CUSTOMERS of Manila Electric Co. (Meralco) should see lower bills for the second straight month in June, the utility announced on Thursday, citing a lower generation charge for power purchased in May.

In its statement, Meralco said its overall rate dropped P0.1948 per kilowatt hour (/kWh) to P10.0918/kWh from P10.2866/kWh in May. The overall rate is now down P0.47/kWh since May.

Households consuming 200 kWh in a month — which make up the biggest segment of residential consumers — can expect a P39 total reduction in their bills, while those consuming 300 kWh, 400 kWh and 500 kWh will see reductions of P58, P44, P77.92 and P97.40, respectively.

“The generation charge decrease is primarily due to lower charges from the Wholesale Electricity Spot Market (WESM), despite increases in the charges of Independent Power Producers (IPPs) and Power Supply Agreements (PSAs),” Meralco said, noting that WESM, IPPs and PSAs accounted for nine percent, 41% and half of the utility’s supply in May.

Generation charge for June slid by P0.1350/kWh to P5.4158/kWh from P5.5508/kWh.

Purchases at the WESM decreased by P0.31/kWh despite continued tightness of supply in Luzon.

“While the number of days on red alert, as declared by the National Grid Corporation of the Philippines (NGCP), decreased from seven last month to two in May, the number of days on yellow alert (signifying thin reserves) increased from seven in April to 13 this month due to higher demand for power,” Meralco added.

Meanwhile, cost of power sourced from IPPs and PSAs inched up by P0.0556/kWh and P0.0717/kWh, respectively, partly due to weakening of the peso against the greenback.

Dollar-denominated costs of IPPs and PSAs account for 97% and 68% of their charges, respectively.

To boost supply, Meralco said the San Buenaventura power plant — its new PSA with power facilities in Mauban, Quezon — started commissioning tests this month and provided two percent of total energy requirements.

Two new interim PSAs which Meralco secured this month — with Therma Mobile, Inc. and Millennium Energy Corp., provided additional capacity for emergencies.

Transmission charge for residential customers decreased by P0.0427/kWh primarily due to lower ancillary service charges, while taxes and other charges also decreased by P0.0171/kWh.

Meralco’s distribution, supply and metering charges have been unchanged for 47 months, after these were reduced in July 2015.

Payment for the generation charge goes to power suppliers, while payment for the transmission charge goes to the NGCP.

Taxes and other public policy charges like the feed-in tariff allowance rate are remitted to the government.

Meralco shares dropped P1.80 or 0.46% or P1. 80 to end P389 apiece on Wednesday, reflecting broader weakness in the industrial sectoral index — under which the stock is listed — which fell by 22.12 points or 0.19% to 11,567.99.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — J. C. Lim