NGCP-Aboitiz deals bring cheaper standby power

MANILA, Philippines – The National Grid Corp. of the Philippines (NGCP) may soon be able to offer cheaper ancillary service charges, or standby power, to its customers as it seals new agreements with three power firms of the Aboitiz group.

Ancillary services help regulate transmitted electricity to avoid fluctuations, enable the system to adapt to sudden power loss, and prevent the occurrence of massive outages.

The country’s electricity superhighway operator said it entered into Ancillary Service Procurement Agreements (ASPA) with SN Aboitiz Power (SNAP) Magat Inc., SN Aboitiz Power (SNAP) Benguet Inc. and Therma Luzon, Inc.

NGCP said the agreements with SNAP-Magat and SNAP-Benguet were sealed on July 26, 2013 and would be valid for three years, while the agreement with Therma Luzon would run for five years.

After it signed the agreements, NGCP said its ancillary service charges would be 30-percent to 40-percent cheaper than the current structure for the same amount of reserves.

The Energy Regulatory Commission recently granted provisional authority to the transmission network operator to implement the agreements with the three Aboitiz companies.

“We continue to push for less expensive ancillary services to make sure that we only get the more efficient and affordable ancillary services providers. We want to serve our grid customers better. We will secure the reliability and stability of the grid, but we will not burden the end-consumers,” NGCP president Henry Sy Jr. said.

The ERC issued the order in response to the petition of NGCP to procure ancillary services from the three power plants to augment the existing reserves for the Luzon grid, where demand is increasing.

According to NGCP, available reserves were not enough to fill the required levels of contingency and dispatchable power prescribed in the Philippine Grid Code.

The agreement will also address the possible deficiency of ancillary power supply during the dry season, when the water reserve of the Kalayaan hydroelectric runs low.

NGCP is a privately owned company that operates  and develops the country’s power grid. It transmits high-voltage electricity through “power superhighways” that include the interconnected system of transmission lines, towers, substations and related assets.