Electricity transmission rates decrease in October — NGCP

Electricity consumers may see a reduction in their bills for October due to a decline in overall transmission charges, according to the National Grid Corporation of the Philippines (NGCP).

“There is a downward trend in the transmission rates, from PHP 1.22 per kilowatt-hour (kWh) to PHP 1.19 per kWh,” Julian Ryan Datingaling, NGCP’s head of revenue management department, said during a briefing on Thursday.

Mr. Datingaling said that ancillary services (AS) rates for the September supply period went down by 7.3% to PHP 0.5680 per kWh.

Ancillary services are deployed by grid operators to support the transmission of power from generators to consumers to maintain reliable operations. These are pass-through charges billed by the grid operator and remitted directly to generation companies.

The transmission wheeling rate, or what NGCP charges for its primary services of delivering power, climbed by 3.68% to P0.4936 per kWh, attributed to the decrease in electricity consumption in September.

“With a fixed revenue and a decrease in consumption, the tendency is an increase in the rates,” Mr. Datingaling said.

For Luzon, transmission charges went down by an estimated PHP 0.09 per kWh. Rates in the Visayas increased by PHP 0.29 per kWh, while rates in Mindanao declined by PHP 0.02 per kWh.

“For this month, more than 50% of our billing is for ancillary services, and that proportion is largely driven by market prices in the reserve market,” NGCP Spokesperson Cynthia P. Alabanza said.

The NGCP clarified that it does not earn from AS and did not benefit from the increase in prices as it is a pass-through cost and is collected for generation companies.

“Of the overall transmission charge, only 49 centavos is charged by NGCP for the delivery of its services to power consumers. This month’s transmission charge is comprised mainly of AS charges remitted directly to power generators providing ancillary services to the grid,” the grid operator said.

Transmission charges usually account for 3% of a monthly electricity bill.

Meanwhile, Ms. Alabanza said that the company is looking forward to the release of the decision from the Energy Regulatory Commission (ERC) regarding its rate reset process.

“NGCP is more than capable of pursuing all its transmission projects, but we do need to have our reset issued and our applications acted on,” Ms. Alabanza said.

“It is very critical for us to have a fair recovery mechanism and completion of the reset process to ensure what level of capex (capital expenditure) we can spend,” she added.

The rate reset process is usually a “forward-looking” exercise that requires the regulated entity to submit forecast expenditures and proposed projects over a five-year regulatory period.

NGCP’s rate reset process accounts for the fourth regulatory period, which covers the years 2016 to 2020 and includes the lapsed period of two years.

ERC Commissioner Catherine P. Maceda told a Senate budget hearing on Wednesday that the commission was preparing to publish the final draft determination within the month. — Sheldeen Joy Talavera