The Energy Regulatory Commission (ERC) has issued Resolution No. 09, Series of 2026, adopting the revised rules on how distribution utilities (DUs) may recover certain local taxes—specifically real property tax (RPT), local franchise tax (LFT), and business tax (BT)—from electricity consumers.
The updated rules aim to make the process of recovering these taxes more transparent, fair, and easier to understand for both utilities and consumers.
Any over-collection must be refunded, while under-collection may be adjusted in future billings.
To further protect consumers, the ERC requires DUs to submit complete supporting documents and regular reports before and during the implementation of these charges.
DUs are allowed to recover all just and reasonable costs pertaining to taxes that are levied by local government units (LGUs) subject to the post validation and confirmation mechanism of the Commission to ensure that only the correct amounts are collected. Any over-collection must be refunded, while under-collection may be adjusted in future billings, subject to ERC approval.
Also under the revised rules, DUs are allowed to pass on only taxes that are actually paid and properly documented, and only within a defined period. These charges must appear as separate line items in consumers’ electricity bills—labeled as RPT, LFT, and BT charges—so that consumers can clearly see and understand the composition of their payments.
The rules also clarify that taxes from previous years (arrears), excluding penalties and interest, may only be recovered under strict conditions and, for electric cooperatives, with the consent of their member-consumers.
ERC Chairperson and CEO Atty. Francis Saturnino Juan emphasized the importance of the new rules in balancing the financial sustainability of utilities and the protection of consumers.
“These revised rules ensure that consumers are charged only for taxes that are valid, reasonable, and properly verified.”
“These revised rules ensure that consumers are charged only for taxes that are valid, reasonable, and properly verified. By requiring transparency and strict monitoring, we are empowering consumers to better understand their electricity bills while ensuring that distribution utilities remain financially viable,” Juan said.
The Resolution was approved following extensive consultations with stakeholders, including distribution utilities, consumer groups, and industry associations.
With this measure, the ERC strengthens its commitment to consumer protection, transparency, and accountability in the power sector, ensuring that electricity rates remain fair and properly regulated.
