Below is a general discussion of relevant laws, regulations, and considerations related to charging tenants PHP 20 per kilowatt-hour (kWh) in a serviced apartment setting in the Philippines. This is for informational purposes only and does not constitute legal advice. For any specific matter, it is best to consult a qualified Philippine attorney or the relevant government agencies.

1. Regulatory Framework Over Electricity Distribution

1.1. The Electric Power Industry Reform Act (EPIRA) of 2001 (Republic Act No. 9136)

The EPIRA governs the restructuring of the electric power industry, the privatization of the National Power Corporation’s assets, and the regulation of electricity rates. One of its primary goals is to protect consumer interests by ensuring that electricity rates are just and reasonable.

Under EPIRA, entities that engage in distribution of electricity must be authorized by the Energy Regulatory Commission (ERC). As a general principle, only duly licensed or franchised distribution utilities (DUs) are allowed to sell electricity to end-users. Individuals or establishments reselling electricity to their tenants need to comply with the rules set by the ERC, especially regarding pricing.

1.2. Role of the Energy Regulatory Commission (ERC)

The ERC is mandated to promulgate rules governing electricity rates and enforce consumer protection. It oversees:

Setting or approving the distribution rates for authorized DUs.
Monitoring compliance with the pricing guidelines (e.g., no mark-up beyond authorized amounts).
Investigating complaints related to overcharging or unauthorized electricity resale.

If a landlord or operator of a serviced apartment wants to charge for electricity, that charge is essentially a pass-through of what the distribution utility charges the landlord, plus any permissible administrative fees if authorized by regulations. Any excess or arbitrary profit on electricity sale may be questioned under ERC rules.

1.3. Department of Energy (DOE) Circulars and Guidelines

The DOE issues circulars that clarify the responsibilities of distribution utilities and other parties involved in the power supply chain. DOE guidelines generally prohibit entities from selling electricity at prices that exceed the distribution utility’s approved rates, barring other authorized costs or charges.

2. Sub-Metering and Resale of Electricity

2.1. Sub-Metering Basics

“Sub-metering” occurs when a master meter (registered under the name of the building owner or developer) receives electricity from a distribution utility. The landlord or developer then installs individual sub-meters for each tenant or occupant and charges them for their consumption.

Key legal points about sub-metering in the Philippines:

The entity reselling electricity typically must bill tenants only for the share of actual consumption and the proportional share of any ancillary fees or charges permitted by the ERC.
Mark-ups or additional charges outside of the pass-through costs (i.e., the amount that the distribution utility charges the building) are generally disallowed, unless the ERC has authorized them (which is rare and usually subject to strict rules).

2.2. Resale Rate vs. Distribution Utility Rate

The standard position is that the sub-metering entity (the serviced apartment’s management, in this case) cannot charge more than the total cost it pays to the distribution utility.
If the building or landlord does add charges for administrative or maintenance costs, these typically have to be nominal or consistent with ERC or local regulations—and must not lead to an effective rate (like 20 PHP/kWh) that grossly exceeds the official distribution utility’s rate in that area.

3. Charging PHP 20/kWh: Potential Issues

3.1. Justification of the Rate

The average residential electricity rate in Metro Manila and many parts of the Philippines typically fluctuates (historically around PHP 8 to PHP 12 per kWh, though it can vary based on generation charges, distribution charges, transmission charges, and taxes). A 20 PHP/kWh rate is significantly higher than standard rates in most areas.

If a landlord in a serviced apartment is charging 20 PHP/kWh:

The landlord must be prepared to show that the rate includes only:
- Actual cost per kWh from the distribution utility,
- Permitted taxes,
- Any authorized systems loss charge,
- Any other standard charges (e.g., universal charges, feed-in tariff allowance),
- And a nominal administrative fee, if legally allowed (and subject to the ERC’s guidelines).
If 20 PHP/kWh is significantly above the local utility’s approved rate, it raises the issue of potential overcharging or “profiteering” from electricity resale, which is prohibited by law.

3.2. Tenant Rights and Remedies

If a tenant believes they are being overcharged or that the sub-metering arrangement is unreasonable, they can:

File a complaint with the Energy Regulatory Commission (ERC).
Seek intervention from the local government unit (LGU) or the Department of Trade and Industry (DTI) if it involves consumer protection aspects.
Pursue legal recourse through filing a civil complaint for breach of contract or unjust enrichment if the lease or service agreement is being violated.

3.3. Possible Penalties for Overcharging

The ERC may impose fines and penalties on entities that illegally resell electricity at unapproved rates.
Landlords who collect excessive charges could face administrative and civil liabilities, and possibly face criminal sanctions if there is clear fraudulent intent.

4. The Hotel and Serviced Apartment Exception?

4.1. Hotel or Short-Stay Operational Model

Some serviced apartments operate more like hotels and provide accommodations on a short-term basis. In these situations:

Electricity may be bundled into the accommodation fees or included in the daily rate.
There is typically no separate kWh charge because the occupant is charged a fixed rate for the use of facilities, akin to a hotel stay.

4.2. Long-Term Serviced Apartment Leases

For longer stays, some serviced apartments function more like residential units. The occupant may sign a lease-like contract, itemizing charges for utilities. In this scenario:

The occupant should still be protected by the relevant laws on sub-metering and consumer protection.
If the occupant is effectively a “tenant,” the lessor or property manager cannot simply impose arbitrary utility rates that exceed actual costs.

4.3. Bundled Services vs. Separate Metering

If electricity is fully bundled with other services (e.g., housekeeping, laundry, building amenities) and is not itemized as a separate charge per kWh, the occupant is essentially paying for a complete service package. In such a setup, the occupant might have a harder time challenging the cost distribution—unless it is manifestly unconscionable or fraudulent. However, as soon as the landlord separately bills or itemizes electricity consumption, it triggers the sub-metering rules and potential ERC oversight.

5. Practical Considerations for Landlords and Tenants

5.1. For Serviced Apartment Operators / Landlords

Compliance: Ensure that sub-metering is in line with ERC rules. You can inquire directly with the distribution utility or the ERC on permissible administrative mark-ups, if any.
Transparency: Provide tenants with copies of the distribution utility bill, a breakdown of charges, and how their share is calculated to avoid disputes.
Written Agreements: Incorporate clauses in the lease/occupancy contract that clarify how electricity charges are computed, referencing official ERC or distribution utility rates.

5.2. For Tenants

Request for Billing Details: Tenants can ask for the main electricity bill from the distribution utility and compare it with the sub-meter reading and charges.
Consult the ERC: If charges are suspiciously high, contact the ERC for guidance or to file a formal complaint.
Documentation: Keep records of all bills, official receipts, and written communications. Legal or regulatory bodies will need evidence of any alleged overcharging.

6. Conclusion

In the Philippines, the legality of charging 20 PHP/kWh in a serviced apartment depends on whether the charge accurately reflects the cost of electricity (including only approved pass-through costs and minimal authorized add-ons) or exceeds the official rate from the distribution utility. Given that 20 PHP/kWh is substantially higher than typical residential rates, a landlord demanding that figure may face legal challenges unless they can justify every peso under applicable regulations.

Key Takeaways

Overcharging or profiteering from electricity resale is prohibited under Philippine laws and ERC guidelines.
Tenants have recourse to regulatory bodies if they suspect overcharging.
The landlord or serviced apartment operator should maintain transparency and documentation to demonstrate compliance with lawful billing practices.
For short-term (hotel-like) stays, electricity might be bundled into the accommodation fee. For longer-term stays, if electricity is billed separately, it is subject to sub-metering rules.

Ultimately, any per-kWh charge to tenants must either match or be very close to the official distribution utility rates—unless there is a clear, authorized rationale for any minor administrative fee. If a serviced apartment levies an amount as high as 20 PHP/kWh without regulatory clearance or justification, it risks violating Philippine regulations on electricity distribution and consumer protection.

Disclaimer: This summary provides an overview based on existing laws and regulations in the Philippines as of this writing. Consult a Philippine-licensed attorney or the ERC for specific legal advice regarding any particular lease or sub-metering arrangement.