The Energy Regulatory Commission (ERC) has ordered Manila Electric Co. (Meralco) to refund more than P9.5 billion to consumers after determining that the distribution utility over-recovered distribution charges during the period from January to December 2025. 

In a 28-page decision dated 31 July 2026, the ERC approved, with modifications, Meralco's applications seeking confirmation of its Actual Weighted Average Tariff (AWAT) calculations for the first and second halves of 2025. 

While Meralco initially proposed separate refunds totaling about P9.01 billion to be implemented over 36 months, the ERC recalculated the amount, added interest, and directed the company to refund a total of P9,506,566,556, equivalent to an average refund rate of P0.3448 per kilowatt-hour, to be implemented within six months or until the full amount has been returned to customers. 

The commission said the refund covers Meralco's over-recovery under the distribution wheeling rates during the regulatory period and includes P496.07 million in interest, computed using the weighted average rates of 364-day Treasury bills. 

The ERC found that Meralco's total over-recovery reached P9.01 billion, consisting of P4.69 billion for January to June 2025 and P4.32 billion for July to December 2025. After adding the applicable interest, the total refund increased to P9.51 billion. 

Under the order, residential and General Service A customers will receive a refund rate of P0.5861 per kWh, while General Service B customers will receive P0.3879 per kWh. General Power customers will receive P0.1740 per kWh, GHMSCI customers P0.2298 per kWh, Flat Streetlights P0.5746 per kWh, and Generator Wheeling customers P0.0493 per kWh. 

The refund will appear as a separate line item in customers' monthly electricity bills labeled "AWAT (Refund)/Collect." Meralco was also directed to submit monthly implementation reports to the ERC until the refund has been fully completed. 

The cases stemmed from applications filed by Meralco seeking confirmation of its Actual Weighted Average Tariff against its previously approved distribution rates for the periods January to June 2025 and July to December 2025. The applications were filed pursuant to ERC resolutions requiring private distribution utilities operating under performance-based regulation to undergo a true-up process for their lapsed regulatory periods. 

In its decision, the commission said the over-recovery was validated using Meralco's actual distribution revenues, energy sales, and the required inclusion of 50 percent of net income from related businesses, as provided under the Rules for Setting Distribution Wheeling Rates and the Electric Power Industry Reform Act.