Malampaya maintenance shutdown may cause power rate hikes

Malampaya gas supply can last until 2029, but…

The Malampaya gas project is set to undergo a 20-day maintenance shutdown in early 2017 that may cause power rate hikes, the Department of Energy (DOE) said.

DOE spokesman Felix William Fuentabella said Malampaya’s maintenance from January 28 until February 16 may trigger high electricity prices.

“There will be [price] simulation first. Then we will look into coordination, market and regulatory management,” he said.

A projected electric supply deficit of around 700 megawatts, Manila Electric Co. (Meralco) spokesman Joe Zaldarriaga said.

The shutdown is seen to affect supply to three power plants: Sta. Rita, San Lorenzo and Ilijan that has a combined capacity of 2, 700 MW.

The DOE will hold a stakeholders meeting on Thursday to address issues concerned on the shutdown, adding that “no more than 2000 MW [of capacity] maximum worst case” shall be affected.

Meralco and DOE said that they may buy electricity supply from the Wholesale Electricity Spot Market.

The Malampaya Gas project is located in the offshore of northwest Palawan and is a consortium between Shell Philippines Exploration B.V., Chevron Malampaya LLC and Philippine National Oil Company (PNOC) Exploration Corp.

In November 2013, the Malampaya went under maintenance that also pushed up power rates, this led to reforms in the WESM.

*Photo from Shell