Meralco Eyes May Power Rate Cut Amid Supply Recovery

The Manila Electric Company (Meralco) is projecting a possible decrease in electricity rates for May 2025, citing improved power supply conditions and lower market charges as key factors.

The forecast follows a sharp rate hike in April, when power rates surged by PHP0.7226 per kilowatt-hour (kWh) to PHP13.0127 per kWh due to constrained supply and elevated spot market prices.

Meralco Vice President and Head of Corporate Communications Joe Zaldarriaga said that power supply has stabilized in recent weeks as previously offline plants resumed operations, increasing capacity in the Wholesale Electricity Spot Market (WESM).

“To recall, capacity on outage went up by almost 1,000 MW while demand increased by over 1,000 MW during the March supply month, driving WESM prices higher,” Zaldarriaga said.

He noted that the return of these facilities in April has helped relieve pressure on the grid and has led to a notable drop in generation charges, which make up the largest portion of a consumer’s electricity bill.

Transmission charges may also decline due to the easing of Reserve Market prices and the end of an additional PHP0.11 per kWh collection for February to March 2024 reserve market costs.

“We also see a possibility of lower transmission charges due to the decline in Reserve Market Prices,” Zaldarriaga added.

While the final billing data from power suppliers is still pending, Meralco expressed optimism that the anticipated rate cut will be confirmed within the first week of May.

If realized, the reduction will ease the burden on consumers across Meralco’s franchise area, which includes Metro Manila, Bulacan, Cavite, Rizal, Laguna, and parts of Batangas, Quezon, and Pampanga.

The potential adjustment comes as a welcome development after a tumultuous summer supply period, which saw simultaneous plant outages and rising demand drive prices to multi-month highs.

Meralco sources a significant portion of its supply from bilateral contracts and spot market purchases, making it highly sensitive to price volatility in the WESM.

Consumer groups and energy policy analysts have long urged regulatory bodies to address grid reliability and price transparency, warning that rate spikes disproportionately impact low-income households and small businesses.

The Energy Regulatory Commission (ERC) and the Department of Energy (DOE) have both launched initiatives to improve supply stability, including encouraging investment in baseload generation and fast-ramping ancillary services.

According to the DOE, peak demand on Luzon’s grid reached more than 13,800 MW in April, a record high driven by extreme heat and economic activity.

Meralco is expected to release its final rate advisory by mid-May, once all supplier invoices are validated and reviewed by regulators.