Power rate hike seen as Malampaya shuts down in Feb for maintenance

Luzon is assured of a stable power supply during the scheduled two-week maintenance shutdown of the Malampaya gas facility in February next year, the Department of Energy (DOE) said on Friday.

However, without providing specific estimates, Energy Secretary Raphael Lotilla said the outage of this facility, which supplies about 20 percent of Luzon’s electricity requirement, could lead to higher rates.

The Malampaya facility supplies to natural gas-based power generation plants in Batangas which, in turn, supply to Meralco. These generation plants, Lotilla said, will have to switch to alternative fuels which can be “more expensive historically speaking.”

In a virtual briefing, Lotilla said the maintenance of the Malampaya deep water gas-to-power project is scheduled for Feb 4 to 18, 2023.

“This is a regular maintenance activity that has been closely coordinated with the DOE and other relevant stakeholders to ensure that the Malampaya facilities and equipment operate in a safe, reliable, and efficient manner to avoid incidents that can potentially impact the continuous supply of gas to the customer power plants,” the DOE said in a statement read by Lotilla.

“During this period, the supply of gas will temporarily stop, and will lead the power plants to switch to alternate sources of fuel,” it added.

The DOE outlined the contingency measures to be implemented to ensure uninterrupted power supply for the duration of the Malampaya gas facility’s shutdown:

• Designation of “must run” plants. A “must run” status means that the concerned power plant must supply electricity to the grid under all condition
• Close coordination with Meralco, other distribution utilities and Retail Electricity Suppliers to activate and expand the Interruptible Load Program (ILP) to help soften the impact whenever supply deficiency and power interruptions are imminent in the grid
• National Grid Corporation of the Philippines (NGCP) to accelerate completion of transmission lines in the Luzon grid and implement a day-ahead (6:00 p.m.) announcement of red and yellow alerts;
• Encourage large users to do own-use generation
• Pursue an accelerated campaign for energy efficiency and conservation for industrial, commercial, governmental, and residential consumers

Lotilla did not provide any specific estimates but said the scheduled outage of the Malampaya gas platform, which supplies about 20 percent of Luzon’s electricity requirement, could lead to higher rates.

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