The Department of Energy (DOE) on Monday issued advisories detailing responsibilities of electric power industry participants in providing secure, reliable and stable power supply this year amid the threat of El Niño.
This developed as the DOE is calling for comments on a draft circular that aims to implement a causer pays mechanism (CPM) which penalizes sectors in the power system that cause the need to utilize ancillary services (AS).
The DOE said in an advisory the National Grid Corporation of the Philippines (NGCP) must ensure the integrity and reliability of the power grid at all times by averting grid interruption and disturbances.
Generation companies are expected to comply with DOE’s approved Grid Operating and Maintenance Program for the year and to strictly observe outage allowances.
Distribution utilities are tasked to ensure continuous operations of its systems.
The Energy Regulatory Commission is expected to facilitate timely issuance of all provisional authority to operate and certificates of compliance to ensure the continued operations of existing generation facilities and enable the entry of additional capacity from new ones.
The issuance said the National Electrification Administration will formulate mechanisms to capacitate electric cooperatives’ readiness in addressing the expected effects of El Niño while the Independent Electricity Market Operator of the Philippines will facilitate the timely registration of new generation facilities in the Wholesale Electricity Spot Market.
In a separate issuance, the DOE also directed all distribution utilities in the country to implement interruptible load program (ILP).
Under ILP, customers with large electricity consumption are encouraged to run their own generator sets whenever supply of electricity in the grid is short in exchange for monetary incentives.
The fuel they will use in running their own power source are then paid by consumers.
Meanwhile, the DOE said the proposed CPM will save consumers from shouldering all the additional fees brought about by the use of AS.
AS are services needed to maintain balance in the power system to ensure normal frequency and voltage levels in response to demand changes, variability of renewable energy and possible loss of a large generating unit.
Under the draft, CPM will allow for the equitable recovery of the cost from wholesale electricity spot market (WESM) members that required or caused the use of such AS.
The CPM will be applied to generation companies, NGCP as transmission network service provider as well as power customers.
“It is a policy aiming to have a sharing of cost of reserve between generators and consumers, considering that reliability is affected by changes in supply and demand. Further to this, the policy is also designed to impose appropriate AS cost to generators who cause the dispatch of contingency and dispatchable reserves,” said Luningning Baltazar, DOE assistant director of the Electric Power Industry Management Bureau, in a statement.
“Those generators which are frequently on outage will have a higher share of AS cost as determined based on the formula for reserve responsibility sharing,” Baltazar added.
The DOE is accepting comments for the said draft circular until April 25.
