The Manila Electric Co. (Meralco), the country’s largest power distributor, said electricity rates are likely to rise this month, mainly due to the peso’s depreciation, which has increased the costs of dollar-denominated power supply.

“While we are still waiting for some billings from our suppliers to finalize the October electricity rate, indications point to a possible increase in the generation charge this month,” Meralco vice president and head of corporate communications Joe R. Zaldarriaga said on Tuesday.

Weaker peso

He said the weaker peso has raised generation costs, but the possible increase may be tempered by lower prices at the Wholesale Electricity Spot Market (WESM), as reported by the Independent Electricity Market Operator of the Philippines.

“Rest assured that we will announce the overall rate adjustment once all billings have been received and verified,” Zaldarriaga added.

Seven-month low

Electricity prices in the WESM fell to a seven-month low of P3.04 per kilowatt-hour (kWh) in September, down from P4.59 in August, as higher supply and weaker demand widened the reserve margin and eased pressure on the grid.

Last month, Meralco implemented a P0.1852 per kWh reduction, bringing the overall rate to P13.0851 per kWh from P13.2703 in August, mainly due to lower generation charges from Independent Power Producers and Power Supply Agreements following a stronger peso and cheaper fuel prices.