Meralco announces steep power rate hike in July

MANILA Electric Co. (Meralco) announced Monday a steep increase in electricity rates for July — P2.1496 per kilowatt hour (kWh), following the decrease of P1.9623 per kWh in June.

Meralco said this brings the overall electricity rate for a typical household to P11.6012 per kWh, up from the previous month's P9.4516 per kWh.

For residential customers consuming 200 kWh, the adjustment is equivalent to an increase of about P430 in their total electricity bill for July.

Meralco said the increase was mainly due to higher generation charges as power costs normalized following artificially low rates last month.

The generation charge went up this July by P2.0021 per kWh as Wholesale Electricity Spot Market (WESM) charges returned to normal levels as a result of the Energy Regulatory Commission's (ERC) order to stagger the collection of all distribution utility charges for the May supply-month in four equal monthly installments until September 2024.

Meralco also clarified that this order differs from the ERC's approval of its request to divide the collection of about P500 million in generation costs in May 2024 for four months until September 2024.

These costs are from its 2024 Emergency Power Supply Agreements and IPPs, and the approval is also currently being implemented.

In the month of July, WESM charges were higher by P6.6370 per kWh, as charges not only normalized but also reflected the recovery of a portion of deferred WESM costs from the May supply month.

What mitigated the increase was the reduction in spot market prices as average demand in the Luzon grid decreased by about 900 megawatts, and the secondary price cap triggering only 6.6 percent of the time for July 2024, down from June's 19.3 percent.

Meralco apologized for the slight delay in the distribution of electricity bills as this was due to July's rates including various adjustments for generation, transmission, system loss, and lifeline subsidy charges, all of which were done under proper ERC rules.

"We again appeal for the understanding of our customers over the delayed bills as we sought guidance from the ERC on the implementation of this month's rate adjustment. Rest assured that Meralco will adjust the due dates to give our customers enough time to settle their bills," Meralco vice president and head of corporate communications Joe R. Zaldarriaga said.