Weak peso lifts Meralco power rates

Meralco customers are facing higher electricity costs in October after the power distributor raised its residential rate by ₱0.3191 per kilowatt-hour, bringing the overall rate to ₱15.0615 per kWh from ₱14.7424 in September. For a household consuming 200 kWh a month, the increase translates to about ₱64 more on the electricity bill. Meralco attributed the adjustment mainly to higher generation charges, including rising fuel costs and the impact of the weaker peso on dollar-denominated power supply contracts.

The Energy Regulatory Commission has also approved a higher average distribution rate for Meralco of ₱1.48 per kWh, up from ₱1.35 per kWh, following a regulatory review. This adjustment, which applies to distribution charges rather than the entire bill, is set to take effect next month. The approved rate is lower than the ₱2.34 per kWh initially requested by Meralco, but it still represents a 9.6 percent increase from the current distribution rate.

Electricity price pressures are mounting as the Philippine peso weakens sharply against the US dollar. The local currency breached the ₱64-per-dollar mark for the first time, hitting an intraday low of ₱64.20 before closing at a record ₱64.17 per dollar. Energy Secretary Sharon Garin said the weaker peso will make imported coal, diesel and liquefied natural gas more expensive, increasing costs for power producers that rely on dollar-priced fuel.

Garin noted that these higher import costs can be passed through to consumers in the form of higher electricity rates per kilowatt-hour. She described ₱64 per dollar as likely the highest level so far and warned that the peso’s slide is already contributing to this month’s higher electricity rates in Metro Manila and nearby provinces, where some power supply contracts are dollar-denominated.

In response to these pressures, the Department of Energy is seeking ways to cushion the impact of the peso’s depreciation and market volatility on households. Garin said she would meet with Energy Regulatory Commission Chair and CEO Francis Saturnino Juan to discuss possible regulations to prevent sudden spikes in electricity bills and to explore measures that could delay or soften rate increases.

The DOE is also considering asking oil companies to implement price adjustments in a staggered manner rather than imposing large increases at once, with the aim of easing the burden on consumers. In the fuel market, the department has prescribed maximum weekly price hikes of ₱1.20 per liter for diesel and ₱0.50 per liter for kerosene, while gasoline prices have fallen by at least ₱0.30 per liter. Officials have indicated that if the financial impact on households becomes too heavy, they may recommend additional assistance, including possible subsidies, for higher-level government consideration.

Beyond currency and fuel price movements, the power sector faces added risks from a super El Niño and a global oil crisis. Garin has warned that the extreme hot and drier conditions associated with El Niño could drive up electricity demand, potentially leading to further increases in power rates and raising the risk of outages. These weather-related pressures would compound the effect of higher fuel import costs driven by the weak peso.

Authorities indicate they are trying to minimize the impact of these converging factors on consumers, but acknowledge that households may face continued uncertainty over electricity costs. With the peso under pressure, imported fuel prices elevated and regulatory adjustments to distribution rates underway, consumers in Meralco’s service areas are preparing for higher power bills in the near term.