Higher electricity rates in September

Users of electricity within the Manila Electric Co. (Meralco) franchise will face higher electricity rates starting in September after the Energy Regulatory Commission (ERC) approved the recovery of more than P4 billion in costs tied to a major gas plant owned by its affiliate.

In an order promulgated on April 14, the ERC gave Meralco the go signal to recover from consumers the monthly fixed fees it owed to its unit, Excellent Energy Resources, Inc. (EERI), for the power supply supplied early last year.

The amount to be recovered stood at P3.67 billion and $6.37 million (P381.7 million) for the costs relating to the declaration of commercial operations date of the gas plant’s units.

This is equivalent to an additional charge of P0.1099 per kilowatt-hour (kWh), which the ERC allowed Meralco to collect from its customers over a 12-month period.

“However, considering the current situation of increasing prices of electricity, the Commission finds it prudent to adjust the start of recovery period not earlier than September 2026 billing,” the ERC said in an 18-page order.

The recovery rate to be charged by the power distributor remains subject to the ERC’s earlier advisory, which encourages all distribution utilities experiencing generation cost increases of more than P1 per kWh to stagger the adjustment.

EERI, the operator of the 1,275-megawatt combined cycle power plant in Ilijan, Batangas, is jointly owned by the subsidiaries of Meralco, Aboitiz Power Corp. and San Miguel Global Holdings Corp. (SMGP).

EERI is 67% owned by Chromite Gas Holdings, Inc. — the joint venture between Meralco PowerGen Corp. and Therma NatGas Power, Inc., and 33% by SMGP.

The ERC partially approved the 15-year power supply agreement of Meralco and EERI in late 2024 amid pending acquisition of the gas plant.

The three units of the EERI plant have yet to secure a certificate of compliance from the ERC but have already obtained the final certificate of approval to connect (FCATC) from the National Grid Corp. of the Philippines (NGCP).

“The Commission recognizes that the (commercial operations date) of EERI is from the date of NGCP’s FCATC for each unit of the EERI plant. Hence… the Commission determines that the reasonable recovery period to be used is 12 months,” the ERC said.

Meralco is the country’s largest private electricity distribution utility, serving more than 8.2 million customers in Metro Manila and nearby provinces including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.