Philippines: Malampaya shutdown to raise power rates in March

Philippines: Malampaya shutdown to raise power rates in March

Power rates are seen to go up by P1.44 per kilowatt-hour (kwh), a little
higher than earlier projections in March following the 20-day Malampaya
shutdown, the Manila Electric Co. (Meralco) said yesterday.

The electricity rate hike is higher than the previous simulation of P1 per
kwh sent by Meralco to the Department of Energy (DOE) as it factored in not
only the shift to diesel and/or condensate, but foreign exchange rates as
well.

"We are confirming this based on the estimates we did given the shift from
(natural gas) to liquid fuel by the gas plants, inclusive of taxes such as
the VAT," Meralco spokesman Joe Zaldarriaga said.

"These estimates are also based on fuel price and exchange rate
assumptions," he added.

In December, Meralco submitted simulations to the DOE showing power tariff
could increase by P1 per kwh on the generation cost rate that will be
reflected in the March 2017 billing period.

Meralco had said the increase in generation cost would include the possible
hike in spot market prices due to plant outages and the use of more
expensive liquid fuel during the Malampaya shutdown from Jan. 28 to Feb. 16.

Natural gas fuel only costs around P4 per kwh and using replacement fuel,
such as diesel, would double costs to P6 to P8 per kwh.

As the Malampaya shutdown is expected to increase power rates, Energy
Secretary Alfonso Cusi assured consumers that mitigating measures and legal
options are in place.

These measures include ensuring the availability of fuel requirements for
the affected natural gas power plants.

These plants are the 1,000-megawatt Sta. Rita plant, 500-MW San Lorenzo
plant and 97-MW Avion plant.

The DOE said these plants would be using alternative fuel to continue
operation and generate electricity during the maintenance period.

The government-owned 470-MW Malaya Thermal Power Plant in Pililia, Rizal
will also be running during the Malampaya maintenance period.

On the other hand, the DOE has tapped Interruptible Load Program (ILP)
participants with a total of 900 MW enrolled power capacities that would
augment supply during critical periods.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

Link to Original Article:
http://www.philstar.com/headlines/2017/01/12/1661971/malampaya-shutdown-rais
e-power-rates-march

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com