Meralco Announces Rate Hike in January Due to Increased Generation Costs

In January 2024, customers of Manila Electric Co. (Meralco) will experience an increase in their electricity bills due to a hike in the power rate. Meralco announced an adjustment of 8.46 centavos per kilowatt-hour (kWh), setting the overall rate for a typical household to P11.3430 per kWh, up from P11.2584 per kWh in December.

This rate hike translates to an increase of about P17 in the monthly bill for a residential customer consuming 200 kWh. The main factor behind this increase is the higher generation charge, which rose by 11.36 centavos to P6.6468 per kWh, primarily due to the increased cost of power from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs).

The spike in WESM charges by 56.11 centavos per kWh is attributed to higher average capacity on outage in the Luzon grid, which increased by around 418 MW. Additionally, charges from IPPs also rose by 13.84 centavos per kWh due to higher fuel costs of First Gas-Sta. Rita and San Lorenzo, resulting from the use of imported liquefied natural gas (LNG) in testing and commissioning of its LNG terminal.

The increase in generation charge was somewhat offset by a 15.22-centavo per kWh reduction in charges from Power Supply Agreements (PSAs) due to lower charges from Emergency PSAs and higher excess energy deliveries from some PSAs, priced at a discount.

Meralco’s transmission and other charges saw a net reduction of 2.90 centavos per kWh. Furthermore, the collection of the Feed-In Tariff Allowance (FIT-All) remains suspended as directed by the Energy Regulatory Commission (ERC).