Higher Power Rate Looms

Manila Bulletin

By MYRNA M. VELASCO

June 5, 2012, 7:00pm

MANILA, Phiilippines --- A confluence of factors, such as last month’s peak demand and extended plant shutdowns, will trigger a sharp increase in the generation charge of Manila Electric Company (Meralco) in this June billing.

These events, according to sources from the power utility firm, exerted pressure on supply vis-à-vis demand, and thus resulted in sudden spike in prices at the Wholesale Electricity Spot Market (WESM) prices.

“Demand surged with effect of summer, while supply was limited due to reduced hydro availability and problems with large coal-fired plants,” a source from the company said.

Given such turn of events, an increase in Meralco’s generation cost component in the bills will be inevitable.

It has been noted that spot market prices in May “were more than double their April levels.”

Based on data culled from the WESM, peak demand in Luzon climbed to 7,900 megawatts in May, higher than the 7,500MW in March.

This scale of demand surge was noted by system operator National Grid Corporation of the Philippines (NGCP); and also triggered some “low voltage dilemmas” in the country’s major power grid.

Typically, May is the period when peak demand in electricity is being experienced. Consequently, prices are higher in this billing cycle.

It was gathered that in the supply equation, “there was a reduction in sourcing from hydro plants, due to low water levels.”

Industry sources added that the major coal plants – Sual and Pagbilao in particular – “experienced extended breakdowns,” noting that one unit of the 735-MWPagbilao “went offline starting May 19 and is not expected to be back until June 10.”

On the other, the 1,200-MW Sual facility underwent “governor valve” problems and a boiler tube leak from April 27 to May 10. A governor valve is an automatic transmission control valve that converts line pressure into vehicle-speed dependent governor pressure.

“As a result of these supply issues, NGCP had to designate the Malaya and Limay oil-fired plants as must-run units,” purposively to address “the low-system voltage and inadequate reserve levels,” it was said.   source