Meralco customers face higher August billings

Customers of Manila Electric Co., the country’s biggest power distributor, may have to brace for higher bills in August as the cost of electricity it bought from generation companies increased last month.

This higher power rate was attributed mainly to the eight-day shutdown of the Malampaya gas facility in offshore Palawan in July, according to a source privy to Meralco data.

The source explained that the 1,000-megawatt Sta. Rita and the 500-MW San Lorenzo natural gas-fired power plants owned by First Gas—which depends solely on the Malampaya field for their gas supply—were forced to run using the more expensive liquid fuel to ensure continued and stable power supply in Luzon. The two facilities contribute a large portion of Meralco’s electricity requirements on a monthly basis.

At the same time, the 1,200 MW Ilijan natural gas plant was also shut down for a certain period last month, prompting Meralco “to resort to the wholesale electricity spot market (WESM) to make up for the unavailability of Ilijan,” the source said.

Apart from the IPPs and the WESM, Meralco also sources a portion of its electricity requirements from the state-run National Power Corp.

Meralco is expected to announce Tuesday the final amount of the generation charge, which is a pass-through component in the electricity bill.

It should be noted that the cost of electricity sold by the power-generation 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 part of Meralco’s sourcing strategy is to buy electricity from different suppliers to obtain adequate and reliable power at the most reasonable price.