NGCP warns DoE proposal can cause rate hikes

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Sumary of NGCP warns DoE proposal can cause rate hikes:

  • Consumers stand to suffer from soaring electricity rates should the Department of Energy’s (DoE) proposed strategy of 100-percent firm contracting for ancillary services (AS) prevail, according to the National Grid Corporation of the Philippines (NGCP)..
  • The DoE has been reiterating the dispatch of ancillary services as a response to thin operating margins and possible load dropping in the Luzon grid at various points this year due to multiple power plants on extended outage..
  • The NGCP explained that the initial simulations show that power rates can see an upsurge of P0.64 per kilowatt-hour (kWh) for Luzon, P0.54 per kWh for the Visayas, and P1.39 per kWh for Mindanao..
  • The NGCP has repeatedly clarified that ancillary services are not meant to replace baseload plants or for any long-term or continuous use..
  • Instead, ancillary services are a stop-gap measure, dispatched only to stabilize and balance the grid in cases of power supply and demand imbalance..
  • “In times when supply is sufficient, it is meant to run only long enough to bridge the gap between the loss of supply event, and the time that replacement power can be scheduled by the Independent Electricity Market Operator of the Philippines, Inc..
  • Thus, shifting from the current non-firm arrangements to a firm arrangement will not solve the current lack in supply, as they are taken from the same pool of power plant suppliers, NGCP said..
  • We get our power to support AS from the same pool of generators, many of which went on unscheduled shutdowns, and whose current collective output is not enough to meet consumer demand….

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