Understanding The Meralco Bill

Thursday, May 26, 2016




Many Filipinos are burdened with high electricity costs during summer. When Meralco announced that the rate for it's residential customers for the month of May would go down by P0.41 per kilowatt-hour, people are wondering if they will feel the decrease.

The answer is YES.

If your household is consuming 200 kWh, your electricity bill will be cheaper by around P82.00.

Understanding the Meralco bill

The money you pay does not all go to Meralco. There are other components that share with the amount charged to you. Also, Meralco does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corporation of the Philippines (NGCP).

Where your money goes 

54% GOES TO GENERATION COMPANIES 

Generation charge is the largest component of the bill. It comprises the total of all costs charged by the different generation companies that provide Meralco with power supply. These include SMC Global Power, Aboitiz Power, DMCI, First Gen, AES, and EGCO. In special cases, this may include charges from the Wholesale Electricity Spot Market (WESM).

11% GOES TO NGCP

Transmission charges goes to National Grid Corporation of the Philippines. The power supply generated by the generation company will have to pass through the NGCP before distributing to the customers and therefore Meralco has to pay for the transmission services of NGCP.

18% GOES TO MERALCO

The only amount that Meralco receives for its services is the distribution charge. This is regulated by the Energy Regulatory Commission (ERC). The distribution charge decreased in 2014, became even lower in 2015, and has not changed since then.

12% GOES TO TAXES

The taxes collected by the government include Value Added Tax (VAT), Universal Charge and Local Franchise Tax

5% OTHER CHARGES

Other charges warranted by the government regulators to ensure the industry's viability are System Loss Charge, Subsidies and Feed-In Tariff Allowance (FiT-All).

Instead of each of these entities delivering bills to your doors and collecting payment, Meralco consolidates all charges in one electric bill. Then Meralco collects payment and pays the other companies and the government in behalf of its consumers.



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15 scribbles

  1. Thanks for the info! I think people should know more about this and how it goes.

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    1. I used to put all the blame to Meralco for high electricity costs. It was only after this forum that I got to understand.

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  2. Great informative post for the people that need to understand better their energy bill. I live in the UK and other rules apply to my bill. :)

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  3. I think Meralco charges fairly. It is true that generation companies get the highest component of the bill. The coal generation companies still have to source their coal from either Indonesia (low gross calorific value) and other countries like Austria for the higher GCV. It's good that Meralco does its part of disclosing the components of the bill to consumers. Makes consumers think less ill of them. Thank you for sharing this information -Me-An

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    1. I was one of those people who put all the blame at Meralco hahaha I thought all the money paid for the bill goes to them.

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  4. We don't use Meralco's services but this post is informative. Maybe I can use this in the future.

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  5. Well I guess, Meralco is still the best among the providers.Even somehow it is quite pricey but the after service itself is good like they announce if they will have a rotating brown outs. They are super convenient :D

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  6. Wow! I love this post because it's very informative. But Meralco is very convenient and has a great service.

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  7. I think more people should learn about this, Meralco is just a private distributor but all the blame goes to them cos it's their name on the bill hehe.

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  8. Thanks for the detailed info Roselle! But Im still unsure why our Meralco bill last month was zero. He He He. Baka kasi bawiin next month.

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  9. Thanks for this guide. I hope meralco will more and more be transparent. Most of all that a competitor comes in!

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  10. thanks for this very informative posts... I am the done who is paying our Meralco bill at home so I think i should really keep this in mind.. and now that we have a new administration coming, i wonder how big it will impact the current process

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  11. Hey hey, thank you for this post. You can call me maangal but really, I do put all the blame to Meralco for our electicity charges- this post has opened up my eyes. This has enlightened my rather judgemental mind. So shut ul na lang ako talaga next time. Haha! Xoxo- jaimie

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  12. Informational article!! So detailed and well explained!! :) Thanks for this! :)

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  13. Finally, a post that explains where to money goes. It is important for consumers to know this because every time the meralco bill increases, most think it all just lands in the pockets of the company and its top managers without really understanding where it all goes. I'm glad to have seen this Ate Roselle. So when I hear someone ranting about their Meralco bill, I can butt in and tell them this information.

    ❤ Louise | Tales & Escapades

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