The ERC significantly reduced the financial request submitted by the utility. Meralco had sought a total revenue requirement of P532 billion over the four-year period, but the commission approved only P342 billion, a reduction of P190 billion, or 36 percent. The final authorized rate of P1.48 per kWh is also well below the P2.34 per kWh originally proposed by Meralco and undercuts the P1.60 to P1.98 per kWh range suggested by intervenors during the proceedings, which ran from March to May 2026. ERC Chair and CEO Francis Saturnino Juan stated that the commission did not accept the utility’s application as submitted, noting that they “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.”
The rate reset specifically covers the distribution charges, which compensate Meralco for delivering electricity through its poles, wires, and substations. This component is distinct from generation and transmission charges, taxes, and other pass-through items. Generation costs, which account for more than half of the total electricity bill, are influenced by fuel price fluctuations and foreign exchange movements and are passed through to consumers separately. Meralco’s overall residential electricity rate stood at P14.7424 per kWh in September, meaning a household consuming 200 kWh paid nearly P2,950 monthly before this latest adjustment. The utility has yet to clarify exactly how the new distribution rate will translate into the final residential bill, nor has it announced when the change will reflect in consumer statements.
Consumer advocates have welcomed the outcome, emphasizing the importance of public participation in the regulatory process. Lawyer Lester Nazarene Ople, who represented former ERC Commissioner Alfredo Non as an intervenor, stated that the decision reflected the value of consumer representation. The ERC highlighted that the approved revenue provides Meralco a “clear path to operate more efficiently” and execute capital projects necessary for a more reliable network, including new substations, modernized metering, and measures to reduce system loss. Meralco’s head of regulatory management, Jose Ronald Valles, said the company had not yet received the full decision and would review its implications, but expressed belief that the ruling allows for greater clarity in pursuing investments in advanced metering infrastructure and cybersecurity.
The approval comes amid heightened economic pressures in the Philippines, where inflation rose to 7.2 percent in September, driven by faster price increases in food, transportation, and electricity. Meralco reported record profits of P51.13 billion in 2025, a figure that has drawn scrutiny given the high cost of power for households. The distribution rates had effectively been frozen since 2015 as successive ERC administrations failed to complete regular reviews. The new regulatory period will see Meralco held accountable for delivering the efficiency and network improvements cited in the ERC’s determination.
