MERALCO rates to increase in November due to surge in generation charge

Manila Electric Company (MERALCO) reports an increase of Php 0.4274 per kilowatt hour (kWh) in its November electricity bill, which hikes up the overall rate for a typical household to Php 11.8569 per kWh.

MERALCO Vice President and Head of Corporate Communications Joe Zaldarriaga said that the increase could be attributed to a surge in generation charge of around Php 0.2884 per kWh.

“Ang naranasan nating [increase] ngayong November ay dahil sa pagtaas sa generation charges ng Php 28 centavos per kilowatt hour,” said Zaldarriaga.

This would translate to an additional charge of about Php 85 on this month’s electricity bill for residential customers with a monthly consumption of 200 kWh.

Zaldarriaga added that transmission fees and charges from existing agreements should also be factored in.

The depreciation of the Peso by Php 2 against the US Dollar pushed up costs for Independent Power Producers (IPPs) and Power Supply Agreements (PSAs), resulting in rate hikes of Php 0.9392 and Php 0.4295 per kWh, respectively. This exchange rate shift affected nearly all IPP expenses and almost half of PSA costs, as they are tied to the dollar.

Additionally, the LNG terminal fees for First Gas Sta. Rita and San Lorenzo facilities added to the rising IPP charges, further driving up overall energy costs.

Meanwhile, charges from the Wholesale Electricity Spot Market (WESM) inched up by Php 0.0150 per kWh. Average demand in the Luzon grid was higher by about 198 megawatts (MW), while average capacity on outage also increased by 179 MW. 

The electricity rate increase this month was further influenced by a Php 0.0724 per kWh hike in transmission charges, which resulted from higher ancillary service costs in the WESM Reserve Market. 

Moreover, taxes and other charges also saw a rise of Php 0.0666 per kWh, contributing to the overall rate adjustment.

Following the recent directive from President Ferdinand Marcos Jr. and the Energy Regulatory Commission (ERC), MERALCO has taken steps to support customers affected by Severe Tropical Storm Kristine.

Residents in areas under a state of calamity, with monthly electricity usage of less than 200 kWh, will not face disconnection until December 2024. Furthermore, MERALCO is offering flexible payment options, allowing affected customers to settle their electricity bills from October to December 2024 in installments over the next six months.