After delivering back-to-back rate reductions in previous months, Manila Electric Company (Meralco) announced a modest upward adjustment in electricity rates this February, driven primarily by higher transmission and ancillary charges imposed by the grid operator.
Meralco said the overall rate for a typical household increased by P0.2226 per kilowatt-hour (kWh), bringing the February rate to P13.1734 per kWh from P12.9508 per kWh in January.
For residential customers consuming 200 kWh, the adjustment translates to an increase of about P45 in the total monthly bill.
The company emphasized that the bulk of the increase stemmed from higher transmission charges, which rose by P0.1975 per kWh. This was largely due to a significant jump in ancillary service charges sourced from the Reserve Market and higher power delivery service charges incurred by the National Grid Corporation of the Philippines (NGCP).
Ancillary services are reserve power procured by the grid operator to maintain system reliability and ensure stable electricity supply, especially during periods of tighter power conditions.
Adding to the increase was a P0.0770 per kWh rise in the Universal Charge for Missionary Electrification (UCME), following the approval by the Energy Regulatory Commission (ERC) of a new rate of P0.2763 per kWh, up from P0.1993 per kWh.
The UCME, implemented beginning the February billing cycle, subsidizes electricity costs in remote areas not connected to the main transmission grid.
Other charges, including taxes, posted a net increase of P0.0554 per kWh.
Despite these upward adjustments, Meralco noted that lower generation costs helped cushion the impact on consumers. The generation charge declined by P0.1073 per kWh to P7.6398 per kWh, primarily due to reduced charges from Independent Power Producers (IPPs).
IPP charges fell by P0.8108 per kWh, driven by lower fixed fees from First Gas–Sta. Rita following the completion of fee collection under the interim extension of its contract, as well as a reduction in Malampaya natural gas prices after quarterly repricing.
This decline offset higher charges from the Wholesale Electricity Spot Market (WESM), which rose by P1.5682 per kWh amid tighter supply conditions in the Luzon grid, where average capacity on outage increased by about 973 megawatts.
Charges from Power Supply Agreements (PSAs) also inched up by P0.0483 per kWh due to lower dispatch during the planned maintenance shutdown of Excellent Energy Resources Inc. and South Premiere Power Corp., whose generating units were back online by mid-January in preparation for the dry season.
For the period, PSAs accounted for 66 percent of Meralco’s total energy requirement, IPPs for 24 percent, and WESM for 10 percent.
Meralco reiterated that generation and transmission charges are pass-through costs paid directly to power suppliers and the grid operator, while taxes, universal charges, and renewable energy subsidies are remitted to the government.
The company underscored that its distribution charge has remained unchanged since the P0.0360 per kWh reduction implemented in August 2022.
Meanwhile, the ERC recently mandated a new uniform national lifeline consumption threshold for marginalized and low-income households, including beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps). Qualified customers consuming 50 kWh or less will receive a 100 percent discount on electricity rates.
discount for those consuming 71 to 100 kWh. The uniform national lifeline subsidy rate of P0.01 per kWh will take effect in the March billing, while the revised discount structure will be reflected starting April.
“We welcome this directive from the ERC which we hope will provide additional relief to our qualified customers,” said Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga.
With the dry season approaching, when electricity demand typically rises, Meralco encouraged customers to continue practicing energy efficiency to better manage consumption and mitigate higher costs.
The company reminded customers that concerns and service requests may be reported through the My Meralco app, its official social media accounts, via text, or through its hotline.