Manila Electric Co. (Meralco) has warned of potential increases in electricity rates for its customers this April, citing higher generation and transmission charges as primary factors driving up costs.
Meralco vice president and head of corporate communications, Joe Zaldarriaga, said on Tuesday that the expected rise in rates is due to higher prices at the Wholesale Electricity Spot Market (WESM) and ancillary services charges.
“We are still awaiting final billing, but initial indications point to an increase in generation and transmission charges,” Zaldarriaga said. He attributed the higher generation costs to a tight supply situation in March, with a significant increase in demand and capacity outages that led to a rise in WESM prices.
Additionally, higher reserve market prices are expected to increase transmission charges, further contributing to the rate hike for April.
However, Meralco offered a glimmer of hope for consumers, saying that it is hopeful of implementing a P19.95 billion refund to mitigate the impact of the potential price increase. The Energy Regulatory Commission (ERC) approved the phased refund spread over a 36-month period. This refund will result in a 20-centavo per kilowatt-hour (kWh) reduction for residential customers starting in April.
Meralco is expected to announce the official rate changes for April later this week. In March, Meralco implemented an increase of P0.2639 per kWh in its rates, mainly driven by higher transmission charges, feed-in-tariff allowance charges, and taxes. This increase translated to an additional P53 for residential customers using 200 kWh monthly.
Meanwhile, the Independent Electricity Market Operator of the Philippines (IEMOP) reported that the average price of electricity in the WESM surged significantly in late March. Prices jumped 95.5 percent from P2.73 per kWh in February to P5.34 per kWh, driven by increased demand and a decrease in available supply. IEMOP data also revealed that total average demand rose by 5.9 percent in the same period, while supply dropped by 4.4 percent.
Consumers are advised to stay updated on Meralco’s official announcements to understand the full impact of the upcoming rate adjustments.
