Meralco seeks ERC nod on P8 billion cost recovery

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March 2, 2026 | 12:00am

MANILA, Philippines — After nearly three years, power giant Manila Electric Co. (Meralco) is pinning its hopes on the Energy Regulatory Commission (ERC) to finally approve its roughly P8-billion cost recovery.

“We’re hoping the ERC will soon decide on that, since those costs have already been paid to the generators, the transmission provider and the government,” Meralco regulatory management head Jose Ronald Valles said.

This follows Meralco’s application for over/under-recoveries of pass-through charges from 2020 to 2022, covering generation, transmission, system losses, taxes and subsidies.

The utility giant is seeking to collect about P7.98 billion in net under-recoveries from consumers, equivalent to about P0.22 per kilowatt-hour (kWh), to be collected over 12 months.

Meralco noted that it would neither earn profits nor incur losses from the costs covered by this application, as they are all pass-through charges.

Under the Electric Power Industry Reform Act, distribution utilities are allowed to recover “just and reasonable costs” to ensure their continued and viable operations.

However, if the ERC approves Meralco’s filing now, it could coincide with the P31 billion in additional charges already approved for power producers.

The ERC earlier authorized the collection of an additional P0.2816 per kWh from Meralco customers for 12 to 36 months or until the total amount is fully recovered.

This includes claims from the San Miguel Group, ACEN Corp. and Panay Energy Development Corp., seeking to recover losses caused by fuel price spikes due to the Russia-Ukraine war and the pandemic.

In addition to cost recovery, Meralco is also awaiting the Department of Energy’s (DOE) approval of its competitive selection process (CSP) for the procurement of new power supplies.

According to Valles, the DOE has not yet issued the certificate of conformity, pending comments from the Philippine Competition Commission (PCC).

As a competition safeguard, the PCC is reviewing Meralco’s CSPs following a big-ticket liquefied natural gas venture with San Miguel Global Power and Aboitiz Power Corp.

Under its approved procurement plan, Meralco proposes competitive auctions for 600 MW of baseload and 450 MW of mid-merit supply, as well as an additional 900 MW of baseload power.

“We were supposed to have concluded the CSPs for those three last year, so we’re almost a year delayed already,” Valles stressed. “That’s my concern.”

The Meralco official also warned that continued delays in competitive bidding could deter new investments in the sector.

“We’re opening up opportunities for (investors) to invest in generation through the CSP. But with the delay, the entry of investments will also be delayed,” Valles said.