Meralco to review fuel mix as Middle East tensions risk electricity costs
POWER DISTRIBUTOR Manila Electric Co. (Meralco) said on Wednesday it will review its fuel mix, including liquefied natural gas, coal, and diesel, as shifts in global fuel prices driven by the Middle East conflict could affect electricity costs.
“We want to ensure adequate supply of power and manage price volatility as responsibly as possible,” Chairman Manuel V. Pangilinan said in a post on X.
“[I] have made it clear to the team that we must help protect consumers as cost of goods rises globally,” he added.
He also urged households and businesses to be mindful of electricity consumption, noting that “we import much of the fuel used to generate power — we can all help to have enough power to get through the next few weeks if we conserve power.”
While Meralco does not source oil for its power supply requirements, the company warned of a potential impact of the Middle East conflict on electricity rates due to upward inflationary pressure.
Lawrence S. Fernandez, vice-president and head of utility economics at Meralco, said that constraints on oil may also drive coal and gas prices higher, which make up the company’s supply requirements.
“That’s one of the impacts we’re anticipating on global commodity prices because of the situation in the Middle East,” he said.
Currently, gas accounts for 60% of Meralco’s power supply requirements, followed by coal at 20-25%, and renewable energy at 10%. The remainder is sourced from the country’s electricity spot market.
Mr. Fernandez said that energy prices will depend on how long the tensions persist.
The Meralco official also noted that the current situation would not affect the March billing period.
“The earliest we may see an effect is for April. But again, this would depend on how long this situation will persist. So, we’re hoping it will normalize as soon as possible,” Mr. Fernandez said.
On the supply side, he assured that the company has adequate fuel and that consumers will continue to have electricity in the summer months.
“I’d like to assure everyone that we have our supply requirements adequately covered. We will make sure that we will be able to provide electricity to all our customers and that we will continuously support remote and ensure that we in Meralco will continuously push energy efficiency and energy saving practices in support of the government’s call as well,” Meralco Spokesperson Joe R. Zaldarriaga said.
Last month, Meralco rates increased by P0.2226 per kilowatt-hour (kWh) to P13.1734 per kWh this month from P12.9508 per kWh in January, mainly due to higher transmission charges.
Meralco is the country’s largest private electric distribution utility, serving over 8.1 million customers in Metro Manila and surrounding provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.
Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
