THE higher transmission charges that triggered an increase in Manila Electric Co.’s (Meralco) power rates for this month were caused by ancillary service (AS) costs, National Grid Corp. of the Philippines (NGCP) said on Thursday.
“NGCP clarifies that while consumers may notice an increase in transmission charges, this is a result of the resumption of the AS reserve market,” assistant vice president Cynthia Perez-Alabanza said.
AS rates for the August 2024 billing period rose to P0.6127 per kilowatt-hour (kWh) from P0.2712/kWh in July, the company said, adding that these covered AS from the reserve market, which resumed operations on August 5 after regulators partially lifted a suspension order in May.
The Energy Regulatory Commission (ERC) suspended reserve market billing and settlement in March after significant price increases in power costs for the month compared to February.
In May, it ordered the settlement of 30 percent of the amounts due to allow generating firms to partially recover costs and lifted the suspension fully in July.
Not included in the AS rates behind the higher transmission charges is the remaining 70 percent for March.
“In compliance with directives from the Department of Energy and the ERC, NGCP contracts 50 percent of its AS requirement from firm agreements and 50 percent from the AS reserve market,” Alabanza said.
Meralco on Wednesday announced a P0.1543/kWh rate hike for September that brought the overall rate for a typical household to P11.7882/kWh from P11.6339 in August.
NGCP said that it does not earn from AS and thus would not benefit from higher prices.
“The AS cost is a pass-through cost, and generating companies benefited from this increase. AS are support services used to balance and stabilize the grid during power supply-demand imbalance,” Alabanza said.
NGCP also said that its transmission wheeling rates, or what it normally charges for the primary service of delivering power, actually went down to P0.4761/kWh in August from P0.5038 in July.
For the remaining 70 percent of amounts to be settled for the March billing period, the company said that it is still awaiting a recalculation by the Independent Electricity Market Operator of the Philippines Inc.
In another development, Alabanza said that NGCP expects to fully energize the 230-kiloVolt Cebu-Bohol interconnection project in the next few weeks.
“We do have plenty of projects on the pipeline, but within the year, we can announce the full completion of Cebu-Bohol,” she added.
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