NGCP to hold public bidding for backup power

MANILA - The Philippines' privately-run power grid operator said Wednesday it will start a competitive bidding process for its ancillary services (AS) requirement following a government order.

The National Grid Corporation of the Philippines (NGCP) said the move is meant to help meet the objectives of the Department of Energy and secure the best value for power consumers.

Ancillary services are backups for times when the NGCP's regular power service providers are unable to keep up with demand.

“We want to guarantee the best pricing for AS, especially since this is a pass-on cost to consumers. With an open and public bidding process, we ensure full transparency and comply with internal governance imperative of accountability, which all our stakeholders deserve,” NGCP President and CEO Anthony Almeda said.

NGCP, however, maintained that procuring AS on either firm or non-firm basis is not a solution to the recurring brownouts in the country.

The DOE has ordered NGCP to enter into firm contracts for ancillary services, in place of the mix of firm and non-firm contracts which the power grid operator currently maintains.

A firm contract means a service provider is obliged to furnish power whenever it is needed, while a non-firm contract means the service provider can choose whether or not to furnish power to the NGCP.

While the DOE says firm contracts provide a better guarantee against power outages, the NGCP says these will only result in higher costs for consumers and do not really guarantee against outages.

• NGCP says power rates to spike if DOE insists on firm contracts for backups

“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,” said Almeda.

Very little progress has been made in developing new energy sources as existing power facilities age and outputs decline, NGCP said.

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