Meralco rate reset ruling faces delay

MANILA, Philippines — The decision on Manila Electric Co. (Meralco)’s proposed P532-billion revenue program may be issued by September at the latest, according to the Energy Regulatory Commission.

ERC chairman and CEO Francis Saturnino Juan told reporters yesterday that the regulator is still targeting to release the rate reset ruling for the first entry group this month, although he said July is a “more realistic timeline.”

The first entry group includes Meralco, Cagayan Electric Power and Light Co. Inc., Cotabato Light and Power Co. Inc. and Dagupan Electric Corp.

Juan, however, said Meralco’s case may take another “one to two months after July” due to its extensive coverage, which requires a more thorough evaluation.

Meralco, the country’s largest power utility serving Metro Manila and nearby provinces, has sought ERC approval to collect about P532.13 billion from consumers under its first regulatory period (1RP) covering 2027 to 2030.

The proposal will cover the company’s operating and maintenance expenditures, regulatory depreciation, taxes and other duties while ensuring a reasonable return on capital.

Meralco has applied for an average distribution tariff of P2.34 per kilowatt-hour, well above its last approved rate of P1.35 per kWh.

The proposed increase is intended primarily to fund its P272-billion capital expenditure program over the four-year period.

Meralco regulatory management head Jose Ronald Valles earlier said the utility giant was expecting the ruling on its application to be released “in time for the start of the 1RP in June 2026.”

Highly regulated entities like Meralco undergo a rate reset process that sets the rules and parameters for investments, operations and pricing to determine how much consumers pay for electricity.

Ideally, the rate reset process is forward-looking and should begin before each RP starts. But the process has been plagued by long delays, prompting the ERC to overhaul the system with a new set of rules designed to finally unlock long-overdue rate resets.

The reform marks the first major upgrade to the performance-based regulation framework in more than a decade.

Under the new framework, the ERC applies a price-cap regulatory methodology that establishes a maximum allowable rate based on efficient costs, service quality targets and measurable performance indicators.