Another power rate hike seen likely in June

MANILA, May 31 ------ Meralco has alerted consumers about a potential increase in power rates the coming June 2026 billing following the series of red alerts in Luzon.

The Luzon grid was on red alert from May 13 to May 15 due to a problem in major transmission lines, which caused some generating plants to bog down. The independent electricity market operator of the Philippines said that prices of electricity reached up to P32/kWh during the hours when the red alert was declared from May 13 to 15. Meralco and some electric cooperatives source a portion of their supply from the spot market. For Meralco, it's around 10-15 percent of its monthly supply; the rest are all contracted.

PEAK DEMAND REACHED

Due to the intense heat, Meralco said the highest electricity consumption for Luzon in 2025 was already surpassed on May 14, when Luzon was on red alert. Peak demand for 2025 was at 13,389 MW, but demand last May 14 was at 14,374 MW. For Meralco alone, the peak for 2025 was only at 9,131 MW, but at 9,292 MW on May 14. But reaching and surpassing the peak demand because of intense heat has implications for electricity rates. "A higher peak demand means there's more pressure on the spot market prices to go up. Because it's a market mas mataas yung demand-supply situation [which] will affect prices," said Larry Fernandez, head of Meralco's utility economics.

FACTORS THAT LEAD TO HIGHER BILLS

According to Fernandez, two factors affect consumers' electricity bills at this time of the year -- higher usage of cooling devices to beat the heat, and higher prices of electricity due to higher demand aggravated by a yellow or red alert on the grid. Both of these factors are playing out now, said Fernandez, that's why it is likely that the next billing in June will further go up. "So on both ends of both factors, lower supply plus higher demand, so there's really pressure for the spot market prices to go up," said Fernandez.

Source: news.abs-cbn.com