Aug. transmission rates up as cost of power reserves rises

Power consumers will have to pay higher transmission charges in their electricity bills this month, due to increased cost of power reserves, the National Grid Corp. of the Philippines (NGCP) said.

“The reason for the increase is mainly due to the increase on the AS (ancillary services) rates, particularly from the reserve market,” Julius Ryan D. Datingaling, head of business and regulatory development at NGCP, said at a briefing on Wednesday.

The overall rate for August, which will appear in September electricity bills, climbed by 7.09% to PHP 1.4171 per kilowatt-hour (kWh) from PHP 1.3233 per kWh in July.

AS charges, or power reserves deployed by grid operators to support the transmission of power and to maintain reliable operations, rose by 13.4% to PHP 0.6659 per kWh from PHP 0.5872 per kWh a month earlier.

Mr. Datingaling said the increase in AS rates was due to spot quantity, or the amount of reserve capacity traded in the reserve market.

“That was due to market forces because it’s market-driven, so the rules on supply and demand will apply,” NGCP Spokesperson Cynthia P. Alabanza said.

Meanwhile, transmission wheeling rate — or what NGCP charges for its primary service of delivering electricity — inched up by 0.8% to PHP 0.597 per kWh from PHP 0.5923 per kWh.

Other charges included universal charge, feed-in tariff allowance, and value-added tax on transmission and AS charges.

“NGCP does earn from AS and does not benefit from changes in AS prices,” the company said.

Transmission charges reflect the cost of delivering electricity from power generators to the distribution system. These charges usually account for around 9% of a consumer’s electricity bill.

Meanwhile, the grid operator said it has implemented the necessary preparations and precautions to minimize the impact of Tropical Depression Mirasol on transmission operations and facilities.

“Preparations include ensuring the reliability of communications equipment, availability of hardware materials and supplies necessary for the repair of damage to facilities, as well as the positioning of line crews in strategic areas to facilitate immediate restoration work,” NGCP said.

Through its Integrated Disaster Action Plan, the company outlined procedures to ensure the readiness of all power transmission facilities expected to be affected by weather disturbance.

Ms. Alabanza said that the company upgraded its facilities to withstand 300 kilometers per hour (kph) of wind speed, from old facilities that were only able to withstand 180 kph winds.

Tropical Depression Mirasol is forecasted to move northwestward within the next 12 hours while traversing northern Luzon. It was set to exit the Philippine Area of Responsibility on Thursday morning or afternoon.

The NGCP officially started operations as a power transmission service provider in 2009. Under a congressionally granted 50-year franchise, the company has the right to operate and maintain the transmission system and related facilities. — Sheldeen Joy Talavera