Meralco distribution rate increase approved, billing date unclear
The regulator set the average distribution rate at ₱1.48 per kilowatt-hour, but the effect on residential customers has yet to be determined.
The Philippines’ Energy Regulatory Commission (ERC) has cleared an increase in Meralco’s average distribution rate from ₱1.35 per kilowatt-hour (kWh) to ₱1.48 per kWh. Approved on October 9 and announced publicly on October 10, the adjustment is the utility’s first distribution rate rise in 15 years.
No starting billing period has been announced by either Meralco or the ERC. The size of the increase for households depends on the final residential rate. Meralco said on October 10 that it had not received the complete decision and needed to examine it before assessing the effects on customers and its business.
The ERC approved a revenue requirement of ₱342 billion over four years, cutting Meralco’s ₱532 billion request by 36%. ERC Chairperson Francis Juan said the regulator rejected capital spending that lacked justification, excessive operating expenses and provisions for bad debts. It also excluded contingencies and duplicated assets, and lowered the proposed return on capital.
Juan said the approved revenue would enable network projects such as additional substations, power lines and upgraded meters, with Meralco held responsible for delivering the improvements. Jose Ronald Valles, Meralco’s head of regulatory management, said the decision would give the company more clarity as it pursued network modernisation.
Distribution fees pay for Meralco’s network operations and profit. Customers’ bills also include separate charges for generation, transmission and taxes.
