ERC orders audit of NGCP performance

by Riza Olchondra, February 6, 2015
from Philippine Daily Inquirer

MANILA, Philippines–Regulators are looking into National Grid Corp. of the Philippines’ (NGCP) performance as a system operator (S.O.) under the Wholesale Electricity Spot Market rules for a competitive energy market.

In a resolution, the Energy Regulatory Commission (ERC) ordered  an independent  review of NGCP, its first as a system operator. While NGCP is the S.O., Philippine Electricity Market Corp. (PEMC) is the autonomous group market operator (AGMO).

“The S.O. review, which will be conducted by the PEM Audit Committee (PAC) through an independent third party reviewer, will be under the supervision of the Department of Energy and ERC,” the quasi-judicial body said in the terms of reference for the review.

ERC said that as an S.O., NGCP balances the supply and demand of electricity to efficiently serve all of its customers: power generators, private distribution utilities, electric cooperatives, government-owned utilities, eco-zones, industries as well as directly connected companies.
NGCP provides the central dispatch to all generation facilities and load connected, directly or indirectly, to the transmission system, according to the dispatch schedule submitted by the market operator.

PEMC, as the market operator, ensures the optimal dispatch of generation based on the submitted offers from generators, bids from customers and conditions of the grid from NGCP, from which a spot price for electricity throughout the grid is set. PEMC facilitates the settlement of financial accounts of the trading participants based on the same sources of information.

ERC noted that the PAC has conducted four independent audits on market operations from 2009 to 2013. The M.O. audit covered the WESM bid-to-bill operations. However, the operations of the S.O. were not included in the audit scope.

External auditors of the annual M.O. audit, regulators noted, have “consistently and strongly recommended” the conduct of an S.O.

NGCP is a private consortium that holds the 25-year concession to operate the country’s power transmission network. The Sy-led consortium is composed of State Grid Corp. of China (40 percent), One Taipan Holdings Corp. (30 percent) and Calaca High Power Corp. (30 percent).