Electricity consumers will see a slight increase in the transmission component of their July power bills, as higher reserve power costs offset lower grid delivery charges, with ancillary services (AS) continuing to account for the largest share of transmission rates.

The National Grid Corp. of the Philippines (NGCP) reported on Wednesday that the equivalent average transmission rate in June, which distribution utilities and electric cooperatives will bill this July, rose 0.77 percent to P1.4604 per kilowatt-hour (kWh) from P1.4492 per kWh in May.

The increase came as AS rates, or the cost of reserve power tapped to stabilize the grid during supply-demand imbalances, climbed 10.18 percent to P0.7955 per kWh from P0.7220 per kWh in the previous month.

This more than offset the decline in NGCP's transmission wheeling rate, or the fee for transporting electricity through the transmission network, which fell to P0.5058 per kWh from P0.5607 per kWh.

"As the system operator, NGCP's priority is to ensure the grid remains resilient during supply-demand imbalances. NGCP does not profit from AS charges, as these are remitted directly to the providers who help us maintain the continuous flow of electricity across the country," the grid operator said.

NGCP Head of Revenue Management Julius Ryan Datinggaling said movements in AS rates are driven by two factors: reserve power costs and electricity consumption. The factor with the larger percentage change determines whether rates move higher or lower.

He said both reserve power costs and electricity demand increased across Luzon, Visayas, and Mindanao during the billing period.

In Luzon and Mindanao, reserve power costs rose faster than electricity consumption, resulting in higher ancillary service rates. In the Visayas, however, electricity demand increased more than reserve power costs, tempering the impact and leading to a lower ancillary service rate for the grid.

Meanwhile, NGCP spokesperson Cynthia Alabanza said the higher AS charges were largely driven by conditions in the power generation sector rather than transmission operations.

"It's really generation driven," Alabanza said.

She explained that NGCP sources ancillary services from the same power plants that supply electricity to the grid. When these facilities undergo planned or unplanned outages, the availability of reserve power is likewise affected, limiting the grid operator's supply options.

“So on NGCP's part, because our reserve supply also depends on power plants that sometimes undergo unplanned maintenance shutdowns, we have no alternative sources to draw from," she said.

Alabanza added that NGCP's role is to monitor grid conditions and ensure adequate reserves are available to maintain the reliability and stability of the country's power system.