DOE warns of possible rise in power rates in August

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SUNDAY, 17 JUNE 2012 20:45 PAUL ANTHONY A. ISLA / REPORTER

CONSUMERS could expect power rates to increase in August due to a scheduled nine-day maintenance shutdown of the Malampaya platform in July, the Department of Energy (DOE) warned.

Energy Secretary Jose Rene Almendras said spot prices of electricity at the Wholesale Electricity Spot Market (WESM) could be expected to go up during the maintenance shutdown next month.

Almendras on Friday attributed the looming increase to use by three natural-gas power plants of alternative liquid fuels to generate electricity—1,000 megawatt Sta. Rita, 500 MW San Lorenzo and 1,200 MW Ilijan. He said the impact of the possible rise in power rates would be reflected in electricity bills of consumers in August.

Almendras said they have taken all necessary measures to avert possible shortage in supply during the Malampaya maintenance shutdown. “First of all, the three plants will still be generating electricity, however using more expensive liquid fuel,” he said.

According to Almendras, they have prepared all generating plants that will take up the load to complete their own maintenance shutdowns before the Malampaya platform goes on a maintenance break.

The recent unplanned outage of the Malampaya platform two weekends ago, he said, could result in minimal increase, or none at all, in power rates for July.

Almendras added that the unplanned outage could also have no effect on power rates considering that the outage took place on a weekend, during which demand was low.

Ernesto Pantangco, president of the Philippine Independent Power Producers Association (Pippa), earlier said power supply in the Luzon grid will remain sufficient even as the Malampaya gas-to-power project goes offline for maintenance program next month.

In the case of 1,000-MW Sta. Rita and 500-MW San Lorenzo power plants, Pantangco said First Gas has secured 30 days’ worth of fuel to run the two natural-gas power plants.

He added that the DOE and the National Grid Corp. of the Philippines have come up with solutions to address possible generation shortfall from  Ilijan power plant by deferring  scheduled maintenance breaks for the other power plants.

Pantangco said there might be a slight increase in WESM prices during the maintenance shutdown of the Malampaya paltform, as the more expensive bunker-fired power plants will come in to supply power to the Luzon grid. “It may only be a slight increase in WESM prices and not as significant to cause a surge in power rates,” he added.

Power rates at WESM surged in November last year due to limited generation supply as a result of the maintenance shutdown of the Malampaya gas pipeline from October 20 to 26 last year.

In November last year, the Manila Electric Co.’s (Meralco) generation charge increased by P0.44 per kilowatt-hour  to P5.79/kWh  from P5.35/kWh in October last year.

Meralco attributed the increase to a surge in WESM prices that was partly brought about by the full shutdown of the Malampaya natural gas pipeline from October 20 to 26 last year. The pipeline’s shutdown affected operations of large power plants dependent on Malampaya for fuel, particularly the 1,200 MW Ilijan power plant, which was completely unavailable.    source