NGCP faces audit for first time amid power plant shutdowns

By Riza Lozada

The operator of the country’s electricity network, the National Grid Corp. of the Philippines (NGCP), will undergo an “operation audit” to ensure greater supply of electricity and a rational pricing of the power supply. 

The audit was ordered by the Energy Regulatory Commission following observations about the tight supply of electricity and the lack of transparency in the pricing of electricity as a result of the Interruptible Load Program (ILP).

The performance of NGCP, which is a tie-up of the State Grid Corp. of China and the SM Group, has never been subject to any review.

“The NGCP is hereby directed to procure through competitive bidding, an independent qualified third party that shall review its operations as System Operator under existing laws and regulations and its franchises and concessions, consistent with the Terms of Reference that shall be reviewed by the commission, and allocate funds necessary for the same, subject to recovery through transmission charges,” the ERC said in its resolution-order.

NGCP has broad authority over the electricity supply in the country and is the only body that can declare a “red alert” on the reserve status on electricity supply as part of its functions.

The ERC is particularly interested in the scheduling of maintenance shutdowns of major power plants that lately appears to have contributed to the tight supply in electricity.

NGCP performs a crucial role in maintaining the integrity of the national grid system that transmits the electricity to all distributors.

It also functions as the sole authority in determining the reliability and security of the Luzon, Visayas and Mindanao grids by monitoring the supply and demand of electricity and preventing massive outages.

But the recent incidences of generation facilities placed under maintenance and damage repairs have raised concerns that NGCP, as the system operator, is not being efficient in ascertaining the reliability of electricity supply.

The Manila Electric Co. (Meralco), the biggest power distributor in the country, which controls almost 70 percent of the archipelago’s market share in electricity supply, had indicated that 121 of its franchise-area customers already use their own electricity generators during peak demand periods as part of the Interruptible Load Program (ILP).

Meralco compensates private firms for their use of their own power sources but the amount the power firm shells out is passed on to the monthly electricity bills of consumers, thus raising electricity charges in exchange for not experiencing brownouts during peak hours of demand.

The Department of Energy (DOE), meanwhile, said the ILP took off in the Luzon grid officially last April 15 when 121 ILP participants “de-loaded from the grid” a total of 247 megawatts (MW), which, in effect, prevented rotating brownouts in the region.

The DOE could not provide detailed information on the impact of ILP in the consumer billing next month but confirmed that electricity rate in the Luzon area would increase as a result of the ILP implementation.

Energy Secretary Zenaida Monsada told reporters the ILP would trigger an increase in power rates due to the use of diesel and gasoline in running the generation sets that ILP participants turn on during peak hours of electricity use.

The DOE said, “with ILP, the peak demand was arrested at a lower level of 9,416 MW. A total of 247 MW of power was deloaded from 121 participants, so an estimated 290,000 customers in Metro Manila and nearby provinces were spared of rotating brownouts.

The DOE reported that NGCP, Meralco and the participants of the ILP hurdled a critical power supply situation in Luzon last April 15.

“Under the ILP, big load customers of Distribution Utilities and Electric Cooperatives registered in the program run their stand-by generation sets in times of energy supply deficiency to prevent power outages,” the agency said.

The ILP was implemented in the Meralco area on April 15 to stabilize the power-supply situation following the “red alert” notice of NGCP.

The high and increasing heat index triggered the unusual rise in demand for power, where Luzon alone needed around 9,700 megawatts (MW), breaching historical records.

Historically, power consumption rises during the hot summer months, as more consumers spend time in their homes and use air-conditioners.