The electricity rates of Manila Electric Co. will likely go up in November as a result of the Malampaya maintenance shutdown that forced natural gas power plants to run on the more expensive liquid fuel.
“We are still waiting to complete receipt of all suppliers’ bills. However, it has been anticipated beforehand that the generation cost will be affected by the Malampaya shutdown,” Meralco head of utility economics Lawrence Fernandez said.
The Malampaya gas project in northwest Palawan, which supplies natural gas to power plants with a combined capacity of more than 3,000 megawatts, went on maintenance shutdown from Oct. 2 to 25.
Fernandez said the Ilijan and San Gabriel power plants were not able to operate because of non-availability of Malampaya gas.
“As a result, generation supply was reduced, leading to higher charges in the WESM [Wholesale Electricity Spot Market]. It may be recalled that there was one instance of ‘yellow alert’ last month and that the secondary price cap was triggered from Oct. 21 to 22,” Fernandez said.
The WESM is the trading floor of electricity where prices are driven by supply and demand.
“Also as a result of the Malampaya shutdown, the First Gas plants were asked to continue operations by utilizing liquid fuel. The latter costs around twice the cost of using Malampaya gas. Thus, this will affect generation costs,” Fernandez said.
He said the Malampaya shutdown was extended for three days, meaning that First Gas had to continue to run on liquid fuel during the extension of the shutdown period.
Fernandez said that while they were still waiting for the bills of the other suppliers, the effect of the Malampaya shutdown would not likely be offset by other factors.
Meralco, the country’s biggest power retailer, announced higher rates for a typical household of P0.0283 per kWh to P9.1374 per kWh in October from P9.1091 per kWh in September driven by increase in the transmission charge,
Transmission charge for residential customers increased by P0.0282 per kWh to P0.7085 per kWh from P0.6803 in September on higher ancillary service charges, which accounted for about 33 percent of the National Grid Corporation of the Philippines’ total transmission costs.
The increase in overall rates was partly tempered by Meralco’s continued implementation of the Distribution Rate True-Up refund which began in March.