Manila Electric Co. (Meralco) reduced electricity rates for August as the regulator-approved refund cushioned increases in transmission, tax, and generation charges.

In a statement, Meralco said the country’s largest power distributor lowered its overall rate for a typical household by ₱0.0428 per kilowatt-hour to ₱14.7833 per kWh from ₱14.8261 per kWh in July.

For residential consumers using 200 kWh a month, the reduction translates to a savings of roughly ₱9 on their total monthly bill.

The rate cut was primarily driven by a ₱9.5 billion refund—equivalent to ₱0.5861 per kWh for residential customers—authorized by the Energy Regulatory Commission (ERC) to be implemented over six months starting this August.

The rebate covers the variance between Meralco’s actual weighted average tariff and its approved distribution tariff for full-year 2025. Consumers will see the adjustment listed as “AWAT Refund/(Collect) 2” on their statement, which comes on top of an existing refund of ₱0.4278 per kWh.

“As earlier explained by the regulator, this refund stems from the delay in rate reset process of distribution utilities in the country that includes Meralco. We submitted the refund application in accordance with the rules,” Joe Zaldarriaga, Meralco spokesperson, said.

The regulatory rebate helped offset upward pressure from several pass-through charges that escalated during the billing period.

Transmission charges from National Grid Corporation of the Philippines rose ₱0.3024 per kWh due to higher ancillary service fees in the Reserve Market, which comprised roughly 60 percent of total transmission costs.

Under ERC directives, ancillary service fees now appear as a separate line item from transmission charges on customer bills.

Taxes and government-mandated charges logged a net increase of ₱0.2113 per kWh. The rise incorporates an ERC-approved ₱0.1348 per kWh adjustment in the Feed-In Tariff Allowance, as well as a ₱0.04 per kWh increase in tax liabilities.

The tax gain stemmed from suppliers First Gas Corp. and Prime CoreGen relying more heavily on liquefied natural gas and liquid condensate—which carry a 12 percent value-added tax—during maintenance shutdowns at the VAT-exempt Malampaya natural gas facility.

Higher international crude prices during the first half of the year also raised Malampaya contract prices following quarterly updates.

The generation charge posted a minor uptick of ₱0.0296 per kWh, driven by higher fuel costs from First Gas and Prime CoreGen. However, steep price declines in wholesale power markets limited the broader impact.

Wholesale Electricity Spot Market rates fell ₱0.5452 per kWh amid weaker grid demand, while Power Supply Agreement charges dropped ₱0.1079 per kWh due to lower global LNG prices.

Separately, the regulator authorized Meralco to begin collecting ₱8.7 billion in pass-through net under-recoveries spanning 2011 to 2022, a sum the utility previously advanced to suppliers, grid operators, and government agencies.

The recovery will average about ₱0.08 per kWh over an estimated 36-month period. Meanwhile, the ₱0.0371 per kWh Green Energy Auction Allowance remains suspended.

Outside billing adjustments, Meralco said field crews are operating continuously to restore service in areas affected by monsoon rains, while urging consumers to adhere to safety protocols near flooded electrical infrastructure. (Gabriell Christel Galang)