Understanding The Meralco Bill: Where Does Your Money Goes


meralco bill

Meralco, short for Manila Electric Company, is the largest electric distribution utility company in the Philippines. Understanding your Meralco bill is essential for managing your electricity consumption effectively and ensuring accurate billing. Most of us think that Meralco gets all the money we pay and blame them when our electric bill goes up.  The truth is, only a portion is paid to Meralco. 

Where your money goes 

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).

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.

Navigating the Bill Statement

Billing Information

The top section of your Meralco bill contains crucial billing information. This includes your account number, billing period, and due date. Take note of these details to ensure timely payments and avoid any potential service interruptions.

Summary of Charges

Next, the bill provides a summary of charges. This section outlines the total amount due, current charges, previous balance, and any payments or adjustments made during the billing period. Understanding this summary is crucial for budgeting and tracking your electricity expenses.

Consumption Details

One of the most critical aspects of your Meralco bill is the consumption details section. Here, you'll find information about your electricity consumption measured in kilowatt-hours (kWh). Meralco uses an electronic meter to record your usage, and this section breaks down your consumption into different periods, such as peak and off-peak hours.

Breakdown of Charges

Your Meralco bill includes a breakdown of charges, illustrating the various components contributing to your total bill. These may include the generation charge, transmission charge, system loss charge, distribution charge, and other government-mandated taxes and fees. Understanding these components empowers you to identify areas where you can potentially reduce your energy costs.

Energy Saving Tips

Meralco often includes energy-saving tips and recommendations on the bill. These tips aim to help you optimize your energy usage and reduce your electricity costs. Pay attention to these suggestions to make your household or business more energy-efficient.

Service and Payment Information

The bottom section of your Meralco bill provides details about where and how to settle your payment. It includes Meralco's customer service contact information, payment centers, and accepted payment methods. Ensure you follow the guidelines to avoid any inconvenience in the payment process.

Understanding your Meralco bill is essential for managing your electricity expenses effectively. By breaking down the different sections of the bill and paying attention to details such as consumption patterns and charge breakdowns, you can make informed decisions to optimize your energy usage and save on costs. Regularly reviewing your Meralco bill empowers you to take control of your electricity consumption and contribute to a more sustainable and cost-effective energy future.