Meralco Announces Slight Increase in August Electricity Rates

MANILA — The Manila Electric Company (Meralco) disclosed on Monday that electricity rates for its customers have risen slightly in August, marking a small increase in the monthly power bill for residential consumers.

According to Philippines News Agency, the rate has increased by PHP0.0327 per kilowatt-hour, bringing the current rate to PHP11.6339 per kWh, up from PHP11.6012 per kWh in July. This change will result in an approximate PHP7 increase for residential customers consuming 200 kWh per month. The utility attributes this rate hike primarily to higher transmission charges this month, which saw an increase of PHP0.1086 per kWh due to the grid operator’s heightened ancillary service charges aimed at maintaining grid reliability.

Meralco reported that the transmission charge increase was significant enough to outweigh a PHP0.0503 per kWh reduction in the generation charge. Variations in charges were noted among different power sources: while charges from Independent Power Producers (IPPs) declined, rates from the Wholesale Electricity Spot Market (WESM) and Power Supply Agreements (PSAs) increased. Meralco sourced 40 percent of its power from PSAs, 33 percent from IPPs, and the remaining 27 percent from WESM.

Further influencing future rates, Meralco highlighted potential changes in generation costs associated with the use of Malampaya gas by the First Gas – Sta. Rita and San Lorenzo plants. Following the expiration of the old Gas Sale and Purchase Agreement (GSPA) last month, the new supply arrangements are covered by a new GSPA between First Gas and the Malampaya Consortium. However, the pricing formula remains based on the old agreement pending regulatory approval of the new GSPA.

Meralco’s vice president and head of corporate communications, Joe Zaldarriaga, noted that once the new GSPAs receive regulatory approval, there will likely be a direct impact on the generation charges for these plants, potentially affecting future electricity rates further.