Meralco seeks staggered rate increase

Posted on February 10, 2017
http://www.bworldonline.com/content.php?section=Corporate&title=meralco-seeks-staggered-rate-increase&id=140437

MANILA ELECTRIC Co. (Meralco) has applied for an increase in the generation charge amounting to P0.9174 per kilowatt-hour, which will be charged to power users over a three-month period.

Lawrence S. Fernandez, Meralco vice-president and head of its utility economics, said the country’s largest distribution utility applied for the increase with the Energy Regulatory Commission (ERC).

“We filed last Jan. 31,” he said in a text message.

Consumers will find the increase in their monthly electricity bill starting with P0.30 in March and another P0.30 in April. The rest will be collected in May.

“It was proposed to stagger collection of incremental liquid fuel cost over three months,” Mr. Fernandez said.

The increase comes after the rise in the price of petroleum, which fuels power plants, and the scheduled maintenance shutdown of the Malampaya natural gas facility, which provides around 20% of the country’s electricity requirements.

The rate applied by Meralco is lower than the P1-per-kilowatt-hour that the Department of Energy (DoE) expected in December last year, quoting a simulation from the distribution utility.

The Malampaya offshore facility is scheduled to be out from Jan. 28 to Feb. 16 next year.

The DoE previously said that Meralco’s simulation factored in the possible wholesale electricity spot market (WESM) prices because of plant outages during the period when Malampaya is not in service. It also counted in the generation cost of natural gas plants when they switch to diesel and condensate liquid fuels, which are more expensive than Malampaya’s natural gas.

The Energy department said the 600-megawatt Ilijan natural gas power plant in Batangas would schedule its maintenance outage during the Malampaya downtime ahead of summer when power reserves fall as electricity demand rises.

Energy Secretary Alfonso G. Cusi had assured the public that industry stakeholders would continue to coordinate their activities during the Malampaya shutdown “to avert any situation leading to the worst case scenario and to maximize the protection for the energy consuming public.”

The DoE said it was making sure that the Malampaya shutdown is kept within schedule.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. -- Victor V. Saulon