Manila: A PHP0.49 per kilowatt-hour increase in Manila Electric Company's (Meralco) July rates has been attributed to higher generation charges, driven by a surge in oil prices following the Iran-Israel conflict and the depreciation of the Philippine peso. This follows the total of PHP0.8575/kWh decline in rates in the past two months.

According to Philippines News Agency, for residential consumers utilizing around 200 kWh, the increase in their bill is around PHP98, Meralco spokesperson and head of Corporate Communications Joe Zaldarriaga said in a briefing Friday. Zaldarriaga noted that the generation charge was driven by the almost PHP0.45/kWh increase in the power supply agreements and the almost PHP0.50/kWh hikes in supply from independent power producers (IPPs). These increases were partially offset by the PHP0.17/kWh decrease in supply sourced from the Wholesale Electricity Spot Market (WESM), he added.

Larry Fernandez, Meralco Utility Economics head, during the same briefing, stated that the prices of the supply acquired from power producers are US-dollar-denominated, making them susceptible to currency fluctuations. With the local currency posting its weakest in three months, especially by the end of June, peso depreciation played a significant role in the higher generation charge compared to the surge in world oil prices, which only occurred for two weeks, Fernandez explained.

Zaldarraiga also mentioned that providing a definite outlook is challenging due to the multifaceted factors influencing the prices. Fernandez highlighted that the depreciation of the Philippine peso, following a period of appreciation, significantly affected the dollar-denominated costs of suppliers, particularly the IPPs.