After two straight months of rate rollbacks, the Manila Electric Company (Meralco) is raising power rates by P0.4883 per kilowatt-hour (kWh) this July, bringing the overall rate to P12.6435 per kWh from P12.1552 per kWh in June.

For a typical household consuming 200 kWh, the adjustment translates to an increase of about P98 in the monthly electricity bill.

Higher generation charge

Meralco said Friday the increase was mainly driven by the higher generation charge, which rose by P0.3407 per kWh.

Costs from Power Supply Agreements (PSAs) and Independent Power Producers (IPPs) went up by P0.4476 and P0.4992 per kWh, respectively, due to higher fuel prices and a weaker peso.

Peso fell to lowest level since March

The local currency fell to its lowest level since March, affecting dollar-denominated PSA and IPP costs.

Fuel costs spiked following tensions between Israel and Iran during the month of June supply. A P0.1703 per kWh drop in charges from the Wholesale Electricity Spot Market helped ease the increase, as Luzon grid demand dropped by over 770 megawatts — offsetting a rise in plant outages.

Energy supply for the month was sourced from PSAs, IPPs and WESM.

Hike in transmission charge

Also pushing up the overall rate was a P0.0734 per kWh hike in the transmission charge, linked to higher charges from the Reserve Market. Other charges, including taxes, posted a net increase of P0.0742 per kWh.

Meralco clarified that distribution charges remain unchanged since a P0.0360 per kWh reduction in August 2022.

Customers continue to enjoy a P0.2024 per kWh reduction from the ongoing distribution-related true-up adjustment.