Meralco customers in the Philippines will pay P0.3428 more per kilowatt-hour (kWh) for electricity in July, with the overall residential rate rising from P14.4833 per kWh in June to P14.8261 per kWh. The increase is driven by higher fuel costs, the scheduled shutdown of the Malampaya natural gas facility beginning June 15, and tight power supply conditions that pushed up electricity generation costs. The rate adjustment comes as the Energy Regulatory Commission (ERC) is expected to decide by August or September on a separate application that could raise Meralco's distribution charge from P1.35 per kWh to P2.34 per kWh.
Generation Charge Increases P0.1800 Per kWh in July
The generation charge rose by P0.1800 per kWh to P9.2504 per kWh from P9.0704 per kWh in June. The generation charge is a pass-through cost that Meralco collects from customers and turns over to power suppliers. Charges on Meralco's power supply agreements increased by P0.2678 per kWh to P8.8694 per kWh due to the continuing Middle East conflict and its impact on international fuel markets.
The actual change in customer bills depends on household electricity consumption during the billing period. At 100 kWh usage, the rate adjustment adds approximately P34. At 200 kWh, the increase is approximately P69. At 300 kWh, customers pay approximately P103 more. At 400 kWh, the additional cost is approximately P137, and at 500 kWh, the increase is approximately P171.
Malampaya Shutdown Forces Switch to Imported LNG
The scheduled month-long shutdown of the Malampaya natural gas facility beginning June 15 contributed to the rate increase. Malampaya supplies locally extracted natural gas to power plants in Batangas, including the Sta. Rita and San Lorenzo plants. With Malampaya unavailable, the plants switched to imported liquefied natural gas (LNG), which is more expensive. Charges from First Gas and Prime CoreGen climbed by P0.3613 per kWh to P10.6489 per kWh.
Wholesale Electricity Spot Market Prices Rise to P8.0337 Per kWh
Prices at the Wholesale Electricity Spot Market increased by P1.0056 per kWh to P8.0337 per kWh. Record-high electricity demand in Luzon tightened supply conditions. Transmission and other charges added another P0.0668 per kWh to the July increase.
ERC to Decide on Distribution Rate Reset by August or September
July's rate increase does not include changes to Meralco's distribution charge, which pays for poles, wires, substations, meters, billing services, and other infrastructure. Meralco has not raised its distribution charges since 2015, when its last rate reset period ended. The company's pending application proposes raising the average distribution charge from P1.35 per kWh to P2.34 per kWh, or by P0.99 per kWh.
ERC Chairperson Francis Saturnino Juan stated the commission expects to take up its staff recommendation toward the end of August or in September, after completing inspections of Meralco's assets. Juan addressed concerns about approving higher rates amid allegations of inaccurate meter readings on Thursday, July 9. "If there are violations committed by Meralco, these are separate matters, separate from these pending rate proceedings for us to be able to determine what should be correct rates moving forward," Juan told reporters.
FAQ
What caused the Meralco rate increase in July?
The P0.3428 per kWh increase in July is caused by higher fuel costs linked to the Middle East conflict, the scheduled shutdown of the Malampaya natural gas facility beginning June 15, and record-high electricity demand in Luzon that tightened supply conditions and pushed up wholesale spot market prices by P1.0056 per kWh to P8.0337 per kWh.
When will the ERC decide on Meralco's distribution rate application?
The Energy Regulatory Commission expects to take up its staff recommendation on Meralco's distribution rate reset application toward the end of August or in September, after completing inspections of Meralco's assets, according to ERC Chairperson Francis Saturnino Juan on Thursday, July 9.
How much did generation charges increase in July?
The generation charge rose by P0.1800 per kWh to P9.2504 per kWh from P9.0704 per kWh in June, with charges on power supply agreements increasing by P0.2678 per kWh to P8.8694 per kWh and charges from First Gas and Prime CoreGen climbing by P0.3613 per kWh to P10.6489 per kWh due to the switch from Malampaya natural gas to imported LNG.
