Power rate seen up over shift to expensive fuel

by Riza Olchondra, 18 March 2015
from Philippine Daily Inquirer

MANILA, Philippines–Customers of the Manila Electric Co. (Meralco) are facing higher power bills for April and May as gas-fired power plants supplying Metro Manila and nearby areas switch to more expensive liquid fuel due to the temporary shutdown of the Malampaya gas platform.

During an energy forum, Meralco officials said the increase could reach 46 centavos per kilowatt-hour (kWh) in April and 72 centavos per kWh in May.

Some gas-fired plants have shifted to condensate, while others turned to diesel or biodiesel, which are usually more expensive than natural gas.

“Those are the overall rate increases in blended generation rate expected while the Malampaya facility is offline,” said Lawrence Fernandez, Meralco head of utility economics.

The rate increases, Fernandez said, may vary because the Malampaya shutdown will cover two supply months.

“That’s around 10 days in March and 20 days in April,” Fernandez said.

As for the overall rate, he said, it would not necessarily reach P1 per kWh because of other factors.

“We computed based on latest information on fuel costs,” Fernandez said.

Meralco spokesman Joe Zaldarriaga said that among the factors considered were the impact of foreign exchange rates and the actual dispatch of power plants based on actual demand in the Luzon grid.

On the possibility of price spikes similar to the Malampaya shutdown in 2013, Fernandez said Meralco would not expect price hikes like in the November and December 2013 supply months because of the lower primary cap in the Wholesale Electricity Spot Market.

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