Due to the liquid fuel shift of the gas plants and the incidents of ‘yellow alert’ during the 23-day shutdown of the Malampaya production facility, spike in the electric bills of the customers of the Manila Electric Company (Meralco) is highly anticipated in the November billing cycle.

Lawrence S. Fernandez, vice president of Meralco, indicated that the cost of the liquid fuel utilized by the gas plants during Malampaya’s maintenance downtime period on October 2-25 had been “around twice the cost of using Malampaya gas,” and such will trigger uptick in the generation charge component of the electricity rates pass-on to consumers.

To note, global oil prices have been incessantly surging past $80 per barrel even prior to the Malampaya shutdown; and international benchmark Brent crude peaked at the level of $87 per barrel last month.

Meralco said it is still waiting for the billings of its various power suppliers – including for the volume it procured from the Wholesale Electricity Spot Market (WESM).

Data from WESM operator Independent Electricity Market Operator of the Philippines (IEMOP) showed that the average settlement price in October soared to P6.265 per kilowatt-hour (kWh) in Luzon grid from just P3.287 per kWh in September.

A report of the spot market operator stated that secondary price cap was enforced for 8.39-percent in the last supply month “due to sustained high prices that occurred in the market,” hence, breaching the secondary price cap prescribed for WESM’s trading intervals.

Fernandez further noted “as a result of the Malampaya shutdown, the Ilijan and San Gabriel power plants were not able to operate because of non-availability of Malampaya gas. As a result, generation supply was reduced – leading to higher charges in the WESM.”

The Meralco executive expounded that there was also an instance of “yellow alert” last month – or a state in the power system manifesting insufficiency of reserves – and that triggered the enforcement of secondary price cap in the WESM last October 21 to 22.

Malampaya’s preventive maintenance had likewise been stretched for additional three days – or until October 25 from the original repair timeframe of October 2-22, and according to Fernandez, that compelled First Gen “to continue to run on liquid fuel during the extension of the shutdown.”

Fernandez reiterated that as had already been anticipated “the generation cost will be affected by the Malampaya shutdown.”