The P9.5B MERALCO Refund, Explained

Millions of Filipinos served by the Manila Electric Company (MERALCO) are set to receive a refund after the Energy Regulatory Commission (ERC) ordered the utility to return ₱9.5 billion to consumers. While this announcement was welcomed warmly, it changed days later when the ERC then allowed MERALCO to recover ₱8.7 billion in previously under-collected costs.

Here’s what you need to know about the MERALCO refund and how it has sparked debate on electricity costs as a whole.

What Will Happen?

The ERC ordered the MERALCO refund after finding that the company’s actual weighted average tariff for a regulatory period in 2025 was higher than the approved distribution rate. In other words, customers paid more than what regulators eventually determined was allowable.

The estimated ₱9.5 billion refund is equivalent to an average of ₱0.3448 per kilowatt-hour (kWh). This is to be rolled out over the next six months, appearing as a separate line item in customers’ electricity bills.

Why Still Have Additional Charges?

Yet, the ERC also approved MERALCO’s recovery of ₱8.7 billion in pass-through charges accumulated from 2011 to 2022. These include approved costs related to electricity generation, transmission, system loss, and certain taxes that MERALCO previously did not fully recover.

Unlike the refund, the recovery will be spread over 36 months (3 years). According to the ERC, this is part of the “true-up” process, which compares what a utility actually collected against the costs it was allowed to recover.

If customers were overcharged, they receive a refund. However, if approved costs were under-collected, regulators may later authorize recovery.

System Loss Charge Discourse

The MERALCO refund and recovery adds to the talk of system loss charges, which President Ferdinand Marcos Jr. highlighted during his 2026 State of the Nation Address (SONA). He directed concerned agencies to study its possible removal, saying consumers should not shoulder costs for electricity they did not use.

While many consumers support this directive, regulators and industry leaders say doing so requires careful study because someone will still have to absorb those costs.

READ: The 2026 SONA Promises: Which Ones Will Filipinos Actually Feel First?

For now, the MERALCO refund offers welcome relief for millions of consumers. Conversely, it also highlights the complexity of electricity pricing, where refunds, cost recoveries, and policy reforms can happen all at once.