Power users facing another increase in electricity bills are paying more because of rising fuel costs in global markets, a weaker peso, and the country's reliance on more expensive fuel—not because of higher Manila Electric Co. (Meralco) charges. 

Meralco Senior Vice President and Head of Regulatory Management Jose Ronald V. Valles said on Friday that the latest increase comes from generation charges, which reflect the cost of producing electricity.

"The recent electricity price increases pertain to generation charges, which reflect the spike in international fuel prices and peso depreciation as a result of the ongoing conflict in the Middle East, and the government's policy to use of transition fuel and the suspension of new coal-based power plants," Valles said.

"The effect of these factors on the generation charge is beyond the control of Meralco," he added.

Valles said the Department of Energy has directed Meralco, the country’s largest power distributor, to continue sourcing electricity from natural gas-fired power plants to maintain grid security.

About 50 percent to 60 percent of Meralco's electricity comes from natural gas plants, he said, warning that without those contracts, the Luzon grid could face supply shortages and prolonged power outages.

Responding to concerns over rising generation costs, Valles said electricity procurement is tightly regulated through competitive bidding overseen by the Department of Energy and the Energy Regulatory Commission (ERC).

"All the power supply agreements of Meralco were approved by ERC, a testament to its compliance with the Least Cost mandate under the EPIRA," he said.

Valles added that the ERC also verifies that only proper and allowable generation costs are passed on to consumers. He also said higher monthly bills are not always the result of higher electricity prices.

"The electric bill is not only affected by the generation charge but also by the individual's electricity consumption. There are instances when electricity prices decline, but the overall bill increases because of an increase in electricity consumption," he said.

Valles also defended Meralco's own charges, saying distribution rates have fallen over the past decade.

"On Meralco charges, our rates have actually gone down by 18 percent since 2014, unlike all other private distribution utilities. Customers are paying less today for the distribution-related charges that go to Meralco compared to more than a decade ago," he said.

To recall, Meralco raised residential electricity rates for the second straight month in July, increasing the overall rate by P0.3428 per kilowatt-hour (kWh) to P14.8261 per kWh from P14.4833 per kWh in June. 

The adjustment adds about P69 to the monthly bill of a typical household consuming 200 kWh. 

The increase was driven mainly by higher generation charges, along with higher taxes and transmission costs. Generation charges climbed to P9.2504 per kWh from P9.0704 per kWh.