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Friday, March 29, 2024

Malampaya shutdown to hike power rates by over P1/kWh

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Consumers should brace for higher power rates of over P1 per kilowatt-hour once the Malampaya natural gas facility goes on a 30-day maintenance shutdown starting in the middle of March, power authorities said Wednesday.

“Once the gas plants shift to liquid fuel, there’s around P1 per kWh automatic increase,” Luis Miguel Aboitiz, president of the Philippine Independent Power Producers Association told reporters during a roundtable discussion organized by GE Philippines.

The Malampaya production facility, which supplies fuel to three natural gas power plants with a combined capacity of 2,700 megawatts, will close down next month in preparation for its linkage to a new platform as part of a $1-billion expansion program.

“I guarantee that there will be a spike because that happens whenever Malampaya shuts down,” Aboitiz said.

He said the expected P1 per kWh increase arising from the fuel shift did not include the possible price spikes at the Wholesale Electricity Spot Market and the compensation for participants to the Interruptible Load Program.

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Aboitiz, however, said mechanisms are in place to mitigate the impact of the price increase at the WESM during the dry months when demand is high and supply is tight.

“But it won’t be as bad [as 2013] because we’ve got a lower primary cap at the WESM and a secondary cap,” Aboitiz said.

Generation charges including other rates had surged by P4.15 per kWh as a result of the Malampaya shutdown in northwest Palawan in November to December 2013.

Meralco vice president and head of utility economics Lawrence Fernandez said the anticipated higher rates would be reflected in the April to May billing of consumers.

The Malampaya project will shut down from March 15 to April 14, with the impact to be felt in the April and May bills of consumers.

Fernandez, however, said the P1 per kWh “depends on the prices of fuel during that period.”

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