The National Grid Corporation of the Philippines (NGCP) clarified that due to higher Ancillary Services (AS) rates stemming from the resumption of the AS Reserve Market (AS-RM), consumers can expect an increase in transmission charges in their September 2024 power bills.
Transmission wheeling rates, or what NGCP charges for its primary service of delivering power, has gone down by 5.5%, from PhP 0.5038/kilowatt-hour (kWh) in July 2024 to PhP 0.4761/kwh in August 2024.
AS rates for the August 2024 billing period increased by 125.92%, with PhP 0.6127/kWh compared to PhP 0.2712/kwh in July 2024. This cost pertains to the AS sourced from the AS-RM, which resumed on 05 August 2024, and does not include the settlement of the remaining 70% AS cost for the March 2024 billing period.
On 09 May 2024, ERC ordered the partial lifting of the suspension on settlement amounts in the AS RM and approved the 30% Partial Settlement for March 2024 Billing Period to mask the spike in AS charge.
“NGCP clarifies that while consumers may notice an increase in transmission charges, this is a result of the resumption of the AS Reserve Market. In compliance with directives from the Department of Energy and the Energy Regulatory Commission, NGCP contracts 50% of its AS requirement from firm agreements and 50% from the AS Reserve Market,” stated the company.
NGCP does not earn from AS and did not benefit from the increase in prices. The AS cost is a pass-through cost, and generating companies benefitted from this increase. AS are support services used to balance and stabilize the grid during power supply-demand imbalance.
