Meralco hikes rates this month

MANILA, Philippines — Power utility Manila Electric Co. (Meralco) is increasing its power rate by P0.6268 per kilowatt-hour in August, bringing the overall rate to P13.2703 per kWh from July’s P12.6435 per kWh.

The adjustment, which marks the second straight month of hikes, is equivalent to an increase of around P125 in the electricity bill of typical households consuming 200 kWh.

At a press conference yesterday, Meralco spokesman Joe Zaldarriaga attributed the rate hike to higher generation and transmission charges.

Generation charges, or the cost of power procured from energy suppliers, climbed by P0.3749 per kWh, mainly due to higher prices from independent power producers (IPPs) and the Wholesale Electricity Spot Market (WESM).

“The biggest factor that pushed generation costs higher was the depreciation of the peso against the dollar,” Meralco head of utility economics Larry Fernandez said.

Fernandez said the weakening of the peso was “very sharp,” with the local currency reaching as high as P58 against the dollar during the period.

The peso depreciation was said to have affected around 99 percent of IPP costs that were dollar denominated.

Charges from power supply agreements (PSAs), meanwhile, dropped following the decline in coal and liquefied natural gas prices, coupled with improved supply dispatch.

PSAs, IPPs and WESM accounted for 68 percent, 25 percent and seven percent, respectively of Meralco’s total energy requirements for the July supply period.

Also contributing to upward rate adjustments in August was the increase in transmission charges, or the cost of transporting electricity from power plants to distribution networks.

The transmission charge went up by P0.127 per kWh after the National Grid Corp. of the Philippines (NGCP) started the implementation of its P28.3-billion cost recovery ordered by the Energy Regulatory Commission.

Other charges, including taxes, likewise posted a total increase of P0.1249 per kWh.

Pass-through charges for generation and transmission are paid by Meralco to power suppliers and the NGCP, while other charges are all remitted to the government.

The distribution charge, the only portion that goes to Meralco, has not moved since August 2022.