BUSINESS
Advocates Philippines
After Back-To-Back Rollbacks, Power Rates Rise In July Due To Higher Generation Costs
FILE
MANILA, Philippines – July 11, 2025 – After enjoying two straight months of electricity rate reductions, Meralco customers will see a higher electric bill this July. The Manila Electric Company (Meralco) announced today an increase of P0.4883 per kilowatt-hour (kWh), bringing the overall rate to P12.6435 per kWh—up from P12.1552 per kWh last June.
For households consuming 200 kWh, this translates to a roughly P98 increase in their monthly electricity bill.
What’s Driving the Increase?
The main reason for the hike: higher generation charges, which went up by P0.3407 per kWh.
Two key contributors—Power Supply Agreements (PSAs) and Independent Power Producers (IPPs)—posted rate increases of P0.4476 and P0.4992 per kWh, respectively. These were driven by rising global fuel prices and a weaker Peso, both of which affected the cost of power generation. In June, fuel prices spiked in response to renewed geopolitical tensions in the Middle East, particularly the Israel-Iran conflict. The Peso also slipped to its lowest value since March, adding further upward pressure on dollar-denominated energy costs.
About 58% of PSA charges and 99% of IPP costs are linked to the US dollar, making them particularly sensitive to currency fluctuations.
On the other hand, rates from the Wholesale Electricity Spot Market (WESM) helped ease the increase slightly, with a P0.1703 per kWh drop. The improvement was attributed to lower average demand in June and better supply conditions in the Luzon grid.
For the month, Meralco sourced 56% of its power from PSAs, 28% from IPPs, and 16% from WESM.
Transmission and Other Charges Also Up
Beyond generation costs, the transmission charge also rose by P0.0734 per kWh, driven by higher reserve market prices. Additional taxes and other pass-through charges added another P0.0742 per kWh.
It’s important to note that these costs are not retained by Meralco. Generation and transmission charges are paid to suppliers and the grid operator, while taxes and universal charges go to the government. Meralco’s own distribution charge remains unchanged since August 2022, when it was reduced by P0.0360 per kWh.
Customers also continue to benefit from an ongoing true-up adjustment, which brings down their bill by P0.2024 per kWh.
Rainy Season Safety Reminder
With the rainy season now in full swing, Meralco also issued a reminder for customers to observe proper electrical safety, especially in flood-prone areas.
If flooding occurs, Meralco advises turning off the main power switch or circuit breaker, and ensuring hands are dry before touching any electrical appliance. Wet electrical outlets or equipment should not be used until inspected by a licensed electrician.
The power distributor also encouraged customers to keep communication lines open. In case of emergencies or service interruptions, concerns can be reported through the My Meralco app, official social media channels, via text at 0920-9716211 or 0917-5516211, or by calling the Meralco Hotline at 16211.
For households consuming 200 kWh, this translates to a roughly P98 increase in their monthly electricity bill.
What’s Driving the Increase?
The main reason for the hike: higher generation charges, which went up by P0.3407 per kWh.
Two key contributors—Power Supply Agreements (PSAs) and Independent Power Producers (IPPs)—posted rate increases of P0.4476 and P0.4992 per kWh, respectively. These were driven by rising global fuel prices and a weaker Peso, both of which affected the cost of power generation. In June, fuel prices spiked in response to renewed geopolitical tensions in the Middle East, particularly the Israel-Iran conflict. The Peso also slipped to its lowest value since March, adding further upward pressure on dollar-denominated energy costs.
About 58% of PSA charges and 99% of IPP costs are linked to the US dollar, making them particularly sensitive to currency fluctuations.
On the other hand, rates from the Wholesale Electricity Spot Market (WESM) helped ease the increase slightly, with a P0.1703 per kWh drop. The improvement was attributed to lower average demand in June and better supply conditions in the Luzon grid.
For the month, Meralco sourced 56% of its power from PSAs, 28% from IPPs, and 16% from WESM.
Transmission and Other Charges Also Up
Beyond generation costs, the transmission charge also rose by P0.0734 per kWh, driven by higher reserve market prices. Additional taxes and other pass-through charges added another P0.0742 per kWh.
It’s important to note that these costs are not retained by Meralco. Generation and transmission charges are paid to suppliers and the grid operator, while taxes and universal charges go to the government. Meralco’s own distribution charge remains unchanged since August 2022, when it was reduced by P0.0360 per kWh.
Customers also continue to benefit from an ongoing true-up adjustment, which brings down their bill by P0.2024 per kWh.
Rainy Season Safety Reminder
With the rainy season now in full swing, Meralco also issued a reminder for customers to observe proper electrical safety, especially in flood-prone areas.
If flooding occurs, Meralco advises turning off the main power switch or circuit breaker, and ensuring hands are dry before touching any electrical appliance. Wet electrical outlets or equipment should not be used until inspected by a licensed electrician.
The power distributor also encouraged customers to keep communication lines open. In case of emergencies or service interruptions, concerns can be reported through the My Meralco app, official social media channels, via text at 0920-9716211 or 0917-5516211, or by calling the Meralco Hotline at 16211.
Jul 11, 2025
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