Meralco denies 'unfounded' power rate claims


At a glance

  • Manila Electric Co. (Meralco) firmly refutes the allegations made by Santa Rosa City Rep. Dan Fernandez, asserting that the distribution utility did not overcharge its customers starting from 2012.

  • Jose Ronald Valles, Meralco first vice president and head of regulatory management, said the company's rates are thoroughly reviewed and confirmed to ensure fairness and reasonableness, similar to other distributors.

  • Meralco clarified that the determination of the weighted average cost of capital (WACC) is the responsibility of the regulator, not Meralco, in response to Fernandez's claims about Meralco's "extremely high" WACC.

  • The rates on customers' electricity bills are approved by the regulator following a rigorous and transparent process involving public hearings, Meralco said.

  • Meralco's most recent approved WACC, set by the regulator under Performance-Based Regulation (PBR), applies to all private DUs in the same category. Additionally, Meralco has not had a defined WACC since July 2015 due to the absence of a completed rate reset during that regulatory period.

  • Before conducting Competitive Selection Process (CSP), Meralco secures approval from the Department of Energy (DOE) for its Power Supply Procurement Plan and the Terms of Reference (TOR) to ensure alignment with government requirements and standards.


Power distributor Manila Electric Co. (Meralco) denied anew Santa Rosa City Rep. Dan Fernandez's claim that the company overcharged its customers since 2012.

In a statement on Sunday, Nov. 26, Jose Ronald Valles, Meralco first vice president and regulatory management head, said the company's rates are reviewed to ensure fairness and reasonableness, similar to other distributors.

Meralco also said it cannot set its own rates as all rates on customers' electricity bills are approved by the regulator after a strict and transparent public process.

“I would like to reiterate that as a highly regulated entity, Meralco strictly adheres to the rules governing its operations and franchise and the rates we implement always have prior approval from the regulator,” Valles said.

Valles said that these rates are also regularly confirmed by the Energy Regulatory Commission (ERC).

“The proper venue for discussing the refund claims is the ERC, which has the rate-setting power and the regulator has already decided on a refund totaling P48 billion, which Meralco implemented in a timely manner,” he added.  

In response to Fernandez's claims about Meralco's "extremely high" weighted average cost of capital (WACC), Maralco said the regulator is responsible for determining it.

Meralco added that the last approved WACC, set by the regulator under Performance-Based Regulation (PBR), applies to all private distribution utilities. 

Since July 2015, Meralco said it has not had a defined WACC due to the absence of a completed rate reset during that regulatory period.

Meanwhile, Meralco cited a recent study by the International Energy Consultants, which said that its rates are fair and reasonable as they accurately reflect the true cost of electricity. 

This is in contrast to other countries where power costs are heavily subsidized by their governments, Meralco said.

“This was the result of the company’s constant efforts to source the least cost available supply through, among others, the conduct of a transparent competitive selection process (CSP),” Meralco said.

Before conducting CSP, Meralco said it obtains approval from the Department of Energy (DOE) for its Power Supply Procurement Plan and the Terms of Reference (TOR) to ensure compliance with government requirements and standards.

“This is contrary to the baseless and malicious claims that Meralco’s TOR is tailor-fitted to favor select generation companies,” Valles said. 

“Our past CSPs conducted are proof that no such tailor-fitting is happening, precisely because the TOR and other bidding documents are required to comply with existing policies of DOE and regulations of ERC, and the resulting Power Supply Agreement needs to be approved by regulator,” he added. (Chino S. Leyco)