Daven Tamayo

Power bill shock? Meralco says pass-through charges not new; ex-lawmaker questions legal basis

Article (news)

Andrea Taguines

ABS-CBN News

<p>MANILA — As complaints over alleged “bill shocks” continue to mount, Meralco reiterated that so-called pass-through charges are nothing new and have long been imposed on consumers as supposedly mandated by the law.</p><p>At a press conference, the company said all distribution utilities and electric cooperatives collect and remit these charges to the government to fund various programs.</p><p>These public policy charges include the lifeline subsidy for 4Ps beneficiaries, the senior citizen discount, and universal charges that support marginalized sectors, as well as the Feed-in Tariff Allowance (FIT-All) and Green Energy Auction Allowance (GEA-All), which aim to promote the development of renewable energy in the country.</p><p>Meralco Utility Economics Head Larry Fernandez said these charges are nothing new and have been included in consumers&#x27; bills for years. He added that other power distributors also include these charges.</p><p>“Kung pumunta kayo sa General Santos City, sa Iloilo, sa Bacolod o sa Meralco, makikita ninyo lahat po ng utilities meron ito,” said Meralco Utility Economics Head Larry Fernandez.</p><p>Meralco also warned against the spread of false information claiming the company benefits from these charges.</p><p>“Doon sa mga disinformation na lumalabas na pinasok lang daw namin ngayon yan, Meralco daw nagpapasok ng kung ano-ano, na dapat kami yung sumasalo— those are outright lies. Hindi naman kami maglagay sa electricity bill nang walang kaukulang approval sa ilalim ng batas at guidance ng regulator,” said Meralco Spokesperson Joe Zaldarriaga.</p><p>Zaldarriaga added that these charges constitute less than 10 percent of the total bill.</p><p>“Ang pinakamalaki pa rin pong component sa bills natin na more than 50 percent ay yung generation charge. The generation charge is likewise the main driver every time we announce a rate adjustment, whether it’s an increase or a decrease,” he said.</p><div><br/></div><div><span class="fr-img-caption fr-fic fr-dib" style="width:960px;display:block" width="960"><span class="fr-img-wrap"><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/1777373901246viber_image_2026-04-28_18-20-00-653.jpg" style="width:960px" class="fr-fic fr-dib" width="960"/><span class="fr-inner" style="text-align:left">Source: Meralco</span></span></span></div><p>The Department of Energy (DOE) also insisted that the pass-through charges in question have legal basis.</p><p>“I’m sure when Congress passed these laws, there were extensive consultations made,” said DOE Secretary Sharon Garin.</p><div><br/></div><div><strong>WHAT LEGAL BASIS?</strong></div><p>But Bayan Muna chairperson and former lawmaker Atty. Neri Colmenares questioned the legal basis cited by both Meralco and the DOE.</p><p>He argued that subsidies are typically funded by the government through appropriations or tax mechanisms— not directly passed on to ordinary consumers already burdened by high prices and stagnant wages.</p><p>“Nakalagay sa batas, i-subsidize mo ang lifeline, i-subsidize mo ang senior citizens. Pero wala akong nakitang sinabi, singilin mo na lang yun sa consumers. I don’t care about the ERC (Energy Regulatory Commission) resolution. (An) ERC resolution is nothing without the law,” said Colmenares in an interview with ABS-CBN News.</p><p>“Meron namang law na tax rebate o tax deduction. Yung 20 percent (senior citizen discount) sa restaurant, paano mabawi yan ng restaurant owner—tax deduction, di ba? Bakit hindi nila ilagay yun? That the supplier can claim these subsidies as tax deductions every time it files its corporate income tax,” he added.</p><p>Colmenares also supports the proposal of some consumer groups like the Power for People Coalition to temporarily suspend value-added tax (VAT) and excise tax on electricity amid the energy crisis.</p><p>In fact, he said the VAT imposed on system loss should be permanently removed, emphasizing that VAT is a consumption tax and system loss is not something a consumer actually receives or consumes.</p><p>“Bumili ka ng damit sa palengke, may 12 percent VAT ka. Pero at least may damit kang iuuwi diba? Pag system loss, nagbayad ka ng 12 percent, anong inuwi mo? Wala. Ang system loss, problema yan ng Meralco pag ang kanilang technical capacity to ensure system loss ay mahina… Hindi namin kasalanan bakit kami ang sisingilin?” added Colmenares.</p><div><br/></div><div><strong>LOWER POWER RATES SEEN IN MAY</strong></div><p>Meanwhile, Meralco says the faster refund implementation ordered by the Energy Regulatory Commission would help bring down electricity rates in May.</p><p>“Ngayong April, nakikita niyo for residential customers it’s a refund of 22 centavos. By May halos mado-doble na po ito magiging almost 43 centavos, so definitely makakatulong sa pagbababa ng electric bills,” said Meralco Tariff Management Head Roderick Nacu.</p><p>The utility giant said it would also be taking into account the suspension of VAT on locally-sourced gas, as well as the electricity generated from it.</p><div><a href="https://www.abs-cbn.com/news/business/2026/3/23/bir-exempts-indigenous-natural-gas-transactions-from-vat-1720" rel="noopener noreferrer" target="_blank">BIR exempts indigenous natural gas transactions from VAT</a></div>

<p>Meralco said all distribution utilities and electric cooperatives collect and remit these charges to the government to fund various programs.</p>

Meralco said all distribution utilities and electric cooperatives collect and remit these charges to the government to fund various programs.