Updated as of May 1, 2026

Breakdown of Charges

Here’s a guide to help you understand where your payment goes and what each charge is for. Your electricity bill reflects the full journey of power—from generation to delivery to your home.

All the components of your bill are based on the law and the rules and regulations of the Energy Regulatory Commission (ERC).
 

Bill Charges Pie Chart 2026

Based on 2025 average

Only about 12% of your bill goes to Meralco

This covers the cost of:

  • Building and maintaining the distribution network
  • Delivering electricity safely and reliably
  • Customer service, metering, and billing

Meralco has not increased its charges since 2015.

The remaining 88% are pass-through charges that do not go to Meralco. Meralco only acts as the collecting agent and does not earn from them.

 

64%: Generation Charge 

The largest portion of your bill which covers the cost of power we purchase from our suppliers: 

  • Independent Power Producers / Power producers with Power Supply Agreements with Meralco
  • Wholesale Electricity Spot Market (WESM)
  • Exported energy from Net Metering and Distributed Energy Resource program participants 
    • Because this makes up for a large portion of the bill, the ERC ensures that Meralco sources electricity at the lowest possible cost.

 

11%: Other Charges 

These are government-mandated costs, which include:

  • Government Taxes 
    This cover applicable taxes on electricity services:
    • Value Added Tax and Energy Tax (for residential customers consuming over 650 kWh), which go to the national government 
    • Real Property Tax and Local Franchise Tax, which go to Local Government Units
  • Lifeline Subsidy 
    • This is used to provide bill discount to 4Ps beneficiaries and certified-marginalized customers consuming 100 kWh and below. This is remitted to Power Sector Assets and Liabilities Management.
  • Senior Citizen Subsidy 
    • This is used to provide bill discount to senior citizens consuming 100 kWh and below, as well as DSWD-accredited institutions for the elderly. 
  • Feed-in Tariff Allowance (FiT-All)
    • This supports the development of renewable energy projects under the Feed-in Tariff Program. It is set annually by the ERC and is remitted to the National Transmission Corporation. 
  • Green Energy Auction allowance (GEA-All) 
    • This funds the development of renewable energy projects like solar, wind, and hydro. It supports the Green Energy Auction Program (GEAP), a government program where renewable energy projects are selected through competitive bidding to ensure the lowest possible cost for customers. This is remitted to the National Transmission Corporation (TransCo).
  • Universal Charges 
    This covers the following and is remitted to PSALM (Power Sector Assets and Liabilities Management):
    • Missionary Electrification: funds electricity service in remote or off-grid communities that are not connected to the national grid transmission system, and are difficult or costly to serve
    • Environmental Charge: a fixed charge of P0.0025/kWh, used for watershed rehabilitation and management and is managed by the National Power Corporation
    • NPC stranded debts cover the unpaid financial obligations of the NPC

 

8%: Transmission Charge 

This covers the cost of using transmission lines to deliver electricity from power plants to Meralco’s system, as well as ancillary services that help ensure the stability and reliability of the power grid. This is remitted to the National Grid Corporation of the Philippines (NGCP).

 

5%: System Loss Charge 

This is part of the generation and transmission costs paid to generation companies and NGCP. This accounts for electricity lost due to technical and non-technical factors. The ERC has set a system loss cap, and any losses beyond this limit cannot be passed on to customers.