NGCP enforces ‘wheeling rates’ 

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Expect higher electricity bills

The wheeling rates charged by the National Grid Corporation of the Philippines (NGCP) to customers have increased by 7.22 percent and will be reflected in the December bill due for payment in January, the power grid operator said.

The wheeling rate is supposedly a set of just and reasonable prices, as approved by the energy regulator, which should be charged to independent power producers, retail energy suppliers, or to wheeling customers using the electric power grid for delivering energy to their customers. 

The National Grid’s primary service charges for delivering power increased to P0.5315 per kilowatt hour (kWh) in December 2024 from P0.4957 per kWh in November 2024, the company said in a press briefing yesterday.

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Its ancillary service (AS) rates, which form part of the wheeling rate for the billing period last December, also increased by 4 percent to P0.5928 per kWh from P0.5699 per kWh month-on-month.

The transmission grid provider’s ancillary service refers to the generating capacity available for dispatch to plug any contingency reserve requirements when a power generating unit trips or a transmission interconnection problem occurs.

National Grid told reporters during the briefing that 50 percent of its ancillary service requirements are covered by firm agreements, while the other 50 percent are under contract with the Ancillary Service Reserves Market. This is in line with directives from the Department of Energy and the Energy Regulatory Commission (ERC), it said. 

Ryan Datinggaling, NGCP head of revenue management department, said they are also expecting an increase in the cost of its ancillary service next month when the balance of uncollected charges from 2024 will fall due and collectible.

The regulatory commission suspended operations at the energy reserves market in March 2024 as it had been identified as a factor that drove power rates higher.

By May 2024, the industry regulator partially lifted the suspension order on the amounts that must be settled in the reserve market to give power-generating companies a chance to recover some of the costs for trading transactions amounting to P1.7 billion or 30 percent of the P5.7 billion total collectibles.

The balance of 70 percent will be charged to consumers next month, but National Grid said it has not yet received any notice from the Independent Electricity Market Operator of the Philippines on how this would actually be implemented as well as its impact on consumers.

“During NGCP’s next billing statement to be given to customers next month, we will see the collection of the 70 percent of AS charge that was not yet collected from the March 2024 billing period,” Datinggaling said.

“The collection will be staggered for Luzon and Mindanao in three months and for Visayas. This is within six months. We will see that the AS that was not collected last year will be on top of the current AS,” he added.

In a esperarte statement National Grid emphasized it is majority owned by Filipinos despite having Chinese equity participation.

The State Grid Corporation of China has a 40 percent stake in National Grid, while Filipino businessmen of Chinese descent Henry Sy Jr. and Robert Coyiuto Jr. hold 30 percent each of the remaining equity.

National Grid has been the subject of Congressional hearings regarding its ownership, and whether or not it is serving the interest of Filipinos or that of China.

“We have six Filipinos and four foreign board directors which is proportionate to their shares in investment …” Cynthia Alabanza, NGCP spokesperson, suring during the same briefing. 

“In the board, even if the chairman is a foreigner, it will still be a numbers game, meaning, the vote of the majority will win, and I must emphasize that there are six Filipino stockholders,” she added.

Despite having the Chinese board members, National Grid’s day-to-day operations are governed by Filipinos, the company said. Philippine law allows foreigners to serve as chairman of a local company as long as they serve only as presiding officers.

Such a scenario is also allowed not just in Philippine laws but also in National Grid’s contract and concession agreement with the government., Alabanza said.

The Chinese board members cannot assert control over the transmission system of the Philippines, she added.

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