Electric bills to go up as ERC OKs surcharge hike
MANILA, Philippines — Consumers are set to pay higher renewable energy (RE) charges this month following the Energy Regulatory Commission (ERC)’s approval of an increase in the feed-in tariff allowance (FIT-All).
The ERC has granted provisional authority to National Transmission Corp. (TransCo) to raise the 2026 FIT-All rate by P0.1348 per kilowatt-hour to P0.3359 per kWh beginning with the August billing period.
As a result, households consuming 500 kWh a month are expected to pay about P168 in FIT-All charges alone.
FIT-All, currently at P0.2011 per kWh, is a uniform charge imposed on all on-grid electricity consumers to fund payments to eligible RE plants such as solar, wind and small hydro facilities. All qualified projects are entitled to the incentive for up to 20 years.
The increase follows TransCo’s application to adjust the FIT-All’s working capital allowance (WCA) to maintain the financial stability of the FIT-All Fund and ensure timely payments to RE developers.
TransCo argued that the FIT-All Fund entered 2026 without the required WCA, leaving it without the necessary buffer to address funding and cash flow requirements.
As of May 7, the WCA recorded a negative balance of P322.9 million.
Given the fund’s current financial position, the ERC said it found sufficient basis to grant provisional authority for the rate adjustment, even as the commission has yet to conduct public hearings on TransCo’s application.
“The grant of provisional authority is without prejudice to the final outcome of this case,” the regulator added.
“Any over- or under-recovery resulting from the implementation of this provisional authority shall be subject to confirmation, adjustment, refund or recovery as may be directed by the commission in its final decision.”
P8.7 billion more
The ERC has allowed Manila Electric Co. (Meralco) to recover P8.7 billion in previously uncollected pass-through costs, including P595 million in system loss charges.
In a 51-page decision, the ERC approved Meralco’s collection of under-recoveries from generation, transmission, system loss and real property tax over three years, equivalent to a rate of P0.08 per kilowatt-hour.
For typical households consuming 200 kWh a month, this translates to an additional P16 on their electricity bills.
At the same time, the regulator directed Meralco to refund about P30.13 million in pass-through charges covering the lifeline subsidy, senior citizen discount and local franchise tax.
The decision stemmed from Meralco’s compliance filings seeking confirmation of over- and under-recoveries in its pass through charges from February 2011 to December 2022.
ERC chairman and CEO Francis Saturnino Juan clarified that pass-through charges are “not sources of profit but merely costs that Meralco collects on behalf of generation companies, the transmission provider and government authorities.”
Since pass through charges are based on previous months’ electricity sales, while recoveries are calculated using actual sales during the implementation period, the amount collected by a distribution utility (DU) may not always exactly match its actual allowable costs.
To correct this, the ERC requires all DUs to periodically reconcile these charges through a process called a “true-up” and submit their computations for review and approval.
“Through this confirmation and verification process, the ERC closely scrutinizes every peso that Meralco charges under these components against its actual allowable costs,” Juan said.
“This mechanism protects consumers from any unapproved or excessive charges while ensuring that DUs recover only what they are legitimately entitled to – no more, no less,” he added.
Meralco was ordered to immediately implement the pass-through collections starting with the next billing cycle upon receipt of the decision.
The collection is expected to coincide with the regulator’s separate order requiring the utility to refund P9.5 billion in over-recoveries to its more than eight million customers.
The refund resulted from a true-up calculation for the lapsed period in 2025, reconciling Meralco’s actual weighted average tariff with its final approved distribution rate.
The refund, equivalent to P0.5861 per kWh for residential customers, will be implemented over six months or until the full amount has been returned.
Meanwhile, former Bayan Muna representative Carlos Zarate criticized the ERC’s twin decisions, describing them as a “bigay-bawi” (give-and-take-back) scheme reflecting regulatory capture and an anti-consumer bias.
“On one hand, the P9.5-billion refund appears to be a form of assistance. On the other hand, they are allowing Meralco to collect nearly P8 billion again from consumers. What is the point of the refund if it will just be taken back from our pockets anyway?” Zarate said yesterday.
The ERC’s decisions, he added, would only leave Meralco customers with “virtually no real relief.”
10-GW target
At the Department of Energy, Secretary Sharon Garin said 10,000 megawatts of new power capacity are on track to come online before President Marcos ends his term in 2028.
“By this year, the target is to complete around 4,100 MW out of the 10,000 MW,” Garin told a press briefing yesterday.
To meet the remaining goal, the DOE is tracking committed RE and conventional power projects with a combined capacity of more than 6,600 MW.
The additional capacity supports Marcos’ directive in last year’s State of the Nation Address to accelerate the construction of 200 power plants.
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