a distribution, problem. For the grid to effectively address imbalances between supply and demand, we need to increase the power capacity of the country to meet rising demand as we start to recover and fully reopen the economy,” Almeda added.
He said the firm contracting being insisted by DOE will not “result in additional supply, it will only lead to a change in payment terms where all power, used or unused, will have to be shouldered by the public.”
This take or pay arrangement, he added, will only lead to higher electricity cost for consumers.
Senator Imee Marcos for her part warned the DOE and NGCP not to waste time pointing fingers instead of finding solutions. Marcos said that power outages in the short -term to long-term will trip the country’s economic recovery.
Marcos said the DOE and NGCP should stop this blame game.
