ERC orders Meralco to refund P2.64 billion to customers

MANILA, Philippines — Regulators have ordered Manila Electric Co. (Meralco) to return an additional P2.64 billion to its customers over six months, offering temporary relief as higher distribution charges kick in.

In an order approved on Oct. 9 made public yesterday, the Energy Regulatory Commission (ERC) granted provisional approval to Meralco’s refund application for the lapsed period covering January to June 2026.

Equivalent to an average rate of P0.102 per kilowatt-hour across all customer classes, the refund will appear as a separate line item on customers’ bills labeled “AWAT (Refund/Collect).”

Residential customers stand to receive a larger refund of P0.1733 per kWh, translating to a reduction of about P34.66 for those consuming 200 kWh.

“When Meralco collects more than it is entitled to, the ERC will make sure it is returned and that it is returned quickly,” ERC chairman and CEO Francis Saturnino Juan said.

The refund stems from the true-up calculation, which reconciled the difference between Meralco’s AWAT or actual weighted average tariff of P1.5537 per kWh from January to June and the approved final distribution rate of P1.3522 per kWh for the same period.

In July, the ERC ordered Meralco to refund P9.5 billion in overrecoveries based on a true-up calculation for the lapsed period last year.

A lapsed period represents the time that has passed since the last rate adjustment, affecting the pricing and revenue structures of a regulated entity like Meralco.

During a lapsed period, consumers pay charges that are no longer reflective of the current cost of the service while awaiting approval of a new rate.

The STAR has sought comment from Meralco on the latest refund order, but has yet to receive a response.

In its filing, the power utility giant had proposed to spread the refund over 12 months at an average rate of P0.0487 per kWh.

The regulator, however, shortened the refund period to six months to provide consumers with faster relief amid elevated electricity prices.

Juan said the refund will take effect in the next billing cycle after Meralco receives a copy of the decision.

“We’ll include that together with the decision on the rate reset, so there will be almost no movement in Meralco’s current rates,” he said.

Over the weekend, the ERC approved an average distribution rate of P1.48 per kWh for Meralco’s first regulatory period covering July 2026 to June 2030, up from the existing rate of P1.35 per kWh.

The approved rate, however, is roughly 37 percent lower than what Meralco had proposed.

It is also lower than the P1.60 to P1.98 per kWh proposed by some intervenors in the case.

The approval marks Meralco’s first rate reset in about 15 years.

The rate reset determines how much Meralco can charge consumers for delivering electricity through its poles, wires and substations.

It covers only distribution costs and excludes generation and transmission charges, taxes and other pass-through costs.

Meralco’s distribution rate was last reset in 2011, with subsequent reviews delayed due to unresolved regulatory periods.