MANILA, Philippines — Customers of the Manila Electric Co. (Meralco) will face higher electricity bills this month, driven by an increase in both the generation charge and transmission fees.

In a briefing on Tuesday, Meralco officials announced that the overall electricity rate would rise by P0.4274 per kilowatt hour (kWh), bringing the rate for a typical household to P11.8569 per kWh, up from the previous month’s P11.4295 per kWh. Households consuming 200 kWh will see an additional P85 added to their monthly bill.

Meralco Vice President and Head of Corporate Communications Joe Zaldarriaga attributed the rate hike primarily to a P0.2884 per kWh increase in the generation charge. He also cited a rise in transmission charges, which went up by P0.0724 per kWh due to higher ancillary service fees from the Wholesale Electricity Spot Market (WESM) Reserve Market.

The increase in generation charges is attributed to higher costs from Independent Power Producers (IPPs) and Power Supply Agreements (PSAs). IPP charges rose by P0.9392 per kWh, while PSA charges increased by P0.4295 per kWh. The depreciation of the Philippine Peso, which weakened by P2 against the US Dollar, played a significant role, affecting 98% of IPP costs and 49% of PSA costs, both of which are dollar-denominated. Additionally, payments for liquefied natural gas (LNG) terminal fees at First Gas Sta. Rita and San Lorenzo plants contributed to the increase in IPP charges.

Charges from the Wholesale Electricity Spot Market (WESM) saw a slight rise of P0.0150 per kWh, driven by a 198 MW increase in average demand in the Luzon grid, along with a 179 MW increase in average capacity on outage.

For this period, IPPs, PSAs, and WESM accounted for 24%, 47%, and 29%, respectively, of Meralco’s total energy requirement.

Higher Transmission and Other Charges

In addition to the increased generation costs, transmission charges also rose. The transmission charge went up by P0.0724 per kWh, due to higher ancillary service charges from the WESM Reserve Market. Taxes and other charges rose by P0.0666 per kWh.

These pass-through charges for generation and transmission are paid to power suppliers and grid operators, while taxes, universal charges, and the Feed-in Tariff Allowance (FIT-All) are remitted to the government. Meralco’s distribution charge has remained unchanged since a P0.0360 per kWh reduction in August 2022 for typical residential customers.

Meralco officials noted that, while power consumption typically drops during the colder months, the upcoming yuletide season and related festive activities could lead to higher electricity use, further contributing to the rate increase.