Meralco rates higher this month

MANILA, Philippines — Households within the franchise coverage of power distributor Manila Electric Co. (Meralco) can expect an increase of P0.6436 per kilowatt-hour (kWh) in electricity bills this month.

Meralco said the increase, which was due to higher pass-through charges, brought the overall electricity rate to P12.0575 per kWh in June from last month’s P11.4139 per kWh.

The adjustment translates to an increase of about P129 for a typical household consuming 200 kWh a month.

According to Meralco, the rate hike this month was driven by an increase in generation charge of P0.3466 per kWh amid higher costs from the Wholesale Electricity Spot Market (WESM).

“In the last supply month, we’ve seen tightness of supply coupled with high demand from the system. There was really pressure to increase WESM prices,” Meralco VP and head of corporate communications Joe Zaldarriaga said at a press conference.

For June billing, WESM charges surged by P1.5203 per kWh due to tight supply conditions last month, with average demand rising by over 1,200 megawatts (MW).

Meralco said charges from independent power producers (IPPs) also rose by P0.0224 per kWh—net of deferred generation costs—on the back of lower average IPP dispatch and the weak peso.

The higher generation charge, however, was tempered by the P0.2988 per kWh decrease in charges after Meralco and some power suppliers deferred the collection of portions of the generation cost this month.

“The increase... would have been higher, but Meralco took the initiative to cushion the impact of the higher pass-through costs on our customers with the help of some of our suppliers,” said Jose Ronald Valles, Meralco SVP and head of the regulatory management office.

Meralco, Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co. and South Premiere Power Corp. deferred the collection of around P500 million in generation costs, resulting in a P0.1313 per kWh reduction in the generation charge.

The deferred costs would be added to the electricity bills of consumers on a staggered basis over the next three months, the Pangilinan-led company noted.

The Energy Regulatory Commission was said to have approved the measure.

“We are still waiting for regulatory approval of our 400-MW interim power supply agreement (PSA) with Limay Power Inc., which could significantly reduce our WESM exposure and generation costs,” Valles added.

WESM, IPPs and PSAs accounted for 33 percent, 29 percent and 38 percent, respectively, of Meralco’s total energy requirement.

Meanwhile, the transmission charge for household consumers rose by P0.1450 per kWh as ancillary service charges went up.

Meralco’s distribution charge has not changed since August 2022, when it was reduced by P0.0360 per kWh.

Last month, Meralco electricity rates increased by P0.4621 per kWh due to higher generation charges.