Your Meralco bill contains 15+ individual line items that most people have never read. This walkthrough explains every charge — not just what it is, but who controls it, why it fluctuates, and whether any part of it is actually negotiable. By the end, you’ll know exactly where your electricity money goes every month.
What you’ll learn
- The 8 major charge categories on your Meralco bill and who controls each one.
- Why the generation charge fluctuates monthly while distribution charges stay flat.
- What “RORB”, “PBR”, “VAT”, “FIT-All”, and “SCC” mean in plain language.
- How to find your kWh consumption when it’s not clearly printed on your bill summary.
The top section: Your account and consumption summary
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Account Number and Meter Number
Your account number is your billing identifier with Meralco — the number you use when paying online, calling customer service, or authorizing a supply switch. Keep it handy.
Your meter number identifies the physical meter at your property. This is the number that appears on the device installed on your wall or in your meter box. The two numbers are different — your account number can be reassigned when a property changes hands; the meter number stays with the hardware.
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kWh Consumption and Billing Period
Your kWh consumption is the total electricity your household used during the billing period — typically 29–31 days. This is the reading difference between your meter’s current and previous readings.
The billing period affects your charges: Meralco reads meters in rotation, so your “monthly” bill may not align exactly with calendar months. Longer periods mean higher consumption; shorter periods mean lower. This is why your bill amount can vary even if your usage habits don’t.
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Rate Classification
Your rate classification determines which tariff schedule applies to you. Common residential classifications:
- R-1: Residential — standard rate for household customers
- R-2: Residential — higher consumption bracket (above 200 kWh in some areas)
- Lifeline Rate: Subsidized rate for low-income households consuming less than 100 kWh/month
If you think you’re misclassified, contact Meralco’s customer service — an incorrect classification can mean years of overbilling.
Generation Charge — The largest number
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What it is
The generation charge is the cost of the electricity itself — what Meralco paid to buy power from generators on your behalf. It’s shown in ₱/kWh and multiplied by your consumption to give a monthly peso amount.
Current rate: approximately ₱7.47/kWh. This is ~55% of your total effective bill rate.
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Why it changes every month
Meralco procures electricity from two sources: the Wholesale Electricity Spot Market (WESM) and bilateral contracts with generators. WESM prices settle every 5 minutes based on real-time supply and demand. Bilateral contract prices are fixed for the contract term.
Your monthly generation rate is a weighted average of Meralco’s WESM purchases and contracted supply for that billing period. It fluctuates with:
- Fuel prices (coal, natural gas, oil — affecting thermal plant operating costs)
- Hydro availability (drought reduces cheap hydropower, forcing more expensive thermal generation)
- Demand (hot months drive up AC usage and tighten supply)
- Plant outages (forced outages reduce available supply and spike spot prices)
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What you can do about it
The generation charge is the only major component of your bill that consumer choice can reduce. A Retail Electricity Supplier like SunShare contracts generation directly with producers at negotiated rates — bypassing Meralco’s default procurement. For SunShare Phase I members, the effective generation rate is reduced by 13.49%–17.86% compared to the Meralco default.
Transmission Charge
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What it is
The fee for using the national high-voltage transmission network — the infrastructure that moves electricity from power plants to Meralco’s distribution system. Operated by NGCP (National Grid Corporation of the Philippines) under a government concession.
Current rate: approximately ₱0.79/kWh. This is a pass-through charge — Meralco collects it from you and remits it directly to NGCP. Meralco earns no margin on this line.
System Loss Charge
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What it is — and why you pay for losses you didn’t cause
Not all electricity that enters Meralco’s distribution network reaches consumers. Technical losses from wire resistance and transformer inefficiency, plus non-technical losses (theft), mean that more kWh enter the network than exit via customer meters.
The system loss charge recovers the cost of this “lost” electricity from all consumers. The ERC caps system loss recovery at 8.5% of consumed kWh for private DUs. Current rate: approximately ₱0.67/kWh.
In plain terms: if you consume 100 kWh, you’re also paying a share of the ~7.6 kWh that got lost in the system before reaching you.
Distribution, Supply, and Metering Charges
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Distribution Charge
Covers the cost of operating and maintaining Meralco’s local distribution network — the lines, transformers, substations, and switching equipment that deliver electricity from the high-voltage transmission grid to your neighborhood.
Rate: approximately ₱1.68/kWh. Set by the ERC through a Performance-Based Regulation (PBR) framework, reviewed every few years. Unlike generation, this rate is very stable — it changes only when the ERC approves a distribution rate review.
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Supply Charge
Covers Meralco’s commercial operations — billing systems, customer service, account management, and the administrative cost of being your electricity retailer. Rate: approximately ₱0.56/kWh.
When you switch to SunShare, this charge partially shifts: Meralco’s supply charge is reduced (because they’re no longer your generation supplier), but SunShare’s supply fee applies. The net effect is small — and is already factored into the savings projections you see in the calculator.
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Metering Charge
Covers the cost of your electricity meter and the data collection process. Includes meter rental, smart meter data processing, meter reading (or remote reading via AMI), and verification. Rate: approximately ₱0.49/kWh.
If you’ve been upgraded to a smart meter (Meralco’s AMI rollout), your metering charge may look different — smart meters are billed at a slightly higher rate but eliminate estimated billing and provide interval consumption data.
Government Taxes
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Value Added Tax (VAT) — 12%
Applied at 12% to generation, transmission, and distribution charges. Calculated on the sub-total of these charges before other fees. This is the largest tax line on your bill — at current rates, VAT adds approximately ₱1.26/kWh to your effective rate.
When you switch to an RES, you still pay VAT — but you pay it on a lower generation base, which reduces the absolute VAT amount even though the rate stays at 12%.
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Local Franchise Tax and Other Fees
Meralco pays a franchise tax to local government units (LGUs) for the right to operate in their jurisdiction. This is passed through to consumers. The rate varies slightly by LGU.
Universal Charges
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Missionary Electrification Charge
Funds electricity supply in off-grid and missionary areas — remote islands and communities that can’t be served economically by the main grid. A cross-subsidy from urban consumers to rural electrification. Rate: approximately ₱0.0406/kWh.
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Stranded Contract Costs (SCC)
Legacy costs from the National Power Corporation’s pre-EPIRA power purchase agreements that couldn’t be renegotiated when the market was restructured. Still being amortized across all consumers. Rate: approximately ₱0.0234/kWh. This charge will eventually expire as the legacy contracts are fully paid off.
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Feed-In Tariff All (FIT-All)
The most visible of the universal charges. FIT-All is a cross-subsidy mechanism that compensates renewable energy generators (solar, wind, biomass, run-of-river hydro) above the market rate to incentivize clean energy investment.
Current rate: approximately ₱0.1189/kWh. The ERC reviews and adjusts FIT-All annually based on the actual volume of renewable generation in the system.
Reading your totals correctly
Your bill will show a “Current Bill Amount” — this is what you owe for the current month, before any previous balance. It will also show an “Amount Due” — which includes any outstanding balance from prior months. Always check which one you’re paying if you pay online.
Quick kWh estimate: If your bill shows only the peso total, use this formula to reverse-calculate your consumption: kWh = (Total bill − ₱30.17) ÷ 13.4382. Accurate to within 0.5% for typical Metro Manila residential accounts at Q1 2026 rates. Use this number in the SunShare Savings Calculator.
Once you understand your bill, you understand where the opportunities are. The generation charge is the only component that market competition can reduce — and understanding how large it is (55% of your total) helps you understand why switching to an aggregation-based RES delivers such meaningful savings.
