DoE seeks to avoid passing on Malampaya cost to consumers


THE Department of Energy (DoE) is looking for ways not to pass on to consumers the cost arising from the completion of maintenance works on the Malampaya natural gas field facilities, an energy official said.

The Malampaya consortium is composed of Shell Philippines Exploration B.V., Chevron Malampaya LLC and PNOC Exploration Corporation.

“DoE wants to maximize consumer protection and is willing to look into the details of the contracts and talk to the parties on how we can address the same goal of maximizing consumer protection in line with [Energy] Secretary Cusi’s direction,” DoE Usec. Felix William B. Fuentebella told reporters on Thursday.

“How can we have an end-result without [a]price shock? Either passed on or not, but we have to address the foreseeability that we should know how much and they should prepare how much for that scenario,” he explained.

Fuentebella said that the energy department is looking at another item on the contract where the pass-on is coming from so it can lower the cost. “The good thing about what the Secretary says is this is the end result.
Whatever you do from one point to the next destination point, as long as there is no price shock,” he said.

The other goal of DoE is not to pass on to the consumers if next time there will be another Malampaya shutdown.

“That is our goal, in the next Malampaya maintenance shutdown, there will be no price shock by reviewing, looking into all the items of the contracts and looking at all the possibilities and talk to parties to achieve the goal of not passing Malampaya’s fuel shift costs onto consumers so that we can ensure the maximized consumer protection policy of Secretary Cusi,” he said.

Meanwhile, DoE hailed the Malampaya plant’s scheduled maintenance shutdown last 28 January to 16 February as a success, saying that it was a springboard for continued close coordination among the energy industry players that guarantees energy supply reliability, stability and efficiency.

“The preventive measures we’ve put in place relative to the Malampaya shutdown, such as ensuring availability of the alternative liquid fuel to run the natural gas power plants (NGPP), have averted the possibility of power supply deficiency. We have experienced normal power situation all throughout the course of the maintenance activity,” Cusi said in a statement.

He also reported that the DOE is closely coordinating with the concerned power generators and the Manila Electric Company (Meralco) to cushion the impact on electricity prices of the higher liquid fuel cost used in running the NGPPs.

According to Meralco, the Energy Regulatory Commission (ERC) has computed an incremental liquid fuel cost at approximately P0.66 per kilowatt-hour, lower than the initial estimation of P0.92 per kwh.

The power company also reported that the ERC has approved its request to stagger the incremental liquid fuel cost over a period of three months starting this March in order to minimize the burden on customers.

“We are still keen on looking for ways on [how]not to pass on to the consumers the incremental cost brought by the shutdown. We are planning to hold a conference among those involved to address a no pass-on policy,” Sec. Cusi underscored.

Cusi said the Malampaya gas-to-power project supplies natural gas to five natural gas power plants located in Batangas, namely, Sta. Rita (1,000 MW), San Lorenzo (500 MW), Ilijan (1,200 MW), Avion (97 MW), and San Gabriel (414 MW).


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