After a price cut last month, Manila Electric Company (Meralco) has announced a power rate increase for May. The new household rate will be P11.4139 per kWh, up from April’s P10.9518. This slight increase of P0.4621 per kWh will result in less than P92 added to the total electricity bill for customers consuming 200 kWh.
Meralco attributes the rise in power rates to an increase in the generation charge, which has climbed to P0.4455 per kWh. The spike is due to higher costs from the Wholesale Electricity Spot Market (WESM) and Power Supply Agreements (PSAs). The charges from the WESM also saw an uptick by P1.7913 per kWh, as there was a tight supply on the Luzon grid in April.
The power grids in Luzon, Visayas, and Mindanao have been facing a persistent shortage in power supply, leading to yellow and red alert statuses being issued. A red alert indicates an insufficient power supply to meet demand, while a yellow alert suggests a narrow operating margin.
PSAs saw an increase of P0.2871 per kWh, attributed to decreased excess energy deliveries. On the other hand, charges from Independent Power Producers (IPPs) saw a reduction of P0.6942 per kWh, helping to offset potential rate increases.
Meralco sourced 30% of its total energy requirement from the WESM, 36% from PSAs, and 34% from IPPs during this period. The increase in power rates for May is a result of various factors affecting the electricity market in the Philippines.
