Meralco hikes July power rates by P0.49/kWh

Consumers will see higher electricity bills this July after the Manila Electric Company (Meralco) announced a P0.49 per kilowatt-hour rate hike, driven by rising generation charges brought about by surging global oil prices and the weakening of the Philippine peso.

The increase follows a cumulative P0.8575/kWh drop in power rates over the past two months.

For typical residential users consuming 200 kWh, the adjustment translates to an additional P98 in their monthly electricity bill, according to Meralco spokesperson and Corporate Communications Head Joe Zaldarriaga in a press briefing on Friday.

Zaldarriaga explained that the generation charge rose due to nearly P0.45/kWh hikes from power supply agreements (PSAs) and about P0.50/kWh from independent power producers (IPPs). These were slightly offset by a P0.17/kWh decrease in charges from the Wholesale Electricity Spot Market (WESM).

When asked whether rates would continue to rise, Zaldarriaga said it’s difficult to provide a clear forecast given the number of unpredictable variables involved.

Larry Fernandez, Meralco’s Head of Utility Economics, noted that the power supply costs from producers are dollar-denominated, making them sensitive to currency fluctuations.

“With the peso posting its weakest level in three months by the end of June, its depreciation had a greater impact on generation charges than the oil price spike, which only lasted about two weeks,” Fernandez said.

He emphasized that the sharp peso depreciation last month came after two months of currency strength and significantly raised the peso-equivalent cost of dollar-priced supply, especially from IPPs.

Meralco urged consumers to practice energy efficiency and conservation to help manage their electricity bills amid global and domestic economic pressures.