Meralco Announces February Rate Increase

This February, Manila Electric Company (Meralco) customers will face higher electricity bills following a rate hike announced by the utility. Meralco’s latest advisory reveals an increase in the household electricity rate by 57.38 centavos per kilowatt-hour (kWh), setting the new rate at P11.9168 per kWh up from January’s P11.3430 per kWh.

The rate hike will see the monthly bill of a typical household consuming 200 kWh rise by approximately P115. This adjustment stems from a notable rise in the generation charge, which surged by 45.52 centavos to P7.1020 per kWh, attributed mainly to the escalated costs associated with power sourced from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs).

The primary factors behind the increase include heightened fuel costs at First Gas-Sta. Rita and San Lorenzo power plants, driven by an increased reliance on imported liquefied natural gas. Additionally, the depreciation of the peso has exacerbated costs, especially considering that charges from IPPs, which constitute 96% of their expenses, are predominantly dollar-denominated.

PSA charges also experienced a rise, increasing by 15.58 centavos per kWh due to the augmented charges from Emergency PSAs and the peso’s depreciation, affecting the 11% of PSA costs that are dollar-denominated. IPPs and PSAs together contributed to 32.8% and 46.8% of Meralco’s total energy supply in the last supply month, respectively.

However, this increase was somewhat offset by a 40.71 centavo per kWh reduction in charges from the Wholesale Electricity Spot Market (WESM), attributed to an improved supply situation in the Luzon grid. This improvement came as both average demand and average capacity on outage decreased during January’s supply month.

Meralco also highlighted a net increase in transmission and other charges by 11.86 centavos per kWh, including the resumption of the 3.64 centavo per kWh Feed-In Tariff Allowance (FIT-All) collection as per the Energy Regulatory Commission’s directive.

The utility emphasized that pass-through charges for generation, transmission, taxes, universal charges, and FIT-All are remitted to the respective power suppliers, grid operator, and government. It also noted that Meralco’s distribution charge has remained unchanged since a reduction for typical residential customers in August 2022.