Manila Electric Co. (Meralco), the country’s largest power distributor, expects a potential increase in electricity rates this month despite marginal decline in prices in September.

Joe Zaldarriaga, Meralco Vice President and Head of Corporate Communications, said the projected increase was due to a higher generation charge—the portion consumers pay for energy purchased by the power distributor.

Zaldarriaga explained that the costlier generation charge is primarily driven by the weaker peso agianst the US dollar and the interim power supply agreement between Meralco and First Gen Corp.’s First Gas-Sta. Rita Power Plant.

“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,” Zaldarriaga said.

Earlier, the Energy Regulatory Commission (ERC) approved the supply deal for the 1,000-megawatt (MW) Sta. Rita gas-fired power plant until January 2026. The extension was granted under a force majeure clause to ensure a stable supply across Luzon.

The agreement is also necessary to maintain the operations of the Malampaya natural gas facility, which fuels First Gas's Sta. Rita and San Lorenzo plants.

Meralco previously projected that while the approval ensures supply, it could result in a P0.32 per kilowatt-hour (kWh) increase for consumers this month.

Meralco executives, however, remain hopeful that the increase will be mitigated by falling prices in the spot market.

“We, however, are hopeful that these possible increases will be tempered by lower Wholesale Electricity Spot Market (WESM) prices as reported by the Independent Electricity Market Operator of the Philippines (IEMOP),” Zaldarriaga added.

IEMOP recorded a 31.7% decline in Luzon’s spot market prices yesterday, falling to P2.57 per kWh from P3.76 per kWh. Power supply in Luzon saw minimal growth, rising to 14,681 MW from 14,646 MW.

Meralco is expected to announce its final price adjustments for October soon.