Revised natgas pricing prompts price hike

Customers of the Manila Electric Co. (Meralco) may have to pay an additional 33 centavos for 12 months starting in October after the Energy Regulatory Commission (ERC) allowed the power distributor to modify rates from natural gas-fired power plants with existing supply contracts.

Based on ERC’s Notice of Resolution dated 13 August but was only published on Thursday, First Gas Power Corp. and FGP Corp. are now allowed to recover the difference between the previously approved pass-through costs and the landed cost of liquefied natural gas (LNG) and the new Gas Sale Purchase Agreement (GSPA).

First Gas Power and FGP are both affiliates of the Lopez Family’s First Gen Corp.

ERC chairperson Monalisa Dimalanta clarified that the monthly impact of the decision on power rates could range from 32 to 33 centavos per kilowatt-hour (kWh) for 12 months.

“For a consumer with 200 kWh consumption, that's a P66 irate increase for a month,” the ERC chief said in a text message. 

Nonetheless, Dimalanta stressed that the monthly fuel charge is not fixed. It varies based on the fuel mix used by the companies, which currently may include indigenous gas, liquid fuel, and imported LNG.

In a separate statement, Meralco clarified that its initial computation showed that the ERC decision will only translate to "around 12 centavos per kWh every month."

"As we have announced earlier this week, this will affect the generation charge -- which comprises the biggest chunk of customers’ electricity bills," Meralco said.

"While we have yet to do the final computations, rest assured that Meralco will duly inform the ERC and public about the actual impact of this order on the power rates," it added.