February 2014 MERALCO power rate

February 2014 MERALCO power rate

The February generation cost for MERALCO is pegged at Php5.5359 per kW-hr across all consumption level (50-5000 kW-hr) or a cost decrease of 2.3% from January 2014 generation cost of Php5.6673 per kW-hr

Graph 1:  2011 to 2014 the cost for 300 kW-hr for the month of February

Graph 2: Annual electricity rate as of February 2014 for all level (50-5000 kW-hr)

Graph 3: Monthly electricity rate for 300 kW-hr level last 12 months

Source: Meralco website

http://www.meralco.com.ph/customer/page-cusCare-billRates.html#

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ERC approves rules on renewable energy

ERC approves rules on renewable energy 

By Iris C. Gonzales (The Philippine Star)  | Updated February 10, 2014 - 12:00am

MANILA, Philippines - The Energy Regulatory Commission (ERC), the power regulator, has approved the disbursement and collection guidelines for the so-called Feed-in-Tariff (FIT) system, a move seen to support the renewable energy sector.

The National Renewable Energy Board (NREB) said the guidelines, approved in December, along with efforts of the Department of Energy, would encourage players to build more solar, wind, biomass and run-of-river hydro power plants.

“The RE industry congratulates both the ERC and the DOE for their continued efforts to bring much needed clean generating capacity to the grid.

Additional RE capacity not only stabilizes power rates but will also provide jobs in mostly rural areas.  It will also contribute to a cleaner and healthier environment for all,” NREB chairman Pete Maniego said.

To date, under the Energy department’s “first come, first served” FIT policy, roughly 320 MW of much needed generation capacity will be added to the grid, according to Maniego.

Once completed, these power plants will provide much needed capacity that will help stabilize power prices at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

According to NREB, the FIT policy has attracted over $800 million in direct investments and aided rural economies by creating over 3,500 construction jobs across the Philippines.

The government has been encouraging players in the renewable energy sector through FIT.

The FIT regime is a form of incentives for renewable energy players.

Feed-in tariffs offer cost-based compensation to renewable energy players among other perks.

The FIT rate approved by the Energy Regulatory Commission (ERC), the power regulator are as follows: P9.68 per kilowatt-hour for solar; P8.53 per kwh for wind, P6.63 per kwh for biomass and P5.90 per kwh for hydropower projects.


The Energy department has been pushing for a robust and diverse power supply mix including renewable energy sources to help ensure the country’s power needs.

Committed Power Projects Still Inadequate To Meet Future Demand

Despite assurance from Energy Secretary Carlos Jericho L. Petilla of capacity additions when supply conditions hit straining point in 2015, a list of the Department of Energy (DOE) revealed that there are actually only two committed power projects in the Luzon grid.

These are the coal-fired plants of South Luzon Thermal Energy Corporation (SLTEC) of Trans-Asia and Ayala group joint venture; and that of Southwest Luzon Power Generation Corporation of the Consunji group.

The initial 135-MW of the Putting Bato coal-fired facility of SLTEC is targeted on stream August this year, according to the energy department; while the 300-MW of the expanded Consunji coal plant in Calaca, Batangas is for commissioning around November this year for Unit 1 of 150MW; and the second unit of another 150MW by February 2015.

The Phinma Group-Ayala joint venture has programmed to expand the capacity of their coal plant by another 135MW and this is targeted on-line by 2015.

What has been teeming in the DOE’s list are “indicative power projects”, but these may not necessarily reach commercial development either due to major issues such as financing, political risks or hurdles on off-take agreements.

The roll of committed power projects for the Visayas grid has also been dismal, with only the 270-MW of Palm Thermal Consolidated Holdings Corporation taking off from blueprint to-date. The facility is due for commissioning in 2015.

Based on DOE’s forecast, Luzon and Visayas grids will be afflicted with supply tightening around 2015. If power projects cannot be firmed up on time, these two power grids faces prospects of brownouts.

For Mindanao, the only committed project logged by the energy department is the 300-MW Therma South Inc. coal plant of the Aboitiz group.  It will shore up the grid’s power supply starting 2015.

There are other Mindanao power facilities which project developers guaranteed to be on-line by 2015 and 2016, but these are not included yet in the DOE’s “committed projects’ list”. These include the 210-MW Sarangani coal-fired plant of the Alcantara group and the 405-MW plant of FDC Utilities Inc. of the Filinvest group.

Power industry players have been seeking concrete policy directions as well as updated and sensible energy blueprint that shall guide them in their investment plans.

And while the DOE leadership sounded off expectations that power plant projects will come on-line as they are needed,   what it missed in such assumption had been the lingering policy uncertainties which may discourage capital flows in the sector in the near term. (MMV)

Reference:


Velasco, M.M.(2014 February 6). Committed Power Projects Still Inadequate To Meet Future Demand. ManilaBulletin. Retrieved from http://www.mb.com.ph/committed-power-projects-still-inadequate-to-meet-future-demand/

Meralco says power rates down this month

Meralco says power rates down this month

February 3, 2014 10:11 pmManila Times (online version)

by Madelaine B. Miraflor

POWER consumers will see a drop of 13 centavos per kilowatt-hour in their February bill because of lower generation charges, according to the Manila Electric Co. (Meralco).

The country’s biggest power distributor said the generation charge was smaller because the power supply has stabilized. For February, the generation charge will be P5.54 kilowatt per hour (kWh), 13 centavos lower than January’s P5.67.

Meralco said the cost of power sourced from the Wholesale Electricity Spot Market (WESM) went down to P30.67 per kWh from P36.08 per kWh in December.

“This reduction in the generation charge, particularly in the cost of power from WESM, was expected as power supply normalized during the January supply month, with most of the baseload power plants that were previously out of service returning to normal operations and with gas-fired plants no longer using the more costly liquid fuel, such as condensate and bio-diesel,” the power distributor explained.

“Sa pagbabalik-normal ng suplay ng kuryente, bumaba sa P5.54/kWh ang generation charge ngayong buwan,” Meralco said on Twitter.

The surge in the generation charge prompted Meralco to seek a record rate hike late last year. The company blamed the higher rates to the shutdown of the Malampaya plant and other power plants. Luzon gets the bulk of its power from Malampaya.

The Supreme Court stopped the implementation of the P4.15 per kilowatt-hour rate increase in December.

Who screwed the power consumers?

Who screwed the power consumers? 
DEMAND AND SUPPLY By Boo Chanco (The Philippine Star)  | Updated January 27, 2014 - 12:00am

If you followed the Senate hearing on what went wrong with our power bills, a typical consumer will likely end up more confused than ever. The various parties invited to shed light ended up pointing to each other as being primarily responsible for screwing us, the power consumers.

The problem with that hearing is that it was mostly the lawyers talking and we all know lawyers aren’t as interested in unearthing the truth as they are with protecting their principals. They will obfuscate the issues and because of the technical complexities of the power industry, it is easy to obfuscate.

There was also failure to ask more tough questions. I am however glad that enough was said to confirm most of the points I have raised in this column. But the smoking gun was nowhere in sight.

Indeed, the issue of collusion was all but forgotten. I feel the way to get to the truth of who was responsible for that catastrophic rise in our power bills is to follow the money. By this I mean look into the records of WESM to see who gave a maximum bid of P62/kwh and actually got dispatched.

Some executives of generating companies were reportedly popping champagne bottles and computing their expected outsized bonuses because of the extraordinary profits from that national tragedy. But some of them are saying they were not the only ones who earned a bonanza. They tell me we should also focus on possible “trading profits” of Meralco.

Let us try to follow the money. Based on records, here is the list of generators who submitted bids in the 60s level during the time in question. Their bids were dispatched, thus setting the clearing price.

In sum, there were 23 out of 744 intervals (hours) in November and 68 out of 720 intervals in December that cleared at approximately P60/kwh during the time that the Malampaya platform was being maintained including at non peak hours.

For the November billing period (Oct. 26 to Nov. 25), these were the days and plants that offered >60 P/kWh.

November 10: 1590 (Bauang), Pan Asia (Limay)

November 15: 1590 (Bauang), Therma Mobile (Navotas)

November 16: 1590 (Bauang),Therma Mobile(Navotas)

November 17: 1590 (Bauang), Therma Mobile(Navotas)

November 20: 1590 (Bauang), Therma Mobile(Navotas)

November 23: 1590 (Bauang), Therma Mobile(Navotas)

November 25: 1590 (Bauang), Therma Mobile(Navotas)

For the December billing period (November 26 to Dec. 25), these were the days and plants that offered >60 P/kWh.

November 26: Pan Asia (Limay), APRI (Makban)

November 27: Pan Asia (Limay),

November 30: Therma Mobile(Navotas)

December 1: Therma Mobile(Navotas)

December 2: Pan Asia (Limay),

December 3: Pan Asia (Limay),

December 5: 1590 (Bauang), Pan Asia (Limay),

December 6: 1590 (Bauang), Therma Mobile (Navotas), Pan Asia (Limay),

December 7: Therma Mobile(Navotas)

December 8: 1590 (Bauang), Therma Mobile(Navotas),

December 11: 1590 (Bauang), Therma Mobile(Navotas),

December 12: Therma Mobile(Navotas).

These are all diesel powered plants except for APRI (Makban) an Aboitiz geothermal plant. The 1590 Bauang plant is owned by a company called Vivant, a company that also owns VECO. The Limay plant used to be owned by San Miguel who supposedly divested it to another company which many in the industry believe is still related to San Miguel. Therma Mobile belongs to Aboitiz Power and fully contracted to Meralco which in effect makes it a Meralco plant.

It should be interesting to know how much these companies earned during the Malampaya shutdown emergency. Checking the details of the records can help tell us the presence of collusion.

On the other hand, we can also point out the appearances of collusion by analyzing the bidding behavior. We start with the fact that all the generating companies know Malaya is hardly dispatched. Thus, in making their bid calculations, they assume Malaya is out of the picture.

Did they can see the thin reserve and agreed with each other to all submit bids on the high side… up to the limit of P62/kwh? Or did they give their bids as independent rational decisions based on market conditions?

The NGCP as system administrator, on the other hand, sees all the available generating plants including the diesel fired plants quoting at P62/kwh and concludes there is enough supply and Malaya need not be called.

Or did NGCP collude with some generators to keep rates high? Note that NGCP also failed in its duty as system administrator to properly schedule maintenance shutdown of some generators in the light of the Malampaya shutdown. Henry Sy Jr.’s Triratna group once made an offer to buy Meralco from the Lopezes in alliance with San Miguel, presumed owner of one of the generators that submitted maximum bids shown above. 

 NGCP is not concerned about the impact of high dispatch rates to consumers. The massive profits of the group of Henry Sy Jr and their Chinese government partner at NGCP are protected by ERC on a formula that allows full recovery of claimed costs plus margin.

 On the other hand, PSALM, the government entity that now owns Malaya, is not keen on running the 620 MW power plant because it is expensive to do so.

Malaya is a base load plant designed to run for long periods of time. It takes 16 hours of running offline before it can be lined up for dispatch. Indeed it makes no sense to burn diesel for almost a day only to run for two hours to satisfy peak demand. The other diesel plants can be dispatched in less than half an hour.

Still, the Malampaya shutdown was planned in advance and PSALM could have arranged to run Malaya not only to prevent a brownout and also to prevent spot prices going too high during the entire period. Malaya operated only from Dec. 2 to 10, or too late to arrest the surge in generation rates.

Meralco president Oscar Reyes observed that “There is an analysis of the behavior of the WESM, if Malaya was online and offered during the Malampaya shutdown, the WESM average price Nov. 11 to Dec. 10 would have gone down by as much as 70 percent from P21 per kwh to about P5 per kwh.”

PSALM’s Emmanuel Ledesma Jr did a Pontius Pilate and insisted “NGCP is the one who determines dispatch. My understanding was the supply was sufficient. NGCP never mentioned anything to us with regard to insufficiency of supply.”

NGCP, for its part, stressed that during the Malampaya shutdown from Nov. 11 to Dec. 10, there was actually no shortage in supply. “There was no deficiency in the system. In that period, there was sufficient capacity,” Raul Saludo, head of NGCP’s system operations for Luzon, also said during the hearing.

That’s because NGCP was only looking at the technical sufficiency of demand, that is, there was no system condition (e.g. voltage problem) that would trigger the call for must run units. But NGCP should have also been looking at what was happening in the spot market. Or maybe, that is the job of the Department of Energy who should have had an active monitoring team during those critical days.

What do I see from all these facts? Collusion may be hard to prove but I clearly see there is no one looking out for the consumers. The private sector generators were after maximizing profits which the deregulated environment under EPIRA allows.

The diesel power generators saw an opportunity to make big money. Their plants are idle most of the time and this was a rare opportunity to loudly ring the cash registers. Because the Energy Secretary declared Malaya to be on economic shutdown and knowing how reluctant PSALM is in running Malaya, they were emboldened to bid at the maximum allowed.

If Energy Secretary Jericho Petilla was more alert and decisive, he should have surprised all of them by ordering Malaya to run and thus screw the generators before the generators could screw the consumers. The behavior of the generators in a tight market should have been predictably obvious to Petilla, who after all, is energy secretary.

Indeed, there is a protocol that former Energy Secretary Rene Almendras used in past Malampaya shutdowns and other emergencies called the Grid Operations and Maintenance Protocol which Secretary Petilla should have used.

As it turned out, Malaya proved to be a paper tiger. It was the only weapon the Secretary of Energy had and he failed to use it.

Of course the Secretary will say he also has the mandate to maintain a power industry environment conducive to more investments in power plants. Using Malaya the way Almendras did to dampen rates would have given a negative investment signal.

The tunnel vision of NGCP and PSALM can only be described as an absence of malasakit for the consumers. That, plus the incompetence of ERC and DOE sealed the negative outcome for all of us.

 Sec Petilla should have realized that his most immediate responsibility is to protect the consumers. Allowing the rates to go haywire as it did produced a serious political backlash that is bad for the power industry too.

Now they are telling us that the average price of power to consumers last year was lower than the year before. That may be true but allowing that extreme volatility to happen makes that fact simply incredible to consumers.

The senators must follow the money if they want to know who had the most number of orgasms from that rate orgy.

WESM seeks P814M from customers

Another round of increase pending!

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WESM seeks P814M from customers
By Riza T. Olchondra
Philippine Daily Inquirer 
8:26 am | Tuesday, January 28th, 2014


MANILA, Philippines—Philippine Electricity Market Corp., which operates the Wholesale Electricity Spot Market (WESM), seeks to collect market transaction fees (MTFs) of P814.5 million from trading participants this year. 

In an order, the Energy Regulatory Commission (ERC) said that pending the final resolution of the proposed MTF, the spot market administrator should continue applying the 2013 rates. 

“Based on initial indicative figures, the estimated (proposed) MTF rate for 2014 is P0.0125/kWh,” the ERC said, noting that this represents a 4 percent decline from the 2013 rate. 

The new rate sought was based on the projected energy transactions in Luzon and Visayas this year of 63,789 gWh. 

The bulk of the fees sought for 2014 would fund “budgetary requirements”  worth P796.024 million, broken down as follows: capital expenditures (P82.412 million); personnel services (P388.641 million); maintenance and other operating expenses (P309.363 million); and provision for the Department of Energy/Energy Regulatory Commission monitoring facilities (P15.608 million). 

Another P18.505 million was sought for the Year 1 budget for the Market Design and Structural Feasibility Study (Forwards Market) and the Market Research and Development Platform project. 

ERC noted, however, that the amounts sought were net of corporate income and value added taxes. These also do not cover possible adjustments in expenses due to changes in regulations, as well as PEMC’s separate applications for additional fees. 

On Aug. 14, 2012, PEMC filed an additional MTF application meant to enable the WESM operator to collect some P900 million in fees from trading participants to repay the loan used for the establishment of its Market Management System (MMS) loan. That was done under agreements with state-owned firms National Power Cop., National Transmission Corp. and Power Sector Assets and Liabilities Management Corp. 

On Sept. 15, 2011, PEMC filed separate applications for additional MTF for a New Market Management System (NMMS) project. 

ERC said PEMC’s MMS and NMMS applications were still pending.


Read more: http://business.inquirer.net/161959/wesm-seeks-p814m-from-customers#ixzz2reMdklVP 
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Meralco sets new hike

Meralco sets new hike
By Alena Mae S. Flores | Jan. 09, 2014 at 12:01am

Computation for January rates to be released today

CONSUMERS face a new spike in their electricity bills as a result of the lingering effects of the shutdown of the Malampaya gas field and other power plants, the Manila Electric Co. (Meralco) said Wednesday.

The country’s biggest power distributor will release its computation for the January rates today.

The company’s head of utility economics, Lawrence Fernandez, said Meralco said the actual January generation charges billed to consumers will still be at P5.67 per kilowatt-hour because of a 60-day temporary restraining order imposed by the Supreme Court.

“The December supply month continued to be affected by forced, scheduled and extended power plant outages. These were on top of the Malampaya shutdown, which affected 15 days of the supply month. As in November, all these would correspondingly affect December’s generation costs,” he said.

The Malampaya gas platform was shut down for maintenance from Nov. 11 to Dec. 10 but Meralco was only able to compute the impact on power bills from Nov. 11 to Nov. 25 because its billing cycle ends every 26th of the month.

Earlier, Meralco sought to impose a P4.15 per kWh increase – the highest in the country’s history – but was stopped from doing so when the Supreme Court issued a temporary restraining order while it decides on the petitions filed against the rate hike.

The government has asked the Supreme Court to excuse the Energy Department and the Energy Regulatory Commission, from commenting on the petitions against the rate hike, even though they were also named as respondents.

The Office of the Solicitor General said both the department and the ERC were nominal parties that were not directly involved in the case, and should therefore be exempted from filing their comments.

In doing so, the government was leaving it to Meralco to defend its P4.15 rate hike.

Meralco was set to file its comment Wednesday, the deadline set by the court for respondents to answer the consolidated petitions.

Oral arguments have been set for Jan. 21.

Petitioners alleged that their constitutional right to due process was violated when the ERC approved the rate hike without public hearings. They also attacked the ERC for approving Meralco’s petition just four days after it was submitted.

Meralco’s P4.15 computation does not include the price impact from Nov. 26 to Dec.10, during which Malampaya was still closed, company officials said.

As a result of the restraining order, Meralco has asked its customers to set aside their December billing and use the November billing as a guide for paying.

Meralco president Oscar Reyes earlier expressed concern over the lingering impact of the Malampaya shutdown and new plant shutdowns on power rates.

“Even as we may expect the generation cost and the WESM (Wholesale Electricity Spot Market) charges, volatile as they are, to drift down to more normal levels in March 2014, rendering this a temporary blip for now, we are still challenged by new or additional power outages which have risen in the last two weeks in the January billing,” Reyes said.

The ERC, meanwhile, has yet to release the results of its investigation into allegations that power suppliers had colluded to jack up electricity rates in time for a Jan. 15 submission to the Senate.

“We have no commitment [to Congress]. It is not yet finished,” ERC spokesman Francis Saturnino Juan said.

“There is no definite timeline for the investigating unit (to submit its report),” he said.

Earlier, ERC Commissioner Josefina Patricia Asirit said it was possible that the report would be released before Jan. 15.

She said commission is set to hold its first regular meeting on Jan. 13 but is not sure when the investigation unit will present its results to the commission.

The regulator is conducting its report amid allegations of market abuse, which pushed up the generation costs of Meralco.

In the House, Oriental Mindoro Rep. Reynaldo Umali confirmed that the House had not received a report on the allegations of collusion either, despite assurances that the report would be submitted by Jan. 6.

Umali said Energy Secretary Jericho Petilla and ERC chairwoman Zenaida Ducut gave no reason for their failure to comply.

“It is the first time we tasked them to report and they failed to submit. Reportedly they said they will complete their investigation and report on Dec. 30, 2013 and then Jan. 6, 2014,” Umali said.

The House committee on energy chaired by Umali was scheduled to resume its probe of the power rate hike Wednesday, Jan. 8 but the hearing was cancelled.

Earlier, the Energy Department admitted that Meralco’s P4.15 kWh increase was much higher than their anticipated rate of P1.58 per kWh.

At a hearing conducted by the House committee on energy last year, Energy Undersecretary Raul Aguilos had disclosed that the Energy Department already conducted its probe into the unplanned outages that occurred in several plants like the Sta. Rita, San Lorenzo, Pagbilao, Masinloc, GN Power, Calaca and Ilijan.

Meralco blamed the power plant outages, especially the scheduled maintenance shutdown of the Malampaya natural gas platform, for the higher cost of electricity.– With Maricel V. Cruz and Rey E. Requejo

http://manilastandardtoday.com/2014/01/09/meralco-sets-new-hike/

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