Customers of Manila Electric Company (Meralco) will need to allocate higher budget for their electric bills this December, as the utility firm already indicated upticks in rates in the current billing cycle.

“The prevailing high coal prices in the world market and the continued use of more expensive alternative fuel with the persisting Malampaya gas supply restriction are expected to raise the fuel costs for this billing period,” Meralco Vice President Lawrence S. Fernandez said.

The power firm specified that it is still waiting for the billings from all of its power suppliers, but the emerging trend points to higher electricity rates in the bills that will be dispatched soon.

“Initial indications show that an increase is expected in the generation charge for the December bill,” the company executive noted. Meralco is anticipated to announce the rate adjustments toward the end of next week.

Fernandez further pointed out “the increase for the December bill will include one-fourth, or around P0.13 per kilowatt hour, of the deferred generation costs from the November bill, as directed by the ERC (Energy Regulatory Commission).”

It is worth noting that the preventive maintenance shutdown of the Malampaya gas production facility on October 2 to 22 this year, which was then extended for three days or until October 25, resulted in rate hikes that would be passed on in the electric bills of Meralco customers on staggered basis starting in this December billing.

The accumulated tariff hike from the Malampaya facility’s scheduled repair downtime could have been at aggregate P0.52 per kWh, but the ERC had instructed Meralco to spread the cost pass-on to four installments at P0.13 per kWh per billing cycle.

The continuing restriction in the Malampaya gas field production has likewise been triggering supply tightness in the power system, hence, the resulting higher settlement prices in the Wholesale Electricity Spot Market.”

According to Fernandez, “WESM prices are still elevated even after the resumption of Malampaya” even as he emphasized that “the secondary price cap is still being triggered, indicating sustained high spot market prices.”

In this week’s advisory to trading participants in the spot market, WESM operator Independent Electricity Market Operator of the Philippines (IEMOP) declared that the secondary price cap was imposed within specified trading intervals on December 1 and 2 as the cumulative price threshold (CPT) of P9.00 per kWh had been breached within the prescribed 5-minute rolling average of the generator weighted average price over a three-day period.

In addition, Meralco conveyed that the generation output of the 1,200-megawatt Ilijan gas plant had been de-rated to 400MW “because of inadequate fuel supply from Malampaya.”

Source: Manila Bulletin (