Malampaya shutdown to raise power rates in March

By Danessa Rivera (The Philippine Star) | Updated January 12, 2017 - 12:00am

http://www.philstar.com/headlines/2017/01/12/1661971/malampaya-shutdown-raise-power-rates-march

MANILA, Philippines – Power rates are seen to go up by P1.44 per kilowatt-hour (kwh), a little higher than earlier projections in March following the 20-day Malampaya shutdown, the Manila Electric Co. (Meralco) said yesterday.

The electricity rate hike is higher than the previous simulation of P1 per kwh sent by Meralco to the Department of Energy (DOE) as it factored in not only the shift to diesel and/or condensate, but foreign exchange rates as well.

“We are confirming this based on the estimates we did given the shift from (natural gas) to liquid fuel by the gas plants, inclusive of taxes such as the VAT,” Meralco spokesman Joe Zaldarriaga said.

“These estimates are also based on fuel price and exchange rate assumptions,” he added.

In December, Meralco submitted simulations to the DOE showing power tariff could increase by P1 per kwh on the generation cost rate that will be reflected in the March 2017 billing period.

Meralco had said the increase in generation cost would include the possible hike in spot market prices due to plant outages and the use of more expensive liquid fuel during the Malampaya shutdown from Jan. 28 to Feb. 16.Natural gas fuel only costs around P4 per kwh and using replacement fuel, such as diesel, would double costs to P6 to P8 per kwh.

As the Malampaya shutdown is expected to increase power rates, Energy Secretary Alfonso Cusi assured consumers that mitigating measures and legal options are in place.

These measures include ensuring the availability of fuel requirements for the affected natural gas power plants.

These plants are the 1,000-megawatt Sta. Rita plant, 500-MW San Lorenzo plant and 97-MW Avion plant. 

The DOE said these plants would be using alternative fuel to continue operation and generate electricity during the maintenance period.

The government-owned 470-MW Malaya Thermal Power Plant in Pililia, Rizal will also be running during the Malampaya maintenance period.

On the other hand, the DOE has tapped Interruptible Load Program (ILP) participants with a total of 900 MW enrolled power capacities that would augment supply during critical periods.