Meralco warns of higher electricity rates due to Super El Niño

Consumers may face higher electricity rates as the Super El Niño is expected to ramp up power demand and push up prices in the wholesale electricity spot market (WESM), the Manila Electric Co. (Meralco) warned Tuesday.

According to Meralco spokesperson Joe Zaldarriaga, electricity prices typically rise when demand increases, especially during periods of tight supply, as seen historically in the WESM. This is expected amid the Super El Niño.

“Historically, kapag mayroong upward demand sa electricity, makikita naman din natin na may pressure for prices to go up as well. That is why it’s very important on the part of Meralco to secure ‘yung aming supply needs from our bilateral contracts and to ensure that we are ably covered,” he said in a virtual briefing.

(Historically, when there is an increase in electricity demand, we also see upward pressure on prices. That is why it’s very important on the part of Meralco to secure our supply needs from our bilateral contracts and to ensure that we are adequately covered.)

The state weather bureau PAGASA said the record-breaking El Niño could bring less rain this October and could last until March or even June 2027.

Around 40 provinces are expected to experience less rainfall during the dry spell and drought. Once January comes, this number could jump to 80.

US-based Climate Impact Lab has also warned of 6,500 heat-related deaths in the Philippines through February 2027 amid the El Niño.

“There are factors beyond our control. ‘Pag masyadong mataas ‘yung (If there is too high a) demand for energy as we see during the previous summer months, talagang there are pressure for prices to go up, specifically sa (on the) wholesale electricity spot market,” Zaldarriaga said.

“That is why it’s very important for us, Meralco, to get the best supply or sourcing possible and find ways to lower the cost of electricity based on what the situation is on the ground,” he added.

The WESM is a trading platform where electricity generators sell power, and distribution utilities and other eligible buyers purchase electricity demand. WESM charges are part of the generation charges, which make up 64% of the Meralco bill.

Zaldarriaga said Meralco is also working closely with the government, particularly with the Department of Energy (DOE), to monitor the developments and the impact of the El Niño.

“We have sufficiently contracted our power supply to meet the needs and the demand of our 8.3 million consumers, so from the standpoint of our supply adequacy, we are prepared to serve our customers,” Zaldarriaga said.

“Regular din naman ‘yung ginagawa ng mga line crews na maintenance activity, upgrades, at strengthening ng distribution network para matiyak na maayos ang kondisyon ng mga pasilidad ng kuryente para ma-meet ‘yung pagtaas ng demand,” he added.

(Our line crews also regularly conduct maintenance activities, upgrades, and strengthening of the distribution network to ensure our electricity facilities remain in good condition and can meet increased demand.)

Meralco vice president and head of utility economics Lawrence Fernandez said the company is expecting an additional 450 megawatts (MW) of capacity for its franchise area — 200 MW from the bidding earlier this year that has yet to be approved by the Energy Regulatory Commission (ERC), and another 250 MW from Terra Solar that will come in summer 2027.

“In terms of the demand, kasalukuyan naming nire-review ‘yung forecast for next year. Bukod sa impact ng El Niño, we’re reviewing the economic forecasts. Alam naman natin nag-a-update din ‘yung mga iba ibang ahensya tungkol sa forecast nila ng GDP growth ng Pilipinas for 2027,” he said in the same briefing.

(In terms of demand, we are currently reviewing next year's forecast. Aside from the impact of El Niño, we’re reviewing the economic forecasts. We know that the different agencies update their forecast for the GDP growth of the Philippines for 2027.)

“We have to consider those updated economic forecasts, along with the impact of El Niño. Right now, hindi pa naman tapos ‘yung review na ‘yun (that review is not finished yet), ongoing pa rin,” he added.

Meralco is also bidding out 900 MW of baseload supply, with the deadline set for Thursday, October 15, 2026. The 15-year agreements from the auction would take effect by 2031.

The company constructs, operates, and maintains electric distribution systems in the cities and municipalities of Bulacan, Cavite, Metro Manila, and Rizal, as well as certain areas in the Batangas, Laguna, Pampanga, and Quezon provinces.