MANILA, Philippines—Customers of Manila Electric Co. (Meralco) may enjoy a reduction in their electricity bills next month, due to an expected lower cost of power from one of its suppliers and the completion of its P5.5-billion underrecoveries collection.
In a briefing, Meralco first vice president Ivanna dela Peña said that a possible driver of this reduction would be the use of banked gas by independent power producer (IPP) First Gas Power Corp. for its 1,000-megawatt (MW) Sta. Rita natural gas facility this month.
Dela Peña explained that the use of banked gas usually starts in November, which would have an impact on December rates. But the ability to burn banked gas had been limited due to preventive maintenance shutdowns for both of First Gas' Sta. Rita and the 500-MW San Lorenzo power plants.
In fact, only the Sta. Rita facility was able to use banked gas this month, which would have an impact on the generation charge in January, she added.
This so-called banked gas comprised of natural gas that was not consumed in 2002 to 2003 and was priced much lower. Natural gas prices were benchmarked against oil prices and moved with the preceding six months’ average basket of fuel prices as specified in the contract with the gas sellers—in this case the Malampaya consortium of Shell Philippines Exploration BV, Chevron, and PNOC Exploration Corp.
Aside from the First Gas facilities, Meralco also sources power from another IPP, the Quezon Power Philippines Ltd. Other suppliers included state-run National Power Corp. and the wholesale electricity spot market.
Dela Peña added that the country's largest power distributor has completed collecting from power consumers its under-recoveries in transmission charges worth a total of P5.5 billion this month. This meant that Meralco would no longer collect 19 centavos per kilowatt-hour from its customers starting January 2011.
