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MVP: address generation side of higher fuel cost

Meralco chairman Manny V. Pangilinan: It's really the generation side where there's higher fuel cost. INTERAKSYON.COM FILE means BUSINESS

MANILA - The Department of Energy estimates that electricity rates will go higher by more than one peso once the scheduled maintenance shutdown of the Malampaya power plant gets under way.

According to Energy Undersecretary Wimpy Fuentebella, the increase cold range from P1.20 to P1.40 per kilowatt hour.

The higher charge takes effect in March 2017.

The Malampaya maintenance shutdown is scheduled from January 28 until February 18.

Because of the shutdown, sourcing supply from power producers using more expensive fuel will become inevitable.

"Nagkakaroon po tayo ng demand side management of kampanya; para doon sa mga may bahay at saka sa mga nagma-manage ng commercial areas, commercial buildings, or industrial areas, eh, magkakaroon ng computation kung papaano sila makapagtipid or makapaggamit ng kuryente nang masinop or judicious use of electricity [There's a need to manage the demand side; estimates are being made as to how the households, as well as those managing commercial areas, commercial buildings, or industrial areas, can save money or apply what is called judicious use of electricity]," said Fuentebella."

He added, "we are also looking into policies [on how to ease the burden of] consumers, so we will do our proper coordination with the other energy agencies."

Focus on generation side

As far as Meralco and TV5 chairman Manny V. Pangilinan is concerned, high electricity pricing has long been an issue in the country.

In an interview with Bloomberg TV Philippines Tuesday, Pangilinan said Meralco is now focused on local investments in order to respond to the electricity requirements.

"We see a significant need for more generation capacity.  There's always the issue of high power prices in this country and one of the factors that could put downward pressure on pricing is if you have a fairly significant margin to demand which is growing year on year," said Pangilinan.

Right now, Pangilinan said he does not see any substantial movement of prices emanating from the distribution companies like Meralco.

"It's really the generation side where there's higher fuel cost; and because of higher coal prices this year and slightly higher crude oil prices, whether that continues to go up or not is another question," Pangilinan pointed out.

Malampaya is on scheduled shutdown end of January to mid-February, and they will have to resort to liquid fuel, as compared to natural gas, so that will add cost to the power supply by the three gas companies, he explained.