Following back-to-back rate reductions, the Manila Electric Company (Meralco) announced today an upward adjustment of P0.3191 per kWh in the electricity rate for October. This brings the overall rate for a typical household to P15.0615 from P14.7424 per kWh in September.

For residential customers of Meralco who are consuming 200 kWh, this adjustment translates to an increase of around P64 in the total electricity bill.

Driving this month’s overall rate increase was the generation charge which went up by P0.4973 per kWh.

Charges from First Gas/Prime CoreGen went up by P3.2206 per kWh due to higher fuel costs as a result of its utilization of liquefied natural gas for September supply, the price of which remains elevated with the ongoing Middle East conflict; as well as the weakening of the peso against the US dollar that affected around 89 percent of First Gas/Prime CoreGen costs that were dollar denominated.

Charges from the Wholesale Electricity Spot Market (WESM) also increased by P3.5167 per kWh owing to the increase in WESM bill adjustments and tighter supply conditions in the Luzon grid in the September supply month.

Meanwhile, charges from Power Supply Agreements (PSAs) went down by P0.7567 per kWh. Fuel cost of South Premier Power Corp. (SPPC) was lower this month due to its utilization of Malampaya natural gas tempered the increase brought about by peso depreciation, affecting around 54 percent of PSA costs that were dollar denominated.

For this period, First Gas/Prime CoreGen, WESM, and PSAs accounted for around 24 percent, 2 percent, and 74 percent, respectively, of Meralco’s total supply requirements.

The increase in the generation charge was partly tempered by lower charges from the National Grid Corporation of the Philippines (NGCP), as well as a net reduction in taxes and other charges.

Ancillary service charge for residential customers went down by P0.1321 per kWh due to lower charges from the Reserve Market, while the transmission charge also slightly decreased by P0.0063 per kWh. Together, these brought down NGCP charges by P0.1384 per kWh.

Despite the P0.0634 per kWh increase in universal charge for missionary electrification in accordance with a recent directive by the Energy Regulatory Commission (ERC), taxes and other charges still registered a net decrease of P0.0398 per kWh. Taxes decreased by P0.1436 per kWh due to higher share of indigenous natural gas which is exempt from value-added tax (VAT) and the removal of the VAT on the system loss charge.

Pass-through charges for generation, and transmission and ancillary service are paid by Meralco to the power suppliers and the NGCP, respectively; while taxes, universal charges, and other public policy charges are all remitted to the government and the relevant agencies.

After over 15 years without a rate reset, the ERC has announced the approval of an average distribution rate of P1.48 per kWh for Meralco for the First Regulatory Period (1RP) covering the period July 1, 2026 to June 30, 2030.

While Meralco has yet to receive a copy of the ERC’s decision, the distribution utility welcomes the development as this addresses outstanding regulatory matters and provides stability for the energy industry.

Despite Peso depreciation, global increases in the cost of materials, increases in the cost of basic commodities, and higher minimum wage rates over the 15-year period, it can be recalled that Meralco’s actual distribution charge has not increased and even went down to P1.35 effective 2016.

Meanwhile, the ERC also announced that it has approved Meralco’s application to refund P2.64 billion, equivalent to an average refund rate of P0.1020 per kWh for all customer classes and a higher P0.1733 per kWh for residential customers, to be implemented beginning November 2026 billing over six months or until such time the full amount has been fully refunded.

Meralco likewise is continuously implementing two simultaneous refunds–equivalent to a total of P1.0139 per kWh for residential customers, covering the Lapsed Periods from July 2022 to December 2025. Meralco