Power Bills Climb As Supply Crunch Sends Wholesale Prices Soaring

Consumers are expected to pay higher electricity bills this July after wholesale electricity prices climbed sharply in June, driven by tighter power supply conditions, persistent plant outages, higher fuel costs, and the temporary shutdown of the Malampaya gas facility.

Data from the Independent Electricity Market Operator of the Philippines (IEMOP) showed that the system-wide average price at the Wholesale Electricity Spot Market (WESM) rose 22.7 percent to ₱9.56 per kilowatt-hour (kWh) in June from ₱7.79 per kWh in the previous billing period. The increase is expected to feed into generation charges, which account for the largest portion of consumers’ electricity bills.

For Manila Electric Co. (Meralco), generation charges comprise about 64 percent of a typical residential bill, although the utility sources only around seven percent of its electricity requirements from the spot market.

Visayas Outages Tighten Supply

IEMOP attributed the increase in WESM prices to localized supply constraints and reserve deficiencies across the country’s three major grids, despite overall electricity demand easing during the period.

Average nationwide demand slipped 1.9 percent to 15,454 megawatts (MW) from 15,755 MW in May. However, average available supply also declined by 1.1 percent to 21,133 MW, narrowing reserve margins and putting upward pressure on market prices.

Rica Cagnayo, IEMOP market simulation and analysis staff member, said regional supply-demand conditions produced mixed results, with the sharpest price increases occurring in the Visayas due to repeated power plant outages.

Average WESM prices in the Visayas surged 41.7 percent to ₱14.46 per kWh from ₱10.20 per kWh after average supply fell 7.5 percent to 2,183 MW, while demand eased by only 0.5 percent to 2,166 MW.

She said continued forced outages and rising electricity demand tightened supply conditions, prompting several yellow and red grid alerts during the billing period and driving market prices higher.

Mindanao experienced a similar trend, with average WESM prices increasing 37.5 percent to ₱12.75 per kWh from ₱9.28 per kWh as supply dropped 6.1 percent to 3,291 MW while demand declined 2.5 percent to 2,153 MW.

Luzon posted the lowest average spot price among the three grids at ₱7.95 per kWh, up from ₱7.02 per kWh, supported by a slight increase in available supply to 15,659 MW even as demand eased to 11,135 MW.

IEMOP data also showed the country’s peak demand during the June billing period reached 19,842 MW on May 28, just 2 MW below the all-time system peak, underscoring the pressure placed on available generating capacity.

Higher July Rates

Reflecting the higher cost of procuring electricity, Meralco announced that its overall residential rate will increase by ₱0.3428 per kWh, bringing the July rate to ₱14.8261 per kWh from ₱14.4833 per kWh in June.

The adjustment means households consuming 100 kWh will pay about ₱34 more this month, while those using 200 kWh, 300 kWh, and 400 kWh will see increases of around ₱69, ₱103, and ₱137, respectively.

The largest contributor was the generation charge, which rose by ₱0.1800 per kWh to ₱9.2504 per kWh.

Generation charges are pass-through costs that cover electricity purchased from power suppliers and the spot market. These amounts are remitted to generators and do not form part of Meralco’s distribution earnings.

Apart from higher WESM prices, Meralco cited increased fuel costs arising from tensions in the Middle East, which pushed up charges under its power supply agreements.

The scheduled month-long shutdown of the Malampaya natural gas facility beginning June 15 also contributed to higher costs. Gas-fired power plants supplied by Malampaya shifted to imported liquefied natural gas (LNG), resulting in higher generation expenses and increased charges from suppliers First Gas and Prime CoreGen.

Transmission and other pass-through charges likewise contributed to the overall increase in electricity rates.

Distribution Rate Review

While consumers are paying higher electricity bills this month, Meralco clarified that the increase does not stem from changes in its distribution charge, which has remained unchanged since 2015.

However, the Energy Regulatory Commission (ERC) is expected to decide by late August or September on Meralco’s long-pending application for a distribution rate reset.

The utility has proposed increasing its average distribution charge from ₱1.35 per kWh to ₱2.34 per kWh, although regulators emphasized that the application remains under review and could still be modified or even result in lower approved rates.

ERC Chairperson Francis Saturnino Juan said ongoing complaints regarding alleged inaccurate meter readings would be handled separately from the rate-reset proceedings. He stressed that the commission’s review aims to determine the appropriate rates based on Meralco’s operating requirements rather than assume an automatic increase.

Meanwhile, IEMOP Vice President for Trading Operations Isidro Cacho said June was an unusually volatile month for the electricity market but noted that conditions are expected to improve. With the onset of the rainy season reducing electricity demand, he said WESM prices are likely to ease in July as pressure on power supply gradually subsides.

Source:

https://mb.com.ph/2026/07/09/electricity-bills-seen-rising-as-spot-prices-surge-in-june

https://newsinfo.inquirer.net/2261042/june-power-bills-go-up-as-spot-market-prices-rise

https://www.rappler.com/business/why-your-meralco-bill-higher-july-2026-rise-again-soon