ERC approves Meralco rate reset after 15 years

The Energy Regulatory Commission (ERC) on Saturday announced that it had approved Manila Electric Company’s (Meralco) regulatory rate reset for the first time in more than a decade.

In a statement, the ERC said it approved Meralco’s rates for the July 2026 to June 2030 regulatory period under ERC Case No. 2026-016 RC.

The regulator approved a total revenue requirement of around P342 billion for Meralco over the four-year period, P190 billion, or about 36%, lower than the P532 billion sought by the power distributor.

The ERC also approved an average distribution rate of P1.48 per kilowatt-hour (kWh) for 2027, lower than Meralco’s proposed rate of P2.34 per kWh and the P1.60 to P1.98 per kWh proposed by some intervenors in the case.

A rate reset is a periodic review that determines how much Meralco may charge consumers for distributing electricity through its poles, wires, and substations during a regulatory period.

It covers only Meralco’s distribution charge and excludes generation and transmission charges, taxes, and other pass-through charges.

Meralco’s distribution rates were last reset in 2011. Unresolved regulatory periods prevented another review for more than a decade.

The ERC said it resumed the process under the Rationalized Rules for Setting Distribution Wheeling Rates (RRDWR), issued in November 2025. Following hearings from March to May 2026, the commission evaluated the major components of Meralco’s application with the assistance of its technical staff and independent regulatory reset expert.

“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,” ERC Chairman Francis Saturnino Juan said.

“The approved revenue gives Meralco a clear path to operate more efficiently and to roll out the capital projects needed for a more reliable network, including new substations and lines, modernized metering, and measures to bring down system loss. Meralco will be held to delivering these results,” he added. –VBL, GMA News