Manila Electric Company (Meralco) announced a slight reduction in electricity rates for May after Energy Regulatory Commission (ERC)-approved mitigating measures offset increases in generation charges driven by higher Wholesale Electricity Spot Market (WESM) prices, fuel costs, and peso depreciation.

For May 2026, the overall residential rate decreased by PHP 0.0151 per kilowatt-hour (kWh), bringing the rate for a typical household down to PHP 14.3345/kWh from PHP 14.3496/kWh in April.

“Despite initial indications of an increase, Meralco power rates this May had a modest reduction,” said Meralco Vice President and Head of Corporate Communications Joe R. Zaldarriaga.

“This was achieved through the proactive efforts led by the Energy Regulatory Commission (ERC) to cushion the impact of potentially high rates as a result of the geopolitical tensions that ultimately affect energy prices,” he explained.

Despite the lower overall rate, Meralco said generation charges increased to PHP 8.7942/kWh from PHP 8.3864/kWh in April. 

The utility said various ERC-approved measures helped offset the increase. Among the major mitigating factors was the acceleration of Meralco’s ongoing refund implementation. The ERC directed the utility to refund the remaining PHP 14.2 billion balance within 12 months instead of the original remaining refund period of two years.

This increased the refund rate for residential customers to PHP 0.4278/kWh from the previous PHP 0.2024/kWh.

The ERC also suspended the collection of the Green Energy Auction Allowance (GEA-All) from May to June 2026, reducing charges by PHP 0.0371/kWh. GEA-All is a charge collected to support electricity supply sourced through the government’s renewable energy auction program.

Meralco also said consumers partially benefited this month from the long-delayed implementation of the value-added tax (VAT) exemption for power generated using indigenous natural gas under Republic Act No. 12120, or the Philippine Natural Gas Industry Development Act.

Transmission charges likewise declined by PHP 0.0493/kWh, while taxes and other charges also posted a net decrease of PHP 0.1482/kWh.

However, Meralco said generation costs remained under pressure due to a sharp increase in WESM charges. According to the utility, WESM charges increased by PHP 7.7239/kWh, particularly due to the line rental component.

To mitigate the impact, the ERC allowed Meralco to immediately implement line rental caps under its ERC-approved Power Supply Agreements (PSAs), resulting in suppliers absorbing a portion of the WESM-related costs.

This helped reduce PSA charges by PHP 0.1793/kWh and partially offset the higher WESM costs.

Meanwhile, charges from the Sta. Rita and San Lorenzo gas plants of First Gas/Prime CoreGen increased by PHP 0.1786/kWh due to higher fuel prices and the peso’s depreciation.

Meralco noted that 99% of First Gas/Prime CoreGen costs are dollar-denominated.

For the billing period, PSAs accounted for 73% of Meralco’s energy requirement, while First Gas/Prime CoreGen and WESM accounted for 20% and 7%, respectively.

The utility also reminded consumers that actual electricity bills may still increase if household consumption rises during the summer season.

“While overall electricity rates have gone down, the dry season is typically marked by higher consumption, especially from cooling appliances, which can still drive bills upward,” Zaldarriaga said. “By being more mindful of their power consumption and observing energy efficiency, customers can take better control of their electricity bills.”

Meralco encouraged consumers to practice energy conservation measures such as optimizing air conditioner settings to 25 degrees Celcius, regularly cleaning aircon filters, unplugging unused appliances, and using LED bulbs.

As generation costs remain vulnerable to fuel price volatility and market pressures, will temporary regulatory interventions be enough to keep electricity rates manageable for consumers in the coming months?

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