After brownouts, rate hikes will be consumers’ next dilemma

by Myrna Velasco April 18, 2016 (updated)
http://www.mb.com.ph/after-brownouts-rate-hikes-will-be-consumers-next-dilemma/

Arriving passengers make their way down this dimly lit corridor leading to the immigration area after the Ninoy Aquino International Airport-Terminal 3 (NAIA-3) was plunged into darkness for five hours Saturday because of a trip at a Meralco sub-station and the inadequate back-up generators at the airport.

After the rolling power interruptions last week, the next dilemma for electricity consumers will be rate hikes in their upcoming bills.

Industry players have manifested tight supply condition that ignited the ‘red alert’ and ‘yellow alert’ scenarios in Luzon grid last week, and the concomitant impact of these would be increases in electricity rates.

Energy acting undersecretary Mylene Capongcol has already indicated to media the spikes in prices at the Wholesale Electricity Spot Market (WESM), noting that in some trading intervals, clearing prices have been breaching the P10 per kilowatt hour level.

Manila Electric Company (Meralco) vice president Lawrence Fernandez similarly explained that “the yellow and red alerts indicate tight supply-demand situation.”

He thus added “this will likely be reflected as higher spot market prices for April, which will be the basis for the May generation charge.”

Additionally, the move to call on participants of the interruptible load program (ILP) to ease brownout conditions last week will add up to the cost pressure because there would be due compensation to entities that have switched on their generating sets.

Meralco noted that 121 companies with a combined de-loading of 247 megawatts were activated under ILP,” primarily during Friday’s (April 15) power interruptions.

Fernandez said “these participants will be compensated for their activation in accordance with the ERC’s (Energy Regulatory Commission’s) regulation.”

He expounded “such compensation will then be recovered from all customers of Meralco as an add-on to the rate in succeeding months.”

Meanwhile, as of Monday (April 18), power supply had been relatively stable due to the early return-to-operation of one unit of the 735MW Pagbilao coal-fired power plant. The plant was on scheduled maintenance shutdown.

Another generating unit that was brought back to service had been that of the Kalayaan hydro facility after suffering from forced outage.

According to Meralco, the National Grid Corporation of the Philippines (NGCP) projected for Monday that Luzon grid “would be in normal state’; and reserves would be at least 1,300 megawatts on average for the day.