Meralco rolls back household rate by 75 centavos in May 2025

Customers of the Manila Electric Company (Meralco) should expect a sigh of relief this month as the power distributor implements a reduction in its household rate on the back of lower generation and transmission charges.

In an advisory, Meralco announced it is slashing its power rate by 75 centavos per kilowatt-hour (kWh) for the May billing cycle.

The power rate rollback could translate to about a P150 decrease in this month’s bill of a typical customer consuming 200 kWh.

In particular, the power distributor's overall rate will go down by P0.7499 per kWh, bringing it to P12.2628 per kWh from P13.0127 per kWh in April.

“The rate reduction is due to lower generation and transmission charges,” said Meralco vice president and head of Corporate Communications Joe Zaldarriaga.

Meralco’s generation charge was pulled down by P0.3144 per kWh, bringing it to P7.4651 per kWh for the billing month, due to lower charges from the Wholesale Electricity Spot Market (WESM) and Independent Power Producers (IPPs).

WESM charges were slashed by P1.1424 per kWh resulting from “improved supply situation” in the Luzon grid, while IPP charges also decreased by P0.955 per kWh “because of higher average IPP dispatch and the peso appreciation to its strongest level since December 2023, affecting around 97% of IPP costs that were dollar-denominated.”

The reductions seen in WESM and IPP charges offset the P0.1884 per kWh hike in Power Supply Agreements (PSA) charges.

The peso’s strength mitigated further hike in PSA charges as 56% of PSA costs were dollar-denominated.

WESM, IPPs, and PSAs accounted for 26%, 33%, and 41%, respectively of Meralco’s total energy requirement for the period.

The overall household rate was also brought down by the P0.2970 cut in transmission charge as both ancillary service charges from the reserve market and the National Grid Corp. of the Philippines’ (NGCP) Ancillary Service Procurement Agreements (ASPAs) posted reductions in the preceding supply month.

Meralco noted that the transmission charge for May no longer includes Energy Regulatory Commission (ERC)-approved adjustments related to NGCP's Reserve Market transactions for February and March 2024, following the completion of collection last month.

The power distributor further said that other charges, including taxes, registered a net decrease of P0.1385 per kWh.

Meralco said that 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.

The company added that its distribution charge has not moved since the P0.0360 per kWh reduction for a typical residential customer beginning 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,” it said. — RSJ, GMA Integrated News