Lower Meralco rates seen next month

MANILA, Philippines - Manila Electric Co. (Meralco) consumers could expect lower bills next month following three consecutive months of rate increases.

A source said declining demand and cheaper power generation costs after major power plants returned to normal operations have resulted in lower bills.

“Malampaya is back online resulting in lower independent power producer rates,” the source said.

The maintenance of the Malampaya gas-to-power project in Palawan was completed late last month, normalizing the power supply situation in the Luzon grid.

The Malampaya project, whose natural gas fuels three power plants with a combined capacity of 2,700 megawatts (MW) or about 40 percent of Luzon’s power generation requirements, underwent a scheduled preventive maintenance on July 13 to 20.

“Plants that used more expensive liquid condensates were back to using natural gas,” the source added.

During the Malampaya shutdown, the Lopez-led First Gen Corp.’s 1,000-MW Sta. Rita and 500-MW San Lorenzo natural gas plants were forced to use more expensive liquid condensate fuel to ensure steady supply while San Miguel Corp.’s 1,200-MW Ilijan natural gas plant reduced its output.

The source said power generation costs might drop because of lower demand in the Wholesale Electricity Spot Market (WESM) during the rainy season.

“The Department of Energy sees [electricity rates] tempering certainly in costs and also in volume,” said Energy Undersecretary Josefina Patricia Asirit.

Actual generation charge that was reflected in Meralco customers’ bills this month jumped 28 centavos per kilowatt-hour to P6.7397, up from July’s P6.4549 per kwh, P6.1392 per kwh in June and P5.5962 per kwh in May.

The generation charge, which is the electricity bill’s biggest component, accounts for 56 percent of the customers’ average monthly power bill. This charge goes directly to suppliers of Meralco, the country’s largest power distributor.

Asirit said electricity bills would also be lower because of power outages during heavy rains and typhoons.

In a report, WESM administrator Philippine Electricity Market Corp. (PEMC) said supply over the past 12 months generally increased but the market still suffered from periods of supply tightness.

“While supply levels picked up during early part of 2012 after the holiday-timed maintenance outages, supply levels again started to tighten in summer,” PEMC said.

High demand in the summer season was aggravated by successive planned and unplanned outages of several generating units, PEMC said.

“As the WESM is operated as a single market, average prices in Luzon and Visayas are the same levels for most part of the year,” PEMC said.