Manila Electric Co. (Meralco) consumers will get an electrifying shock this month as the power company will implement a significant power rate increase owing to the maintenance shutdown of the Malampaya natural gas plant, which supplies power to huge areas in Luzon.
Meralco said that power rates may be raised by more than P2, or up to P2.50 per kilowatt hour. This would mean a P500 increase in the electricity bills of a typical household consuming an average of 200 kilowatt-hours a month.
Meralco said that the power rate increase would have been lower if other power plants had not been put out of commission.
“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.
“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 said.
The generation charge, a component of consumers’ electricity bills, is the cost of power Meralco buys from suppliers. The Malampaya maintenance started on November 11 and is expected to last until December 10.
Energy Secretary Carlos Jericho Petilla earlier warned that the Malampaya shutdown will trigger a significant price hike.
A Meralco official previously explained that Malampaya will continue to operate except that it will run using an 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.
Ivanna Dela Pena, also of Meralco said that prices will peak in December, taper down in January, and will hopefully normalize in February.