Meralco hikes power rate by 53 cents this April

Customers of the Manila Electric Company (Meralco) will see another round of increase in their household electricity rate this month as the peso’s depreciation against the US dollar due to the Middle East crisis drove up generation costs.

In an advisory on Friday, Meralco announced an increase of 53 centavos per kilowatt-hour (kWh) in its power for April 2026.

In particular, the power distributor’s overall rate will go up to P14.3496 per kWh this month, up P0.5335, from P13.8161 per kWh in March.

The upward adjustment translates to an increase of P106 in this month’s bill of a typical household consuming 200 kWh.

The power rate hike was driven by the P0.5257 per kWh increase in generation charge to P8.3864 per kWh from P7.8607 per kWh month-on-month “largely due to the weakening of the peso against the US dollar.”

Meralco explained that for the March supply month, the exchange rate rose by over P3 to P60.748, noting that the last time the peso depreciation by about 5% in a month in June 2022.

With this, the local currency’s depreciation affected around 99% of costs of First Gas Sta. Rita and San Lorenzo gas plants (First Gas) and 44% of the rest of Meralco’s Power Supply Agreements (PSAs) that were dollar-denominated, according to the power distributor.

“As a result, charges from First Gas and PSAs went up by P1.2342 and P0.1989 per kWh, respectively,” Meralco said.

WESM

Moreover, it said that charges from the Wholesale Electricity Spot Market (WESM) grew by P2.3955 per kWh due to tight supply conditions in the Luzon grid mainly driven by the seasonal increase in demand of about 579 MW on average.

Meralco said First Gas, PSAs, and WESM accounted for 20%, 74%, and 6%, respectively, of its total energy requirement for the period.

At a virtual press briefing, Larry Fernandez, Meralco vice president and head of utility economics, clarified that the fuel price increases due to the Middle East conflict were not reflected yet in the April rate adjustments.

“Sa Mayo pa ‘yung ina-anticipate na epekto ng higher fuel prices… dahil ‘yung ginamit na fuel nung March nakarating na sa Pilipinas bago magkaroon ng Middle East conflict so the cost of fuel that we used for the March supply, which would be reflected in the April generation charge, ‘di pa siya affected,” Fernandez said.

(The anticipated effect of higher fuel prices would be felt in May… because the fuel used in March already arrived in the Philippines before the Middle East conflict so the cost of fuel that we used for the March supply, which would be reflected in the April generation charge, is not yet affected.)

Despite the anticipated electricity rate hikes in May, the Meralco official noted that the Energy Regulatory Commission directed a modified administered pricing mechanism whole the operations of the Wholesale Electricity Spot Market (WESM) were suspended due to the crisis.

Under the ERC-approved mechanism, cost adjustments exceeding P0.005 per kWh will be recovered gradually over three equal installments in successive billing periods to cushion the impact on consumers. 

Meralco’s transmission charge for residential customers, meanwhile, declined by P0.0656 per kWh “due to lower ancillary service charges incurred by the National Grid Corporation of the Philippines (NGCP) from the Reserve Market.”

Other charges, including taxes, registered a net increase of P0.0734 per kWh, said Meralco.

The power distributor said that pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively; while taxes, universal charges, and renewable energy subsidies are all remitted to the government.

 The company noted that consumers continue to benefit from the on-going Actual Weighted Average Tariff (AWAT) adjustments refund amounting to P0.2024 per kWh for residential customers. 

“Meralco’s distribution charge, on the other hand, has not moved since the P0.0360 per kWh reduction for a typical residential customer in August 2022,” it said.

Lifeline discount

Meanwhile, the company said that in accordance with the Energy Regulatory Commission’s (ERC) new uniform national lifeline consumption threshold for marginalized and low-income households, such as members of the Pantawid Pamilyang Pilipino Program (4Ps), qualified customers with consumption of 50 kWh or less will get 100% discount on their electricity rates starting this April.

Meralco added it will continue to implement its existing lifeline discounts beyond the national threshold, granting a 35% discount for qualified customers consuming 51 to 70 kWh and a 20% discount for those consuming 71 to 100 kWh.

Efficiency reminders

Amid the ongoing dry season and persisting volatility in global markets due to the Middle East conflict, the power distributor encouraged its customers to practice energy efficiency to better manage electricity consumption.

Electricity demand historically spikes during the dry season as households increase their use of cooling appliances such as air conditioners. 

During last year’s dry season, consumption increased between 20% and 33%.

“We urge our customers to continue practicing energy efficiency and conservation. Beyond helping manage consumption and electricity bills, these practices can contribute to mitigating the impact of external factors on electricity costs,” said Meralco vice president and head of Corporate Communications Joe Zaldarriaga said.

Meraclo said some energy efficiency tips that customers can observe include unplugging appliances when not in use; utilizing natural light when and where possible; and setting air conditioners to 25°C with regular maintenance to ensure efficient operation. 

Meralco also advised against overloading refrigerators to allow proper air circulation inside, and ironing clothes in large batches. —VAL/RSJ, GMA News