Power rate hike possible due to Malampaya shutdown in October


The Department of Energy (DOE) said there is a big probability that electricity rates could increase when the Malampaya gas field temporarily shuts down in October.

Based on a Rappler report, Sen. Nancy Binay asked Energy officials during the Senate Committee on Energy’s hearing on Thursday about the possible impact of Malampaya’s scheduled maintenance from October 2-22. The temporary shutdown could affect over 3,200 megawatts of power in the Luzon Grid.

Energy Usec. Felix William Fuentebella explained that gas-fired power plants address their needs by using condensate, a more expensive type of fuel. And while the official said that it’s just one factor that may affect the bill, he noted that there really is a big probability for an increase.

Sen. Risa Hontiveros also mentioned during the hearing that in 2013, the Manila Electric Company (MERALCO) had raised rates by Php4.15 per kilowatt-hour due to the gas facility’s closure. However, the Supreme Court stopped the rate hike due to market abuse allegations.

Meanwhile, Energy Regulatory Commission (ERC) chairperson Agnes Devanadera told senators that such a hike may be unlikely this time because there were policies that have been implemented to avoid the incident in 2013.

She said that now there is a secondary cap that kicks in after sustained high prices for five days and the rule was changed so it could be imposed from the earlier five days to only three days of sustained high prices at the Wholesale Electricity Spot Market (WESM).

The ERC recently amended the imposition of the price mitigating measure in the spot market to ensure consumer safety nets and prevent price shocks.