MERALCO rates may increase in March

meralco malampaya

Updated (March 7) – Customers within the Manila Electric Co. (MERALCO) franchise area can expect an increase in the March billing following forecasts of higher generation charges due to the Malampaya maintenance shutdown and price increase in the Wholesale Electricity Spot Market (WESM). 

In a report by the Manila Bulletin, MERALCO vice president and head of corporate communications Joe Zaldarriaga said that the projected hike rate was mainly due to the use of “more expensive alternative fuel by the Sta. Rita and San Lorenzo power plants” during the Malampaya maintenance shutdown in February. 

Zaldarriaga further explained that the gas facility’s shutdown also affected the supply condition in the Luzon Grid “which led to higher bid prices in the spot market.” 

Apart from the Malampaya-related increases and high WESM prices, MERALCO also secured supply at a higher rate of Php 8.5250 per kilowatt-hour from its emergency power supply agreement (EPSA) with Aboitiz Power Corporation’s GNPower Dinginin Ltd Co. (GNPD) 

The 300 MW capacity from the Dinginin generating facility was procured from January 26 to February 25 as a replacement for the Ilijan capacity that was subject to the injunction by the Court of Appeals. 

In a separate statement, GNPD said that the price of the second EPSA includes “line rental costs and value-added tax (VAT). “This is in contrast to other cited prices which are the plain cost of power, without additional costs such as VAT and other charges.” 

Zaldarriaga said that MERALCO is exploring options to “cushion the impact of the looming higher cost on our customers’ power bills.” Among the options being considered includes seeking an imprimatur of the Energy Regulatory Commission (ERC) for a possible staggered pass-on of the increase from the Malampaya maintenance shutdown. 

MERALCO is currently negotiating its third emergency PSA with GNPD. 

The EPSA partially covers the 670 MW power supply deal MERALCO had with South Premiere Power Corp. (SPPC) before it was subject to a writ of preliminary injunction from the Court of Appeals.