Rising fuel prices, weak peso push electricity rate up

The ongoing Malampaya gas supply restriction necessitated the increased use of more expensive alternative fuel by First Gas Sta. Rita and San Lorenzo to ensure a continuous supply

Photo by Al Padilla

September 9, 2022

The same market forces bumping up commodity prices are now set to raise the electricity rate this month as power distributor Meralco said the skyrocketing petroleum prices and the weakening peso had pushed generation costs upward.

The increase in the September electricity bill comes after two straight months of reductions.

Meralco announced on Thursday that the overall rate for a typical household in September slightly inched up by 39 centavos per kWh to P9.94 from P9.56 per kWh in August.

For residential customers consuming 200 kWh, this is equivalent to an increase of around P78 in this month’s power bills.

Meralco attributed the power rate increase to the higher generation charge — which jacked up by P0.36 to P6.94 per kWh from the P6.58 per kWh the previous month.

Charges from the Independent Power Producers and Power Supply Agreements went up by P0.80 and P0.33 per kWh, respectively, driven by higher fuel costs and peso depreciation.

Meralco, the country’s largest power distributor, also noted that the ongoing Malampaya gas supply restriction necessitated the increased use of more expensive alternative fuel by First Gas Sta. Rita and San Lorenzo to ensure a continuous supply.

Peso depreciation also pushed up charges from the IPPs and PSAs since 98 percent of total IPP costs and 36 percent of PSA costs are dollar-denominated. The continued rise in international coal prices also increased the PSA rate.


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