How would you feel if you learned that you will have to pay somebody else’s debt?
That’s what customers of the Manila Electric Company (Meralco) are about to feel soon enough.
The reason: the Energy Regulatory Commission (ERC) has once again agreed to let Meralco pass to its customers billions in unpaid debts to power-generation companies.
Last January 26, the ERC approved the request of Meralco and power generator ACEN Corp. to pass off an additional P0.2816 per kilowatt-hour (kWh) in “fuel cost recovery costs” to its customers.
This meant that Meralco customers will see their monthly electricity bills increase by up to P56.32 (for an average consumer using 200 kWh per month) starting this March.
The cost recovery period may span 12 to 36 months, or until the full amount is recovered.
P31-B debt
What’s more boggling about the recent ERC decision is that, in effect, consumers are being forced to shoulder what should be Meralco’s obligations totaling over P31 billion to four power-generating companies.
And here’s another small detail that really makes the ERC’s judgement questionable: one of these power-generating companies is connected to Meralco itself.
We’re talking about the Panay Energy Development Corp. (PEDC), the thermal subsidiary of Meralco PowerGen Corp., which in turn is the power generation arm of Meralco.
Wait a minute, why are consumers from Metro Manila and Southern Luzon shouldering the debts of connected to power generation in Visayas?
The other three companies include ACEN Corp., the renewable-energy arm of Ayala Corporation; and the South Premiere Power Corp. and Sual Power Corp.
The last two are both owned by San Miguel Global Power Holdings Corporation (SMGP), the energy arm of San Miguel Corporation (SMC).
Meralco owes SMGP subsidiaries the lion’s share of the P31 billion it intends to collect from consumers – a combined P29.21 billion. It also owes over P1.75 billion to ACEN Corp., and over P380.62 million to PEDC.
The official explanation for the ERC’s decision to pass off this debt to consumers is a “change in circumstance” (CIC) that forced Meralco to terminate its power supply agreements (PSAs) with the four power-generation companies.
The change in circumstances involve surges in fuel costs brought on by Indonesia’s coal export ban and the Russia-Ukraine war.
Consumer advocates, however, think otherwise.
“Meralco's fixed cost supply contracts was to insulate consumers from risk in fuel price volatilities, a consumer coup. CIC or change in circumstances was the gencos' escape clause from fixed costs. It's clear that this is a countercoup by certain generation companies,” was how electricity advocate Butch Junia put it in a social media post.
Junia also pointed out that while former ERC chair Monalisa Dimalanta had vetoed the CIC claims, power generators eventually won a Supreme Court suit that allowed Meralco to recover its debts through its consumers.
"New ERC under Chair [Francis Saturnino] Juan orders the CIC payout. Classic doublespeak. Why did ERC give up the fight for fixed cost?" Junia added.
Downplaying the impact?
And if that's not enough to irritate consumers still reeling from high costs of basic goods and commodities, ERC officials have tended to downplay the overall impact of their decision to allow Meralco to pass off its debts to its customers.
Here's what ERC Chairperson Juan has to say on the issue: "Despite the P0.28 per kilowatt-hour (kWh) rate impact, which we achieved by stretching the recovery periods for all these adjustments, we are still anticipating that the overall net effect on Meralco’s rates of the change in circumstances (CIC) adjustments will be minimal or none at all.”
The reason, Juan explained, is that ERC expects Meralco to finish collecting P5.1 billion from its customers under another ERC directive as an initial payment to SMGP subsidiaries for fuel cost recoveries, a debt that Meralco has been passing off to its customers since September 2025.
“That is why we directed the implementation of the remaining CIC adjustments starting in March 2026 only so as to mitigate any impact on the overall rates of Meralco,” he told reporters.
“Minimal” or no impact at all, Mr. Juan?
P56.32 a month already means a lot for the average family in Metro Manila who still have to struggle with minimum wages that barely cover the costs of living, given the fact that the country’s inflation rate went up to 1.8 percent last December 2025.
Not to mention that the rate hike brought by the ERC decision will come at the worst possible time – the height of the summer season, when energy consumption in the Philippines traditionally increases due to extreme temperatures.
We’re in for a summer of discontent, indeed.
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