Malampaya shutdown completed, but rate hikes await consumers

By Myrna M. Velasco – February 17, 2017, 10:00 PM

from Manila Bulletin

The maintenance shutdown of the Malampaya gas production facility had been completed without consumers suffering from the anguish of rolling brownouts, but in the next three months, its financial impact will show up in the electric bills in the form of rates hikes.

The Manila Electric Company (Meralco) applied for staggered pass-on of the P2.4-billion fuel shift cost of the gas plants or an aggregate of p0.92 per kilowatt hour (kwh)– translating to rate increases of P0.32 per kwh for March billing; and P0.30 per kwh adjustments for April and May billings.

Since that just accounts for the fuel cost, the rate hikes may still go heftier on summer months as scorching weather could trigger supply tightness that may then drive up rates in the spot market.

According to Energy Regulatory Commission (ERC) Chairman Jose Vicente B. Salazar, they will decide on Meralco’s application for staggered rate adjustments pass-on prior to the cut-off date for March billing.

It has been categorically laid down that the maintenance downtime of the gas production facility may either cause power interruptions if there are sudden forced outages in power plants; and the more manifest impact would be increases in electricity tariffs because the gas plants needed to shift to condensate and other liquid fuels that are generally more expensive.

The power plants utilizing the gas output of the Malampaya field include the 1,000-megawatt Sta. Rita, 500MW San Lorenzo; 1,200MW Ilijan; 414MW San Gabriel and 97MW Avion facilities.

The upside of the whole exercise though, according to Energy Secretary Alfonso G. Cusi, could be anchored on the fact that “the Malampaya scheduled maintenance shutdown has been completed safely and ahead of schedule.”

The energy chief said “the measures undertaken helped avert any power outage as a result of the Malampaya shutdown.”

He indicated that on the entire duration of the gas facility’s maintenance activity, “the power supply reserve was maintained at normal levels,” and there had been no unwanted incidents of yellow or red alert incidents for both the energy-sharing grids of Luzon and Visayas.

But with the critical summer months approaching, the energy chief still intensified his appeal to the consuming public to seriously exercise restraint in their electricity usage.

He stressed that his department “will aggressively pursue demand-side management,” with him noting that even legislators at the Joint Congressional Power Commission (JCPC) are now taking notice of such initiative.