ERC OKs deal between NGCP, Phinma

The Energy Regulatory Commission (ERC) has approved the ancillary services procurement agreement (ASPA) between the National Grid Corp. of the Philippines (NGCP) and Phinma Energy Corp.

The deal will ensure secure power supply and competitive electricity prices in the Visayas grid until 2022.

Based on the ERC approval, the applicable rates for the ASPA would be P1.25 per kilowatt-hour (kwh).

Under a non-firm basis, NGCP will contract up to 32 megawatts (MW) of dispatchable reserve (DR) from Phinma Energy’s diesel-fired Power Barges (PB) 101 and 102.

DR refers to the generating capacity readily available for dispatch in order to replenish the contingency reserve service whenever a generating unit trips or a loss of a single transmission interconnection occurs.

“The contracted capacity for DR is 32 MW per generation facility and shall be made available at all times for NGCP’s instruction and dispatch, except upon the existence of any of the circumstances specified in the ASPA,” the joint application said.

The power barges have four generating units with a rated capacity of 32 MW for each power plant. PB 101 has a valid certificate of compliance (COC) until April 9, 2021, while PB 102’s COC is valid until March 2021.

The COCs, issued by the ERC, are required to commercially operate a power plant or other facilities used in generation of electricity.

Phinma has no power supply agreements for these power plants and currently trades its generated capacity on the wholesale electricity spot market.

In their application, NGCP and Phinma sought for a provisional authority since the current levels of DR in the Visayas Grid has not yet met the required levels to ensure reliability and security of the grid.

With Phinma providing additional ancillary services, it will ensure competition between and among providers “which will ultimately initiate a downward pressure to cur- rent prices,” the firms said.

In the ERC approval, the DR rate of Phinma is lower than that of San Roque Power Corp. at P1.50 per kwh and comparable with those of CIP II and 1590 EC at P1.25 per kwh and PanAsia’s Limay diesel plant at P1.12 per kwh.

Investors are now expected to have investors coming in as the ASPA ensures system reliability and stability in the power grid.

“NGCP and PHINMA likewise stressed that absence of system reliability and stability discourages investments and growth, thus, necessitates the immediate issuance of Provisional Approval of the subject ASPA to maintain the reliability and security of the grid,” the two firms said.