ERC slaps NGCP P5.1M in penalties for violations of support services rules

The National Grid Corporation of the Philippines (NGCP) must pay the government P5.1 million in penalties for violations of requirements related to contracting ancillary or support services.

In a decision dated 24 October and released to media on 8 November, the Energy Regulatory Commission (ERC) said one of NGCP's violations was its failure to submit to the Energy Department (DoE) its Terms of Reference (TOR) and Invitation to BID (ITB) for ancillary services.

Second, the NGCP's failure to publish and maintain on its website the ITB without prior DoE approval also counted as another violation.

Daily Tribune has reached out to NGCP for comment.

In 2021, DoE issued Department Circular No. DC2021-10-0031: "Prescribing the Policy for the Transparent and Efficient Procurement of Ancillary Services by the System Operator."

It required all ancillary services or reserves in the grid to undergo an open and competitive bidding process for transparency, competitiveness, and wide dissemination to qualified facilities.

"For energy security, it is crucial for NGCP to meet and maintain the required reserve levels," ERC said.

Section 7.4 of the policy requires NGCP, as System Operator, to seek DoE's approval of the TOR before publishing the ITB.

NGCP, in an explanation to ERC, admitted it did not comply with Section 7.4 since it is allegedly invalid.

The ERC issued a warning
that it may endorse the cancellation of NGCP's Certificate of Public Convenience and Necessity, and the revocation of its legislative franchise, if it incurs more violations.

NGCP holds a 25-year franchise to solely operate the power transmission assets of the government under the Republic Act 9511 signed in 2008.