Understanding the cost of power: A closer look at NGCP’s charges on your electricity bill

Power consumers in the Philippines are enjoying affordable electricity rates, with an estimated cost of only P0.04 for every peso spent on the transmission charge, according to the National Grid Corp. of the Philippines (NGCP), the country’s transmission network operator.

This estimate is based on the April average residential bills of major distribution utilities nationwide.

The transmission charge, which typically constitutes around 5 percent of the total electricity bill, encompasses the expenses associated with delivering and balancing high-voltage electricity from the generators to the distribution utilities.

Within this charge, approximately 1.64 percent is allocated to ancillary services, which are essential support services for maintaining transmission capacity and energy sustainability. NGCP collects this pass-through charge and directly remits it to the ancillary service providers.

The remaining 3.4 percent of the transmission charge encompasses various components, including the power delivery service charge, system operator charge, metering service provider charges, and connection and residual sub-transmission charges. These components contribute to the efficient and reliable operation of the transmission network.

Apart from the transmission charge, other significant factors in the electricity bill include the generation charge, which constitutes the bulk of consumers’ expenses and is paid to power generation suppliers.

The distribution charge, paid to distribution utilities such as Manila Electric Co., follows as the next major item.

Additionally, government taxes account for 10.61 percent, system loss represents 5 percent, the universal charge amounts to 2.12 percent, and subsidies make up 0.51 percent of the total bill.

NGCP’s takeover of the transmission network operations from the government has yielded positive results. The transmission charge has been decreasing, providing consumers with more affordable rates.

Furthermore, NGCP has made remarkable progress in reducing transmission outages by 77 percent. This achievement has resulted in a more stable transmission frequency and voltage, benefiting numerous communities, offices, schools, and homes throughout the country.

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