Electricity consumers will see a modest increase in their bills this April after the Manila Electric Co. (Meralco) confirmed a P0.5335 per kilowatt-hour (kWH) hike, raising the overall residential rate to P14.3496 per kWh from P13.8161 per kWh in March.

For a typical household consuming 200 kWh, this translates to an increase of about P107 in the monthly bill.

The adjustment comes amid concerns of a possible price shock driven by global energy tensions linked to the Middle East crisis, with Meralco noting that current rates do not yet reflect potential fuel price increases from the ongoing conflict.

Higher generation charges

Meralco reported on Friday the adjustment was driven mainly by higher generation charges, which rose by P0.5257 per kWh to P8.3864, due to the peso’s depreciation against the United States dollar.

For the March supply month, the exchange rate climbed to P60.748, which raised costs for dollar-denominated power sources, where nearly all costs are foreign exchange-exposed, and portions of other power supply agreements (PSAs).

Charges from First Gas and PSAs increased by P1.2342 and P0.1989 per kWh, respectively.

WESM pushed costs higher

The Wholesale Electricity Spot Market also pushed costs higher, adding P2.3955 per kWh amid tighter supply conditions in the Luzon grid driven by seasonal demand.

First Gas, PSAs, and WESM accounted for 20 percent, 74 percent, and 6 percent of Meralco’s energy supply.

Transmission charges, on the other hand, eased by P0.0656 per kWh due to lower ancillary service costs, while other charges rose by P0.0734 per kWh.

According to Meralco, consumers continue to benefit from an AWAT refund of P0.2024 per kWh, while distribution charges remain unchanged since August 2022.