After two straight hikes, Manila Electric Co. (Meralco) will implement a slight reduction in power rates this month, with the initial rollout of the P9.5-billion refund helping temper upward adjustments in other bill components.
In a media briefing on Monday, the power distributor said power rates would dip by P0.0428 per kilowatt-hour (kWh), bringing the overall rate for a typical household to P14.7833 from P14.8261 per kWh in July.
This translates to around a P9 reduction in the electricity bills of residential customers consuming 200 kWh.
‘The main driver was the ERC (Energy Regulatory Commission) approved the refund that was able to offset other increases in the other bill components,’ said Meralco vice president and corporate communications head Joe Zaldarriaga.
The refund is equivalent to P0.5861 per kWh for residential customers, he said.
Ancillary service charge
Regulated entities such as Meralco must submit to regulators their spending and proposed projects over a certain period, usually five years. This will be the ERC’s basis in adjusting rates.
The P9.5-billion refund represents the price correction for the lapsed period from January to December 2025.
A lapsed period refers to the duration since the previous rate update, potentially affecting the pricing and revenue of regulated entities such as Meralco. During this period, consumers are charged using outdated rates, which may no longer reflect the current costs of the service as the company awaits new tariff adjustments.
‘As earlier explained by the regulator, this refund stems from the delay in rate reset process of distribution utilities in the country that includes Meralco … We hope that this will help provide relief to our customers and assure them that this will be implemented in a transparent manner,’ Zaldarriaga said.
The drop in power rates would have been larger if not for the increase in ancillary service charge bill from the National Grid Corp. of the Philippines (NGCP).
‘The transmission charge goes to NGCP and the ancillary service charge goes to generators providing reserves. Because of the ancillary service charge increase, the transmission charge component went up by 30 centavos per kilowatt hour,’ said Lawrence Fernandez, vice president and head of utility economics at Meralco.
The generation charge, which accounts for more than half of the power bill, only went up by P0.0296 per kWh