Feb. electricity rates may go up due to plant outages

by Riza T. Olchondra, January 29, 2015
from Philippine Daily Inquirer

CUSTOMERS of Manila Electric Co. (Meralco) are facing higher electricity bills in February after seeing a string of rollbacks since the end of 2014.

Meralco spokesperson Joe Zaldarriaga said increased power plant outages in January, which would impact rates in the February billing, would cause “upward pressure” on power rates. Officials would not say, however, if the increase would be substantial enough, or reach as much as P1 per kilowatt-hour, noting that they are still assessing the actual impact.

“As far as the January supply month, compared to the December supply month, there were more [power plant] outages in January. When that is the situation, there is more pressure for prices to go higher. Also, we are coming from record low rates in the December supply month (which was billed in January).

Asked why consumers did not feel the effects of power plant outages in terms of blackouts, Meralco head of utility economics Lawrence Fernandez explained that there was low demand for electricity for much of January because of the low temperature.

“It was relatively cold, so demand was low. In that sense, the outages were not felt. But in terms of price, there is an impact,” Fernandez said, noting that the impact was felt even though the distribution utility’s exposure to the volatile energy spot market was just around one percent.

According to Meralco’s data, there were 1,000 megawatts (MW) of scheduled outages and 1,400 MW of unscheduled outages in the January supply month.

However, lower oil prices may offset the impact of power generation charges, Meralco chair Manuel V. Pangilinan said.

Power sales will pick up toward summer, when the temperature is higher, the company said.

Also, Meralco has enough power supply contracts to prevent outages despite the anticipated power crisis, Pangilinan said. The Interruptible Load Program—a voluntary scheme where companies with generation sets use their own power to ease demand from the grid at peak times—is ongoing, with more than 600 MW of capacity signed up.

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