Ancillary rates seen increasing P0.10 per kWh
By Alena Mae S. Flores – May 16, 2024, 8:00 pm
from manilastandard.net
Grid operator National Grid Corp. of the Philippines expects an average increase of more than P0.10 per kilowatt-hour (kWh) in the ancillary charges of consumers in the June billing following the Energy Regulatory Commission’s decision to allow the recovery of partial costs in the reserve market.
The Energy Regulatory Commission (ERC) recently ordered the partial lifting of the suspension on settlement amounts in the reserve market to allow power generators to partially recover costs for trading transactions for the March billing month amounting to P1.7 billion.
NGCP revenue management department head Ryan Datinggaling said the P0.10 per kWh computation, which is expected to be passed on to consumers in the June billing, is only an estimate covering 30 percent of the transactions in March.
He also said the anticipated increase in ancillary charges differ per grid. The P0.10 per kWh increase is lower than the previous estimates of around P0.20 to P0.60 per kWh.
Power retailer Manila Electric Co., the country’s biggest power distributor, has yet to determine the actual rate impact of the reserve market cost recovery.
“Following the ERC’s order on the partial lifting of the suspension on settlement amounts in the Reserve Market, the NGCP can start recovering costs for trading transactions made in the Reserve Market. While we have yet to determine the actual rate impact, this will be reflected in the ancillary services component of the transmission charge in the June bills,” Meralco spokesperson Joe Zaldarriaga said.
“For the overall adjustment, we still have to consider the movement on the generation charge which is still the single biggest rate component,” he said.
The ERC issued an order for Case No. 2023-002 RC, promulgated on May 9, 2024 allowing the settlement of 30 percent of the amounts for payment for trading transactions made in the Wholesale Electricity Spot Market’s Reserve Market for the March 2024 billing month.
The decision was made to ensure continuous operations of power generators providing reserves in the system following the suspension order issued on March 25, 2024.
“The ERC always needs to strike a balance in performing its mandate to ensure the reliability and security of the power system through the continuous operations of the generators and protecting the consuming public,” the agency said in a statement.
The ERC said it is still evaluating the submissions of Independent Electricity Market Operator of the Philippines Inc. (IEMOP), operator of the WESM for the review of the price determination methodology (PDM).
The ERC directed the PEMC, as the governing body of the WESM and IEMOP to suspend the implementation of Section 8 on Billing and Settlement of the PDM in the Reserve Market starting the March 2024 billing period, until the commission finalizes its evaluation of the PDM.
This developed after IEMOP reported significant price increases in reserve costs for March 2024 compared to February 2024, which would impact the total price of electricity charged to the public.
