Meralco rates rise in March as summer demand hits
As motorists reel from higher gas prices, households in Metro Manila will soon face the first wave of summer electricity rate hikes.
Manila Electric Co. (Meralco) announced that electricity rates have gone up by ₱0.6427 per kilowatt-hour (kWh) in March to ₱13.8161/kWh. This means that an average 200-kWh household consumer may see their bills increase by ₱129 this month.
According to Joe Zaldarriaga, Meralco vice president and spokesperson, March marks the beginning of higher power demand, as consumers begin to feel the heat of the summer season.
“We are entering a period when demand for electricity traditionally peaks, and external factors are adding pressure to energy costs,” he said. “By embracing energy efficiency, consumers can have better control over their electricity bills and at the same time contribute to mitigating the impact of external factors on electricity costs.”
Larry Fernandez, head of utility economics at Meralco, likewise assured that the March billing period has not yet accounted for the oil price pressure brought by tensions in the Middle East. He explained that soaring oil prices caused by geopolitical tensions can affect the costs for coal and liquefied natural gas (LNG), which are used for power generation, but the situation is currently being monitored for the month.
What drove power bills up this month, however, was the higher transmission rates, which stood at ₱0.2880/kWh due to a 70-percent spike in ancillary service costs, contributing to this month’s power bill increase.
These costs were incurred by National Grid Corp. of the Philippines (NGCP) from the reserve market, accounting for nearly half of Meralco’s overall transmission charge.
The generation charge likewise increased by ₱0.2209/kWh to ₱7.8607/kWh, driven by fixed charges from the power supply deal with First Gas-Sta. Rita.
The Sta. Rita gas plant’s power purchase agreement (PPA) had a second interim extension, meaning it will supply electricity to Metro Manila until July. This also contributed an additional ₱0.38/kWh to the generation rate in March.
These double increases have lessened the relief from lower Wholesale Electricity Spot Market (WESM) prices, which fell by ₱1.0952/kWh due to improved supply conditions in Luzon.
A new rate has also been included in the monthly billing, reflecting contract price adjustments of ACEN Corp., Panay Energy Development Corp., South Premiere Power Corp. (SPPC), and Sual Power Inc. (SPI), resulting in a ₱0.2817/kWh increase to the generation charge.
“This is equivalent to about ₱789 million in generation costs for this billing month, the impact of which was more than offset by the completion of the recovery of the previous contract price adjustment of SPPC and SPI, totaling ₱858 million or around ₱0.30/kWh,” Meralco explained.
Other charges, including taxes, increased by ₱0.1338/kWh, while a new uniform national lifeline subsidy rate of ₱0.01/kWh has been included.
This subsidy covers the electricity costs of households consuming up to 50 kWh, making them eligible for a full discount on their power bills.