Regulators OK Meralco rate hike after 15 yrs

MANILA, Philippines — More than 8 million customers of Manila Electric Co. (Meralco) may have to pay more after regulators approved a rate increase of about 13 centavos per kilowatt-hour, the first adjustment after 15 years.

The Energy Regulatory Commission (ERC) gave the green light for Meralco’s new average distribution rate of P1.48 per kWh, which is 9.6 percent higher than the current rate of P1.35 per kWh. The approved figure was still lower than the P2.34 per kWh Meralco applied for.

An ERC statement on Saturday announcing the approval did not specify when the new distribution rate will take effect.

Article continues after this advertisement

READ: ERC approves Meralco’s rate hike after a decade

FEATURED STORIES

NEWSINFO

NEWSINFO

NEWSINFO

This development came as the ERC approved the final determination on the regulatory reset of Meralco for the first regulatory period covering July 2026 to June 2030. The last reset was in 2011.

Although Meralco announces electricity rate adjustments every month, these changes reflect the overall rate, which includes various components of the power bill—not just distribution charges.

‘36% less’ than asked

For instance, generation costs, which account for more than half of the electricity bill, cover the cost of power purchased from suppliers and are passed on to power generators. These charges are influenced by several factors, including fluctuations in fuel prices and foreign exchange rates.

The commission has authorized a total revenue requirement of about P342 billion over the next four years, a huge 36-percent slash from the P532 billion Meralco sought.

Article continues after this advertisement

“This final determination shows that the ERC did not simply accept what was applied for. Meralco asked for P532 billion in revenue over four years. We approved P342 billion—PhP190 billion, or 36 percent, less,” ERC Chair and CEO Francis Saturnino Juan said in the statement.

“We trimmed capital projects that were not yet justified, disallowed excessive operating costs and bad debt provisions, removed contingencies and duplicated assets from the asset base, and used a lower return on capital than what Meralco proposed. Every peso allowed has to be prudent, efficient, and necessary, because consumers pay for it,” Juan added.

Article continues after this advertisement

Meralco has yet to issue a statement regarding the rate hike.

Coverage

The details of the ERC decision are in the Commission’s “Decision and Final Determination” which would be promulgated shortly.

Under a rate reset process, a regulated entity, such as Meralco, must submit to the ERC its spending and proposed projects over a period unless extended by the regulator. This will then be the basis of the rate that will be passed on to consumers.

In Meralco’s case, the rate reset only covers the distribution charge of Meralco, particularly for the use of its poles, wires, and substations.

Distribution charges account for only one part of the total electricity bill, as it also covers generation costs, transmission charges, taxes, among others.

Your subscription could not be saved. Please try again.

Your subscription has been successful.

Meralco distributes electricity to Metro Manila, Bulacan, Cavite, Rizal, and select areas in Pampanga, Laguna, Batangas, and Quezon. INQ /mr