Higher Meralco bills seen this month

Customers of Manila Electric Co. (Meralco) may have to pay more for their electricity bills this month as the cost of power sourced from the wholesale electricity spot market (WESM) and independent power producers increased in June.

Meralco is also set to increase by 3 centavos a kilowatt-hour its distribution, supply and metering charges for regulatory year 2013, which covers the period July 2012 to June 2013.

Inquirer sources noted that the cost of power from WESM and the IPPs have increased due partly to the shutdown of the Malampaya gas field last month as well as the forced and planned outages of several critical facilities. These events caused a tight power supply in the Luzon grid, which then triggered the higher electricity prices.

The source pointed out that last month, there was a “forced outage” of a unit at the 700-megawatt Pagbilao coal-fired power plant during the first week and a planned maintenance shutdown toward the end of the month, and also a forced outage of a pipeline that transferred gas from the Malampaya platform to the power plants in Batangas.

Further affecting the supply-demand situation in June were the below-capacity operation of the 1,200-MW Ilijan gas plant, the “derating” of a unit of the 1,200-MW Sual coal plant in Quezon and the forced outage of the Calaca coal facility in Batangas, the source added.

Two of the IPPs supplying a big portion of Meralco’s requirements were affected by the Malampaya shutdown. These were the 1,000-MW Sta. Rita and the 500-MW San Lorenzo gas power plants, both owned by the Lopez group’s First Gas, which had to use more expensive liquid fuel in place of the Malampaya gas to run their facilities.

“WESM rates will be higher because there was really a problem in supply last month. As for the impact of the IPPs, Meralco is still evaluating if the appreciation of the peso will be able to help partly offset the expected increase in the cost of power sourced from the IPPs,” the source said.

The cost of electricity sold by the generating companies could fluctuate monthly due to several external factors such as the supply-demand situation, fuel prices and the foreign exchange rate. This is the reason why Meralco buys from different sources to obtain adequate and reliable electricity at the most reasonable price.

Meralco was earlier allowed by the Energy Regulatory Commission to increase its distribution, supply and metering charges to P1.6303 per kWh starting this month, under the performance-based regulation (PBR) scheme.