The Energy Regulatory Commission (ERC) has rendered its final decision in ERC Case No. 2025-025 RC, directing the Manila Electric Company (Meralco) to refund the remaining balance of P14.17 billion to its customers.
This directive follows the completion of Meralco’s regulatory “true-up” process for the distribution charges implemented from July 2022 to December 2024.
The decision stems from the Commission’s confirmation of the approved distribution rates charged to consumers, which are compared against the computed Actual Weighted Average Tariff (AWAT) for Meralco. This tariff is based on Meralco’s actual revenues and electricity sales during the period.
This mechanism ensures that consumers are charged fairly—neither more nor less than what is permitted under the ERC’s regulation governing the lapsed years when it was not able to conduct a rate reset of the private utilities under performance-based regulation.
Although the initial refund of almost P20 billion began in April 2025 at a rate of P0.1189/kWh, as of February 2026, P14.17 billion remains unrefunded.
“The remaining amount will be refunded over a shorter period of 12 months instead of the original 36 months.”
To provide more immediate relief, particularly given the expected rise in generation charges due to the Middle East conflict, the ERC has mandated that the remaining amount be refunded over a shorter period of 12 months instead of the original 36 months.
This change results in a higher average refund rate of P0.2511/kWh, which will be reflected in the Meralco consumers’ electricity bills. The refund will appear as a separate line item labeled “AWAT (Refund)/Collect,” allowing consumers to clearly see the amount being returned to them each month.
ERC Chairperson and CEO Atty. Francis Saturnino Juan highlighted the critical need for timely regulatory action.
“The true-up mechanism is a safeguard embedded in our regulatory framework, ensuring that tariffs remain cost-reflective and reasonable at all times.”
“The ERC’s mandate is to protect consumers while ensuring a stable and predictable regulatory environment. By expediting the refund, we are providing more immediate relief to Meralco consumers, particularly in the face of rising electricity costs driven by global and domestic factors. The true-up mechanism is a safeguard embedded in our regulatory framework, ensuring that tariffs remain cost-reflective and reasonable at all times,” Juan said.
For households and businesses, the decision translates to lower electricity bills over the next 12 months. The higher refund rate means consumers will feel the benefit more quickly, helping offset recent increases in generation charges and other cost components. Residential customers, in particular, are expected to see more noticeable reductions in their monthly bills, as the refund rate for this class is the highest.
The ERC will continue to closely monitor the implementation of the refund and require regular reporting from Meralco until the full amount has been returned.
