Cusi asks SPEX to explain weekend suspension of Malampaya supply

Cusi virtual roundtable

Energy Sec. Alfonso Cusi has asked Shell Philippines Exploration B.V. (SPEX), the current operator of the Malampaya gas field, to explain the gas restrictions to its five dependent gas-fired power plants over the weekend.

The Department of Energy (DOE) has received word on Tuesday that production would slowly return to normal. However, it is concerned about a possible power rate hike, which may adversely impact consumers.

“These restrictions affect the electricity prices that consumers pay and they will have to be informed on the causes of price increases,” Cusi said in a statement.

While the DOE already promulgated a “no pass-on” provision in the 2018 Competitive Selection Process Policy, the contractual arrangements are covered by previous power supply contracts signed by the Manila Electric Company (MERALCO).

“MERALCO’s notification to the [public requires] more details. Are these part of the previous contracts that it signed with suppliers? Perhaps it can also suggest to consumers on additional information to help alleviate their plight,” Cusi said.

MERALCO spokesman Joe Zaldarriaga, in a BusinessMirror report, said that it would be helpful if SPEX gave more lead time or allowance to stakeholders to prepare for any gas supply disruption or reduction, as well as be informed of their durations.

Meanwhile, Cusi asked the Independent Electricity Market Operator of the Philippines (IEMOP) to simulate the impact on prices of the weekend gas restrictions, as well as the upcoming Malampaya maintenance shutdown from October 2-22. IEMOP is the operator of the Wholesale Electricity Spot Market.

“While there is sufficient supply of electricity during this period, consumers need to know the effects of all these to their power bills,” Cusi explained.

Zaldarriaga added that MERALCO has yet to assess the impact of the October maintenance shutdown on prices and overall supply.

The DOE is set to call a coordination meeting with SPEX, IEMOP, MERALCO, First Gen Corporation, KEPCO Ilijan Corporation (KEILCO), and other relevant stakeholders to discuss the Malampaya shutdown.

First Gen owns and operates the 97-megawatt (MW) Avion, 420MW San Gabriel, 500MW San Lorenzo, and 1,000MW Santa Rita gas plants; while KEILCO operates 1,200MW Ilijan. Avion is currently operating at only half its capacity, as its 48.5MW Unit 2 is damaged.