Meralco customers face 3rd consecutive rate hike

Customers of Manila Electric Co. (Meralco) should prepare for a third consecutive power rate increase this month, driven by a higher transmission charge that outweighs a recent reduction in generation costs.

The upcoming adjustment will raise household electricity rates to P11.79 per kilowatt-hour (kWh), up from P11.63 per kWh last month. 

Thus, households consuming 200 kWh of electricity should expect around a P31 increase in their monthly bills.

In a briefing on Wednesday, Meralco vice president and head of Corporate Communications Joe R. Zaldarriaga explained that the price hike is primarily due to a 29-centavo increase in the transmission charge for residential customers, caused by higher ancillary service fees.

Generation charge down

“We have a reduction in the generation charge of 15 centavos, but it was wiped out by the increase in the transmission charge. Now, the main cause of the increase in the transmission charge this month is the higher ancillary service charges following the resumption of operation of the reserve market on 5 August,” Zaldarriaga said.

Notably, generation charges from Power Supply Agreements (PSAs), Independent Power Producers (IPPs), and the Wholesale Electricity Spot Market (WESM) all decreased. 

The reduction in generation costs was largely attributed to the peso’s appreciation to its strongest level since December 2023, lowering costs for contracts denominated in US dollars. 

According to Meralco, the appreciation resulted in a 24-centavo per kWh reduction in PSA costs and a 5.29-centavo per kWh reduction in IPP costs.

Meanwhile, WESM charges also saw a slight decline of 5.14 centavos per kWh, reflecting the final installment of the deferred May WESM costs ordered by the Energy Regulatory Commission.

During this period, PSAs contributed 46.2 percent of Meralco’s total energy requirement, with WESM providing 27.3 percent and IPPs supplying 26.4 percent.