Power distributor Manila Electric Co. (Meralco) is increasing power rates by P0.1543 per kilowatt-hour this month, bringing the overall rate to P11.7882 per kWh from last month's P11.6339 per kWh.

The latest adjustment, which marks the third straight month of hikes, translates to an increase of around P31 for the electricity bills of typical households consuming 200 kWh a month.

At a press conference yesterday, Meralco attributed the higher power rate to the P0.2913-per-kWh rise in transmission charges, which offset the P0.1547-per-kWh reduction in generation costs.

'If it weren't for the increase in transmission charges, we would have had a reduction this month. Charges from power supply agreements (PSAs), independent power producers (IPPs) and the wholesale electricity spot market (WESM) have decreased,' Meralco spokesman Joe Zaldarriaga said.

The higher transmission costs were due to increased ancillary service charges following the resumption of commercial operations of the power reserve market last month, according to the power firm.

Ancillary service refers to the capacity necessary to ensure the continuous and secured supply of electricity.

Meanwhile, the lower generation costs were mainly attributed to a stronger peso, which affected 50 percent of PSA costs and 97 percent of IPP costs that were US dollar-denominated.

This resulted in the P0.2371 per kWh and P0.0529 per kWh reductions in PSA and IPP charges, respectively.

WESM charges went down by P0.0514 per kWh, factoring in the final of four installments of deferred May 2024 WESM costs earlier ordered by the Energy Regulatory Commission.

PSAs, WESM and IPPs accounted for 46.2 percent, 27.3 percent and 26.4 percent, respectively, of Meralco's total energy needs for the period.

Last month, Meralco rates increased by P0.0327 per kWh as higher transmission charges offset the lower generation costs.

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