Malampaya shutdown to hike April-May rates

by Lenie Lectura, 09 March 2015
from BusinessMirror

The Manila Electric Co. (Meralco) on Monday said consumers should expect an increase in their electricity bills in April and May, in the wake of the 30-day Malampaya deepwater gas-to-power facility shutdown, coupled with higher demand.

The Malampaya facility will not run from March 15 to April 14. Power plants that use natural gas supplied by Malampaya will need to shift to more expensive liquid fuel. As a result of the use of liquid fuel, rates are expected to increase in the billing months affected by the shutdown and the impact of higher energy demand during the summer months. These months include April and May 2015, Meralco said.

At present, the Malampaya gas field fuels three power plants: Santa Rita, San Lorenzo and Ilija in Batangas, with a total capacity of 2,700 megawatts (MW).  It also fuels around 40 percent to 50 percent of Luzon’s power requirements.

The three plants are currently running as baseload, or 24 hours a day, seven days a week, except during forced outages and maintenance shutdown.

Given the high probability of higher rates in the coming months, Meralco reminded the public to observe energy-efficiency tips. These include setting the air conditioner’s thermostat from high cool (18°C) to midcool (25°C). By doing so, customers may save up to P280 per month.

Electric fans should also be regularly cleaned from dust accumulation on the fan blades and motor housing.  This saves around 3 percent in electricity costs.  Likewise, adjusting fan settings to low speed can save 12 percent to  23 percent of consumption.

Ironing large batch of clothing at one time can also save on energy costs. Thus, it would be advisable to schedule ironing on morning of weekends, when the demand for electricity is low. Switch the iron off in the last few minutes of ironing.  The remaining heat will be enough to press lighter materials, Meralco said.

For this month, however, power rates went down by P0.085 per kilowatt-hour (kWh) from last month due to lower generation and transmission charges. The decrease translates to roughly P19 for a typical household consumption of 200  kWh, Meralco also announced.

The utility firm reported that generation charge, or the portion of the bill that goes to the generation companies or power producers, decreased by P0.029 per kWh, from P5.238 to P5.209. This was driven by the 30-centavo reduction in the average rate of Meralco’s Power Supply Agreements (PSAs) for the February supply month owing to higher dispatch of the plants under the PSAs.

PSAs’ share in Meralco’s total power requirements went up from 49 percent to 54 percent. This reduction, however, was dampened by an increase of P1.14 per kWh in the average price of the Wholesale Electricity Spot Market (WESM) and P0.18 per kWh in the case of Independent Power Producers (IPPs).

WESM’s share in Meralco’s total power requirements went up from 4 percent to 4.5 percent due to Quezon Power Philippines Ltd.’s (QPPL’s) maintenance outage. The share of IPPs, on the other hand, went down from 47 percent to 40.5 percent due mainly to the QPPL outage. Despite the lower rates charged by Santa Rita and San Lorenzo, the average IPP rate was pulled up by QPPL.

The balance of Meralco’s power requirements was accounted for by the Interim Power Supply Agreements
(Ipsas). Transmission charge, meanwhile, went down by P0.045 per kWh due to lower ancillary charges. Other charges, which include system loss charge and subsidies, registered a decrease of P0.010 per kWh. These reductions resulted in corresponding decreases in taxes (value-added tax and local franchise tax) of P0.011 per kWh.

Meralco’s distribution charge, however, remained unchanged and had been at the same level since July 2014.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers such as the plants selling to Meralco through the WESM and under the PSAs, IPPs and Ipsas.

Payment for the transmission charge goes to the National Grid Corp. of the Philippines. Of the total bill, only the distribution, supply and metering charges accrue to Meralco.

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