ERC Rolls Out Tougher Billing Rules To Protect Power Consumers
- October 3, 2026
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The Energy Regulatory Commission (ERC) has approved new rules requiring distribution utilities (DUs) to make electricity bills and additional service charges more transparent, including by separately identifying allowable system loss charges and standardizing “Other Charges” collected from consumers.
The measures are contained in Resolution No. 28, Series of 2026, which establishes a new billing format, and Resolution No. 30, Series of 2026, which adopts uniform rates and rules for Other Charges.
Under the new billing format, DUs must clearly and separately reflect government-mandated pass-through charges, including allowable system loss charges, that are excluded from value-added tax (VAT). The change follows the Bureau of Internal Revenue’s issuance of Revenue Memorandum Circular 097-2026, which declared system loss as a government-mandated charge excluded from gross sales for VAT computation.
The ERC said the new format would help consumers distinguish between charges subject to VAT and those that are not.
“The new format requires DUs to clearly and separately reflect government-mandated pass-through charges, including the system loss charge within the allowable cap, that are not subject to value-added tax (VAT),” the commission said.
ERC Chairman and Chief Executive Officer Francis Saturnino Juan said the revised bills would give consumers a clearer view of the components of their electricity payments while ensuring that VAT is not imposed on allowable system loss charges.
The changes come as the government seeks to reduce confusion over electricity charges and make it easier for consumers to determine what they are paying for.
Standardized Other Charges
Resolution No. 30 sets uniform rules for Other Charges that DUs may collect for specific customer-requested or account-related activities that result in additional costs for the utility.
These may include certain connection, disconnection, and reconnection services. The ERC said DUs may collect only charges included in the commission-approved schedule or those subsequently approved by regulators.
The resolution also establishes a standardized method for calculating such charges. Allowable costs are limited to direct labor, deployment and fuel, and replacement materials directly used in providing the service.
Administrative and overhead expenses are excluded because these costs are already accounted for in ERC-approved distribution, supply and metering rates.
The rules are intended to prevent consumers from being charged twice for costs that have already been recovered through their regular electricity rates.
For example, the ERC set the cost of installing a temporary connection service at ₱1,337.80 and a service connection transfer at ₱2,053.59.
The commission said the uniform schedule would provide consumers with a clearer basis for understanding the amount and purpose of additional charges. DUs are also required to make the schedule accessible through their bulletin boards, official websites, and other official social media platforms.
Late Payment Safeguards
The new rules also establish limits on late payment fees and require them to be presented separately on electricity bills.
A DU may impose a late payment fee of no more than 2% of the current month’s bill or the unpaid portion, whichever is lower. The fee may be charged only once per bill.
Before imposing such a charge in connection with nonpayment, the utility must properly serve a Notice of Disconnection to the customer.
The ERC said the requirements are part of broader safeguards intended to make billing practices more consistent and accountable.
“With uniform and transparent Other Charges, consumers will have a clearer basis for understanding what they are being charged and why. DUs may recover legitimate costs for specific services, but consumers should not be made to pay twice for costs already covered by their electricity rates,” Juan said.
“This is part of the ERC’s continuing effort to ensure fair, transparent, and accountable electricity service,” he added.
Implementation Period
DUs have 90 days from the effectivity of the rules to make the necessary changes to their billing systems, information technology infrastructure, and accounting records.
The resolutions will take effect 15 days after publication.
The implementation period is intended to give utilities time to modify their systems and records to comply with the new billing and charging requirements.
The ERC said the measures would allow consumers to see more clearly the different components of their electricity bills while giving utilities a defined framework for recovering legitimate costs associated with specific services.
Source:
https://newsinfo.inquirer.net/2314048/erc-sets-rules-to-curb-double-charges-in-electricity-bills
