Stronger transmission for a stronger nation.

News Release 16 November 2012

For media inquiries, please contact: Atty. Cynthia P. Alabanza, Spokesperson/Adviser for External Affairs (cpalabanza@ngcp.ph/09175707884) E-mail: corpcomm@ngcp.ph / Twitter: @NGCP_ALERT / Facebook: www.facebook.com/1NGCP

NGCP clarifies nature of transmission and ancillary services charges System operator and transmission service provider National Grid Corporation of the Philippines (NGCP) clarified that there has been no increase in transmission charges amidst reports that there will be an NGCP rate hike this November. NGCPs annual maximum allowable revenue (MAR), which is billed in the form of transmission rates, is being fixed and approved by the Energy Regulatory Commission (ERC) on a yearly basis, Spokesperson and Adviser for External Affairs Atty. Cynthia P. Alabanza explained. Alabanza put in context reports that the higher cost of electricity is caused in part by higher transmission charges, particularly ancillary services costs incurred by NGCP from generators. NGCPs transmission charges are for Power Delivery Service, System Operations, and Metering Services which recover, respectively, the cost of conveying electricity to or from the grid, the cost of SO services like communications and SCADA, and the cost metering facilities including software and hardware. Ancillary Service (AS) charges, on the other hand, are pass-through charges that are not part of NGCPs revenues. Please note that the 39% increase in AS rates in Luzon (the comparison being made between September 2012 and October 2012 billing periods) is due to the increase in the market clearing prices for this type of service, which is a factor beyond our control, Alabanza added. AS, however, does not form part of NGCPs approved transmission rate as it forms part of the revenue of the generators that provide the AS service. She clarified that, NGCP does not earn profits from the provision of ancillary services. While it is NGCP who bills and collects ancillary services charges from end-users, as provisionally approved by the ERC, it remits the collection for ancillary services directly and entirely to the generators, from which these ancillary services are taken. NGCP earns nothing from this. NGCP, a privately owned company, continues to perform its mandate as transmission service provider with the full awareness of its nature as a public utility with attendant responsibilities to the public, and in full compliance with the rules and regulations of the regulator, and existing laws governing its operations. ###
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