Meralco to announce big rate hike

Power generation charges in the franchise area of Manila Electric Co. are expected to increase P0.58 per kilowatt-hour this month, reflecting the impact of the Malampaya natural gas field maintenance shutdown, sources said Wednesday.

Meralco’s generation charges will go up to P4.90 per kWh in March from P4.32 per kWh in February, including the impact of the P0.22-per-kWh fuel cost recovery approved by the Energy Regulatory Commission this month.

A government source confirmed an almost P0.40-per-kWh increase in generation charges, including the spot prices at the Wholesale Electricity Spot Market and Meralco’s other suppliers.

WESM prices historically go up when demand is tight.

“The total gen [generation] charge increase is P0.58 per kWh, but excludes system loss and taxes,” the source said.

ERC on Monday approved a fuel cost recovery of P0.66 per kilowatt-hour, equivalent to P1.752 billion.  This was lower than the P2.417-billion application of Meralco as a result of the 20-day Malampaya maintenance shutdown.

ERC approved the implementation of the fuel cost recovery in three installments, or P0.2211 per kilowatt-hour each for March, April and May.

Meralco earlier sought ERC’s approval to stagger the implementation of fuel cost recovery, after generation companies shifted to more expensive fuel when Shell Philippines Exploration Corp. shut down and repaired the Malampaya natural gas facility on Jan. 28 to Feb. 16.

The Malampaya shutdown  affected the supply of natural gas to the power plants of South Premiere Power Corp.-Ilijan, Sta. Rita, San Lorenzo, San Gabriel and Avion natural gas plants.

The Malampaya gas field located in northwest Palawan fuels the said natural gas plants with an aggregate capacity of 3,211 megawatts.  Of the total, 2,565 MW is supplied to Meralco’s franchise area.

Meralco had to source its power requirements from other power suppliers that use liquid fuel which is more costly than natural gas.

The shutdown coincided with the scheduled maintenance of the other power plants such as SEM-Calaca Power Corp. Unit 1 and Quezon Power (Philippines) Ltd. which collectively contribute 585 MW to Meralco.

“We were able to calculate based on actual bill of suppliers…Meralco’s petition was based on projections or forecast,” ERC spokesman Floresinda Digal said on the lower fuel recovery approval.

Meralco previously wanted to recover P0.92 per kWh over a three-month period or P0.30 per kWh for March, P0.30 per kWh for April and P0.32 per kWh for May.

Topics: Manila Electric Co. , Meralco , Power generation charges , rate hike , Malampaya natural gas , maintenance shutdown
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