Hefty power rate hike at this time is sadistic

The Philippine Star 
POSTSCRIPT By Federico D. Pascual Jr. 
Updated December 8, 2013

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THUNDERBOLT: Why should captive consumers be punished for the lack of concern and the incompetence of those managing the power sector?

Like a thunderbolt from a clear sky, Meralco electric rates were poised to surge this month by as much as P3.50 per kilowatt hour! It was only after protests reverberated through the franchise area that steps were taken to spread the burden over a longer period.

The explanation given is that supply of lower-priced electricity in the grid had dropped substantially because of the failure of three natural gas-fueled generators in Batangas to get their regular gas supply. Some other plants are also down.

The Malampaya natural gas platform that supplies cheaper fuel to Batangas generators has shut down since Nov. 11 for preventive maintenance until this coming week.

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PRICE MIX: The plants using gas are those in Illijan (1,200 megawatts), Santa Rita (1,000 mw) and San Lorenzo (500 mw). Illijan is operated by Kepco Phils. (majority controlled by Korean interests), while the two other plants are operated by the Lopez group identified with Meralco.

Since gas is substantially less expensive than coal and diesel, the three plants are able to sell cheaper electricity to Meralco. But when their power supply dropped, Meralco was forced to draw from more expensive suppliers, thereby raising the composite price.

Meralco the distributor merely passes on the generation costs, charging customers and making money mainly from distribution charges. As front-liner, the last-touch handler, it usually bears the brunt of customers’ complaints.

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INSENSITIVE: But for the government, particularly the Department of Energy, to feign surprise and helplessness over the impending power rate is the height of official insensitivity.

The DoE should be on top of the situation all the time, knowing well in advance fuel supply status and generation plant shutdowns for maintenance. It is supposed to take advance steps to shuffle the supply to make rates bearable.

In well-managed service companies, the personnel department asks the employees to plan in advance their vacation leaves. They cannot just suddenly announce in December that they are going on leave. That will disrupt operations.

For three major generators to suddenly stop or scale down operations or look for alternative fuel (if technically feasible) as if they did not expect the reduction or disruption of their gas supply is the height of incompetence.

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CONDITIONING?: Meralco and the regulatory agencies cannot blame customers for suspecting that the rate spike is intentional, calculated to condition the public to dwindling supplies and an impending rise in power rates.

Maintenance of the Malampaya platform and the idling of major generators should not happen simultaneously at around December when demand is at its peak.

This lousy planning of Meralco, generators and regulatory agencies will cost customers 28 percent more for residential users and 45-55 percent more for small and medium enterprises.

Will customers be mollified by the assurance of Meralco president Oscar Reyes that the rates will be raised in tranches “to cushion the impact and make the second tranche during a month when prices are slightly low”?   source