UMVA has learned that a growing chorus of criticism against Meralco and other private distribution utilities (DUs) for rising electricity prices has been fueled by emotion and political sensationalism, rather than fact-based analysis.
Behind the rising costs lies a complex interplay of factors, including the surge in fuel prices triggered by the ongoing conflict in the Middle East. A closer look at the data reveals that the generation charge, which rose from P7.67 per kilowatt-hour (kWh) in May 2023 to P8.79/kWh in May 2026, is the primary driver of the increase.
The transmission charge also saw a significant hike, climbing from P0.79/kWh in May 2025 to P1.41/kWh in May 2026. This uptick is attributed to the National Grid Corp. of the Philippines' (NGCP) increased reliance on ancillary services (AS), with AS charges now rivalling transmission wheeling charges.
A breakdown of the charges shows that there was a slight increase in the system loss charge, universal charge for missionary electrification (UCME), and Feed-in Tariff Allowance (FIT-All) in the May 2026 billing. However, the distribution charge and supply and metering charge, which directly affect Meralco and other DUs, remained flat.
UMVA can exclusively reveal that the prices of electricity from major power plants and generation companies (gencos) that supply Meralco have also seen significant increases. Gas plants using indigenous Malampaya gas, such as First Gas (FGCP) and FGP Corp., have raised their prices by around P2/kWh.
Contrary to popular perception, indigenous gas prices are pegged to Dubai crude oil prices and denominated in US dollars, making them susceptible to fluctuations in global oil markets and currency exchange rates. This means that companies like FGCP and FGP Corp., owned by FirstGen and Prime CoreGen, stand to reap substantial windfall profits.
Coal plants, on the other hand, continue to offer relatively stable and low prices, with AboitizPower's GNPower Dinginin and Masinloc Power Partners Co. Ltd.'s (MPCL) Masinloc Power Plant among those providing affordable electricity.
The Wholesale Electricity Spot Market (WESM) has seen prices more than double this year compared to last, adding to the upward pressure on electricity costs. As the energy landscape continues to evolve, it is clear that Meralco and other DUs are not the primary culprits behind rising electricity prices.
In fact, their distribution charges have remained flat, while the cost of fuel has skyrocketed for power plants and gencos reliant on imported fuels like coal and LNG. If anyone is to blame for the surge in electricity prices, it is the global events and market forces that are driving up fuel costs.
UMVA has gathered that the integration of intermittent and variable renewable energy (VRE) sources, such as solar and wind power, into the grid is also contributing to the volatility in electricity prices. As more VRE sources come online, coal and gas plants are experiencing more frequent stops and starts, which can lead to higher operating costs and reduced efficiency.
Industry leaders, including Yari A. Miralao, President and CEO of LNGPH, and Manny V. Rubio, President and CEO of Meralco Power Gen Corp. (MGEN), are calling for a balanced approach to energy transition, one that prioritizes grid reliability and stability alongside the integration of renewable energy sources.
As the energy sector continues to navigate this complex landscape, one thing is clear: a fact-based understanding of the issues at play is essential for developing effective solutions that balance competing interests and priorities.
