THE Energy Regulatory Commission (ERC) said it drafted rules for the National Grid Corp. of the Philippines (NGCP) to follow in procuring reserve power.
In a draft resolution, the ERC proposed implementing guidelines for the procurement, execution, and evaluation of ancillary services (AS) procurement agreements by the NGCP.
Ancillary services refer to power reserves tapped by the grid to ensure the reliable operation of the transmission system should its regular sources of power fall short.
The ERC said that the Department of Energy’s policy on the competitive selection process (CSP) for AS requires that the regulator review whether the parties comply with the requirements.
The proposed rules require the system operator to undertake “a transparent, competitive and non-discriminatory procurement process for AS.”
To encourage broader participation in AS procurement, the system operator is directed to ensure compliance with the DoE on the mandatory AS capability testing of all generating facilities.
“To ensure SO’s compliance with its obligation to procure cost-effective and least-cost AS, the lowest calculated bid shall be subject to an AS.
Price Cap set by the system operator, which shall not be disclosed by the TPBAC (Third Party Bids and Awards Committee) to the bidders until the opening of bids,” the ERC said.
The ERC said that all AS procurement agreements must obtain its approval prior to implementation, with a maximum term of five years.
Francis Saturnino Juan, ERC chairman and chief executive officer, said in a recent commission meeting that the review of AS procurement agreements should be streamlined akin to the process for power supply agreements.
“I took the initiative to propose these kinds of guidelines so that we have a clear set to follow, which can also serve as a guide for the industry, the SO, and the AS providers who will participate in any CSP that the SO will carry out,” Mr. Juan said.
He said that the review of AS procurement agreements should be streamlined to accelerate the application and for the system to have access to the capacity immediately.
“What we are proposing is to look at the price that came out and, if it has already gone through the CSP, (we need) to accept it as the lowest cost that the system operator can obtain, and for the ERC to just review the other terms of the AS procurement agreement,” Mr. Juan said. — Sheldeen Joy Talavera
