ERC orders Meralco to refund P2.64B to consumers

MANILA, Philippines — The Energy Regulatory Commission (ERC) has ordered the Manila Electric Co. (Meralco) to refund about P2.64 billion to consumers over a six-month period, two days after announcing that it had allowed the power distributor to increase its rates for the first time in 15 years.

The ERC said on Monday that on the average, Meralco customers can expect a refund rate of P0.1020 per kilowatt-hour (kWh) although it will be higher for residential consumers at P0.1733 per kWh.

The directive was based on a revised calculation for the lapsed period covering January to June this year, where Meralco’s approved final distribution rate was tallied at P1.3522 per kWh, lower than the P1.5537 per kWh it had charged consumers.

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The power distributor initially proposed that the refunds averaging P0.0487 per kWh be spread out over 12 months. Power regulators, however, pushed for its faster implementation, resulting in a shortened refund period of six months.

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“The true-up is a safeguard that makes sure what consumers pay always reflects what is fair,” ERC Chair and CEO Francis Saturnino Juan said in a statement.

READ: Regulators OK Meralco rate hike after 15 yrs

The “true-up” calculation shows the gap between Meralco’s actual weighted average tariff and the regulator-approved rate for the period under review.

Faster relief

“When Meralco collects more than it is entitled to, the ERC will make sure it is returned, and that it is returned quickly. By shortening the refund period to six months, we are giving consumers faster relief at a time when electricity prices remain elevated,” Juan added.

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According to him, the refund scheme will coincide with the implementation of Meralco’s new distribution rate, an adjustment that has been delayed for about 15 years.

“In the next billing cycle from Meralco’s receipt of our order, we will include that together with the decision on the rate reset so there will be almost no movement in Meralco’s current rates,” Juan said in a message.

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Over the weekend, the ERC said it had 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.

Rate hike approved

The commission gave the green light for an average distribution rate of P1.48 per kWh, higher than Meralco’s current rate of P1.35 per kWh but lower than the P2.34 per kWh it had applied for. There was no word on when the increase would take effect.

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

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

Last week, Energy Secretary Sharon Garin warned the public that there may be an increase in electricity rates and power outages as the super El Niño threatens to strain the energy system and trigger a surge in consumption.

“It’s possible because demand-supply relationship always has an effect on the market,” Garin told reporters. But she also assured the public that the energy department would closely coordinate with the ERC to ensure that electricity producers and distributors do not abuse the situation.

El Niño refers to the abnormal warming of Pacific Ocean surface temperatures, a phenomenon often linked to extreme climate conditions such as drought, erratic rainfall and stronger heat waves.

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The Philippine Atmospheric, Geophysical and Astronomical Services Administration said it expects El Niño to peak toward the end of 2026 and persist until early next year. /cb