Yellow alert in Luzon grid to spike electricity rates

MANILA, Philippines — Several instances of yellow alert in the Luzon grid would have an upward pressure on the generation charge and eventually raise electricity prices this month and in next month’s bills.

“The effect on billing depends on how the consumers use their appliances, but as far as the rates are concerned, it will increase,” Energy Undersecretary Felix William Fuentebella said.

Last week, a yellow alert status was raised in the Luzon grid for five straight days due to low operating reserves during peak hours.

This was brought about by high demand and low supply due to unplanned outages and de-rated capacities of several plants.

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.

For this month, Manila Electric Co. (Meralco) senior vice president and head of utility economics Larry Fernandez said there was also an upward pressure in the generation charge in the April billing.

“First is we had three days of yellow alerts in the first week of March and then second, the peso was weaker in March versus February. For both factors, there is a tendency that the generation charge will increase,” he said.

Fernandez added more instances of yellow alert status raised in the Luzon grid this month could impact wholesale electricity spot market (WESM) prices.

“Every time there is a reduction in the reserves, there is also pressure in the spot market prices. We’ve had five consecutive days of yellow alerts, so there is a corresponding effect on spot market prices,” he said.

Meralco will announce April electricity rates today.

For the election season and the election day itself, Meralco spokesperson and public information office head Joe Zaldarriaga said the power distributor is prepared to meet the round the clock power demands of its franchise area.

“Would like to provide the assurance that Meralco, as far as our distribution system is concerned, is ready to be able to provide 24/7 services during elections,” Zaldarriaga said.