MANILA Electric Co. (Meralco) announced on Wednesday that its electricity rates will drop by P0.0151 per kilowatt-hour (kWh) in May, bringing the overall rate for a typical household down to P14.3345 per kWh this month from P14.3496 per kWh in April.
The reason for the overall decrease, it said, was mostly due to the Energy Regulatory Commission’s (ERC) approval of several mitigation initiatives to help offset the increase in generation charges for the period.
”Despite initial indications of an increase, Meralco power rates this May had a modest reduction. This was achieved through the proactive efforts led by the ERC to cushion the impact of potentially high rates as a result of the geopolitical tensions that ultimately affect energy prices,” said Joe Zaldarriaga, Meralco vice president and head of corporate communications.
”While our customers stand to benefit from relatively stable rates this May, we would like to advise our customers that the bills that they will receive may still go up depending on their actual consumption, which usually increases during the summer months,” he added.
Meralco said that the various mitigating measures, as approved and directed by the ERC, helped offset an increase in the generation charge.
These include the acceleration of Meralco’s ongoing refund, which increased the refund rate for residential customers by P0.2254 per kWh to P0.4278 from P0.2024 per kWh previously.
The ERC previously directed Meralco to refund the remaining P14.2 billion over a period of 12 months, instead of the original remaining refund period of two years.
The ERC has suspended the collection of the P0.0371 per kWh Green Energy Auction Allowance from May to June 2026.
This month’s taxes and other charges also had a net decrease of P0.1482 per kWh.
Meralco said that in May, electric consumers will partially benefit from the long-delayed implementation of the value-added tax (VAT) exemption for power generated using indigenous natural gas.
The VAT exemption was provided under Republic Act 12120, or the Philippine Natural Gas Industry Development Act, which was enacted back in January 2025.
The generation charge for May went up to P8.7942, from a previous rate of P8.3864 per kWh back in April.
There was a significant P7.7239 per kWh increase in charges from the Wholesale Electricity Spot Market (WESM), in particular, the line rental component.
As a mitigating measure, the ERC allowed Meralco to immediately reflect the line rental caps under its ERC-approved Power Supply Agreements (PSAs) for May 2026 billing. As a result, a substantial portion of the line rental amount from the WESM will be borne by Meralco’s suppliers, pulling down the charges from PSAs by P0.1793 per kWh and partially offsetting the higher WESM charges.
