By Benjamin Cuaresma
MANILA — Complaints of “bill shock” are rising nationwide as households question charges on their electricity bills that go beyond actual kilowatt-hour consumption — including VAT, universal charges, lifeline subsidies, and system loss fees that critics say should be shouldered by utilities, not consumers.
Consumer groups and energy advocates point to several line items that inflate monthly dues:
12% Value Added Tax and other government taxes
Universal Charges for missionary electrification and watershed protection
Lifeline Subsidy for 4Ps beneficiaries and qualified marginalized consumers
Senior Citizen Discount Subsidy for low-usage households
Feed-in Tariff Allowance to promote renewable energy
Systems Loss Charge covering electricity lost to technical transmission losses and pilferage
Meralco’s April 2026 rate breakdown shows only 64% goes to generation. The rest: 12% distribution, 11% “other charges” including taxes and subsidies, 8% transmission, and 5% system loss.
Advocates argue the Systems Loss charge is particularly unfair. This fee covers power that never reaches homes because it dissipates during transmission or is lost to theft.
“That shouldn’t be shouldered by consumers. Those costs should be absorbed by the businesses involved in transmission and distribution,” said the Power for People Coalition.
Lawmakers echoed the call. “Pati system loss may tax. Dito lang sa atin nangyari na pati ba naman yung bagay na wala, nata-tax?” said one senator, pushing to remove the 12% VAT on electricity.
Under current rules, distribution utilities like Meralco are allowed to pass a capped percentage of system losses to consumers as approved by the Energy Regulatory Commission.
Critics say this removes the incentive for utilities to improve efficiency and crack down on pilferage, since the cost is automatically recovered from customers.
Power for People Coalition estimates that if government taxes were suspended, universal charges and lifeline subsidies were funded by the state, and Meralco absorbed system losses, a typical 154-kWh monthly bill could fall by nearly 30%.
For higher consumption households, the peso impact of these add-ons grows even larger because most are computed per kWh or as a percentage of the total bill.
Lifeline and senior citizen discounts of up to 5% for users at 100 kWh or less are mandated by EPIRA and RA 11552. All other customers fund the discount through a “Lifeline Subsidy Rate” on their bills.
Consumer groups and some lawmakers argue social protection programs should be financed through the national budget and general taxation, not utility bills.
Senate Resolution 375 seeks a review of these mandated discounts, saying they should be “partially, if not fully, covered by the national budget, not shouldered by consumers”.
Meralco said it does not keep most of the contested charges. “We act solely as collection agents for these costs,” the company said, adding that taxes and subsidies are remitted to government agencies.
ERC confirmed the charges are mandated by law and collected by all power distributors, not just Meralco.
The issue intensified after Meralco implemented a P0.5335/kWh hike in April, its third straight increase, citing higher generation costs from a weaker peso and fuel prices. This pushed overall rates to P14.3496/kWh.
At the same time, regulators ordered Meralco to refund P14.17 billion in overcollections. Sen. Risa Hontiveros is demanding a full P100 billion refund, saying the current amount is “bitin pa”.
The House and Senate are set to probe mandated charges and pass-through fees under EPIRA. Advocates are calling for:
State absorption of universal charges and lifeline subsidies
Removal of VAT on electricity and system loss
Utility absorption of system losses above a minimal technical threshold
Clearer bill breakdowns and automatic application of senior/PWD discounts
“Electricity is a basic necessity, not a luxury,” consumer advocates said.
ia/xf
