Manila Electric Co. (Meralco) said it will implement a P9.5-billion refund to customers over the next six months after the Energy Regulatory Commission (ERC) approved, with modifications, the distribution utility’s own applications under the mandatory tariff true-up process.

The utility said it supports government efforts to provide relief to consumers and will comply with the ERC’s directive, which translates to an average refund of P0.3448 per kilowatt-hour.

Residential customers will receive an average refund of about P0.5861 per kWh.

Meralco senior vice president and head of Regulatory Management Jose Ronald V. Valles said the company itself filed two separate refund applications in 2025 and early 2026 covering the periods January to June 2025 and July to December 2025, respectively, in compliance with the ERC’s performance-based regulation framework.

The applications sought confirmation of Meralco’s Actual Weighted Average Tariff (AWAT), a regulatory mechanism that compares a utility’s actual distribution tariff with its approved rates.

Depending on the outcome of the true-up process, a distribution utility may either refund excess collections or recover any shortfall.

Uniform application

Valles said that in Meralco’s case, the company applied for refunds — not additional collections — in accordance with the ERC’s rules.

He explained that Meralco’s AWAT exceeded its approved distribution tariff during the period because residential electricity consumption was significantly higher than that of other customer classes, pushing up the weighted average tariff.

“The true-up mechanism is part of the ERC-approved regulatory process that aims to ensure a distribution utility refunds any excess tariff it may have unintentionally collected,” Valles said in a statement.

He added that the mechanism applies uniformly to all private distribution utilities, with the outcome depending on each utility’s sales mix during a given regulatory period.

He noted that other private distribution utilities also have similar true-up applications pending before the ERC.

Interest added

In its 28-page decision dated 31 July, the ERC approved Meralco’s refund applications but increased the amount to be returned to consumers.

While Meralco proposed refunds totaling about P9.01 billion to be implemented over 36 months, the commission recalculated the amount, added P496.07 million in interest based on the weighted average rates of 364-day Treasury bills, and ordered a total refund of P9,506,566,556 to be completed within six months.

The ERC said the over-recovery amounted to P4.69 billion for January to June 2025 and P4.32 billion for July to December 2025. After interest was added, the total refund reached P9.51 billion.

The commission said the computation was based on Meralco’s actual distribution revenues, energy sales and the required inclusion of 50 percent of net income from related businesses under the Rules for Setting Distribution Wheeling Rates and the Electric Power Industry Reform Act.

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

Previous refunds

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

Valles said the latest refund follows earlier true-up refunds implemented by the company.

Meralco refunded P40.5 billion covering the period from July 2015 to June 2022, which was implemented from March 2021 to May 2023.

It is also implementing another P20-billion refund covering July 2022 to December 2024, which began in April 2025.