Following a reduction last month, the Manila Electric Co. (Meralco) announced an upward adjustment in its overall power rate for October, primarily driven by a higher generation charge.

In a statement, Meralco said on Monday, Oct. 13, that consumers will see a ₱0.1852 per kilowatt-hour (kWh) increase this month, which would raise the overall charge for a typical household to ₱13.3182/kWh.

Consumers using 200 kWh will see a ₱47 increase, 300 kWh users around ₱70, 400 kWh about ₱93, and 500 kWh roughly ₱117.

This month’s price spike was driven by an increase in the generation charge by ₱0.1903/kWh, as rates from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs) climbed.

IPP charges have gone up by ₱0.3622/kWh, while PSA rates saw an upward change of ₱0.3567/kWh.

According to Joe Zaldarriaga, Meralco Vice President and Head of Corporate Communications, these movements were caused by the weakening of the Peso against the US dollar, as these costs are dollar-denominated.

He also attributed the increase in generation charge to the impact of the power purchase deal with Lopez-led First Gas-Sta. Rita plant. Despite the deal's approved interim extension, which would improve power supply, consumers will feel the weight of the price spike.

“I think we need to look at the energy security as a result of the contract extension. We very well know that the supply being provided by [the] Malampaya-run gas plants is very crucial to the overall capacity of not only Meralco, but for the Luzon grid,” Zaldarriaga explained.

The Energy Regulatory Commission (ERC) previously green-lighted the procurement deal for the 1,000 MW Sta. Rita gas plant to secure enough supply for the region. Its effect on consumers’ billing is expected to end by January 2026.

Transmission, taxes, and other charges saw a ₱0.0428/kWh jump this month.

Despite this impact, lower rates from the Wholesale Electricity Spot Market (WESM) offset the rising prices, which ensured that the power bill hike wouldn’t rise further.

The Independent Electricity Market Operator of the Philippines (IEMOP) reported last week that the Luzon grid saw a 31.7 percent decline in spot market prices to ₱2.57/kWh.

Along with lower WESM rates, the distribution-related true-up adjustment, meant to correct past overcharges, will reduce consumers’ bills by ₱0.2024 per kWh.

Larry Fernandez, Meralco Head of Utility Economics, assured that this over-collection will still reflect this month.

“[There is] an ongoing AWAT (Actual Weighted Average Tariff) refund… That is still ongoing; that was approved by the ERC (Energy Regulatory Commission).”

In March, the ERC ordered Meralco to refund ₱19.95 billion to its consumers over a three-year period, following the company’s proposal to return costs reflecting the difference between its AWAT and the approved final distribution rate for the period covering July 2022 to end-2024.