Ancillary service costs lift July transmission rates

Power consumers may see slightly higher transmission charges in their July 2026 electricity bills after the cost of maintaining reserve power for the grid rose in June, the National Grid Corp. of the Philippines said.

The equivalent average transmission rate increased by 0.77% to PHP 1.4604 per kilowatt-hour during the June 2026 billing period from PHP 1.4492 per kWh in May.

The increase matters to households and businesses because transmission charges are passed through by distribution utilities and electric cooperatives to end users.

Higher reserve costs could add pressure to electricity bills even as NGCP’s own charge for transporting power through the grid declined.

Ancillary service rates rose by 10.18% to PHP 0.7955 per kWh in June from PHP 0.7220 per kWh in May.

Ancillary services refer to reserve power and other support services used to keep the electricity system stable when supply and demand suddenly become imbalanced.

These services include reserves for system frequency control, voltage support, and the restoration of the grid following major disruptions.

The Philippines integrated the trading of reserves into the Wholesale Electricity Spot Market on Jan. 26, 2024, allowing energy and reserve requirements to be scheduled through a co-optimized market. The Independent Electricity Market Operator of the Philippines operates the WESM and the Reserve Market.

NGCP said ancillary service charges are pass-through costs paid to generators that provide reserve capacity under bilateral contracts or through the Reserve Market.

The grid operator said it does not earn from changes in ancillary service prices.

Payments for contracted ancillary services are remitted directly to generation companies, while payments for reserves purchased from the market are remitted to IEMOP.

NGCP’s transmission wheeling rate, or the fee it collects for delivering electricity through the transmission network, declined to PHP 0.5058 per kWh in June from PHP 0.5607 per kWh in May.

Despite the reduction in the wheeling rate, NGCP said ancillary services continued to account for the bulk of the overall transmission rate.

“As the system operator, NGCP’s priority is to ensure the grid remains resilient during supply-demand imbalances. NGCP does not profit from AS charges, as these are remitted directly to the providers who help us maintain the continuous flow of electricity across the country,” NGCP said.

Ancillary services help the grid respond when a generating plant unexpectedly goes offline, electricity consumption changes abruptly, or other disruptions threaten the balance between available supply and demand.

The Energy Regulatory Commission defines ancillary services as support services necessary for transmitting electricity from power resources to consumers, including frequency regulation, contingency reserves, reactive power support, and black-start capability.

While reserve capacity protects consumers from wider outages, changes in its cost are reflected in electricity bills, linking grid reliability measures directly to household and business expenses.

Context on ancillary services and the Reserve Market was verified through official ERC and IEMOP materials.