The Manila Electric Co. (Meralco) said its power suppliers that rely from Malampaya for fuel will continue to serve their obligated capacity either by using alternative fuels or procuring replacement power with the scheduled maintenance shutdown next month of the country’s sole source of natural gas.
However, with this, Meralco power rates may continue to rise.
Lawrence Fernandez, Meralco vice president and head of utility economics department, said Meralco suppliers that use natural gas for fuel like the Ilijan power plant will find replacement power supply and will still sell it at contract prices while the power plants of First Gas Corp. will run using liquid fuel with the temporary absence of supply from Malampaya.
Fernandez said since March, the Malampaya field has not been able to supply the full requirements of natural gas-fired power plants in Luzon.
“Around 400 to 500 megawatts of gas capacity have been running on liquid fuel for several months now and this has led to an adjustment in the generation charge in the past few months. We will also see this coming October to be reflected in the November generation charge,” Fernandez said.
Consumers served by Meralco will shoulder another increase in power rates this month due to the effects of higher generation charge as the cost for natural gas-fired power plants temporarily running on liquid fuel is more costly.
Meralco power rates will go up by P0.1055 per kilowatt hour (kWh) this month, bringing overall power rates to P9.1091 per kWh from last month’s P9.0036 per kWh.
The sixth consecutive upward adjustment will be equivalent to an increase of around P21 in the bill of a residential customer consuming 200 kWh monthly.
Meralco said that if not for its continued implementation of the distribution rate true-up refund which began last March, the increase could have been higher. The refund will be implemented until a total of P13.9 billion is returned to customers over a period of 24 months.
Generation charge, which makes up about 55 percent of customers’ electricity bills, increased by P0.1117 per kWh to P5.0439 from last month’s P4.9322.
Charges from power supply agreements (PSA) registered an increase of P0.2494 per kWh affected by the reduction in demand brought about by the re-imposition of enhanced community quarantine in Metro Manila and neighboring regions.
Meanwhile, independent power producers (IPP) charges also increased by P0.0955 per kWh due to lower average plant dispatch with the outages of several power plants in Luzon last month as well as the usage of costlier liquid fuel of natural gas power plants who cannot secure more supply from Malampaya.
As for charges from the wholesale electricity spot market (WESM), a reduction of P0.7504 per kWh was recorded while transmission charge for residential customers was also lower at P0.6803 from P0.7323 per kWh.
Subsidies, taxes and other charges inched up by P0.0458 per kWh during the month but the collection of the universal charge-environmental charge amounting to P0.0025 per kWh remains suspended.
Meralco’s interim distribution rates comprised of distribution, supply and metering charges, the only bill component paid to the company remained at P1.381 per kWh for 74 months already.
Ten percent of Meralco’s power requirements for the month was from WESM, 36.8 percent from IPPs and 53.2 percent from PSAs.
Laban Konsyumer Inc. said Meralco could have invoked force majeure to pay the fixed cost of PSAs due to the low demand brought by the reimposition of quarantine measures.
Last year, Meralco invoked force majeure to pay lower generation costs as the actual amount of power consumed was lower than the contracted supply caused by the unexpected quarantine restrictions. In turn, the said move will lower the pass-on charge to the company’s customers. – J. Macapagal
