NGCP explains higher transmission charges

The National Grid Corporation of the Philippines (NGCP) on Thursday explained that the increase in transmission charges for this month is due to higher ancillary services (AS) rates, which it does not earn from.

According to the NGCP, AS rates increased by 125.9% to P0.6127 per kilowatt-hour (/kWh) in August from P0.2712/kWh in July.

This covers the AS sourced from the reserve market which resumed on August 5, 2024 after the Energy Regulatory Corp. (ERC) in May ordered the partial lifting of the suspension on settlement amounts in the AS-RM and approved the 30% partial settlement for March 2024 to offset the spike in charges.

However, this does not include the settlement of the remaining 70% AS cost for the March 2024 billing period.

The AS rates brought transmission rates higher, which in turn brought the overall electricity rate of Manila Electric Company (Meralco) up by P0.1543/kWh to P11.7882/kWh in September from P11.6339/kWh in August.

“NGCP clarifies that while consumers may notice an increase in transmission charges, this is a result of the resumption of the AS Reserve Market,” the NGCP said in a statement.

“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,” it added.

In the same statement, the NGCP said it does not earn from AS and did not benefit from the increase in prices, as this is a pass-through cost and that generating companies benefited from the increase.

“AS are support services used to balance and stabilize the grid during power supply-demand imbalance,” the NGCP said. --VAL, GMA Integrated News