Higher demand causes increase in Generation Charge

12 October 2020

MANILA, PHILIPPINES, 9th October 2020 – After five consecutive months of overall power rate reduction, Manila Electric Company (MERALCO) announced today a slight upward adjustment of power rates, as the overall rate for a typical household inched up by P0.1212 per kWh, from last month’s P8.4288 per kWh to P8.5500 per kWh this October.  This is equivalent to an increase of around P24 in the total bill of residential customers consuming 200 kWh.

This month’s overall rate is still significantly lower by P0.5362 per kWh compared to last year or October 2019, which was at P9.0862 per kWh. The net rate reduction since the start of the year is still well over one peso per kilowatt hour.

Higher Generation Charge brought about by tighter supply conditions in the Luzon grid

From P4.0860 per kWh in September, the generation charge increased by P0.1373 per kWh to P4.2233 per kWh this October. After six straight months of reduction totaling P0.5772 per kWh, the October generation charge is still P0.4399 per kWh lower than in March.

This month’s increase in generation charge is mainly due to higher Wholesale Electricity Spot Market (WESM) charges, brought about by tightened supply conditions and higher demand.

The Malampaya natural gas restriction from August 28 to September 6 and forced outage of several large plants in the first week of September tightened the supply conditions in the Luzon grid. This led to WESM offer cap of P32 per kWh, the highest this year, on September 5 and 7 despite the absence of Yellow Alerts. Higher Luzon demand and more generation capacity on outage resulted in P1.1605 per kWh increase in WESM rate. Had WESM prices remained at their August 2020 levels, the generation charge and the overall rate this month would have decreased by 8-centavos and 14-centavos, respectively.

After being placed under MECQ in August, a rise in the Luzon demand was observed in September with the return to GCQ in Metro Manila and adjacent areas. From August 2020’s peak demand of 10,422 MW, peak demand in September was higher at 10,570 MW. September 2020’s peak was also higher than September 2019’s 10,392 MW, the first time since the start of the pandemic that demand exceeded its year-ago level.

Charges from Power Supply Agreements (PSAs) also increased by P0.1044 per kWh as there were no more Force Majeure (FM) claims for September supply, with the rise in demand.  FM claims in the preceding month amounted to P463 million.  On the other hand, purchases from Independent Power Producers (IPPs) decreased by P0.0174 per kWh mainly due to higher average plant dispatch.

WESM, PSAs, and IPPs accounted for 19%, 47% and 34% of MERALCO’s energy requirements, respectively.

Movements in Other Charges  

Transmission charge, taxes, and other charges for residential customers registered a slight reduction of P0.0161 per kWh.

Collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC.

MERALCO’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 63 months, after these registered reductions in July 2015. MERALCO reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the Universal Charges and the FIT-All are remitted to the government.

MERALCO keeps its doors open for customers during General Community Quarantine (GCQ)  

Customers may visit the nearest Meralco Business Center, which will continue to open its doors during the GCQ, and accept service applications, payments, and other transactions.

Strict safety measures continue to be implemented, like the “No Mask, No Entry” rule, Social Distancing and Temperature Check. Frontliners are available and ready, but strictly follow Social Distancing guidelines. Visitors can rest assured that these frontliners have passed the rapid COVID-19 testing authorized by the Pasig City Health Office. There are also acrylic barriers set up in the Meralco branches to protect both the customer and the frontliner.

But, for maximum safety and convenience, Meralco still encourages customers to use Meralco Online to transact from the safety of their homes. Multiple options for transactions have also been offered by the distribution utility, including the Meralco Mobile App via, Meralco Online via, and the Meralco authorized payment channels at

For more information and concerns, customers may visit MERALCO’s website at, its social media accounts, twitter @MERALCO and Facebook at or may also call the MERALCO Hotline at 16211.