Meralco said the overall rate for a typical household increased by P0.1488 per kilowatt-hour (kWh), bringing the June rate to P14.4833 per kWh from P14.3345 per kWh in May.
For residential customers consuming 200 kWh, the adjustment translates to an increase of about P30 in their monthly electricity bill.
Generation costs
The primary driver of the rate hike was the increase in the generation charge, which rose by P0.2762 per kWh to P9.0704 per kWh from P8.7942 per kWh in May.
According to Meralco, wholesale electricity spot market (WESM) charges increased significantly to P7.0281 per kWh due to tight supply conditions in the Luzon grid.
The Luzon grid was placed on Red Alert status for three consecutive days from May 13 to 15 after electricity demand surpassed 2024's record levels.
The situation was aggravated by transmission line trippings that limited the delivery of available power to the grid. As a result, the secondary price cap was imposed 3.89 percent of the time during the billing period, indicating persistently elevated spot market prices.
Partially offsetting the increase were lower line rental and other charges following the lifting of the suspension of WESM operations on May 1.
Meralco noted that most customers were shielded from the impact of higher line rental charges because a substantial portion was absorbed by suppliers under regulator-approved power supply agreements (PSAs).
However, line rental charges from pre-EPIRA contracts with the Sta. Rita and San Lorenzo gas plants continued to be fully passed on to consumers.
Fuel impact
Excluding line rental adjustments, PSA charges increased by P0.0941 per kWh due mainly to the peso's depreciation and higher global prices of coal and liquefied natural gas (LNG).
Meralco said 54 percent of PSA costs are affected by foreign exchange movements.
Meanwhile, charges from the Sta. Rita and San Lorenzo gas plants operated by First Gas and Prime CoreGen fell by P0.1569 per kWh because of improved average dispatch.
The reduction helped offset higher fuel expenses resulting from increased LNG use and peso depreciation, which affected 99 percent of the plants' charges.
For the billing period, PSAs accounted for 69 percent of Meralco's total energy requirements, while First Gas/Prime CoreGen supplied 21 percent and WESM contributed 10 percent.
Offsetting factors
Tempering the increase in generation costs was a lower transmission charge, which declined by P0.1525 per kWh.
Taxes and other charges, however, registered a net increase of P0.0251 per kWh.
Meralco also reminded customers that they continue to benefit from an ongoing refund equivalent to P0.4278 per kWh for residential consumers.
The utility company emphasized that generation and transmission charges are pass-through costs paid directly to power suppliers and the grid operator, while taxes, universal charges and feed-in tariff allowances are remitted to the government.
Meralco's distribution charge has remained unchanged since August 2022, when it implemented a P0.0360 per kWh reduction for residential customers.
Watch consumption
Meralco warned customers that increased electricity usage during the extreme heat experienced in May could further push up their June bills.
"While there is an increase in electricity rates this month, elevated consumption patterns observed in May are also a major factor that could drive higher power bills of customers," said Meralco vice president and head of corporate communications Joe R. Zaldarriaga.
The company urged consumers to monitor their electricity usage through the historical consumption chart found in their bills and by using the Meralco Appliance Calculator. —Ed: Corrie S. Narisma
