March Sees Potential Drop in Meralco Power Rates

Customers of the Manila Electric Company (Meralco) might experience a decrease in their electricity bills this March, offering a welcome change from recent rate hikes. Joe Zaldarriaga, a spokesperson for Meralco, hinted at a possible reduction in the household rate due to preliminary signs of a lower generation charge for the month.

Although final figures are pending as Meralco awaits complete billing details from its suppliers, the expected decline in the generation charge is attributed to several factors. Key among these is the return to operation of the San Buenaventura power plant post-maintenance and a decrease in Wholesale Electricity Spot Market (WESM) prices, bolstered by an improved supply situation in the Luzon grid. Additionally, a refund related to incremental generation charges—stemming from a rise in natural gas prices under a new gas sale and purchase agreement—will also contribute to the anticipated drop in electricity rates.

This potential decrease follows a period of heightened charges, notably with Meralco announcing a refund to its customers for generation charges after adjustments in natural gas prices were made. The refund was initiated in response to the Energy Regulatory Commission’s (ERC) advisement that passing such costs onto consumers might be premature without thorough validation of the charge’s basis.

Meralco expressed optimism that the expected reduction in generation charges would help mitigate any projected increase in transmission charges, which could arise from higher ancillary service charges. This development comes after February saw an increase in household electricity rates by 57.38 centavos per kilowatt-hour (kWh), pushing the overall rate to P11.9168 per kWh for a typical household from January’s P11.3430 per kWh. This increase, which resulted in an approximate P115 addition to the total bill of a residential customer using 200 kWh, was primarily due to a rise in the cost of power from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs), amid greater reliance on imported liquefied natural gas.

With these adjustments, Meralco customers have reason to anticipate some financial relief in their upcoming March billing, as the power distributor works to manage costs amidst the fluctuating energy market.