Meralco hikes power rate by 49 centavos in July 2025

Customers of the Manila Electric Company (Meralco) should tighten their belts this month as the power distributor is implementing a hike in its household rate due to higher generation charge amid the increase in world fuel prices coupled with the peso’s weakness.

In an advisory on Friday, Meralco announced it is increasing its rate by P0.4883 per kilowatt-hour (kWh) for the July billing period, bringing the overall household rate to P12.6435 per kWh from P12.1552 per kWh in June.

The rate hike came after two straight months of reductions amounting to P0.8575 per kWh.

The power rate hike could translate to about a P98 increase in this month’s bill of a typical customer consuming 200 kWh.

Meralco attributed the power rate hike to the increase in generation charge which went up by P0.3407 per kWh.

This was on the back of increases in the charges from the distribution utility’s Power Supply Agreements (PSAs) and Independent Power Producers (IPPs) by P0.4476 and P0.4992 per kWh, respectively, “owing to higher fuel prices and weaker peso against the US dollar.”

“World fuel prices went up in the June supply month in reaction to the Israel-Iran conflict. The impact of higher fuel costs was aggravated by the peso’s depreciating to its weakest level since March 2025 — affecting around 58% and 99% of PSA and IPP costs, respectively, that were dollar-denominated,” Meralco said.

The company said the P0.1703 per kWh reduction in charges from the Wholesale Electricity Spot Market (WESM) tempered the increase in generation charge.

“The supply situation in the Luzon grid improved in June as average demand went down by more than 770 megawatts (MW), more than offsetting a 490 MW increase in average capacity on outage,” the power distributor said.

PSAs, IPPs, and WESM accounted for 56%, 28%, and 16%, respectively, of Meralco’s total energy requirement for the period.

Also adding upward pressure to the overall rate was the increase in transmission charge which went up by P0.0734 per kWh “due to higher charges from the Reserve Market.”

Moreover, other charges, including taxes, registered a net increase of P0.0742 per kWh.

“Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance are all remitted to the government,” Meralco said.

The power distribution utility reiterated that its distribution charge has not moved since the P0.0360 per kWh reduction for a typical residential customer since August 2022.

“Customers also continue to benefit from the ongoing implementation of the distribution-related true-up adjustment, equivalent to a reduction of P0.2024 per kWh for residential customers,” Meralco said.—AOL, GMA Integrated News