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Barring any untoward incident that may affect the operations of the
country’s large power plants, the price of electricity at the
Wholesale Electricity Spot Market (WESM) in the next couple of
months is expected to sustain this month’s record low, which
earlier led to a drop in the rates of giant utility firm Manila
Electric Co. (Meralco).
Consumers may expect prices at the WESM to
sustain its low price in June in the coming months as the weather
continues to be favorable, officials of the Philippine Electricity
Market Corp. (PEMC), operator of the local spot market for
electricity, said.
“If the rainfall and the low temperature are
sustained and unless some contingencies happen to base-load plants,
we might expect the same results in July,” Mario R. Pangilinan,
PEMC executive vice president, said.
Historically, however, the third quarter has
been the rainy season in terms of weather pattern, he added, which
would allow the country’s hydro electric power plants that
produces cheap electricity to be run more and demand for electricity
for cooling appliance to wane, as what happened a month ago.
This leaves concerns on the effects of typhoons
on transmission lines as something that may affect the availability
of the country’s power plants and with it contribute to tight
power supply. Tightness in supply as well as high demand have
earlier been established as culprits in the volatility of prices at
the WESM.
“But, right now, the National Transmission
Corp. is undergoing the necessary line upgrade and
rehabilitations,” he said.
Based on data from PEMC, hydro plants
contribution to the country’s power generation mix increased from
7.7 percent in April to 12.1 percent in May while expensive diesel
and oil-based plants share decreased to 4.6 percent to 0.9 percent,
which led to less than a P0.50 per kilowatt-hour cut in Meralco’s
rates in June.
However, Lasse A. Holopainen, PEMC president,
said the country’s largest electric utility only sourced around 6
percent to 7 percent of the electricity it distributed to its
customers from the WESM when its rates last month plunged to P1.80
per kilowatt-hour.
“This is significantly below the P5 per
kilowatt-hour that we are averaging before this,” he said.
The said price is the lowest it recorded at the
WESM—an alternative market where power generators, competing
against each other, may offer their capacities to customers such as
electric utilities and large industries—since it started
operations in July 2006.
But the PEMC officials were quick to add that
the market operator has yet to establish whether it would be better
for Meralco to source bulk of its power supply from the WESM or not,
as the Lopez-controlled power utility’s electricity requirements
at about 4,000 megawatts, if culled from the spot market, may
instead lead to higher prices.
-- Euan Paulo C. Añonuevo
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