Manila Electric Company (Meralco) customers will see higher electricity bills this month after frequent power plant shutdowns strained the Luzon grid and drove up spot market prices.
The power distributor increased its overall rate by ₱0.1488 per kilowatt-hour (kWh), bringing the June rate to ₱14.4833 per kWh. This adjustment means an average household consuming 200 kWh monthly will experience a price increase of about ₱30.
During a virtual press briefing, Meralco spokesperson Joe Zaldarriaga explained that the rate hike stems from higher generation costs following consecutive red and yellow grid alerts across Luzon. The generation charge, which makes up roughly 64 percent of a consumer’s total bill, climbed to ₱9.0704 per kWh from May’s ₱8.7942 per kWh.
The utility was forced to heavily rely on the Wholesale Electricity Spot Market (WESM) after numerous power plants suffered forced outages or lowered their capacities.
By law, distribution utilities must buy replacement power from the spot market when contracted suppliers fail to meet their supply targets. Due to the high demand, transmission constraints, and low supply, WESM prices surged by ₱7.0281 per kWh.
Zaldarriaga emphasized that these spikes are the direct result of an unstable power grid.
“If there is a supply constraint, it is reflected in the market. And when you buy from the market under that situation, it usually results in higher costs,” he stated.
Aside from supply shortages, Meralco cited rising fuel costs and the depreciation of the Philippine peso against the US dollar as additional factors driving up the generation charge. The company clarified that it does not profit from the generation charge, as the collected revenues go directly to the power suppliers.
Meralco added that its main focus is maintaining grid reliability, which requires sourcing power from the spot market during shortages.
Following the announcement, Akbayan Party-list Representative Chel Diokno called for a congressional investigation into Meralco’s pricing system to ensure that consumers are not being charged unfair or hidden costs.