Meralco rates up this month

A Meralco lineman repairs an electrical line along Jupiter Street in Makati in this file photo from March.

Ryan Baldemor

MANILA, Philippines —  More than eight million customers of Manila Electric Co. (Meralco) should brace for higher power rates this month following an increase in generation charges.

Meralco spokesman Joe Zaldarriaga reported at a media briefing yesterday an upward adjustment of P0.3191 per kilowatt-hour this month, bringing the overall rate for a typical household to P15.0615 per kWh.

For residential customers consuming 200 kWh, the rate hike translates to an additional P64 on their electricity bills.

The generation charge, which covers the cost of power Meralco procures from suppliers, rose by P0.4973 per kWh due to higher fuel costs and peso depreciation, which affected the cost of dollar-denominated supply deals.

The increase was partly offset by lower transmission charges from the National Grid Corp. of the Philippines (NGCP) and a net reduction in taxes and other charges.

Transmission charges fell by P0.1384 per kWh, mainly due to lower ancillary service costs, which cover backup capacity needed to maintain grid stability.

Taxes also declined by P0.1436 per kWh, reflecting a higher share of indigenous natural gas, which is exempt from value-added tax, and the removal of VAT on the system loss charge.

Meralco pays pass-through charges for generation and transmission to power producers and the NGCP, respectively, while taxes and other charges are remitted to the government.

The only portion that goes to Meralco is the distribution charge, which covers the delivery of electricity through its poles, wires and substations.

After more than 15 years, the Energy Regulatory Commission (ERC) has finally approved a new distribution rate for Meralco, whose vast franchise comprises Metro Manila and nearby provinces.

For the first regulatory period covering July 2026 to June 2030, the company’s average distribution rate will rise to P1.48 per kWh from the current P1.35 per kWh.

The regulator ordered Meralco to refund P2.64 billion over six months, equivalent to a reduction of P0.1733 per kWh for residential customers.

Neither the higher distribution rate nor the latest refund order has been reflected in Meralco’s electricity rates this month.

Although it has yet to receive copies of the two decisions, the country’s largest power utility said it is ready to implement the rate adjustments ordered by the regulator.