The National Grid Corporation of the Philippines (NGCP) on Thursday said consumers can look forward to lower overall transmission charges in electricity bills this month no matter the slight increase in the transmission wheeling rate, a key component of the NGCP’s services.
In a statement, the NGCP clarified that while the transmission wheeling rate saw a minor uptick, ancillary service (AS) rates in the September 2024 billing period decreased significantly, dropping to only P0.5680 per kilowatt hour (kWh) from P0.6127 per kWh in July 2024. The reduction in AS charges is pivotal as it reflects the costs associated with the reserve market and agreements with power providers.
Ancillary services are crucial for maintaining grid stability, providing the necessary generating capacity to address unexpected disruptions, such as power unit failures or transmission issues. NGCP noted that of the overall transmission charge, only 49 centavos is retained for the delivery of services to consumers, emphasizing that the bulk of the charge consists of payments to power generators supplying ancillary services.
Importantly, NGCP said it does not profit from AS charges, categorizing them as pass-through costs. This means that any fluctuations in AS rates directly affect power generators rather than NGCP’s bottom line.
This announcement follows a broader trend in the Philippine energy sector, where discussions about transmission costs and electricity pricing have been prominent. Recent articles have underscored ongoing concerns about power rates amid rising energy demands and the effects of market volatility on consumers.
Energy analysts have pointed to the importance of ancillary services in the context of increasing renewable energy sources, which can introduce variability to power generation. As the Philippines continues to expand its renewable energy capacity, the role of reliable ancillary services will be crucial to ensuring grid reliability and preventing power outages.
NGCP’s proactive communication about changes in transmission charges underscores its commitment to transparency and consumer awareness, providing essential information as the energy landscape in the Philippines evolves.
As consumers receive their updated bills this month, the reduction in overall transmission charges may offer some relief amid the challenges of fluctuating energy prices.
