DOE: Expect power price hike due to Malampaya shutdown

Pia Ranada
DOE: Expect power price hike due to Malampaya shutdown
The DOE says it will try to ease the impact of the Malampaya maintenance shutdown from January 28 to February 18

MANILA, Philippines – The Department of Energy has assured the public that it will make sure the Malampaya natural gas facility’s 20-day maintenance shutdown starting this month will not lead to a power shortage or a price shock for consumers.

Energy Undersecretary Felix William Fuentebella made the statement in a Palace news briefing on Tuesday, January 10, where he enumerated the steps the DOE is taking in relation to the Malampaya shutdown.

“Secretary Cusi made a directive: number one, the Department of Energy has to make sure, in proper coordination with our partners, with the stakeholders involved, that there will be sufficiency of power; and number two, we have to maximize our protection to our consumers so that we will avoid any price shock,” Fuentebella said.

The shutdown of Malampaya, which supplies 40% to 50% of Luzon’s power needs, is set to take place from January 28 to February 18, he said.

Fuentebella said there will be an expected increase in power rates during the shutdown, since natural gas plants dependent on Malampaya will have to use diesel to generate power, which is more expensive.

“There will definitely be higher rates because the issue here is a change of fuel from natural gas to diesel…So what we are explaining to the public is to explain the impact through simulations in pricing and we are also looking into a possibility of staggered payment,” said Fuentebella.

The staggered payment scheme will have to be discussed with consumer groups or the Energy Regulatory Commission, he added.

In April 2015, power rates increased by P0.27 per kilowatt hour (kWh) due to the Malampaya maintenance shutdown.

To avoid a price shock, the DOE is coordinating with energy providers to make sure the shutdown lasts only 20 days.

“We are coordinating with all those involved, number one, the SPEX (Shell Philippines Exploration BV) or the Malampaya consortium to make sure the maintenance won’t exceed 20 days,” said Fuentebella.

As of Monday, the DOE received assurance that everything was “still on track” to limit the scheduled shutdown to 20 days.

The DOE is also ensuring power plants shifting to diesel from natural gas make a smooth transition.

“We are making sure they have enough diesel and they will operate, meaning the megawatts they promised to deliver will be delivered,” Fuentebella said.

The Malampaya gas field fuels 3 power plants in Batangas with a capacity of 2,700 megawatts (MW).

Other generators of power, like renewable energy plants, may also be tapped to ensure sufficient supply.

Consumers can help ensure sufficient energy supply during the 20-day period by conserving their energy usage, the DOE said.

Households, for instance, can schedule energy-consuming activities like ironing clothes for times of the day when energy demand is not that high.

The times to avoid such activities are 7 am to 8 am, 1 pm to 2 pm, and 7 pm to 8 pm – peak hours of energy consumption in the country.

Refraining from using airconditioning systems would also be helpful, said Fuentebella. – Rappler.com

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Pia Ranada

Pia Ranada is a senior reporter for Rappler covering Philippine politics and environmental issues. For tips and story suggestions, email her at pia.ranada@rappler.com.