Powering up Malaya plant could send power rates soaring

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Reactivating the idle Malaya thermal plant in Pililia, Rizal, could trigger a spike in power rates, instead of bringing the rates down.

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Energy Secretary Carlos Jericho Petilla has said the government is prepared to run the Malaya plant for up to 70 days to boost supply during the summer months, when demand is expected to rise.

On Thursday, Presidential Communications Secretary Hermino Coloma Jr. said reactivating the plant is part of the government’s steps “to ensure continuity of power supply during the summer season.”

What Coloma failed to mention was that Malaya was ordered shut down because apart from being “slow,” it runs on diesel fuel which is very expensive.

Even plant manager, Virgilio Cruz, in an earlier interview, warned that consumers should brace for higher electric bills because the giant power distributor Manila Electric Company (Meralco) is likely pay more for Malaya’s “high operating cost.”

The 650-megawatt plant, Coloma said, would ensure steady supply of electricity come the summer season.

Government previously deemed the plant not financially viable to operate. In fact, the plant did not bid in the spot market when Meralco reported a supply shortage due to the shutdown of the Malampaya natural gas facility in Palawan last November.

Salcon, Malaya’s operator, announced it has enough fuel to run the plant and it will be ready for operation  once its owner, the Power Sector Assets and Liabilities Management (PSALM), gives the go signal.

Coloma reiterated that the Department of Energy (DOE) “has advised power plants to undertake preventive and regular maintenance of their facilities, so that these will operate optimally during the peak-demand months.”

Meralco had warned of rotating brownouts if the temporary restraining order (TRO) issued by the Supreme Court against its P4.15 per-kilowatt hour rate hike is not lifted. With the TRO, the generation charge has been frozen at P5.67.

On Wednesday, Meralco announced that it is poised to collect an additional rate increase for the January billing of its customers even if the TRO is still in force.

Meralco officials said they will seek clarification from the Court if the company can collect a separate rate increase since the TRO only covers the P4.15 per kilowatt-hour rate hike.

“As indicated yesterday [Tuesday], my understanding is we will have a manifestation to clarify with the Supreme Court. Plus, any January billing will have to be cleared with and approved by the Energy Regulatory Commission,” said Al Panlilio, Meralco senior vice president and head of Customer Retail Services and Corporate Communications.

JOEL M. SY EGCO

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