Ancillary Services drive rise in August transmission charges

By Francis Allan L. Angelo

Transmission rates increased in August 2025 due to higher Ancillary Services (AS) costs, according to the National Grid Corporation of the Philippines (NGCP).

The overall equivalent average transmission rate climbed by 7.09% to PHP 1.4171/kWh, up from July’s PHP 1.3233/kWh.

In a statement, NGCP reported that AS charges rose by PHP 0.0787/kWh, from PHP 0.5872/kWh in July to PHP 0.6659/kWh in August.

Ancillary Services are support functions needed to maintain grid reliability and stability, especially during imbalances between supply and demand.

AS include frequency regulation, operating reserves, and voltage support, which help prevent power interruptions and blackouts.

These services are contracted from power generation companies or procured through the Reserve Market managed by the Independent Electricity Market Operator of the Philippines (IEMOP).

NGCP clarified that AS charges are pass-through costs and that the grid operator does not earn from changes in AS prices.

“For August 2025, NGCP charges only about PHP 0.5970/kWh for its transmission service, while Ancillary Services remain the biggest component of transmission-related costs,” the company said.

NGCP’s transmission wheeling rate—the fee for transporting electricity through its network—increased only slightly by PHP 0.0047/kWh, from PHP 0.5923/kWh to PHP 0.5970/kWh.

The spike in AS rates came amid a series of Yellow Alert Status advisories between August 1 and 6, which strained electricity supply in the Visayas.

Yellow Alerts are issued when the available supply falls below the capacity of the largest generating unit, signaling a risk of inadequate reserves.

“This means if the supply is thin, the cost of power in the spot market increases,” said Niel Parcon, MORE Power Vice President for Corporate Energy Sourcing and Regulatory Affairs.

“Unfortunately last month, starting August 1, nagsaka ang presyo sang aton nga kuryente, which is the result sang pagkulang sang supply sang aton sa market sa bilog nga Pilipinas,” Parcon added.

“Actually indi lang ni sa Visayas, indi lang ni sa bilog nga Iloilo City, bilog ini nga Pilipinas, unfortunately ang hard hit ang Visayas and kapin pa sa Panay kay ara kita sa tail end sang transmission line network sang NGCP,” he said.

Due to thin reserves in the Visayas, the grid had to pull power from Luzon, Negros, and Mindanao to stabilize supply in Panay Island.

NGCP reported that supply reached 2,528 megawatts while demand peaked at 2,475 megawatts, leaving only a critical 53-megawatt margin.

The Department of Energy confirmed that 14 power plants, including coal-fired generators, went offline during the period, contributing to the shortage.

“Ginahambal ta nga tungod sina, nagsaka ang presyo sang kuryente kay ti syempre nagkulang na,” Parcon said.

“Suppliers market, and tanan nga naga-bid sa aton nga merkado nagapataas-taas na presyo kay ti bal-an nila kulang,” he continued.

“So typical, amu na sa law of supply and demand scenario, very different na sya sa previous months nga tama man kadako sang aton nga supply,” he said.

MORE Power, Iloilo City’s distribution utility, said it is exploring long-term solutions such as building its own power generation facilities.

Parcon assured the public that MORE Power is closely monitoring market developments to keep rates in Panay as low as possible.

He said electricity prices are expected to stabilize in the coming billing cycles once supply conditions improve.