Higher electricity prices next year
Wednesday, November 15, 2006
By MYRNA M. VELASCO
Anticipated up-ticks in electricity spot market prices for November-December billing cycle is expected to gobble up consumers’ pockets at the start of next year, it was forecast by industrialist Raul T. Concepcion.
The rationale for the expected drastic rise in electricity rates, he said, would be on contingencies adopted by operators of the power system to run plants on more expensive oil because of the shutdown of the Malampaya gas field starting November 18 until December 12.
"Electricity prices will increase next year as WESM (Wholesale Electricity Spot Market) would have billed distribution utilities by then the higher cost of electricity traded in the previous month," Concepcion stressed.
The higher prices in the WESM projected during the period would be on top of the P1.30 per kilowatt hour (kWh) already applied for by utility giant Manila Electric Company (Meralco) to reflect higher generation charges due to WESM during the August-September billing period.
The consumers covered by Meralco’s franchise area is likely to suffer brunt of the anticipated rate hikes as the utility firm procures roughly 50 percent of its supply from the spot market.
Concepcion entered his plea before the Energy Regulatory Commission (ERC) as intervenor in Meralco generate rate adjustment application.
The SO have advised that Ilijan plant may not run during the gas field’s shutdown; and to compensate for part of its lost capacity, state-owned National Power Corporation (NPC) has instructed Korea Electric Power Corporation (KEPCO) to ensure full dispatch of the 600megawatt Malaya thermal plant.
All other power facilities have also been told to ensure that they run on full capacity during Malampaya’s downtime period.
The power system’s supply situation has been aggravated with the forced outage of the 1,200 megawatt Sual coal-fired power facility due to damage in its generator stator which will take 6 to 10 months to fix.
The sudden increase in electricity rates was noted in the spot market in its third month of commercial operation when load weighted average prices (LWAP) climbed by more than P1.00 per kWh.
This triggered an investigation on alleged price fixing pointing to Power Sector Assets and Liabilities Management Corporation (PSALM) as could have been the party involved.
The result of the probe instigated by the Market Surveillance Commitee of the WESM is due this November 17.
Philippine Electricity Market Corporation (PEMC) president Lasse A. Holopainen said the higher WESM rates would not be reflected yet in the consumers’ electricity bills until the investigation is concluded.
While utility firms like Meralco have already been billed to the adjusted WESM rates, Holopainen noted that corrective measures can still be undertaken once the result of the probe is out. (MMV)
posted by philpower @ 12:38 PM,
