With power bills already high, Meralco wins approval to raise own fees after 15 years

After its first rate review in 15 years, Meralco has won regulatory approval to raise its distribution charges even after already posting a record P51.13 billion in profits in 2025 Meralco customers will experience higher electricity bills due to a distribution rate increase approved by regulators, marking the first hike in 15 years. The new average distribution rate will rise from P1.35 to P1.48 per kilowatt-hour, impacting household budgets already strained by inflation and rising living costs. Despite the rate increase, Meralco reported record profits and continues to pursue modernization projects, while the government is under pressure to lower electricity costs. This is AI-generated. Read the article for full context. Report any errors. MANILA, Philippines – Meralco customers will face higher electricity bills after regulators approved the utility’s first distribution rate increase in 15 years, pushing up already-high energy costs and further tightening household budgets strained by rising food, fuel, and other living expenses. The Energy Regulatory Commission (ERC) approved a new average distribution rate of P1.48 per kilowatt-hour (kWh), up from the existing P1.35 per kWh, an increase of around 13 centavos. The actual increase will depend on the final residential rate, though Meralco has yet to clarify how exactly this will raise consumer bills. The regulator and Meralco has also not mentioned when the new rate will reflect in consumer electricity bills. Meralco’s overall residential electricity rate already stood at P14.7424 per kWh in September, meaning a household consuming 200 kWh already paid nearly P2,950 monthly. This is before the latest rate hike was factored in. The distribution charge accounts for only one portion of the electricity bill, alongside generation, transmission, taxes, and other charges. However, it is the portion that actually goes to Meralco to cover its distribution operations and earn a profit. Meralco’s distribution rates were last reviewed in 2011 and have effectively been frozen since 2015, as successive ERC administrations did not complete regular rate reviews. The prolonged delays kept the utility from raising its distribution charges. Meralco originally asked for P532 billion in revenue requirement over four years, but the ERC cut this to P342 billion, 36% less than what the energy giant asked for. Even with this reduction, the approved distribution rate is still higher than what customers currently pay. “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,” ERC Chairperson Francis Juan said in a statement. “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. Meralco, in a statement on Saturday, October 10, said it had yet to receive the full decision and would need to review it before determining its implications for the company and customers. “We believe that this will allow Meralco to move forward with greater clarity as we pursue investments and initiatives to modernize our distribution network and enhance service delivery,” Jose Ronald Valles, Meralco’s head of regulatory management, said in a statement, pointing to investments in advanced metering infrastructure, cybersecurity, and other network modernization projects. The increase comes as inflation soared to 7.2% in September, with faster price increases in food, transportation, electricity, and other household expenses. Record profits even before latest hike The higher distribution rate also comes as Meralco continues to earn record profits. The company reported a record P50.6 billion in core profit in 2025. In the first half of 2026, its consolidated core net income reached P26.5 billion, up 3.8% from a year earlier. The rate approval also comes just days after Manuel Pangilinan-led Metro Pacific Investments Corporation (MPIC) completed its P12.4-billion acquisition of additional Meralco shares from San Miguel Global Power on Thursday, October 8, raising the holding company’s stake in the power utility to 49.4%. The shares were purchased at P580.99 each, about 40% above Meralco’s market price that day. Meralco shares subsequently climbed 5.3% to P437 on Friday, October 9, the same day regulators approved the rate reset, although the decision was only publicly announced the following day. So much for Marcos’ push to lower electricity bills There is also a twist of irony in the increase, as it comes just as President Ferdinand Marcos Jr. has been pushing to bring down electricity costs by removing system loss charges that consumers have long been forced to shoulder. During his July State of the Nation Address, Marcos explicitly called for lawmakers and government officials to focus on lowering energy costs. “Malinaw din sa pamahalaan ang hinaing ng taumbayan na pababain ang presyo ng kuryente sa bansa,” Marcos said then. (The plea of the public to lower the price of electricity in the country is clear to the government.) Among the reforms he pushed for was the removal of system loss on consumer energy bills. Shortly after Marcos made the proposal, Pangilinan, who also serves as Meralco’s longtime chairman, criticized this, warning that the power industry “may not survive” if companies were forced to absorb the cost of system losses themselves. The government has made limited progress on this front. Beginning with the October billing, Meralco customers will no longer pay the 12% value-added tax on allowable system loss charges, but the underlying charge itself remains firmly in place. For now, energy agencies are still drawing up plans to reduce these losses. This means consumers will likely continue paying system loss charges for years to come, even as Meralco prepares to collect higher distribution rates. – Rappler.com How does this make you feel? Loading