Malampaya shutdown to hike Meralco rates

MANILA, Philippines – The timing of the maintenance shutdown of the Malampaya deep water-to-gas facility in November and December will likely hike power rates by P1 to P2 per kilowatt-hour, warned officials of power distributor Manila Electric Co. (Meralco).

The maintenance schedule of the Malampaya power facility, which harnesses less expensive and indigenous energy source off Palawan province, was moved to November 9 up to December 8, around the same time other power plants are also scheduled to go offline for their regular maintenance work.

“The shutdown of the Malampaya facility happens once every two years. This shutdown will overlap with the scheduled shutdown of other power plants. This could create an increase and could impact on our generation cost anywhere in the vicinity of P1 to even more than P2,” said Meralco president Oscar Reyes during the power firm’s briefing for its 9-month financial and operating results on Friday, October 25.

The spike in power rates will be reflected in the December billing, he added.

“They actually moved the schedule and this made matters worse because some of the power plants have their own schedules for maintenance shutdown as well,” explained Meralco Senior Executive Vice President Ricardo Buencamino.

The other plants that will be offline simultaneous to Malampaya’s include Calaca, Pagbilao, Masinloc and Ilijan.

Meralco officials explained that generation charge, one of the major components of the electricity bill, will increase because power distributors will have to source power from WESM (Wholesale Electricity Spot Market) and other power plants that run on diesel, which is more expensive than natural gas sourced from Malampaya. (WATCH: Rappler Animate: Why electricity rates in Philippines are high; READ: How does WESM work and affect electric bills?)

Malampaya supplies this to 3 natural gas-fired power plants with a total capacity of 2,700 megawatts (MW). These power plants provide 40% of the electricity needs of Luzon.

Of the 2.7-trillion cubic feet of reserves in the field off Palawan, an estimated 1.2-trillion cubic feet has been used. – Rappler.com