Meralco flags rate hikes from weak peso, new levies
Published Jan 8, 2026 01:56 pm
Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga
Manila Electric Co. (Meralco) customers face a potential uptick in power rates this month as weakening peso and the introduction of new renewable energy levy threaten to offset lower spot market prices.
Meralco Spokesperson Joe Zaldarriaga on Thursday, Jan. 8, warned that the local currency's recent volatility against the United States (US) dollar is exerting upward pressure on generation costs.
Because a big portion of Meralco's power supply contracts is denominated in US dollars, Zaldarriaga said the peso’s slide directly impacts the pass-through charges seen on monthly statements.
The Philippine peso hit a record low of ₱59.35 against the dollar on Wednesday, driven by investor flight to safe-haven assets amid escalating geopolitical tensions between the US and Venezuela.
Zaldarriaga, however, indicated that while the weaker currency is a headwind, the final rate movement remains fluid.
“We hope this will be mitigated or offset by lower WESM [wholesale electricity spot market] prices during the December supply month, as announced by the IEMOP [Independent Electricity Market Operator of the Philippines],” he said.
The utility is currently awaiting final billings from its independent power producers and plants under power supply agreements.
According to the IEMOP, average spot prices in the Luzon grid fell 15 percent to ₱2.98 per kilowatt-hour from ₱3.52 per kilowatt-hour in the previous month.
The decline was attributed to a combination of improved power supply margins and a seasonal dip in demand as cooler December temperatures took hold.
However, consumers must also contend with the debut of the Green Energy Auction Allowance (GEA-All).
The Energy Regulatory Commission recently authorized this new collection to compensate renewable energy developers for projects secured under the government’s auction program.
The charge, which amounts to ₱0.0371 per kilowatt-hour, will appear as a distinct line item on electricity bills starting this month. Distribution utilities, retail suppliers, and IEMOP are mandated to collect these funds from end-users nationwide.
Despite these cost pressures, Meralco executives remain cautiously optimistic about the broader price trend for the early part of 2026. The utility previously implemented a rate reduction of ₱0.3556 per kilowatt-hour in December, following lower transmission and generation costs.
Larry Fernandez, Meralco head of utility economics, has noted that the company has secured its mid-term supply requirements, which should help stabilize rates through the first half of the year.