Meralco’s Price Hike and Other Issues
- April 23, 2025
With the hot summer months in full swing and electricity demand at its peak, Meralco has raised its rates by ₱0.7226 per kilowatt-hour (kWh) in April 2025. The new residential rate of ₱13.0127 per kWh is up from ₱12.2901 in March, adding ₱145 to the monthly bill for households using 200 kWh.
The hike was primarily driven by a ₱0.7278 per kWh rise in generation charges, largely due to surging costs in the Wholesale Electricity Spot Market (WESM), which increased prices due to tight supply conditions in the Luzon grid.
According to Meralco, power plant outages led to a loss of nearly 1,000 megawatts (MW) in capacity, falling short of rising demand, which surged by over 1,000 MW. As supply tightened, electricity prices at the WESM spiked by 95.5% to ₱5.34 per kWh, with Luzon’s rate soaring by 102.7% to ₱5.50 per kWh. The Luzon grid was placed under yellow alert on March 5 due to low reserves.
Transmission fees also rose due to higher reserve market costs. Generation charges, which typically make up over 50% of electricity bills, cover power purchases from suppliers, while transmission charges, about 3% of the bill, cover the cost of delivering power to the distribution system.
(Also read: Power Alerts Signal Energy Stability Gap)
Wheeling rates add to the cost burden
The National Grid Corporation of the Philippines (NGCP) announced a 4.81% hike in its power transmission charges for March, which will be reflected in April’s billing. Rates rose to 55.05 centavos per kWh, up from 52.52 centavos in February.
NGCP reported a 16.05% rise in Ancillary Service rates for March, reaching 80.94 centavos per kWh from 69.75 centavos in February. These pass-through charges, covering backup power needs, along with increased wheeling rates, factored into Meralco’s higher electricity rates for April.
Additionally, transmission charges for March 2025 rose to ₱1.5240 per kWh, up 11.51% from February’s ₱1.3668. Changes in wheeling and Ancillary Service rates impact the overall electricity costs for distribution utilities and electric cooperatives across the country.
Meralco’s refund
To help offset rising power rates, Meralco began rolling out a ₱19.95-billion refund this month, as approved by the ERC. The refund will be applied over 36 months, averaging ₱0.1189/kWh.
“We hope that the start of the implementation of the refund approved by ERC will help mitigate these possible increases in these bill components,” explained Meralco Vice-President Joe R. Zaldarriaga. “This is equivalent to around 20 centavos per kWh downward adjustment for residential customers starting this month.”
This is because the ERC mandates utilities to return excess earnings when revenues exceed approved limits. Chairperson Monalisa Dimalanta clarified that the refund results from over-collection—not overcharging. The surplus came from a growing customer base, triggering the adjustment under the agency’s revenue cap policy.
The refund amount significantly contrasts with the earlier ₱987.16 million mandate issued by the Energy Regulatory Commission (ERC) in December 2024. This refund followed Meralco’s overcharging of customers, who were billed an additional 22 centavos per kWh for regulatory rate reset costs.
Despite utilities being permitted to collect up to 47 centavos per kWh for hiring consultants, no experts were enlisted, as the ERC clarified that government funds had already covered these expenses, rendering the charges unjustifiable.
Senator Risa Hontiveros highlighted that the ₱19.9 billion refund pales in comparison to what Meralco owed to consumers. She stated that the refund is minimal against the overcharges, which industry experts estimate to total ₱100 billion from 2011 to 2022.
Last March, Hontiveros called for a Senate investigation into the issue, blaming the ERC’s flawed rate reset process for the overcollections.
Responses to Meralco’s rate increase
For former policymakers Carlos Isagani Zarate and Teddy Casiño, Meralco’s latest rate hike couldn’t have come at a worse time. They argued that the increase would further strain consumers already grappling with the sweltering summer heat and ongoing economic challenges.
Casiño criticized Meralco for swiftly implementing price hikes while hesitating to refund overcharges, suggesting a slow, three-year payout of the ₱19 billion excess fees collected from 2022 to 2024, despite the company earning a substantial profit last year.
On Meralco’s Facebook post announcing the price hike, numerous consumers voiced their frustration. One wrote, “Kalokohan! Isang taon na kong may other charges sa bills. Hindi malaman kung para saan yung binabayad ko!” (“This is nonsense! I’ve had ‘other charges’ on my bill for a year now. I don’t even know what I’m paying for!”).
Another commented, “Puro pagtaas ginagawa nyo pero ‘yung refunds ng customers nyo, hindi nyo pa pinapatupad, hulugan pa! Sus! Kagaling talaga ng Meralco na ‘to.” (“All you do is raise rates, but you haven’t even processed customer refunds—you’re giving them in installments! Meralco is really something.”).
A third added, “Sobrang taas naman ng kuryente.” (“The electricity cost is just too high.”).
(Also read: DOE Begins Evaluating Possible Nuclear Plant Sites)
Meralco’s record-breaking earnings
In 2024, Meralco achieved record-high earnings, reporting a consolidated core net income of ₱45.1 billion, a 22% increase from ₱37.11 billion in 2023. This surpassed the company’s full-year profit guidance of ₱43 billion.
Meralco’s core net income growth was driven by strong performance across its key business segments. The distribution business remained the largest contributor, accounting for 62% of the total earnings. Power generation followed with a 24% share. Meanwhile, retail electricity supply and non-electricity ventures combined to deliver the remaining 14%.
Energy sales volume rose 6% to 54,325 gigawatt-hours (GWh) from 51,044 GWh in 2023. Notably, residential energy sales increased by 9% to 19,455 GWh, attributed to the prolonged use of cooling devices during the El Niño phenomenon.
Another significant win of Meralco is the early approval of its 25-year franchise extension, even though its current franchise is valid until 2028.
As early as May 2024, lawmakers including Albay Rep. Joey Salceda and Cagayan de Oro Rep. Rufus Rodriguez began pushing for the extension. By November, Senator Juan Miguel Zubiri followed suit, citing Meralco’s ₱10.43 billion tax contributions and ₱275 million in community programs.
However, Senator Hontiveros raised concerns over the premature renewal, arguing there’s still time to address unresolved issues. “Meralco’s franchise doesn’t expire until 2028, giving ample time to correct these wrongs and refund every peso unjustly collected from consumers,” she said.
She maintained that the utility should not be rewarded with a new franchise until it has been held accountable for overcharging, insisting, “They should first return the billions they over-collected from the people.”
The franchise renewal grants Meralco the right to continue supplying electricity across Metro Manila and key provinces—Bulacan, Cavite, Rizal, and parts of Batangas, Laguna, Quezon, and Pampanga—through 2053. The utility currently serves around eight million customers spread across 39 cities and 72 municipalities.
No exclusive franchises for public utilities
While each distribution utility in the Philippines is granted a franchise to serve a specific geographic area, the Constitution prohibits exclusive franchises for public utilities.
For example, in 2024, the Supreme Court ruled that electric cooperatives do not have a constitutional right to an exclusive franchise within their coverage areas. This was affirmed in the case of Iloilo I Electric Cooperative, Inc. (ILECO I), et al. v. Executive Secretary Lucas P. Bersamin, et al., G.R. No. 264260, where the Court upheld the expansion of MORE Electric and Power Corporation’s franchise into areas previously served exclusively by ILECO.
According to an opinion piece by Jake Maderazo, the Supreme Court’s ruling challenges the long-held belief that such franchises are inherently exclusive. The decision clarified that a franchise is a privilege granted by the state and must serve the public interest as determined by Congress.
“In effect, the State can award franchises to introduce new competition, encouraging private utilities and cooperatives to shape up or risk being booted out,” he wrote. “Consumers wouldn’t have to wait for the expiry dates of a franchise to appeal to their elected representative/s for transfer to the services of another distribution entity.”
The SC decision further states, “Meralco’s status as a monopoly does not preclude Congress from awarding other franchises to accommodate future competition that may lead to better public service and public good.”
Philstar columnist Boo Chanco added that Meralco is no longer the monopoly it once was. He pointed out that the company now competes with power generators for large commercial and industrial accounts—its most lucrative market. Meralco also runs a net-metering program, buying excess solar power from customers, signaling its shift to a more market-oriented model.
In terms of power distribution, Chanco wrote, “But it could theoretically happen that a worthy competitor may arise and Meralco will have no choice but to compete because, as the SC said, the Constitution prohibits exclusive franchises.”
Sources:
https://plus.inquirer.net/news/meralco-readies-hefty-power-rate-increase-for-april-consumption/
https://www.gmanetwork.com/news/money/companies/942406/meralco-rate-hike-april-2025/story/
https://plus.inquirer.net/business/meralco-to-refund-customers-p987m/
https://manilastandard.net/news/314569725/hontiveros-p19-9b-meralco-refund-too-little-too-late.html
https://newsinfo.inquirer.net/2052812/meralco-rate-hike-comes-at-worst-possible-time
https://www.facebook.com/meralco/videos/605265649198879
https://www.philstar.com/business/2025/02/25/2423910/meralco-earnings-all-time-high
https://www.philstar.com/headlines/2024/05/14/2354906/meralco-franchise-renewal-good-economy
https://www.pna.gov.ph/articles/1242355
https://www.philstar.com/headlines/2025/02/04/2419066/senate-oks-25-year-meralco-franchise-renewal
https://www.bworldonline.com/top-stories/2025/04/16/666252/meralco-franchise-renewed-for-25-years/
https://sc.judiciary.gov.ph/sc-exclusive-franchises-are-prohibited-by-the-constitution
https://opinion.inquirer.net/181148/people-deserve-better-services
https://www.philstar.com/business/2025/01/27/2417048/no-more-exclusive-franchises
