Unplanned outages in power plants hike Meralco rates


The unscheduled simultaneous outages in nine power plants in Luzon have caused the record-breaking P4.15 per kilowatt hour increase in Manila Electrical Company (Meralco)’s power rate, the Department of Energy said Tuesday.

Undersecretary Raul Aguilos of the Energy department made the disclosure in light of the House probe on the Meralco rate hike of its generation charges due to the shutdown of Malampaya natural gas plant in Palawan for maintenance.

“We anticipated the Malampaya shutdown, and so we coordinated with the stakeholders with the necessary interventions to mitigate the impacts of the spike. Listing these as factors, we anticipated the generation cost to rise by P1.58 per kilowatt hour, so we were surprised when it was P4.15 because there were forced outages from other power plants. It’s possible that the power suppliers are in collusion because it would be hard to believe that they all have forced outages at the same time,” Aguilos told the House Energy panel.

Based on the presentation by Meralco, the power plants which went on unscheduled shutdown as: 250 megawatt Sta. Rita Mod 20, 250 megawatt Sta. Rita Mod 30, 600 megawatt Ilijan, 250 megawatt San Lorenzo Mod 60 (May 28, 2013 to March 2014), 460 megawatt QPPL (October 4 to 5 and 8 to 10), 647 megawatt Sual 1 (October 22 to 27), 300 megawatt Calaca 1 (October 26 to November 16), 370 megawatt Masinloc 1 (October 31 to November 8) and 300 megawatt GN Power 2 (November 11 to 20).

Of the P4.15 per kilowatt hour increase for Meralco users, the bulk will P3.44 will be from the generation charge because of the Malampaya natural gas plant shutdown from November 11 to December 10.

The Malampaya natural gas plant provides 2,750 megawatts of power supply.

“We are now conducting an investigation on this [possible collusion]. If not for the unplanned outages, the increase would not have been as high,” Aguiluz added.

Energy Regulatory Commission’s (ERC) Josefina Asirit backed up Aguiluz’s stance, saying that the ERC also formed a task force which will evaluate the technical problems, if there are really any, that caused the unplanned outrages of power plants.

The outage in the Malampaya natural gas plant has forced power suppliers—the source of Meralco’s supply being a power distributor utility—to get their power supply from liquid gas which is way more expensive (P4.23 to P6.21 per kilowatt hour) compared with natural gas (P1.53 to P1.54 per kilowatt hour).

At least 40 percent of Meralco’s supply is sourced from the Malampaya natural gas plant. With the Malampaya out of service, Meralco also had to purchase power from the Wholesale Electricity Spot Market (WESM) at a price of P33.24 per kilowatt hour.

In an effort to mitigate the effects of such increase and reduce its dependency on the WESM, Meralco sealed a contract with Thermo Mobile Co.—an Aboitiz owned entity—to provide them 234 megawatts power supply good for four power barges at a price of P8.65 per kilowatt hour for three and a half years.

Thermo Mobile, however, has only provided 100 out of 234 megawatts thus far.

“The increase [in generation charge]is 69 percent due to the fact that we are getting supply from WESM since the Malampaya is on shutdown,” Meralco President Oscar Reyes pointed out in the same hearing.

Having said that, Reyes urged the government to build more power plants, considering that the last power plant built in the Luzon grid was built was back in 2000. LLANESCA T. PANTI


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