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Higher ancillary charges loom in February

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Consumers will face higher ancillary charges in their February power bill after the Energy Regulatory Commission (ERC) approved the collection of P3.05 billion from consumers covering 70 percent of the uncollected payments in the ancillary reserve market.

“Next month, we will see the charging of 70 percent of the AS charge that was not collected by the generator from March 2024 billing period, will now be collected from Luzon, Visayas, and Mindanao. For Luzon, Mindanao will be three months, and for Visayas this is within six months,” NGCP spokesperson Cynthia Perez-Alabanza said.

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The ERC earlier said the amount would be collected by NGCP over three months for trading participants in the Luzon and Mindanao Wholesale Electricity Spot Market (WESM) and six months for those in the Visayas.

It said the corresponding rate impact would be P0.124 per kilowatt-hour for Luzon and Visayas consumers, while Mindanao would have a lower rate impact of P0.033 per kWh.

“There is no estimate yet, we are still waiting for the computation of IEMOP [Independent Electricity Market Operator of the Philippines] or the amount to be billed by the IEMOP, but we have not yet received a billing statement from IEMOP to compute for that rate impact,” Alabanza said.

Alabanza said, however, NGCP ancillary charges account for only 5.19 percent, while transmission accounts for 3.02 percent of the total bill.

Reserves, commonly referred to as ancillary services, are services needed to maintain balance in the power system to ensure normal frequency and voltage levels in response to demand changes, variability of renewable energy and possible loss of a large generating unit.

The expected rate adjustment per distribution utility or electric cooperative is expected to vary. Manila Electric Co. estimates an increase of P0.40 per kWh.

The ERC said the collection of the 70 percent recalculated reserve trading amounts (RTAs) would start in the January billing period.

The decision came following the commission’s deliberation of the submission made by IEMOP of the recalculation of RTAs for the billing months of February and March 2024.

The ERC suspended the implementation of the billing and settlement in the co-optimized energy and reserve in the Wholesale Electricity Spot Market on March 26, 2024 due to concerns on the implementation of the Price Determination Methodology (PDM) provisionally approved by the commission.

The initial amount submitted by the NGCP for billing and collection was more than P9.1 billion. After the suspension and upon further review, IEMOP recalculated the amounts due for February and March 2024.

The commission then allowed the collection of 30 percent of the amount on May 9, 2024.

The ERC then lifted on July 26, 2024 the suspension and allowed the resumption of full operations of trading of reserves in the WESM for contracted and merchant plants.

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