THE ENERGY REGULATORY Commission provisionally approved the Ancillary Services Procurement Agreement between SN Aboitiz Power-Benguet and the National Grid Corporation of the Philippines.

In a decision dated May 31, 2010, the commission “finds that the provisional implementation of the Ancillary Services Procurement Agreement will redound to the benefit of all consumers of National Grid Corporation in Luzon in terms of continuous, reliable and efficient power supply.”

SN Aboitiz Power-Benguet Chief Executive Officer Emmanuel V. Rubio said they “welcome the development and are very keen to provide the services necessary to maintain power quality, reliability and security of the grid.”

Ancillary services are those capacity and energy needed to maintain a stable and reliable operation of the interconnected transmission system. Among the ancillary services approved are the fast start capability of a generating unit to provide additional energy to system demand changes, capability to provide reserve capacity necessary to immediately respond to generating units or transmission line failures and the ability to inject or absorb reactive power from the grid to maintain standard voltage levels.

As part of the qualification process, the power firm - which owns and operates the 100 megawatt Binga hydropower plant in Itogon - was tested and determined by the National Grid Corporation as capable of providing the said services.

In approving the ASPA, the commission noted that a significant portion of ancillary services were provided by the National Power Corporation, whose power plants have since been privatized under the Electric Power Industry Reform Act. Generators other than National Power capable of providing ancillary services are necessary to augment the deficiency and meet the required level.

Binga as a merchant plant trades the generated power at the Wholesale Electricity Spot Market. It was privatized through a bidding process as a package with the decommissioned Ambuklao hydro plant in November 2007 and was turned over to SN Aboitiz Power-Benguet in July 2008. SN Aboitiz Power-Benguet is a joint venture of Aboitiz Power and SN Power which submitted the highest offer of USD $325 million for the plants. –rhoda santos