AFTER two consecutive months of reductions, the Manila Electric Company (Meralco) has announced a power rate hike of ₱0.3191 per kWh for October.
This adjustment pushes the overall electricity rate for a typical residential household consuming 200 kWh to ₱15.0615 per kWh, up from ₱14.7424 per kWh in September.
For an average home, this translates to an additional cost of approximately ₱64 on their monthly bill.
The primary driver behind the upward adjustment is an increase in the generation charge, which rose by ₱0.4973 per kWh.
Higher fuel costs from First Gas and Prime CoreGen contributed significantly to this surge, propelled by their use of liquefied natural gas (LNG)—the price of which remains inflated due to the ongoing conflict in the Middle East.
Furthermore, the depreciation of the Philippine Peso against the US Dollar compounded these costs, as roughly 89% of First Gas and Prime CoreGen expenses are dollar-denominated.
Wholesale Electricity Spot Market (WESM) charges also climbed by ₱3.5167 per kWh, driven by WESM bill adjustments and tightening supply conditions across the Luzon grid during the September supply month.
However, these increases were partially offset by a drop in Power Supply Agreement (PSA) charges, which fell by ₱0.7567 per kWh.
South Premier Power Corp. (SPPC) benefited from lower fuel costs by utilizing Malampaya natural gas, which helped temper the impact of the weaker Peso on its dollar-denominated PSA costs (accounting for about 54% of the total).
During this billing period, PSAs accounted for 74% of Meralco’s total supply requirements, while First Gas/Prime CoreGen and WESM contributed 24% and 2%, respectively.
The overall generation charge increase was further cushioned by lower transmission fees and reduced taxes.
Charges from the National Grid Corporation of the Philippines (NGCP) fell by ₱0.1384 per kWh, driven by a ₱0.1321 drop in ancillary service charges from the Reserve Market and a slight decrease in transmission fees.
Additionally, taxes and other charges registered a net reduction of ₱0.0398 per kWh, despite a ₱0.0634 per kWh rise in the universal charge for missionary electrification mandated by the Energy Regulatory Commission.
Tax obligations dropped by ₱0.1436 per kWh, aided by a higher share of value-added tax (VAT)-exempt indigenous natural gas and the removal of VAT on system loss charges.
Meralco reminds consumers that pass-through charges for generation, transmission, and ancillary services are paid directly to power suppliers and the NGCP, while taxes, universal charges, and public policy fees are remitted directly to the government and relevant regulatory agencies.