MANILA, Philippines — Higher electricity rates are expected within the Manila Electric Co. (Meralco) franchise area this month on higher spot market prices and power supply constraints.
Meralco head of utility economics Lawrence Fernandez said there were very strong indications that spot market prices would register significant increases during the March supply month which would be reflected in the April generation charge.
“The supply month started with yellow alert due to a constraint on the supply of Malampaya natural gas which, in turn, forced some gas-fired plants to reduce output or go on forced outage,” he said.
A yellow alert means there were not enough reserves to cover the largest running generating unit at the time, but does not necessarily lead to power outages.
Fernandez said one unit of the Malaya power plant was activated on Feb. 26 to March 1, on March 5 to 10, and on March 12 to 14, which indicated the need to add to the reserves in the Luzon grid.
The 650-megawatt (MW) Malaya Thermal Power Plant (TPP) in Rizal—which runs on diesel—was designated as a must-run unit (MRU) by the DOE to address supply deficiency when operating power plants in the grid suddenly bog down or become unavailable.
“As a result, we have observed daily average prices in the spot market stayed above P5.50 per kilowatt-hour (kwh) in the first two weeks of the supply month, even spiking to P8 per kwh several times,” Fernandez said.
Several power plants were on scheduled maintenance during the March supply month.
These facilities include the 50-MW Unit 3 of the Angat hydropower plant for an annual overhauling until July 29; the 300 MW Calaca Unit 2 for a scheduled maintenance until March 15; the 315-MW Masinloc Unit 2 for an annual overhauling until March 2; the 460-MW Quezon Power Philippines Ltd. Co. (QPPL) plant which is on planned outage until March 12; and the South Luzon Thermal Energy Corp. (SLTEC) plant which is on planned outage until March 6.
The 316-MW Unit 2 of GNPower went on unplanned outage as well, but will be on maintenance outage until March 25.
Last month, electricity rates increased by P0.97 per kwh, but Meralco only charged P0.85 per kwh in customer bills to mitigate the impact of the rate hike on consumers.
The remaining P0.12 per kwh, on the other hand, will be reflected in the April billings.