THE ENERGY Regulatory Commission (ERC) has approved a P2.64-billion refund for customers of Manila Electric Co. (Meralco), covering adjustments to distribution charges collected in the first half of the year.
The P2.64-billion refund will be implemented over approximately six months at an average rate of P0.1020 per kilowatt-hour (kWh), the ERC said in a statement on Monday.
More than eight million Meralco customers are expected to benefit from the refund, which covers excess collections from January to June 2026.
The directive was contained in an order approved by the ERC on Oct. 9, granting Meralco provisional authority to implement the refund following a review of its distribution charges.
The review, known as a “true-up,” compares the utility’s actual weighted average tariff (AWAT), calculated using actual revenues and electricity sales, with the distribution rate approved by the regulator.
The ERC found that Meralco’s AWAT reached P1.5537 per kWh from January to June, exceeding the approved distribution rate of P1.3522 per kWh by about P0.20 per kWh, the regulator said.
This resulted in excess collections of approximately P5.36 billion, it added.
After accounting for adjustments arising from previous refund and true-up decisions, the ERC determined that the net amount to be returned to consumers stood at P2.64 billion.
The regulator shortened the refund period to six months from the 12 months proposed by Meralco to accelerate the return of excess collections.
“By shortening the refund period to six months, we are giving consumers faster relief at a time when electricity prices remain elevated,” ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan said.
Residential customers will receive a refund of P0.1733 per kWh, which will be reflected as a separate line item in their electricity bills.
“[The refund will take effect] in the next billing cycle from Meralco’s receipt of our order. We’ll include that together with the decision on the rate reset so there will be almost no movement in Meralco’s current rates,” Mr. Juan said in a Viber message.
The refund remains provisional and is subject to further review and verification by the ERC. Any necessary adjustments will be made following the regulator’s final evaluation.
The refund covers the remaining “lapsed period” before the start of Meralco’s first regulatory period under the ERC’s revised rate-setting framework.
The first regulatory period covers July 2026 to June 2030, during which the ERC reviews the utility’s costs, investments, and performance to determine allowable distribution rates.
The ERC earlier approved an average distribution rate of P1.48 per kWh for the first regulatory year, compared with the existing average rate of about P1.35 per kWh.
The adjustment follows the regulator’s approval of approximately P342 billion in total revenue requirements for Meralco over four years, 36% lower than the P532 billion sought by the company.
Meralco is the country’s largest private electric distribution utility, serving more than 8.1 million customers in Metro Manila and nearby provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.
For September, Meralco reduced electricity rates by P0.0409 per kWh, bringing the overall rate for a typical household to P14.7424 per kWh from P14.7833 per kWh in August.
Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera