ERC approves NGCP, First Gen Hydro deal on ancillary support

The Energy Regulatory Commission on Friday said it has approved the ancillary services procurement agreement between National Grid Corporation of the Philippines and First Gen Hydro Power Corp. An initial evaluation of the application "will redound to the benefit of the consumers in terms of continuous, reliable, efficient and affordable power supply," said the ERC in its decision. It allowed National Grid, the country's power transmission network operator, to buy ancillary services from First Gen Hydro at P6.20 per kilowatthour. Ancillary services support the capacity transmission of energy while keeping a reliable operation of the system. National Grid and First Gen Hydro said in a joint application before the ERC in April that the agreement would help ensure reliability of power in the Luzon grid. National Grid had negotiated for First Gen Hydro to supply the ancillary services involving the 120.8 megawatt Pantabangan hydro power plant over a three-year period. The available ancillary services in the Luzon grid are significantly "insufficient to meet the required levels," the companies told the ERC. "Thus, at present, the transmission of power Luzon grid cannot be considered reliable, stable and secure... The continued deficiency of available ancillary services, despite the increasing demand for power, will have significant adverse effect on the public," according to the joint application. There is a need to buy ancillary services to maintain power quality, reliability and security in the Luzon grid, the companies said. "The increasing demand for power in Luzon area translates to parallel increase in demand for ancillary services…" they said. National Grid is owned by local investors led by Henry Sy Jr. and their technical partner the State Grid of China Corporation. First Gen Hydro is a subsidiary of First Gen Corp. — VS, GMA News