Manila: Power rates of Manila Electric Company (Meralco) will increase by PHP0.6268/kWh this August due to higher generation and transmission charges. Residential consumers with monthly usage of around 200 kWh will experience an increase of around PHP125 for this August, as the overall rate is now approximately PHP13.2703/kWh, up from PHP12.6435/kWh in July.
According to Philippines News Agency, Meralco Vice President and head of Corporate Communications Joe Zaldarriaga explained that the generation charge rose by PHP0.3749/kWh. This increase is attributed to higher rates imposed by independent power producers (IPPs) and the Wholesale Electricity Spot Market (WESM), as well as the depreciation of the Philippine peso against the US dollar. The peso’s depreciation significantly impacted IPPs’ costs, which are almost entirely denominated in US dollars. Additionally, IPPs reported lower dispatch due to scheduled maintenance, specifically at the First Gas-Sta. Rita from June 30 to July 9, and First Gas-San Lorenzo from July 10 to 14.
During the same briefing, Meralco Utility Economics head Larry Fernandez highlighted that the peso depreciation is the main reason for the rise in generation costs. The local currency weakened to as much as PHP58 to a US dollar from the PHP56 level, primarily due to uncertainties surrounding US tariff policies. He mentioned that the September rate will still be influenced by the peso-greenback movement but expressed hope for an improvement in the local currency against the US dollar, which could help lower generation costs.
Fernandez also noted that the collection of the deferred generation cost from the new gas supply agreement with Malampaya will conclude in September, providing consumers with some relief. The Energy Regulatory Commission (ERC) previously approved the pass-through of the increase in gas supply agreement cost, adding around PHP0.17/kWh since last year. Zaldarriaga expressed optimism, stating, ‘Hopefully, by October, we can see a small reduction since the collection of the deferred cost will end by September.’
