Why Meralco Is Raising Electricity Bills This Month

The Manila Electric Co. or Meralco is set to raise residential electricity bills this month by exactly P.06268 per kilowatt-hour to P13.2703 per kWh from P12.6435. What exactly went into these power rates climbing?

Meralco Vice-President and Head of Corporate Communications Joe Zaldarriaga announced the higher rates on August 12, attributing the higher rates to an uptick in generation and transmission charges.

“The generation charge increased by 37 centavos per kilowatt-hour due to higher charges from independent power producers (IPPs) as well as the Wholesale Electricity Spot Market (WESM),” he said.

Meralco says it has maintained its distribution charge at P0.0360 since August 2022. These IPPS, the WESM, and charges from power supply agreements account for 25 percent, seven percent, and 68 percent respectively of Meralco’s total energy requirement for the month.

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Filipino families and households reaching 200 kWh in power usage will see bills about P125 more expensive, while those who consume upwards of 300 kWh, 400 kWh, and 500 kWh will have to pay an extra P188, P251, and P313 respectively.

Generation charge, which went up by about 37 centavos, usually makes up 50 percent of the electricity bill.

The power distributor provides electricity to about 55 percent of the country’s needs, covering 39 cities and 72 municipalities. The company has been doing so for 122 years and has had its franchise extended for another 25 years.

Meralco Chief Operating Officer Ronnie L. Aperocho earlier told Esquire Philippines in a Corner Office interview that the franchise extension would be used to modernize the grid, elevate customer experience, advance innovation and technology, and to fast-track the clean energy transition.

Meralco Vice President and Head of Utility Economics Lawrence Fernandez said the peso-dollar exchange rate also played a big part in higher charges from IPPs, which climbed by P0.9476 per kWh.

On July 31, the Philippine peso closed at P58.32 and weakened by nearly P2 from the P56.33 closing on June 30.

In a separate statement, Meralco said the transmission increased by P0.1270 per kWh, while other charges and taxes also rose by P0.1249.

Meralco Chairman and CEO Manuel Pangilinan has said the firm is on track to achieve its target earnings of P50 billion this year via its power generation.