Manila Electric Company’s (Meralco) electricity rates in March increased after higher transmission and generation charges pushed up overall costs for consumers.

The utility announced a rate increase of PHP 0.6427 per kilowatt-hour (kWh) for the month. This brings the overall rate for a typical household to PHP 13.8161 per kWh, up from PHP 13.1734 in February.

This means that for residential households consuming around 200 kWh, the adjustment translates to an increase of PHP 129 in their total electricity bill for March.

The increase was mainly driven by a PHP 0.2880 per kWh rise in transmission charges for residential customers. According to Meralco, this was due to a 70% increase in ancillary service charges incurred by the National Grid Corporation of the Philippines from the reserve market.

Reserve market costs accounted for nearly half of the total transmission charge reflected in this month’s billing.

Generation charges also rose during the billing period, increasing by PHP 0.2209 per kWh to PHP 7.8607 per kWh.

Part of the increase came from fixed charges linked to the second extension of the Power Purchase Agreement with First Gas–Sta. Rita, which added around PHP 0.38 per kWh to the generation charge.

The billing also reflected contract price adjustments approved by the Energy Regulatory Commission for ACEN Corporation, Panay Energy Development Corp., South Premiere Power Corp., and Sual Power Inc. These adjustments amounted to PHP 0.2817 per kWh, equivalent to around PHP 789 million in generation costs for the month.

However, these increases were partly offset by a PHP 1.0952 per kWh reduction in Wholesale Electricity Spot Market charges following improved supply conditions in the Luzon grid.

The completion of recovery for previous contract price adjustments involving South Premiere Power Corp. and Sual Power Inc. also offset around PHP 858 million, or about PHP 0.30 per kWh, during the billing period.

Meanwhile, other charges, including taxes, posted a net increase of PHP 0.1338 per kWh.

The March rate also reflected the implementation of a new uniform national lifeline subsidy rate of PHP 0.01 per kWh following a directive from the Energy Regulatory Commission.

Meralco noted that generation and transmission costs are pass-through charges, meaning they are paid to power suppliers and the grid operator, while taxes, universal charges, and renewable energy subsidies are remitted to the government.

The company also said its distribution charge has remained unchanged since August 2022, when it implemented a PHP 0.0360 per kWh reduction for residential customers.

Meralco also reminded customers to practice energy efficiency as the country approaches the dry season, when electricity demand typically rises. This is especially important as global fuel market pressures have also increased the price of oil products. 

“We are entering a period when demand for electricity traditionally peaks, and external factors are adding pressure to energy costs,” said Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga.

“By embracing energy efficiency, consumers can have better control on their electricity bills and at the same time, contribute to mitigating the impact of external factors on electricity costs,” he added.

How can households better manage electricity consumption as power demand and energy costs rise during the dry season?

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