Electricity rates increased this April as the Manila Electric Company (Meralco) implemented a price increase attributed to higher generation costs linked to peso depreciation.

Meralco raised its overall rate by PHP 0.5335 per kilowatt-hour (kWh). This brings the typical household rate to PHP 14.3496 per kWh from PHP 13.8161 per kWh in March.

This means that for residential customers consuming 200 kWh, the adjustment translates to an increase of around PHP 107 in their total electricity bill.

The bulk of the increase came from the generation charge, which rose by PHP 0.5257 per kWh to PHP 8.3864 per kWh from PHP 7.8607 per kWh.

This was largely attributed to the weakening of the peso against the US dollar, which pushed up costs for power supply agreements and gas-fired plants with dollar-denominated charges.

For the March supply month, the peso depreciated to PHP 60.748 per USD, increasing by more than PHP 3 and affecting around 99% of costs from First Gas plants and 44% of other power supply agreements.

As a result, charges from First Gas plants increased by PHP 1.2342 per kWh, while costs from power supply agreements rose by PHP 0.1989 per kWh.

Charges from the Wholesale Electricity Spot Market (WESM) also went up by PHP 2.3955 per kWh, driven by tighter supply conditions in the Luzon grid and a 579-megawatt increase in average demand.

Despite these increases, transmission charges declined by PHP 0.0656 per kWh due to lower ancillary service charges, partially offsetting the upward adjustment.

Other charges, including taxes, also posted a net increase of PHP 0.0734 per kWh.

Meralco noted that there are customers who continue to benefit from the ongoing Actual Weighted Average Tariff (AWAT) refund amounting to PHP 0.2024 per kWh, which helped temper the overall increase.

The distribution charge, meanwhile, has remained unchanged since a PHP 0.0360 per kWh reduction implemented in August 2022.

Starting this April billing, Meralco will also implement a new lifeline discount structure in line with the Energy Regulatory Commission’s updated guidelines.

Qualified low-income households consuming 50 kWh or less will receive a 100% discount on electricity rates, while those consuming 51 to 70 kWh and 71 to 100 kWh will continue to receive discounts of 35% and 20%, respectively.

Meralco said the current adjustments have yet to reflect potential fuel price increases linked to the ongoing Middle East conflict.

Amidst rising costs and the dry season, the company urged customers to adopt energy efficiency measures to better manage their electricity consumption.

“We urge our customers to continue practicing energy efficiency and conservation. Beyond helping manage consumption and electricity bills, these practices can contribute to mitigating the impact of external factors on electricity costs,” said Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga.

How will rising external factors continue to shape electricity prices in the months ahead?

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