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Breakdown of Charges
Here’s a guide to help you understand what each of these bill charges mean, and where they go.
- Generation Charge
This covers the cost of power we purchase from our suppliers - Independent Power Producers (IPPs), power producers with Power Supply Agreements (PSAs) with Meralco, power producers using Renewable Energy and the Wholesale Electricity Spot Market.
- Transmission Charge
This charge is for the cost of delivery of electricity from power suppliers – usually located in other provinces or in remote areas outside of our franchise area – to our distribution system. This is paid to the National Grid Corporation of the Philippines (NGCP), our transmission service provider.
- System Loss Charge
This refers to the cost-recovery of power lost due to technical and non-technical system losses. The maximum level of losses that may be recovered by private distribution utilities was set at 9.5% by Republic Act No. 7832, which was reduced to 8.5% starting 2010, as provided under ERC Resolution No.17, Series of 2008.
- Distribution Charge
This is the only portion of your bill that goes to Meralco. It covers the cost of developing, constructing, operating and maintaining our distribution system, which delivers power from high-voltage transmission grids to commercial and industrial establishments and residential end-users.
- Subsidies – Lifeline and Senior Citizen Discounts
The discount is for the marginalized, low-income customers and senior citizens who consume 100 kWh or less in a given month. They can enjoy a discount of up to 5%, an amount which is subsidized by all other customers. Under Subsidies, Tax Recovery Adjustment Charge is also included. It is the charge collected from customers of the different local government units where local franchise taxes, prior to rate unbundling, were already paid by Meralco but not yet recovered from customers.
- Metering Charge
This is the charge for the cost of reading, operating and maintaining power metering facilities and associated equipment, as well as other costs attributed to the provision of metering service.
- Supply Charge
This is for the cost of rendering service to customers such as billing, collection, customer assistance and other associated services.
Only about 17.5% of your bill component actually goes to Meralco
Meralco is responsible for gathering all these charges and simplifying them, so you wont need to worry about the many different entities collecting payment from you.