Expect higher power cost in next bill

CEBU, Philippines — Visayan Electric (VECO) residential customers will see a P0.95 increase per kilowatt-hour (kWh) in their electricity rates for the September to October billing month.

VECO said the rate adjustment raises the residential rate to P13.52 per kWh.

It also means that for  a household consuming an average of 200 kWh per month, this translates to an additional P190 on their electricity bill.

The increase is driven by higher transmission charges from the National Grid Corporation of the Philippines (NGCP) and the final installment of deferred payments for power purchases made through the Wholesale Electricity Spot Market (WESM) last May,  VECO said, in a statement.

The rise in NGCP transmission charges is primarily due to the resumption of the Ancillary Services-Reserve Market (AS-RM). Ancillary Services provide backup power from qualified generating plants, ensuring a stable and reliable electricity supply.

Although we have to pay more for NGCP s ancillary services, it is essential for maintaining grid stability and preventing power shortages and eventual power outages,  said Visayan Electric President and Chief Operating Officer Raul C. Lucero.

Despite the recent hike, Lucero remains optimistic about future reductions in electricity rates.

He pointed out that cooler weather and the completion of deferred WESM payments this month could ease rates in the near future.

The NGCP, in a separate statement, corroborated what Lucero said, saying consumers can expect an increase in transmission charges in their September 2024 power bills due to higher AS rates, which stems from the resumption of the AS-RM.

Transmission wheeling rates, or what NGCP charges for its primary service of delivering power, has gone down by 5.5%, from P0.5038/kilowatt-hour (kWh) in July 2024 to P 0.4761/kwh in August 2024.

But, NGCP said, AS rates for the August 2024 billing period increased by 125.92%, or to P0.6127/kWh compared to P0.2712/kwh in July 2024.

This cost pertains to the AS sourced from the AS-RM, which resumed on August 5, 2024, and does not include the settlement of the remaining 70% AS cost for the March 2024 billing period.

To recall, on May 9, 2024, the Energy Regulatory Commission (ERC) ordered the partial lifting of the suspension on settlement amounts in the AS-RM and approved the 30% partial settlement for March 2024 billing period to mask the spike in AS charge.

NGCP clarifies that while consumers may notice an increase in transmission charges, this is a result of the resumption of the AS Reserve Market. In compliance with directives from the Department of Energy and the Energy Regulatory Commission, NGCP contracts 50% of its AS requirement from firm agreements and 50% from the AS Reserve Market,  stated the company.

It added that NGCP does not earn from AS and did not benefit from the increase in prices.

It further explained that AS cost is a pass-through cost, and generating companies benefitted from this increase, as well as the  support services used to balance and stabilize the grid during power supply-demand imbalance . (CEBU NEWS)