Higher Ancillary Service Charges Drive Up February Power Bills

Electricity consumers in the Philippines will see increased transmission charges in their February 2025 power bills due to a 12% hike in Ancillary Service (AS) rates.

The charge has risen to PHP 0.6640 per kilowatt-hour (kWh) from PHP 0.5928 per kWh recorded in December 2024.

The National Grid Corporation of the Philippines (NGCP), which collects AS charges, clarified that it does not profit from these fees as they are pass-through costs remitted directly to power generators that provide grid stabilization services.

AS refers to essential support services, such as frequency regulation, spinning reserves, and voltage support, that help maintain grid stability and ensure a reliable power supply. These services are procured by the NGCP from the AS Reserve Market or through bilateral contracts with power generators.

NGCP stated that last month’s AS rate adjustment includes the first tranche of the 70% AS transaction from the Reserve Market, which was initially deferred by the Energy Regulatory Commission (ERC) in March 2024.

In addition to higher AS charges, transmission wheeling rates—fees collected by the NGCP for delivering electricity to distribution utilities—have also increased slightly to PHP 0.5422 per kWh, up from PHP 0.5315 per kWh in the previous billing cycle.

As a result, the total transmission charge for February 2025 stands at PHP 1.3504 per kWh, compared to PHP 1.2583 per kWh in December 2024.

NGCP emphasized that only 54 centavos of the overall transmission charge accounts for its service fees related to power delivery.

The majority of the increase is attributed to AS costs, which are directly remitted to power generators.

“Only 54 centavos of the overall transmission rate is charged by the National Grid Corporation of the Philippines 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 company said in a statement.

The rise in AS charges means a larger portion of consumer electricity bills will be allocated to transmission costs.

While NGCP is responsible for procuring AS, actual rates are influenced by market conditions, fuel costs, and demand fluctuations impacting power generators.