27/06/2026
A Better Way to Lower Electricity Bills
Lowering electricity bills is not just about generating cheaper power. It also requires fixing policies that shift unnecessary costs to consumers. Here are seven reforms that could make electricity more affordable and transparent.
1. Eliminate conflicts of interest in power procurement
Meralco holds equity stakes in some of the power plants it buys electricity from. That creates a potential conflict of interest because the distributor may also benefit from the generator's profits. Distribution utilities should be prohibited from owning shares in any generator they contract with, and all Power Supply Agreements should go through transparent, competitive bidding.
2. Make utilities fully accountable for non-technical system losses
Current rules allow distribution utilities to recover non-technical system losses, such as electricity theft and meter tampering, up to a regulatory cap. Consumers should not bear these costs. Holding utilities fully responsible would create stronger incentives to invest in smart meters, grid monitoring, and anti-pilferage enforcement.
3. Fund social programs through the national budget
Lifeline rates, senior citizen discounts, and missionary electrification are social welfare programs. They should be funded through general taxation rather than through electricity bills. Taxes are generally more progressive than flat utility charges, making the costs more transparent and equitable.
4. Review above-market FIT contracts
Some Feed-in Tariff (FIT) contracts were signed when renewable energy costs were much higher than they are today, leaving consumers paying rates that may exceed current market prices. Where legally feasible, these contracts should be reviewed for voluntary buyouts or renegotiation. Future renewable energy projects should rely on competitive auctions, such as the Green Energy Auction Program, instead of fixed above-market tariffs.
5. Transfer NPC stranded debts to the national government
NPC's stranded debts originated from decisions made by a government-owned corporation. Instead of recovering these costs indefinitely through electricity bills, the remaining obligations should be transferred to the national government, where they can be debated openly during the budget process and funded through general revenues.
6. Reduce or eliminate VAT on essential household electricity
VAT on electricity is regressive because lower-income households spend a larger share of their income on basic utilities. Exempting the first 200 to 300 kWh of monthly residential consumption would recognize electricity as an essential need while preserving VAT on higher consumption.
7. Strengthen the ERC
The Energy Regulatory Commission is often criticized for lengthy proceedings and limited institutional capacity. A stronger regulator should have adequate funding, competitive salaries to attract technical experts, faster timelines for regulatory decisions, and greater independence from political influence.
Summary
Many charges on electricity bills are the result of policy decisions, not just Meralco's distribution business. Some exist because governments chose to recover costs through electricity bills instead of funding them through the national budget or assigning them to the parties responsible.
Lower electricity prices are not simply a technical challenge. They require policy decisions about who should bear specific costs: consumers, taxpayers, utilities, generators, or the government. A better electricity system is possible, but it requires reforms that prioritize transparency, accountability, and fair allocation of costs.
Hindi lang isang charge ang binabayad mo sa kuryente. Here is a plain-language breakdown of every fee on your Meralco bill — who gets it, why you pay it, and which ones are controversial.
