Manila Electric Co. (Meralco) announced on Wednesday a decrease of P0.0151 per kilowatt-hour in its May electricity rate, bringing the overall cost for a typical household down to P14.3345 per kWh from P14.3496 in April.
The reduction comes despite upward pressure on generation costs, which the utility attributed to proactive interventions by the Energy Regulatory Commission (ERC) to shield consumers from high energy prices caused by geopolitical tensions.
Meralco vice-president and corporate communications head Joe Zaldarriaga said that while rates remain relatively stable, total bills may still rise on higher consumption during the summer months. He urged customers to practice energy efficiency as the dry season typically drives up the use of cooling appliances.
Various mitigating measures approved by the ERC helped offset a spike in the generation charge, which rose to P8.7942 per kWh in May from P8.3864 the previous month.
The regulator directed the acceleration of an ongoing refund, increasing the residential credit to P0.4278 per kWh. The ERC also ordered Meralco to return the remaining P14.2 billion to consumers over 12 months rather than the original 2-year period.
Taxes and other charges saw a net decrease of P0.1482 per kWh this month. The ERC also suspended the collection of the P0.0371 per kWh Green Energy Auction Allowance from May to June 2026.
Consumers began benefiting from a value-added tax (VAT) exemption for power generated using indigenous natural gas under the Philippine Natural Gas Industry Development Act enacted in January 2025.
A decline in the transmission charge, which fell by P0.0493 per kWh for residential customers, further contributed to the lower overall rate.
The utility noted a significant P7.7239 per kWh increase in charges from the Wholesale Electricity Spot Market (WESM), specifically in the line rental component.
To address this, the ERC allowed Meralco to apply line rental caps under its approved power supply agreements (PSAs). This shifted a substantial portion of WESM costs to suppliers, reducing PSA charges by P0.1793 per kWh and partially buffering the market volatility.
For the period, PSAs accounted for 73 percent of Meralco’s total energy requirement, while independent power producers provided 20 percent and the WESM supplied 7 percent.
Meralco serves as a billing agent for pass-through charges, remitting generation and transmission fees to suppliers and grid operators while collecting taxes and universal charges for the government. The company’s own distribution charge has remained unchanged since August 2022.
