Higher ancillary costs lift August power transmission rates

By Francis Allan L. Angelo

MANILA — Electricity consumers served by private distribution utilities and electric cooperatives may see higher transmission charges in their August 2026 bills after ancillary service rates jumped 30.85% in the July billing period, the National Grid Corp. of the Philippines said.

Ancillary service rates increased to PHP 1.0391 per kilowatt-hour in July from PHP 0.7941 per kWh in June.

The increase matters to households and businesses because ancillary service costs are passed through to electricity customers as part of transmission charges, adding pressure to power bills even though NGCP said it does not earn from these payments.

Ancillary services provide reserve power and other support needed to maintain grid stability when electricity supply and demand become imbalanced or when unexpected outages and system disturbances occur.

NGCP said ancillary service payments are remitted directly to generation companies that have bilateral contracts with the grid operator and to the Independent Electricity Market Operator of the Philippines for reserves procured through the Reserve Market.

“As System Operator, NGCP’s responsibility is to ensure grid stability and reliability, especially during periods of supply-demand imbalance. NGCP does not earn from Ancillary Service charges. These payments are remitted to the service providers that supply the reserves needed to keep the power system secure and reliable,” NGCP said.

NGCP’s transmission wheeling rate, or the fee charged for delivering electricity through the transmission grid, also increased slightly in July.

The wheeling rate rose to PHP 0.5436 per kWh from PHP 0.5044 per kWh in June.

The combined movements pushed the equivalent average transmission rate charged to distribution utilities and electric cooperatives to PHP 1.7560 per kWh for the July 2026 billing period.

The July rate was 22.22% higher than the PHP 1.4367 per kWh recorded in June.

Distribution utilities and electric cooperatives will reflect the July transmission charges in electricity bills issued to consumers in August.

NGCP said the bulk of the overall transmission rate continues to come from ancillary service charges rather than its own transmission wheeling fee.

Under the Philippine power system, ancillary services are necessary to support electricity transmission and maintain grid security through operating reserves, voltage support and other services that help the system respond to sudden changes in supply or demand.

The Energy Regulatory Commission oversees the regulatory framework governing ancillary service procurement and other transmission-related charges, while the Reserve Market provides another mechanism for procuring reserves needed by the grid.

For consumers, movements in ancillary service prices can affect monthly electricity costs because transmission charges are among the pass-through components collected by distribution utilities and electric cooperatives.

The increase therefore highlights the trade-off between maintaining adequate reserves for a reliable power grid and controlling electricity costs for households and businesses already exposed to changes in generation, transmission and other regulated charges.