Huge power rate hike looms this month


Manila Electric Co. (Meralco) consumers will experience a significant hike in their electricity bill this month amid the upcoming maintenance shutdown of the Malampaya natural gas field which provides bulk of the Luzon’s power generation needs.

“This year, the effect of the Malampaya pipeline shutdown was compounded by the outage of several large power plants,” Meralco utility economics head Lawrence Fernandez said, specifying that consumers will see more than P2 to P2.50 per kilowatt hour increase, or even higher, in the generation charge component of their electricity bill this month.

“We just reiterated our prior advisories for customers to expect significant generation charge increase this December. Based on previous experiences, the generation charge spikes up whenever the Malampaya pipeline goes on extended shutdown,” Fernandez added.

With the projected generation charge adjustment, a typical household consuming monthly average 200 kilowatt-hour will experience an increase of about P500 in his or her bill. This is significantly higher than a normal generation charge increase of just about P200.

The generation charge, a component of consumers’ electricity bills, is the cost of power Meralco buys from suppliers.

The Malampaya Scheduled Maintenance has commenced 11 November 2013 and will last until 10 December 2013, which was originally set on 09 November until 08 December 2013.

Energy Department Secretary Carlos Jericho Petilla already said before that the shutdown of Malampaya, involving the three gas-fed plants: Calaca, Ilijan and Pagbilao, will indeed trigger “significant” price hike in power bills of the consumers.

In his own initial estimates, Petilla said that the power rate will increase as much as P2 per kwh.

A Meralco official previously explained that Malampaya will continue to operate except that it will run using a highly expensive liquid fuel, instead of natural gas.

“That will be one of the reasons that the generation charge will increase, the higher price from Malampaya, and the second is potentially higher WESM [wholesale electricity spot market]prices,” Oscar Reyes, Meralco president, said.

“The problem is we don’t know how the WESM will behave. The WESM movement is very volatile,” he added.

Nevertheless, Ivanna Dela Pena, FVP for regulatory affairs of Meralco, said prices would only peak in December, and would start tapering in January, and would “hopefully” normalize in February. MADELAINE B. MIRAFLOR


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