ERC orders Meralco to refund P14B to customers

The Energy Regulatory Commission (ERC) has ordered the Manila Electric Company (Meralco) to refund the remaining balance of P14.17 billion to its customers, following the completion of its regulatory process for the distribution charges implemented from July 2022 to December 2024.

The decision stemmed from the ERC's confirmation of the approved distribution rates charged to consumers, which are compared against the computed Actual Weighted Average Tariff (AWAT) for Meralco. 

ERC Chairperson and CEO Atty. Francis Saturnino Juan said, ''The ERC’s mandate is to protect consumers while ensuring a stable and predictable regulatory environment. By expediting the refund, we are providing more immediate relief to Meralco consumers, particularly in the face of rising electricity costs driven by global and domestic factors.''

"The true-up mechanism is a safeguard embedded in our regulatory framework, ensuring that tariffs remain cost-reflective and reasonable at all times," Juan added. 

According to ERC, this tariff is based on Meralco’s actual revenues and electricity sales during the said period. 

The ERC pointed out that this mechanism would ensure that consumers are charged fairly—''neither more nor less than what is permitted under the ERC’s regulation governing the lapsed years when it was not able to conduct a rate reset of the private utilities under performance-based regulation.''

It said the initial refund of almost P20 billion began in April 2025 at a rate of P0.1189/kWh, and as of February 2026, P14.17 billion remains unrefunded. 

To provide additional relief to customers amid the expected rise in generation charges due to the Middle East crisis, the ERC ordered a refund of the remaining amount over a shorter period of twelve months instead of the original 36 months.

This change results in a higher average refund rate of P0.2511/kWh, which will be
reflected in the Meralco consumers’ electricity bills. The ERC said that the refund would appear as a separate line item labeled “AWAT (Refund)/Collect,” allowing consumers to clearly see the amount being returned to them each month.

GMA News Online sought comment from Meralco regarding ERC's directive, but it has yet to reply as of posting time. 

The ERC noted that for households and businesses, the decision translates to lower electricity bills in the next 12 months. The higher refund rate means consumers will feel the benefit more quickly, helping offset recent increases in generation charges and other cost components.

Residential customers, on the other hand, are expected to see more noticeable reductions in their monthly bills, as the refund rate for this class is the highest. —VAL, GMA News