As weather temperatures rise, so as the electricity rates that consumers will be paying in their May billing cycle.

Power utility giant Manila Electric Company (Meralco) indicated there is high probability that power rates will increase this month due to confluence of factors – including tightening of supply, the completion of its first round of refund that was previously ordered by the Energy Regulatory Commission, as well as upward adjustment in gas re-pricing.

In the past three months, the power firm noted that the P0.15 per kilowatt hour (kWh) pay-back to residential customers implemented somehow helped soften its pass-on rates, but that reduction will no longer appear in the May bill.

The company said that scale of refund, from previous over-recoveries, had been reflected starting in the January bills and it concluded in April this year.

Meralco Vice President and Head of Corporate Communication Joe Zaldarriaga emphasized that “based on early projections, there may be an upward pressure on the generation charge for the month of May 2021 due to observed increase in WESM (Wholesale Electricity Spot Market) prices.”

He explained that despite the re-imposition of strict lockdowns within the NCR plus bubble, “power situation in the grid remained tight as capacity on outage remained above 3,300 megawatts and Luzon peak demand in April still exceeded 10,400MW.”

Zaldarriaga similarly stated that they are anticipating “increase in Malampaya gas prices due to the quarterly re-pricing, which will reflect the upward trend in Dubai crude oil prices beginning October 2020.”

Meralco has been sourcing sizeable fraction of its supply portfolio from the country’s gas plants – via its contracted independent power producers (IPPs) and power supply agreements.

The Meralco executive expounded that their customers “have experienced lower power rates in the first three months of the year, as average retail rates dropped by P0.29 per kWh compared to the same period last year.”

The power firm said it is still awaiting submission of invoices from power suppliers and the adjustment on its tariff will be announced in the coming days.

But as blazing weather persists, Zaldarriaga is reiterating appeal to consumers “to continue practicing energy efficiency initiatives at home, to be ready in managing their consumption, as the ongoing summer season may bring an increase in residential electricity consumption.”

The thinning of power supply, especially in the biggest power of grid of Luzon, is also anticipated to extend until August this year because of the longer maintenance shutdowns of power plants – and that scenario in the power system could trigger upticks on electricity tariffs.