NGCP explains electricity bill breakdown

National

WHEN the lights go on, who really gets paid?

Electricity bills reflect a layered system of charges split among power generators, transmission services, distribution utilities, and government-mandated costs, a National Grid Corporation of the Philippines (NGCP) official said on Thursday, July 2, 2026.

Cynthia Perez-Alabanza, assistant vice president and head of

NGCP’s Public Relations Department, said during a Power 101 forum that consumers often misinterpret their electricity bills as a single charge, when in fact it is composed of several regulated and market-driven components.

She outlined the typical breakdown of an electricity bill, saying around 50 percent to 52 percent goes to power generation, about 20 percent to distribution utilities, around 20 percent to government-related charges, and roughly 4 percent to NGCP for transmission.

Perez-Alabanza said NGCP’s transmission revenue is governed by a regulatory ceiling set by the Energy Regulatory Commission (ERC), formally known as the Maximum Allowable Revenue, which limits how much the company can collect over a regulatory period regardless of demand growth.

She said the approved revenue is recovered through charges passed on to distribution utilities, which then appear in consumer bills.

She also explained that ancillary services, which support grid stability, are sourced through competitive procurement processes and market-based mechanisms subject to ERC oversight.

Perez-Alabanza said electricity supply flows through two main systems: bilateral contracts between distribution utilities and generators, and the Wholesale Electricity Spot Market, where prices fluctuate based on supply and demand conditions.

She said market operations are facilitated by the Philippine Electricity Market Corporation, which oversees the spot market where generators and buyers trade electricity under competitive pricing rules.

She added that in periods of tight supply, spot market prices tend to rise due to higher demand and limited available generation, while prices ease when supply is abundant.

Perez-Alabanza also acknowledged the impact of rising electricity costs on consumers.

“And although I understand what goes into my power bill, I am likewise frustrated. And I sometimes cannot believe my eyes at what I am being charged by Meralco. Because none of us are immune from the effects and the impact of a declining economic situation,” she said.

She added that electricity pricing pressures are felt across all sectors as economic conditions affect household expenses.

Perez-Alabanza said NGCP’s transmission charges are also influenced by regulatory resets, where the ERC evaluates costs, investments, and performance before setting allowable revenue levels.

She said past ERC decisions have resulted in adjustments to NGCP’s allowable revenue, including reductions to proposed capital expenditures and disallowance of certain recoverable costs.

She added that the regulatory framework ensures NGCP only recovers “just and reasonable” costs while maintaining grid reliability.

The discussion comes amid ongoing scrutiny of electricity pricing structures in the country.

In earlier developments, Akbayan Party-list Rep. Chel Diokno called for a congressional review of electricity billing mechanisms, questioning whether pass-through charges remain fair to consumers.

Diokno said lawmakers should examine whether existing charges place undue pressure on households already facing rising living costs.

Consumer groups have also raised concerns over rising electricity bills, citing increases even with minimal changes in consumption.

Senate inquiries have also been launched into electricity pricing and subsidy systems.

Sen. Bam Aquino filed Senate Resolution No. 375 seeking an investigation into electricity subsidy mechanisms, raising concerns that middle-class consumers may be shouldering costs intended for low-income households.

Sen. Risa Hontiveros also urged the Energy Regulatory Commission to conduct a comprehensive review of electricity billing practices and related charges, including potential refunds of alleged over-collections.(MyTVCebu)