Meralco Rates Rise Ahead of Potential Fuel-Driven Power Price Surge
- March 14, 2026
Table of Contents
As global fuel markets face mounting uncertainty, electricity rates for households served by Manila Electric Co. (Meralco) increased in March, driven mainly by higher transmission and generation charges, with further adjustments possible in the coming months.
The overall electricity rate for a typical household rose by ₱0.6427 per kilowatt-hour (kWh) to ₱13.8161 per kWh in March, up from ₱13.1734 per kWh in February, according to Meralco. For residential consumers using about 200 kWh, the adjustment translates to an additional ₱129 in their monthly electricity bill.
Meralco said the increase was largely due to higher costs across the power supply chain. These are charges that the utility collects and passes through to power generators, grid operators, and the government.
Higher Transmission Costs
A key driver of the rate hike was a rise in transmission charges, which went up by ₱0.288 per kWh.
These costs include fees paid to the National Grid Corp. of the Philippines (NGCP) for transporting electricity from power plants to Meralco’s distribution network. The increase was primarily attributed to higher ancillary service charges, which help maintain the stability and reliability of the national power grid.
Ancillary services, procured through the reserve market, accounted for nearly half of the total transmission charge during the billing period, reflecting increased costs required to support grid operations.
Generation Charges Increase
The generation charge, which is the largest component of electricity bills, also rose by ₱0.2209 per kWh, reaching ₱7.8607 per kWh for the March billing cycle.
Meralco attributed the adjustment partly to fixed charges from the second extension of the power purchase agreement with the First Gas–Sta. Rita power plant, which added about ₱0.38 per kWh to generation costs.
The increase was partially offset by lower prices from the Wholesale Electricity Spot Market (WESM), where charges declined by ₱1.0952 per kWh due to improved supply conditions in the Luzon grid.
Additional adjustments came from contract price revisions involving several power suppliers, including ACEN Corp., Panay Energy Development Corp., South Premiere Power Corp., and Sual Power Inc., following regulatory approval by the Energy Regulatory Commission (ERC).
Other charges, including taxes and subsidies, posted a net increase of ₱0.1338 per kWh, which also contributed to the overall rate adjustment. The billing month also reflected the implementation of a new uniform national lifeline subsidy rate of ₱0.01 per kWh, mandated by the ERC to support marginalized electricity consumers.
Despite the increase in pass-through costs, Meralco emphasized that its own distribution charge remains unchanged. The rate has stayed the same since August 2022, when the utility implemented a ₱0.036-per-kWh reduction for residential customers.
Global Fuel Volatility
Meralco officials noted that the March rate adjustment reflects electricity supply costs from February and does not yet include the impact of geopolitical tensions in the Middle East on global fuel markets.
According to Meralco’s head of utility economics, Larry Fernandez, the ongoing conflict could push fuel prices higher, potentially affecting electricity costs in the coming months. Fluctuations in the peso against the U.S. dollar may also influence generation costs, as several power supply agreements are denominated in dollars.
Energy market uncertainties have already contributed to rising domestic fuel prices. From January to early March, gasoline prices increased by about ₱6.70 per liter, diesel by ₱9.40 per liter, and kerosene by ₱7.70 per liter, reflecting broader disruptions in global energy trade linked to geopolitical tensions.
Timing Of Increase Questioned
The rate increase and broader energy market pressures have also drawn criticism from some commentators and industry observers who question whether additional electricity charges should be pursued amid rising fuel costs.
One point of concern raised is Meralco’s proposal seeking regulatory approval for a 73% increase in its distribution charge, from ₱1.3522 per kWh to about ₱2.34 per kWh, as part of funding plans for an estimated ₱272-billion investment program between July 2026 and June 2030. The planned spending would support network expansion, system reliability improvements, cybersecurity upgrades, battery storage development, and programs related to electric vehicles and customer choice.
Critics argue that such proposals come at a time when consumers are already facing inflationary pressures linked to global energy disruptions and rising fuel prices. Some have questioned whether the costs of certain initiatives should be passed on to ordinary consumers.
Concerns have also been raised about the potential cost impact of future energy policies, including offshore wind projects under the government’s Green Energy Auction program. The Energy Regulatory Commission recently approved a price ceiling of about ₱11 per kWh for offshore wind, significantly higher than recent prices in the Wholesale Electricity Spot Market.
Critics warn that locking in higher-priced power supply contracts for long periods could keep electricity prices elevated even if global fuel markets stabilize.
Rising Summer Demand
The rate adjustment also comes as the Philippines approaches the dry season, when electricity demand typically rises due to increased use of cooling appliances such as air conditioners.
Power demand historically climbs by 20% to 33% during the hotter months, placing additional pressure on generation supply and grid operations.
With higher temperatures and volatile global energy prices expected to persist, Meralco is urging households and businesses to adopt energy-saving practices to help manage electricity consumption.
“By embracing energy efficiency, consumers can have better control of their electricity bills while also helping mitigate the impact of external factors on electricity costs,” said Meralco vice president and corporate communications head Joe R. Zaldarriaga.
Source:
https://www.philstar.com/headlines/2026/03/11/2513492/power-rates-going-up-not-due-oil-crisis
https://malaya.com.ph/business/meralco-hikes-feb-power-rates-seeks73-distribution-tariff-reset
