ERC clarifies pass-through charges are based on existing laws
The Energy Regulatory Commission clarified that "other" charges, like the Lifeline Subsidy Rate, are imposed in accordance with existing laws.
On April 27, the ERC issued a statement on the charges after Meralco explained the power rate increase of P0.6427 noticed by its customers.
"It is important to highlight that distribution utilities (DU), not just Meralco, implement these charges. None of them profit from these charges, as they are pass-through costs. DUs serve as collecting agents, remitting the amounts to the appropriate entities," it said.
"The ERC did not independently invent or create these charges; they are imposed in accordance with existing laws and policies."
It went on to explain that the Lifeline Subsidy Rate, according to Republic Act Nos. 10150 and 1152, extends the lifeline rate program to aid low-income households, including those under the 4Ps program.
"To achieve this legislative objective, ERC Resolution No. 2, s. 2026, established a uniform national subsidy charge of P0.01/kWh. This charge is collected from subsidizing end-users to support 4Ps beneficiaries and qualified marginalized end-users, who receive a 100% discount for consumption up to 50kWh," the ERC stated.
Meralco customers who qualify for the 4Ps program receive a discount on their electricity bill. Those with a monthly electrical consumption of 50kWh and below get a 100% discount; customers within the 51–70kWh bracket receive a 35% discount, while those who consume between 71–100kWh get 20%.
Consumers who do not qualify contribute P0.01 per kWh monthly to help sustain the program. This constitutes the lifeline subsidy rate found in their Meralco bill.
Additionally, the Senior Citizen Subsidy is implemented following RA No. 9994, which provides discounts to eligible senior citizens.
"DUs are mandated to extend a subsidy of at least 5% to senior citizens who consume no more than 100kWh per month. Instead of incorporating the cost of these discounts into the DU's distribution rates, the ERC opted to treat it solely as a pass-through cost to avoid any over- or under-recoveries for the DUs.
Meanwhile, the Feed-in Tariff Allowance (FIT-All) is mandated by the Renewable Energy Act of 2008.
"Starting from the January 2026 billing period, the FIT-All charge of P0.2011/kWh will be applied to all on-grid consumers as FIT-All charge," the ERC stated, adding the Green Energy Auction Allowance also supports the country's renewable energy targets.
Lastly, the Universal Charge is levied on all consumers as per Section 34 of the Electric Power Industry Reform Act of 2001. It aims to fund missionary electrification, watershed rehabilitation, and the National Power Corporation's stranded obligations.
In a video message, Meralco vice president and head of corporate communication Joe Zaldarriaga explained that the lifeline subsidy rate is not an extra charge.
He emphasized Meralco does not receive anything from the payments of this rate.
"Ito ay isang pass-through charge," he said.
