Reserve market costs lift August transmission rates

Electricity users faced higher transmission charges in August as Ancillary Services (AS) costs from the reserve market drove overall rates upward, the National Grid Corp. of the Philippines (NGCP) said.

The operator reported Wednesday that the average transmission rate for the August billing period rose 7.09 percent to P1.4171 per kilowatt-hour (kWh), from P1.3233/kWh in July.

The increase was mainly traced to AS charges, which went up by P0.0787/kWh to P0.6659/kWh in August from P0.5872/kWh the previous month.

In contrast, NGCP’s transmission wheeling rate—the fee for delivering electricity through its grid—barely moved, inching up by just P0.0047/kWh to P0.5970/kWh in August from P0.5923/kWh in July.

NGCP explained that reserve market costs climbed due to higher spot quantities and rising prices, with oil-based power plants contributing to the adjustment. These movements, it noted, are dictated by market forces. While there are months when rates ease, the broader trend points upward as demand continues to grow faster than new supply entering the system.

The NGCP also clarified that it does not earn from AS rates, which are passed on to consumers.

“NGCP does not earn from AS and does not benefit from changes in AS prices,” the grid operator said.

Payments for AS go directly to generating companies with bilateral contracts with NGCP, or to the Independent Electricity Market Operator of the Philippines for those sourced from the Reserve Market.

“For August 2025, NGCP charges only about P0.5970/kWh for its transmission service, while Ancillary Services remain the biggest component of transmission-related costs,” it added.