Higher power rates in August not likely

by Alena Mae S. Flores – August 07, 2016 at 11:50 pm

from Manila Standard Today

Electricity rates will not likely increase during the August billing month of consumers as the impact of the series of yellow and red alerts will be felt in the September billing yet, an official of Manila Electric Co. said over the weekend.

“The recent series of yellow and red alerts began on July 26, which may affect the September generation charge,” Meralco senior vice president and head of utility economics Lawrence Fernandez said.

Fernandez even noted a “strong possibility” of a lower August generation charge “due to reduced charges from the WESM (wholesale electricity spot market) for the July supply month.”

WESM acts as the country’s trading floor of electricity. WESM charges normally go up when the supply is tight.

“As opposed to the several yellow alerts experienced in the June supply month, the July supply month was characterized by less incidence of thin reserves,” the official said.

Power rates of Meralco customers rose P0.29 per kilowatthour in July due to higher plant outages experienced in June.

Fernandez said computations would finalized today (Monday) “but the indications are strong and the likelihood is that there is a reduction of the gen charge (for August).”

The Energy Regulatory Commission, meanwhile, required the generation companies to submit a detailed report on the causes of forced outages, which led to the red and yellow alerts in the past two weeks,

The ERC said the requirement was in addition to the regular reporting required of the gencos whose facilities have been on forced outage status. On Friday alone, 14 power plants were offline resulting in a loss of 3,000 megawatts of capacity from the Luzon grid.

“The ERC has been closely monitoring the situation and the market results as we complete data from the GenCos. We have noted the price surges during the past few days and have also identified the plants that have gone on unscheduled outages. If this condition persists for some time, we will look into the bidding patterns of these power plants. Sanctions will also be imposed in case of the gencos’ non-compliance with our directive,” Salazar said.

The regulator also asked the gencos to submit the action undertaken and protocols to address the contingencies.