Meralco lowers electricity rates for January

MANILA, Philippines — Households can expect a slight reduction in their electricity bills this month, as the Manila Electric Company (Meralco) has lowered the rate to P11.7428 per kilowatt-hour (kWh), down from P11.9617 per kWh.

Meralco announced the decrease of P0.2189 per kWh on Monday, January 13. With this new rate, a household consuming 200 kWh will see their monthly bill drop to P2,348.56, down from P2,392.34 at the previous rate.

This translates to savings of approximately P43.78, which households can use for other expenses.

Meralco attributed the reduced electricity rates to lower generation charges, which are fees paid to purchase power from suppliers, including independent power producers (IPPs), power supply agreements (PSAs), renewable energy producers and the Wholesale Electricity Spot Market (WESM).

The generation charge for January decreased by P0.1313 per kWh to P6.8358 per kWh, driven by a P0.8840 per kWh drop in charges from the WESM and a reduction of P0.1593 per kWh in charges from IPPs.

“The reduction in WESM charges was brought about by the improved supply situation in the Luzon Grid as average peak demand dropped by 471 MW. The average capacity on outage likewise decreased by 305 MW,” Meralco said in a statement. 

For IPPs, the peso's rise in value contributed to the overall decline in generation charges, as it impacted most of the dollar-denominated IPP costs. 

Meralco primarily sourced its electricity from PSAs, which accounted for 36%, followed by WESM at 34% and IPPs which supplied 30% of its total energy requirement for the period.

According to the electric distribution company, more than half of a household's bill goes toward paying generation charges.

Other than generation charges, Meralco also bills households for transmission charges, which also saw a net reduction of P0.0876 per kWh. 

This fee covers the cost of delivering electricity from power suppliers to Meralco’s distribution system. It is paid to the National Grid Corporation of the Philippines (NGCP), also known as the company responsible for managing the power lines.

Transmission charges make up 10.1% of a household’s electricity bill, while Meralco’s distribution charge, from which the firm earns, accounts for 17.5%.

Other fees that households pay for electricity services include taxes (11.7%) and additional charges, such as metering and supply fees (5.7%).

You can estimate your monthly electricity consumption and average cost using Meralco’s Appliance Calculator.

Meralco urged the public to "better manage electricity consumption" by becoming more energy-efficient. Suggested ways include unplugging unused appliances, cleaning air conditioners and switching to LED bulbs.

“While electricity rates decreased this month, we would like to remind our customers to continue practicing energy efficiency as a way of life especially with the dry season fast approaching,” Meralco vice president Joe Zaldarriaga said.

In October 2024, Meralco reported a core net income of P35.1 billion for the first three quarters, marking a 17% increase from the P30 billion earned during the same period in 2023.