Consumers should brace themselves for another increase in their electricity bills this month, as Manuel V. Pangilinan-led Manila Electric Co. (Meralco) has announced a power rate hike for April.

In a statement on Friday, April 11, Meralco reported a ₱0.7226 per kilowatt-hour (kWh) increase in its power rates, bringing the overall rate to ₱13.0127/kWh for a typical household.

Consequently, households and other customers consuming 200 kWh will see an increase of ₱145, those using 300 kWh will see a ₱216 increase, 400 kWh users will see a ₱288 increase, and those consuming 500 kWh will see a ₱360 rise in this month’s billings.

According to Meralco, the ₱0.7278/kWh surge in generation charge is the primary driver of the April billing increase. The company attributed this uptick to higher costs from the Wholesale Electricity Spot Market (WESM).

During the supply month of March, tighter supply conditions in Luzon caused WESM rates to climb by ₱3.4205/kWh. Following this increase, the peak demand expanded to 1,123 megawatts (MW).

Meralco also noted this year’s first yellow alert signal, which occurred on March 5, while the secondary price cap was at 6.39 percent.

Subsequently, power supply agreements (PSA) inched up by ₱0.2811/kWh following the expiration of a deal with Limay Power Inc. for a 400 MW capacity.

The transmission charge also contributed to the increase in consumers’ electricity bills with a ₱0.0809/kWh rise, which was caused by higher ancillary service charges from the reserve market incurred by the National Grid Corporation of the Philippines (NGCP).

“This month’s transmission charge also includes the last of three installments of February and March 2024 reserve market transactions for Luzon that the Energy Regulatory Commission (ERC) directed NGCP to collect,” Meralco explained.

Other rates and taxes also saw an increase of ₱0.1163/kWh. These pass-through charges for generation and transmission are paid to power suppliers and grid operators, while taxes, including universal charges and the feed-in-tariff allowance, are remitted to the government.

“The increases in WESM and PSA charges were partly tempered by lower charges from independent power producers (IPPs),” the statement read.

To limit the price increase this month, IPP charges decreased by ₱0.4738/kWh, driven by the appreciation of the peso against the United States (US) dollar, as the majority of these costs are dollar-denominated.

Moreover, the implementation of the rate true-up adjustment further eased the price spike this month by ₱0.2024/kWh, following the ERC’s order to refund ₱19.9 billion to its consumers.

“This covers the difference between Meralco’s actual weighted average tariff (AWAT) and the latest approved distribution rate for the period July 2022 to December 2024. This refund shall be implemented over 36 months or until the full amount is refunded,” the company clarified.