MANILA, Philippines — Consumers may have to brace for even higher power rates, as the Energy Regulatory Commission (ERC) has approved Manila Electric Co.’s (Meralco) rate reset after more than a decade.
In its decision, the ERC set a total revenue requirement of about P342 billion over the four years, a significant 36-percent cut from the P532 billion Meralco sought. This is equivalent to an average distribution rate of P1.48 per kilowatt-hour (kWh), higher than Meralco’s current rate of P1.35 per kWh.
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However, the approved figure was still lower than the P2.34 per kWh Meralco applied for.
The regulator said Meralco’s rate reset for the first regulatory period covers July 2026 to June 2030.
“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, which is PhP190 billion or 36 percent less,” ERC chair and CEO Francis Saturnino C. Juan said in a statement on Saturday.
“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.
Under a rate reset process, a regulated entity such as Meralco must submit its spending and proposed projects to the ERC for a period, unless the regulator extends it. This then becomes the basis for the rate passed on to consumers.
READ: ERC orders P9.5-B refund to Meralco customers
In Meralco’s case, the rate reset covers only Meralco’s distribution charge, particularly for the use of its poles, wires, and substations.
Distribution charges account for only one part of the total electricity bill, which also includes generation costs, transmission charges, taxes, and more. /pai