What It Means
- The new Meralco refund totals P9.5 billion, covering overrecoveries collected across all of 2025.
- Residential customers will see P0.5861 per kWh credited back, about P117.22 off a household using 200 kWh a month.
- This is the third AWAT true up refund Meralco has issued in four years, after payouts of P40.5 billion and P14.17 billion.
- The ERC compressed the repayment window to six months, shorter than the 36 months Meralco proposed and shorter than each of the two prior cycles.
- Meralco’s rate setting process has now overcollected from customers on three separate occasions since 2015.
The Energy Regulatory Commission has ordered a new Meralco refund of P9,506,566,556 to more than eight million customers, the result of a true up calculation that found the utility collected more than its approved tariff allowed throughout 2025. This Meralco refund averages P0.3448 per kWh across all customer classes, with residential accounts getting P0.5861 per kWh back over a six month window starting with the next billing cycle. Meralco proposed spreading the repayment over 36 months. The ERC said six.
This is not the first Meralco refund tied to this mechanism. It is the third.
The Meralco Refund Pattern Is Not a One Time Correction
Meralco has now run this exact sequence three times since 2015. The first Meralco refund cycle, covering July 2015 to June 2022, resulted in a P40.5 billion payout implemented between March 2021 and May 2023. The second, covering July 2022 to December 2024, produced a P14.17 billion refund ordered in April 2026 and rolled into bills that May, a story HemosPH covered as it landed. Now a third Meralco refund, covering January to December 2025, adds another P9.5 billion to the running total.
Three cycles in four years is not noise in a forecasting model. It is the model. Each time, Meralco’s actual weighted average tariff, the blended rate it actually collects across residential, commercial, and industrial accounts, comes in above what the ERC approved in advance. Each time, the excess gets identified months or years after the fact, and customers get it back in installments rather than at the point of overcharge.
The Mechanics Behind the Overcollection
The overcollection traces to how Meralco’s customer mix shifts against its own forecasts. Residential consumption made up a larger share of total electricity sales in 2025 than Meralco projected when it set its rates, and residential accounts carry a higher blended tariff than commercial or industrial ones. When the mix skews residential, the average rate actually collected rises above the approved ceiling, even without any single line item being set incorrectly on its own.
That is a real accounting mechanism, not an accusation of misconduct. But it is also a mechanism that keeps producing the same outcome, and each outcome triggers another Meralco refund months or years down the line. The architecture behind a Meralco bill was built with pass through charges, true up periods, and lag built into nearly every layer. The AWAT true up is one more layer where the correction always arrives after the money has already moved.
The ERC Keeps Shortening the Leash
What has changed is not the mechanism. It is the regulator’s patience with it. Meralco proposed 36 months for this refund, the same length it proposed on the prior cycle. The ERC gave it six, the tightest window across all three cycles, following the same compression the regulator applied to the April order.
A regulator that keeps cutting the repayment runway on consecutive orders is not treating each case as isolated. It is responding to a track record. The ERC’s own decision language, describing the refund as compensation including interest, signals the commission now treats the float itself, the time value of money Meralco held between overcollecting and repaying, as part of what needs correcting in every Meralco refund case going forward.
Meralco Held the Float, Customers Absorbed the Wait
Meralco filed both applications behind this refund itself, and its public statement leaned on that fact to frame the payout as proactive compliance. That framing skips over the part that matters most. For all of 2025, Meralco held money that belonged, by the ERC’s own calculation, to its customers. It earned no penalty for holding it beyond the interest folded into the eventual refund. The Meralco refund arrives only after the fact, and only because the ERC ordered it on a compressed six month schedule instead of the 36 months Meralco wanted.
A rate model that overcollects three separate times in four years, corrects each time only in hindsight, and hands the utility use of the excess in the interim is not a neutral system working as designed. It is a system where the cost of forecasting error falls on customers as a delayed credit, while the benefit of the float sits with Meralco for as long as each true up takes to catch up. The next AWAT filing will show whether a fourth cycle is already forming, or whether this refund finally forces the forecasting to hold.
More developments that reshape the operating environment in National Signal section of Hemos PH.
