Power rates could rise by P1 per kWh due to Malampaya shutdown

Electricity rates may rise by P1 per kilowatt – hour (kWh) due to the shutdown of the Malampaya gas project in early 2017, the Manila Electric Co. (Meralco) said.

Simulations sent to the Department of Energy (DOE) showed that there could be an increase of around P1 per kWh on the generation cost rate that will be reflected by its consumers by the March 2017 billing period.

“There will be an increase, but what we will do is to minimize the increase to soften the burden to our consuming public,” DOE Secretary Alfonso Cusi said.

The increase in generation cost factored in the possible spot market prices due to plant outages and the use of more expensive fuel like diesel and condensate during the Malampaya shutdown from January 28 to February 16, 2017.

The DOE chief assured that preparatory activities are being done with the industry stakeholders to safeguard energy consumers from possible impact on supply and prices of electricity during the maintenance schedule.

“My directive was clear – the Malampaya maintenance activities should pose no substantial impact to supply of electricity by using all available resources and remedies, because power is a basic necessity for our countrymen,” Cusi said.

Two weeks ago, Shell Philippines Exploration Corporation (SPex) – operator of the Malampaya project – informed DOE of the preparatory works for the scheduled maintenance.

SPEx said that then maintenance will cover repairs on the sub – sea facilities, upgrades on the platform, and maintenance on the onshore plant.

“We have to ensure that the program works for Malampaya is within the prescribed schedule given to the DOE. Historically, SPEX completed its maintenance period on time. It is expected that it will do the same this time,” Cusi said.