Meralco warns of higher rates in Dec on Malampaya shutdown

MANILA, Philippines - Manila Electric Co. (Meralco), the country’s biggest power distributor, has warned of higher electricity rates in December until January next year as a result of the impending shutdown of the Malampaya deep water gas-to-power plant.

The generation charge – a component of electricity bills – may go up by as much as P2 per kilowatt-hour, said Meralco senior executive vice-president Ricardo Buencamino.

Malampaya supplies gas to three natural gas-fired plants: the 1,200 megawatt Ilijan plant, the 1,000-MW Sta. Rita plant and the 500 MW San Lorenzo plant. These plants will now resort to diesel, which could cost P12 per kwh compared to gas, which is priced at P6 per kwh.

Energy Secretary Carlos Jericho Petilla said consumers will have to pay higher rates because the three power plants have no choice but to use gas.

“At this point there is really no source of gas other than Malampaya. We really don’t have any choice. The choice will come maybe in three years’ time when perhaps we can have LNG (liquefied natural gas),” Petilla said.

Malampaya’s scheduled one-month shutdown could drive electricity prices higher but Meralco said it is working with power companies to avoid a hike in rates.

The Malampaya facility, which fuels three gas-fired power stations in Luzon with a combined capacity of 2,700 megawatts, will shut down from Nov. 8 to Dec. 8.

Korea Electric Power owns and operates the Ilijan plant while First Gen Corp. owns and operates the Sta. Rita and San Lorenzo power plants.

At the same time, more power plants are scheduled for maintenance during the period, which could also affect supply and cost. The power plants scheduled for maintenance are the 600-MW Calaca plant, the 1,200 MW Ilijan plant and the 735-MW Pagbilao plant.