By Myrna M. Velasco
With supply tightening last month, the electricity rates to be passed on by Manila Electric Company (Meralco) to its customers will be on upward movement this November billing cycle.
Meralco Spokesperson Joe Zaldarriaga said “we expect the movement of the November generation charge to be on an upward adjustment primarily due to two main factors,” with him citing the uptick in spot market prices due to last month’s maintenance shutdown of the Malampaya gas production facility; and then the decline in the net settlement surplus (NSS) refund of the Wholesale Electricity Spot Market.
“WESM charges may be slightly higher due to a more challenged power supply situation seen in the recent supply month,” he explained.
He added that the four-day Malampaya scheduled maintenance on October 12-15 also resulted in “unavailability of some natural gas plants,” that in turn had triggered the declaration of “yellow alert” incidents by system operator National Grid Corporation of the Philippines.
A “yellow alert” condition in a power grid does not necessarily result in rolling brownouts, but this entails strained supply and lack of reserves in the system — that when more plants will conk out, power service interruptions could ensue.
“There were also some power plants that tripped and went on forced outages. And as a result, Luzon grid had two yellow alerts,” the Meralco executive further noted.
In fact as of Monday (November), system operator NGCP had placed Luzon grid on yellow alert again due to outages of some plants from 1 p.m. to 4 p.m.
Zaldarriaga expounded the second factor that had driven rates up had been “the amount of the NSS refund that we will receive from the WESM.”
He emphasized that such had been in compliance with a directive from the Energy Regulatory Commission (ERC) to reflect such as a cost item in the electric bills.
To recall, he qualified that the reduction in the September generation charge had been partly “due to the implementation of the NSS refund.”
Nevertheless, he said: “It appears that almost all the refund had already been received from the WESM and reflected by the October generation charge, thus, the amount of the NSS refund for November billing “will be much smaller.”
As has been assessed, the remaining NSS refund will be significantly lower for November 2019 billing than the previous month’s payback to customers.