The heroic role of gas plants in cheaper electricity

A number of non-truthful statements against gas plants especially liquefied natural gas (LNG) came out recently. These include that: a.) gas plants are responsible for recent higher Meralco electricity prices; and, b.) gas plant costs are driving up electricity prices globally and cause more hardship to households.

- BIENVENIDO S. OPLAS, JR.

I said “non-truthful” because there are numbers and facts that disprove the above narratives. I compared the electricity rates from July 2022 — the start of President Ferdinand R. Marcos, Jr.’s administration — to July 2025, the last billing period. Here we go.

Meralco’s total electricity rates collected increased from P9.75 per kilowatt-hour (kWh) in July 2022 to P12.64/kWh. This increase was due mainly to: a.) a lower distribution refund rate, and, b.) a higher generation charge from pass-through of higher Malampaya prices and the Energy Regulatory Commission (ERC) denial or inaction on requests to adjust charges due to Change in Circumstance (CIC) claims.

The LNG plants in Batangas — jointly owned by Aboitiz Power (AP), Meralco Power Gen (MGEN) and San Miguel Global Power (SMGP), the Excellent Energy Resources, Inc. (EERI) and South Premier Power Corp. (SPPC or the Ilijan plant) — have nothing to do with the higher prices this year. And there was even a decline in the Meralco distribution charge from 2022 to 2025 by nearly 4 centavos/kWh (see Table 1).

Here are the numbers for the two reasons for the increase that I mentioned.

On (a): In July 2022, Meralco residential customers got a refund of P1.80/kWh in the distribution charge due to distribution rate true-up. The total refund of P48.2 billion was completed in May 2023. In July 2025, the distribution refund rate covering the latest true-up was lowered by the ERC to P0.205/kWh. So there was an “increase” of P1.596/kWh in distribution adjustments which constitutes 55% of the P2.89/ kWh increase over three years.