The National Grid Corporation of the Philippines (NGCP) has adopted a revised billing methodology that encourages consumers to use electricity more efficiently and save on costly transmission charges, the Energy Regulatory Commission (ERC) said on Thursday.
The revision takes effect beginning the May to June 2023 billing cycle.
According to the ERC, it issued an order dated 24 May this year ensuring the NGCP observes the shift to the so-called system peak demand or SPD methodology from the non-coincident peak demand (NCPD) methodology at present in determining the appropriate transmission rate.
Under SPD, users are charged based on their actual impact on the grid during periods of peak demand compared to the NCPD methodology where users are charged based on the collective highest demand of all grid users, regardless of their individual consumption.
Commercial and industrial consumers now have a direct incentive to time their electricity use and save on transmission costs by shifting their time-of-use outside of the system’s peak demand so as to significantly reduce their transmission cost, the ERC said.
It also said the distribution utilities may also encourage customers similarly to time their use of electricity to realize savings from the SPD methodology.
The ERC said the SPD as billing determinant also facilitates the integration of renewable energy resources into the grid as there will be a “clearer understanding” of the peak demand period to allow transmission customers to optimize the use of renewable energy and in effect, increase reliability of electricity supply while reducing reliance on fossil fuel-based power generation.
It also said the SPD helps optimize the efficiency of the grid by reducing the burden on the system during peak hours and effectively lighten the need for capital investments in grid capacity upgrades.
In a separate development, the ERC told NGCP to show cause and explain why it should not be penalized for the delay, non-completion and failure to start 37 approved transmission projects.
In an order dated June 14 but issued on July 4, the ERC ordered the business to explain the delay in pursuing 37 projects in which 26 remain uncompleted and three have yet to start.
According to the ERC, the delays average 820 days ranging from 21 to 2,561 days.
NGCP was given 15 days to submit a verified explanation.
