LOWER MERALCO RATE THAN REQUESTED IS NOT YET PROOF OF A JUST
AND REASONABLE RATE
Consumer group calls for full disclosure of ERC decision, compliance with applicable
Supreme Court directives, and resolution of issues raised by intervenors
The National Association of Electricity Consumers for Reforms, Inc. (NASECORE)
acknowledges the Energy Regulatory Commission’s (ERC) announcement on 10
October 2026 that it approved a reduced revenue requirement of approximately ₱342
billion, compared with the ₱532 billion sought by Manila Electric Company
(MERALCO), under ERC Case No. 2026-016 RC.
The ERC also announced an average distribution rate of ₱1.48 per kilowatt-hour
(kWh) for Regulatory Year 2027, lower than MERALCO’s proposed ₱2.34/kWh.
While NASECORE recognizes the Commission’s reported disallowance of excessive,
unsupported, or unnecessary costs, a reduction from MERALCO’s original application
does not, by itself, establish that the approved rate is just, reasonable, and lawful.
As an intervenor in the proceedings, NASECORE emphasizes that consumers must
be assured that the approved charges are based on properly verified assets, prudent
and necessary expenditures, and a reasonable return on capital, consistent with the
Electric Power Industry Reform Act (EPIRA) and applicable Supreme Court rulings.
Of particular importance is the Supreme Court’s Decision dated 8 October 2019 in
G.R. No. 226443 (NASECORE v. ERC, MERALCO, and COA).
The Supreme Court voided the ERC’s adoption of current or replacement cost valuation of MERALCO’s Regulatory Asset Base (RAB) in the underlying proceedings and directed the
Commission to determine a reasonable and fair valuation of the RAB.
It likewise directed the ERC to determine the parameters for passing on expenses not directly
and entirely related to distribution operations, all toward ensuring that electricity is
provided to consumers “IN THE LEAST COST MANNER.”
While the ERC has subsequently adopted the Trending Method for the historical rate-
unbundling proceedings covered by the ruling, NASECORE seeks clarification on the
status of its implementation, the resulting RAB valuation, and whether any resulting
adjustments have implications for the asset base and revenue requirement approved
in the present regulatory reset.
Other matters requiring examination include the approved capital and operating expenditures, allowable return on capital, reconciliation of prior refunds and over-recoveries, and the Commission’s findings on the substantive issues and documentary
requirements raised by NASECORE and other intervenors.
Significantly, the ERC’s October 10 press release stated that its Decision and Final
Determination would be formally promulgated shortly.
NASECORE therefore calls upon the ERC to promptly furnish all intervenors with the
complete Decision and Final Determination, including the supporting computations,
schedules, and findings on the issues raised during the proceedings.
These documents are essential to enable the parties to properly assess the approved rates,
examine compliance with applicable legal and regulatory requirements, and exercise
their rights under the Commission’s procedural rules.
NASECORE likewise emphasizes that the reported ₱190-billion reduction from
MERALCO’s application should not automatically be presented as actual savings in
consumers’ existing electricity bills.
The Commission should clearly explain how the approved charges compare with currently implemented rates and their actual impact on consumers.
Pete Ilagan, emphasized:
“Hindi sapat na mas mababa ang inaprubahang rate kaysa sa hiningi ng
MERALCO. Ang mahalagang malaman ng consumers ay kung ang mismong
singil ay tama, makatwiran, at may sapat na batayan. Ito ang dapat malinaw na
maipakita ng ERC.”
NASECORE recognizes the Commission’s efforts to address the long-delayed
regulatory reset. Nevertheless, transparency, due process, compliance with applicable
Supreme Court directives, and proper verification remain indispensable to public
confidence in electricity rate-setting.
NASECORE considers it premature to reach a definitive conclusion on the approved
rates based solely on the ERC’s press release. Its immediate priority is to obtain and
carefully examine the complete written Decision and Final Determination, particularly
the Commission’s treatment of the regulatory issues raised during the proceedings.
Upon examination of the Decision, NASECORE will determine the appropriate further
action to safeguard the rights and interests of electricity consumers.
For NASECORE, genuine rate-setting is not measured merely by how much a utility’s
proposed rates are reduced, but by whether the rates ultimately approved are
supported by verified costs, prudent investments, reasonable returns, and compliance
with applicable laws and judicial directives.
Its fundamental purpose is to ensure that consumers pay only what is just, reasonable, and legally justified, while receiving reliable and efficient electricity service.
“GENUINE RATE-SETTING IS CONSUMER PROTECTION.”
Kung nais niyong basahin ang mga sulat ng NASECORE, i-click ang link na ito: https://tinyurl.com/4sey62xe