NGCP warns hike in power bill cost

Tabuk City, Kalinga―The National Grid Corporation of the Philippines (NGCP) warns an increase in electricity rates as the Department of Energy’s (DOE) proposed strategy of 100% firm contracting for ancillary services (AS) prevail.

This is following the demand of DOE on the dispatch of ancillary services or to aid grid operators to maintain a reliable electricity system. This is also seen as a response to thin operating margins and possible load dropping in the Luzon grid at various points this year due to multiple power plants on extended outage.

DOE Circular No. DC2019-12-0018 mandates the NGCP, to buy ancillary services through firm contracts, to ensure that the power plants contracted are always available whenever needed by the system for reliability of the grid.

However, the power transmission operator has repeatedly clarified that ancillary services are not meant to replace base load plants or for any long-term or continuous use.

Instead, ancillary services are a stop-gap measure, dispatched only to stabilize and balance the grid in cases of power supply and demand imbalance.

Based on the initial simulations of NGCP, it shows that power rates can see an upsurge of PhP0.64 per kilowatt hour for Luzon, PhP0.54 pesos per kilowatt hour for Visayas, and PhP1.39 pesos per kilowatt hour for Mindanao.

For a household consuming 200kwh, this would mean an additional PhP128 in electric bills of consumers from Luzon, PhP108 for those in Visayas, and PhP278 for those in Mindanao.

“NGCP does not deny its obligation to secure sufficient AS. This obligation is clear. We only ask that this be thoroughly studied, and the price impact be given primary consideration. With consumers already reeling from the economic effects of the pandemic, industry leaders should think before pushing a procurement strategy that can be, at best, described as anti-poor, and at worst, basis for charges of plunder,” the company stressed.

Meantime, NGCP hopes that the Energy Regulatory Commission (ERC) should consulted and given the opportunity to review the policy and study its full impact on the consumers.

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