Meralco proposes staggered payments for power rate hike

Meralco posts increase in electricity charges for November

The Manila Electric Co. (Meralco) has filed an application with the Energy Regulatory Commission (ERC) to stagger the recovery of the generation charge from its end users for three months.

Power rates for March will increase by P0.9174 per kilowatt-hour (kWh). Meralco has proposed a P0.30 per kWh increase in generation charge from March to May.

This is to address the power rate increase due to the Malampaya shutdown. The power distributor is seeking approval to defer payments to several power suppliers in line with the generation charge recovery.

Alternative fuels drive up costs

Due to the maintenance of the Malampaya natural gas facility, Meralco said other natural gas plants will be running on more expensive alternative fuels.

This affects the gas supply for Luzon’s major natural gas plants like the Avion plants, Ilijan, San Gabriel, San Lorenzo and Sta. Rita plant. These supply 3, 211 megawatts (MW) to the grid, 2,565 MW of which is supplied to Meralco’s franchise area, therefore affecting electricity prices.

Natural gas fuel typically costs around P4 per kWh. Replacement or alternative fuel, such as diesel, will double the costs from P6 to P8 per kWh.

The DOE earlier said that the Sta. Rita, San Lorenzo, Ilijan Unit 2, and Avion plants will be running on alternative fuels in order to continue generating electricity during Malampaya’s maintenance period, which will run until February 16.

“Our filing is to lessen the impact on consumers’ bills, not a one time hit,” Meralco Senior Vice President and head of customer retail services and corporate communications Alfredo Panlilio said.

The state-owned Malaya Thermal Power Plant (TPP) in Rizal, with a capacity of 470 megawatts, started running when a unit of the Sual power station tripped last week.

Unit 1 of Sem-Calaca Power Corp. and Quezon Power Philippines Ltd., with a capacity of 585 MW, will go on a scheduled outage. To address the absence of its output, Meralco said it will source power requirements from the spot market.